OTM 451 Exam Questions And Answers Well Defined Graded A+

Customer Participation - correct answers -The customer is present for the creation of the service -Customer is part of the creation of the service (ex fitness class) -Customer behavior and effort impact the quality -Supporting facilities matter: "on stage" Simultaneity - correct answers -Service is created and consumed simultaneously (ex haircut or concert) -Difficult to test drive before purchase -Quality is hard to control because you can't "throw out the defects" Perishability - correct answers -unused capacity is lost as time passes (Ex airline) -service cannot be inventoried -It's hard to buffer the system from demand variability -customer waiting (rather than inventory) buffers variability Intangibility - correct answers -May not have any physical component -difficult to define and measure quality -perception matters -government regulation becomes important -difficult to patent and protect innovation Heterogeneity - correct answers -High variability -customers have varying preferences and perceptions of quality -customers are involved in the process but have varying skill levels -employees interact directly with the customers varying interpersonal skills -services tend to be highly customized Nontransferable Ownership - correct answers -service customers "rent" a resource for a time -ex seat on airplane, table at restaurant, lawyers time -The resource must be kept current and in good condition -the resources are frequently shared concurrently with other customers service - correct answers an action or deed performed on or for a customer or a customer's asset which the customer values service offering - correct answers -design, strategy, trade offs (be bad at something) -determine which attributes to target, needs of the customer funding mechanism - correct answers -how excellence will be paid for ex charging premium, free customer support ,etc -charge in palatable way, create win/win, spend now save later, customer do the work -4 ways to charge charge the customer, win/win, self serve, spend now save later Employee Management - correct answers -recruiting, training, job design, performance management -reflect service attributes, empower employees -attitude vs aptitude -- together they are expensive Customer Managment - correct answers -customers have an impact -ex customers effecting other customers -what behaviors must a customer demonstrate to derive the most value -- service needs to foster those behaviors Multi Focused firm - correct answers -firms that pursue multiple niches with optimized service models each designed to achieve excellence on some dimensions at the expense of inferior performance on others -benefit from having various service models under on house umbrella -ex Amazon enters many markets such as whole-foods charge the customer - correct answers in a palatable way win/win - correct answers ex progressive. Customer gets into a crash. Progressive comes out right away and gives the check -- customer happy. Results in lower fraud -- company happy self servce - correct answers -less labor costs -less customer wait time spend now, save later - correct answers ex invest in technology now to reduce labor later service act - correct answers "we will" statement -the fundamental function, deed or action -do not include the "how" just the "what" mental stimulus processing - correct answers intangible/virtual + person related (upper left quadrant) ex counciling services, education People processing - correct answers Tangible/physical + Person related (upper right quadrant) -ex salon or ride share Information processing - correct answers Intangible/Virtual + Assets (lower left quadrant) ex zoom Possession Processing - correct answers Tangible/Physical + Assets (lower right quadrant) ex. Amazon strategic priorities - correct answers cost, time, flexibility, quality Shouldice Hospital - correct answers -hernia repairs specialization -customers get up and walk around -less staff/lower labor costs -should they expand -- no Zappos - correct answers -shoe service -free shipping and returns -high customer service and call center -merged with amazon -we will sell shoes -possession processing arrival variability - correct answers -customers do not all want service at the same time or at times necessarily convenient for the company -ex grocery shoppers can't space their transactions such that checkout clerks remain busy and lines don't form -can be addressed by appointments or reservations Request variability - correct answers -customers ask for a range of things -ex at a resort vacationers all want different amenities Capability variability - correct answers -customers vary in their ability to perform tasks needed to receive service -ex a patient has difficulty describing his symptoms, affecting the quality of heath care received effort variability - correct answers -customers expand varying degrees of energy on tasks needed to receive service -ex a warehouse club shopper doesn't return his cart to a parking lot corral - raising the store's costs and impinging on other customer's experiences subject preference variability - correct answers -customers have different opinions about what it means to be treated well -ex one diner appreciates the warmth of the waiter's first name introduction; another resents his presumption of equal footing low-cost accommodation - correct answers paying little or nothing to serve highly variable customers -ex Zipcar: The customers does all the work. They make the reservation, they get themselves to the car, they return the car, they gas and clean the car. This saves Zipcar a lot of money -to mitigate create self service uncompromised reduction - correct answers decreasing variability without eroding customers' experience -focus on narrow band of service -to mitigate target customers with a niche -ex shouldice classic accommodation - correct answers extra employees or additional employee skills to compensate for variations among customers -ex zappos classic reduction - correct answers requires customers to engage in more self-service, use reservation systems, or adjust their expectations -change the customers honesty variability - correct answers ex honesty of the reviews on amazon which could be fake or nonsense -mitigate by "was this review helpful?" uber case - correct answers -people processing -time, quality, flexibility, cost -we will provide car rides zipcar case - correct answers -arrival variability and effort variability -we will provide cars for rent satisfaction - correct answers perception-expectation what causes queues? - correct answers arrival rate service rate (infinite waiting) arrival rate service rate and variability does not equal 0 littles law - correct answers I = R * T mean interarrival time - correct answers a mean service time - correct answers p arrival rate - correct answers lambda = 1/a service rate - correct answers mu = 1/p Instrumental Means - correct answers formal rewards and penalties for specified behaviors - the basic carrots and sticks of discipline -ex Zipcar providing late fees for not returning car on time Normative Means - correct answers shame, blame and pride -make customers want to behave -ex ebay wanting to treat buyer and seller with care. Do the star rating to rank knowledge work - correct answers work that involves expertise and judgement that depends heavily on tactic knowledge (knowledge locked inside the worker's head) Reasons why Lean & TPS might not work well for services - correct answers -knowledge work is not repetitive and can't be unambiguously defined -in manufacturing, there's a common understanding of how to make an operation lean and it can be applied in many organizations unlike knowledge work 6 principles of applying TPS - correct answers 1. continually rooting out waste should be an integral part of every knowledge worker's job 2. strive to make tacit knowledge explicit 3. Specify how workers should communicate with one another 4. Use the scientific method to solve problems as soon as possible. The people who created them problem should fix it 5. A lean system takes years to build 6. Leaders must blaze the trail artistic process - correct answers -judgement based work, craft work or professional work -highly variable environment -output variation that creates customer value scientific process - correct answers -rigidly controlled -standardized conditions for artistic process - correct answers -inputs to the process are variable (ex no two pieces of wood used are alike) -customers value variations in the processes output (ex pianists appreciate the distinctive sound) Virginia Mason medical center - correct answers -implementing TPS in a hospital setting -No layoffs (difficult) had to redirect to new positions, however some don't have specific medial training -different things at stake manufacturing vs medical -redesign the space and physical layout to a circular space -large financial commitment (difficult) -getting support (difficult) cars vs patients 7 types of waste - correct answers transport, inventory, motion, waiting, overproduction, over processing, rework Fresh Fin Speaker - correct answers ranks business as 1. quality 2. flexibility 3. time 4. cost stop trying to delight your customers - correct answers -delighting customers doesn't build loyalty; reducing their effort does dynamic pricing - correct answers costs shift constantly to match demand -ex broadway tickets or airplanes static pricing - correct answers price fixed expected revenue - correct answers 0 x Probability(WTPP) + $price x Probability(WTPP) revenue management - correct answers selling limited, perishable inventory to the right customer (at the right time) for the right price characteristics that favor revenue management - correct answers 1. capacity is constrained 2. capacity is perishable 3. capacity is sold in advance 4. distinguishable customer segments with different WTP 5. the same unit of capacity can serve different segments 6. ethically acceptable to charge different prices and to withhold service/capcity protection level - correct answers rev low/rev high -if lower than the number don't protect, if higher protect iterations - correct answers one trial/roll of the dice simulation - correct answers average of a bunch of iterations gathering or clustering of iterations overbooking - correct answers sell more tickets than seats -risk is that too many people show up #show true capacity --then you need to bump people compass group case - correct answers -business to business -secotrization vs single point of con