SOLUTION MANUAL FOR OPERATIONS AND SUPPLY CHAIN MANAGEMENT 8TH EDITION BY RUSSELL

Answers to Questions 1.1. The operations function involves organizing work, selecting processes, arranging layouts, locating facilities, designing jobs, measuring performance, controlling quality, scheduling work, managing inventory, and planning production. Operations interacts with marketing in product development, forecasting, production planning, and customer service. Operations and finance interact in capital budgeting, cost analysis, production and inventory planning, and expansion and technology plans. Operations and human resources work together recruiting, training and evaluating workers, designing jobs and working with unions. IT and operations work together daily on e-commerce, enterprise resource planning and supply chain management systems. 1-2. a. Operations at a bank involves transferring funds, processing funds, providing checks, cashing checks, preparing monthly statements, reconciling statements, approving loans, loaning money, keeping track of loan payments, approving credit cards, and more. b. Operations at a retail store involves purchasing goods, stocking goods, selling goods, keeping track of inventory, scheduling workers, laying out the store, locating the store, forecasting demand, and more. c. Operations at a hospital involves preparing the rooms, scheduling doctors, nurses and other workers, processing paperwork, ordering supplies, caring for patients, maintaining the facility, laying out the facility, ensuring quality and more. d. Operations at a cable TV company involves taking orders, installing equipment, maintaining equipment, keeping the shows on the air, scheduling work, processing statements and payments, and more. 1.2. Inventions during the industrial revolution brought workers together under one roof in a factory setting where division of labor and interchangeable parts encouraged the formation of separate worker and management jobs. Ideas from the scientific management era made work more efficient. Human relations theorists emphasized the importance of the human element in operations management. The management science era saw many advances in quantitative techniques and their application. The quality revolution focused management on meeting customer expectations and emphasized quality over quantity. The Internet brought numerous opportunities to do work faster and better. It also opened doors to new markets worldwide. Today’s successful companies compete worldwide for both market access and production resources. 1.3. Competitiveness is the degree to which a nation can produce goods and services that meet the test of international markets. A country’s competitiveness is measured by its GNP, import/export ratio, and increases in productivity. Industry competitiveness can be measured by the number of major players in the industry, average market share, and average profit margin. Measures of a firm’s competitiveness include market share, earnings per share, revenue growth, and profit margins. The Internet has opened new avenues of trade so that more firms compete for a larger, global market. The ease with which consumers can compare products and prices online has also increased competitiveness. 1-5. Student answers will vary. The information can be accessed directly from the Internet or through the hyperlinks provided in Chapter 1 of the text’s homepage located at 1-6. Student answers will vary.  1-7. Students can begin this assignment by accessing Fortune’s homepage and referring to the Fortune 500 or Global 500 by industry. The leaders in each industry are listed and there is usually some discussion of industry concerns. Individual data on companies can be found at Hoover’s website (). 1-8. Student answers will vary. 1-9. Student answers will vary. 1-10. Student answers will vary. The information can be accessed directly from the Internet or through the hyperlinks provided in Chapter 1 of the text’s homepage located at 1-11. The WTO is an international organization that works to establish and enforce rules of trade between nations. WTO agreements are ratified by the governing bodies of the nations involved. WTO’s dispute settlement process interprets agreements and rules on violations, thereby avoiding political or military conflict. The group promotes free trade and more recently, has helped developing nations enter the trade arena on more equitable grounds. Currently, there are 147 member nations. Membership is achieved by meeting certain environmental, human rights, and trade criteria, agreeing to abide by the rules of the organization, and being approved by two-thirds of the existing membership. See 1-12. Student answers will vary. Access 1-13. Student answers will vary. Access 1-14. Student answers will vary. Access 1-15. Students will find a variety of answers for this question. In general, it is easy to find mission or vision statements, but more difficult to find evidence of the mission or vision being applied. 1-16. Strategy formulation consists of four basic steps: (1) Defining a primary task—what is the purpose of the firm? What is the firm in the business of doing? (2) Assessing core competencies—what does a firm do better than anyone else? (3) Determining order winners and order qualifiers—what wins orders in the marketplace? What qualifies a product or service to be considered for purchase? (4) Positioning the firm— what one or two important things should the firm choose to concentrate on? How should the firm compete in the marketplace? Student answers will vary. Most start-ups try too much too soon. It’s often difficult to stick with what you do best. 1-17. Core competencies are the essential capabilities that create a firm’s sustainable competitive advantage. They have usually been built up over time and cannot be easily imitated. For example, First National Bank, one of our local banks, is known as a risk taker. Its core competence is its ability to size up the potential of investment opportunities. Through its familiarity with local businesses and its experience in loan making, the bank has developed the ability to predict which loans are worth taking extra risks. Bonomo’s, a successful retail store, is known for having just the right item in stock for special occasions. The store stocks a variety of stylish women’s clothing, but not too much of each style. They specialize in knowing individual customers and even keep track of evening wear purchases so that no one else at a particular party will be wearing the same dress. Toyota emphasizes superior quality at a price below its competitors with its Lexus line of automobiles. To establish a special reputation for quality over the lifetime of the car, the company set up separate sales and service facilities. When it is time for servicing, Lexus owners can have their vehicle picked up and delivered to their home or place of business. The car returns the same day, washed and vacuumed, often with a gift certificate inside for a night on the town complements of the dealer. 1-18. While the answers to this question vary considerably, most students feel competent in the technical areas of their major, but uncomfortable with their communication skills (both oral and written) and their ability to make decisions. This opens the way for more project-oriented assignments from the instructor. The question also helps students prepare for the inevitable interview question—what are your strengths and weaknesses? 1-19. Order qualifiers are characteristics of a product or service that qualify it to be considered for purchase by a customer. An order winner is the characteristic of a product or service that wins orders in the marketplace— the final factor in the purchasing decision. 1-20. a. Most companies approach quality in a defensive or reactive mode; quality is confined to minimizing defect rates or conforming to design specifications. To compete on quality, companies must view quality as an opportunity to please the customer, not just as a way to avoid problems or to reduce rework costs. The manu