, SOLUTION MANUAL FOR
Operations Management Processes and Supply Chains, 14th edition
Krajewski
Important Notes
The file includes the complete test bank, organized chapter by chapter.
A sample of selected pages has been provided for preview.
All available appendices and Excel files (if included in the original resources) are
provided.
We continuously update our files to ensure you receive the latest and most accurate
editions.
New editions are added regularly – stay connected for updates!
Purchase Guarantee
If you believe you have purchased the wrong file, don’t worry. Contact us anytime and we
will gladly replace it with the correct version.
Contact Email:
,Operations Management’s
Instructor Manual by
Dr. M. Khurrum S. Bhutta
Operations Management
Fourteenth Edition
Lee J. Krajewski
Manoj K. Malhotra
, Chapter
1 Using Operations to Create Value
DISCUSSION QUESTIONS
1. Answering this question demonstrates that processes underlie all of our jobs. What might
be surprising is how many students would put their job in the category of “other,”
suggesting that many jobs do not fall neatly into any one functional area. Perhaps many in
the “other” category might best be called “operations” on further reflection. Customers,
both internal and external, are part of each process, and the goal is to manage the processes
to add the most value for them.
2. The hospital’s commitment to provide attention to patients arriving to the emergency unit
in less than 15 minutes and never to turn away patients who need to be hospitalized implies
that the facility must be designed to have extra capacity in both beds and emergency room
facilities. It must plan on having extra personnel in the emergency room and also plan on
having additional emergency personnel on call to take care of unprecedented heavy loads.
In line with the mission statement, maximum utilization of the facilities (i.e., beds and
emergency room personnel) would not be one of the performance objectives for the
hospital.
3. Core processes should link to a firm’s core competencies. Core processes are those
processes that provide the firm the best competitive advantage. Essential to the
definition a firm’s core processes is the concept of “interaction costs.” These costs
include the time and money that are expended whenever people and companies
exchange services, products, or ideas. If the transaction costs are higher to retain a
process within the firm’s organization than to outsource the process, the process
should be outsourced.
PROBLEMS
Trends and Challenges in Operations Management
1. Boehring University
a. Value of output:
students credit-hours $200 tuition $100 state support
75 3 $67,500 class
class student credit-hours
Value of input: labor + material + overhead
1-1
Copyright © 2025 Pearson Education, Inc.
,1-2 Using Operations to Create Value CHAPTER 1
$25
$6500 75 students $30, 000
student $38,375 class
class
Multifactor Productivity ratio:
Output $67,500
Productivity 1.76
Input $38,375
Compared to Solved problem 1, multifactor productivity has increased from 1.25
to 1.76.
b. Value of output is the same as in part a: $67,500 class
Labor-hours of input:
hours weeks hours
20 16 320
week class class
Productivity ratio:
Output $67,500
Labor Productivity $210.94 hour
Input 320 hours
The $192 season ticket price is not used in this calculation. It is a “red herring.”
2. Suds and Duds Laundry
a. Labor productivity
Number of Input Output Output/Input
Week Workers (Labor-hours) (Shirts) Ratio
1 2 24 68 2.83 shirts/hour
2 2 46 130 2.83 shirts/hour
3 3 62 152 2.45 shirts/hour
4 3 51 125 2.45 shirts/hour
5 2 45 131 2.91 shirts/hour
b. Output per person does not vary much whether it is Sud, Dud, or Jud working.
Productivity declines when all three are present. Perhaps there isn’t enough work to
keep three persons occupied, or perhaps there is not enough work space or equipment
to accommodate three workers.
Copyright © 2025 Pearson Education, Inc.
, Using Operations to Create Value CHAPTER 1 1-3
3. White Tiger Electronics compact disc players
Value of Output: $300
Value of Input: Labor + Materials + Overhead
Ouput $300
Productivity 2.000
Input $30 $70 $50
10% productivity improvement 2.00 110 . 2.200
Given productivity 2.20 , and the value of output $300, we solve for the cost of
inputs:
Ouput $300
Productivity 2.20
Input Input
$300
Input $136.36 or $136
2.2
The cost of inputs must decrease by $150 $136 $14 .
a. A $14 reduction in material costs is $14 $70 20.00%
b. A $14 reduction in labor costs is $14 $30 46.67%
c. A $14 reduction in overhead is $14/$50 = 28.00%
4. Symtecks
The output of a process is valued at $100 per unit. The cost of labor is $50 per hour
including benefits. The accounting department provided the following information
about the process for the past four weeks:
Week 1 Week 2 Week 3 Week 4
Units Produced 1124 1310 1092 981
Total Value 112,400 131,000 109,200 98,100
Labor ($) 12,735 14,842 10,603 9526
Labor (hrs) 254.7 296.8 212.1 190.5
Material ($) 21,041 24,523 20,442 18,364
Overhead ($) 8,992 10,480 8,736 7,848
Multifactor Productivity 2.63 2.63 2.75 2.75
Labor Productivity 4.41 units/hr 4.41units/hr 5.15 units/hr 5.15 units/hr
a. Use the multifactor productivity ratio to see whether recent process improvements
had any effect and, if so, when the effect was noticeable.
Value of output
1124units $100 $112, 400
Value of input: labor + material + overhead
$12,735 + $21,041 + $8,992 = $42,768
Productivity ratio:
Output
Labor Productivity
Input
Copyright © 2025 Pearson Education, Inc.
,1-4 Using Operations to Create Value CHAPTER 1
Output $112, 400
Week 1 Productivity 2.628
Input $42,768
Output $131, 000
Week 2 Productivity 2.628
Input $49,845
Output $109, 200
Week 3 Productivity 2.745
Input $39,781
Output $98,100
Week 4 Productivity 2.745
Input $35, 738
2.745 2.628
100% 4.45%
2.628
Improved 4.45% - noticeable in Week 3
b. Has labor productivity changed? Use the labor productivity ratio to support your
answer.
Labor-hours of input: Labor $50/hour
Labor costs
Week 1 = $12,735/$50 = 254.7
Week 2 = $14,842/$50 = 296.84
Week 3 = $10,603/$50 = 212.06
Week 4 = $9,526/$50 = 190.52
Productivity ratio:
Output
Labor Productivity
Input
Output 1124
Week 1 = Labor Productivity 4.4130 / hour
Input 254.7 hours
Output 1310
Week 2 = Labor Productivity 4.413/ hour
Input 296.84 hours
Output 1092
Week 3 = Labor Productivity 5.1495 / hour
Input 212.06 hours
Output 981
Week 4 = Labor Productivity 5.1491/ hour
Input 190.52 hours
5.1491 4.4130
100% 16.68%
4.4130
Improved 16.68%
Copyright © 2025 Pearson Education, Inc.
, Using Operations to Create Value CHAPTER 1 1-5
5. Alyssa’s Custom Cakes
a.
5 Birthday cakes x $50 per cake = $250
2 Wedding cakes x $150 per cake = $300
3 Specialty cakes x $100 per cake = $300
Total monthly revenue = $850
Multifactor productivity ratio = output/input
1.25 = $850/x
Solve for x = $850/1.25 = $680
Total costs = $680
Average cost per cake = $680/10 = $68/cake
b. Labor productivity
Birthday cake = $50/ 1.5 hours = $33.30/hour
Wedding Cake = $150/ 4 hours = $37.50/hour
Specialty Cake = $100/1 hours = $100/hour
c. Based on labor productivity, Alyssa should try to sell specialty cakes the most.
d. Yes, Alyssa should stop selling birthday cakes. Based on answer a, she loses $68
- $50 = $18 every time she sells a birthday cake.
6. Big Black Bird Company
The Big Black Bird Company problem is based on a product made by Raven
Industries. None of the numbers are representative of actual costs or volume.
a. Multifactor Productivity
Original Situation:
Value of output: 2500 uniforms $200 $500,000
Value of input: 2500 uniforms $120 $300,000
Productivity ratio:
Ouput $500,000
Productivity 167
.
Input $300,000
Overtime Situation:
Value of output: 4000 uniforms $200 $800,000
Value of input: 4000 uniforms $144 $576,000
Productivity ratio:
Ouput $800,000
Productivity 139
.
Input $576,000
Productivity decreases by:
1.67 1.39
100% 16.77%
1.67
b. Labor Productivity
Original Situation:
Value of output (from part a) is: $500,000
Labor-hours of input: 70 40 hours 30 40 hours 4000 hours
Copyright © 2025 Pearson Education, Inc.
,1-6 Using Operations to Create Value CHAPTER 1
Labor productivity $500,000 4000 hours $125 hour
Overtime Situation:
Value of output (from part a) is: $800,000
Labor-hours of input: 7 0 7 2 h o u rs 3 0 7 2 h o urs 7 2 0 0 h o u rs
Labor productivity =$800, hours = $111.11/hours
Labor productivity decreases by:
(125/111.11) / 125 x 100% = 11.1%
c. Gross profits
Original Situation: $500,000 $300,000 $200,000
Overtime Situation: $800,000 $576,000 $224,000
Weekly profits increased.
7. Mack’s Guitar Company
a. Labor productivity = output/input
Output = 100 guitars x 80% completion rate x price/guitar
= 80 guitars/ month x $250/guitar = $20,000
Input
Labor = 10/hours per guitar x 100 guitars = 1000 hours
Labor productivity is $20,000/1000 = $20/hour
Multifactor productivity ratio = output/input
Output = 100 guitars x 80% completion rate x price/guitar
= 80 guitars/ month x $250/guitar = $20,000
Input
Labor = $10/hour x 10/hours per guitar x 100 guitars = $10, 000
Material = $40/guitar x 100 guitars = $4, 000
Overhead = $4,000
Multifactor productivity ratio = $20, 000/$18, 000 = 1.11
b. Option 1. Increase sales price by 10%
Output = 100 guitars x 80% completion rate x ($250 x 1.1) = $22,000
Input
Labor is same as in part (a) = $10,000
Material is same as in part (a) = $4,000
Overhead is same as in part (a) = $4,000
Multifactor productivity ratio = $22,000/$18,000 = 1.22
Option 2. Improve Quality
Output = 100 guitars x 90% completion rate x $250/guitar = $22,500
Input
Labor is same as in part (a) = $10,000
Material is same as in part (a) = $4,000
Overhead is same as in part (a) = $4,000
Multifactor productivity ratio = $22,500/$18,000 = 1.25
Option 3. Reduce costs by 10%
Output = same as in part (a) = $20,000
Input
Copyright © 2025 Pearson Education, Inc.
, Using Operations to Create Value CHAPTER 1 1-7
Reduce costs by 10% yields 90% of the input costs from part (a).
= $18,000 x 0.90 = $16,200
Multifactor productivity ratio = $20,000/$16,200 = 1.23
Darren should choose Option 2 and improve quality because it yields the greatest
improvement in multifactor productivity.
8. Mariah Enterprises Productivity of Process Alpha and Process Beta
Excel used to perform all calculations
Process
Alpha Beta
Total Value of Output $17,150 $16,450
Total Cost of Labor $2,600 $3,000
Total Cost of Materials $5,500 $4,900
Total Cost of Overhead $6,000 $5,000
Labor Productivity $6.596 $5.483 unit $/ labor $
Multifactor Productivity $1.216 $1.275 unit $/ total $
Process Alpha has 20% [(6.596-5.483)/5.483] higher labor productivity.
Process Beta has 5% [(1.275-1.216)/1.216] higher multifactor productivity.
While process Beta generates more dollars of output per dollar invested in input,
it doesn’t use labor as efficiently as process Alpha.
9. Morning Brew Coffee Shop
Excel used to perform all calculations
a. Current labor and multifactor productivity
Regular Vienna
Currently Cappuccino total
Coffee coffee
Output in dollars $700.00 $300.00 $600.00 $1,600.00
Labor cost $320.00
Material cost $175.00 $75.00 $187.50 $437.50
Equipment cost $125.00
Overhead cost $225.00
Profit $492.50
Copyright © 2025 Pearson Education, Inc.
Operations Management Processes and Supply Chains, 14th edition
Krajewski
Important Notes
The file includes the complete test bank, organized chapter by chapter.
A sample of selected pages has been provided for preview.
All available appendices and Excel files (if included in the original resources) are
provided.
We continuously update our files to ensure you receive the latest and most accurate
editions.
New editions are added regularly – stay connected for updates!
Purchase Guarantee
If you believe you have purchased the wrong file, don’t worry. Contact us anytime and we
will gladly replace it with the correct version.
Contact Email:
,Operations Management’s
Instructor Manual by
Dr. M. Khurrum S. Bhutta
Operations Management
Fourteenth Edition
Lee J. Krajewski
Manoj K. Malhotra
, Chapter
1 Using Operations to Create Value
DISCUSSION QUESTIONS
1. Answering this question demonstrates that processes underlie all of our jobs. What might
be surprising is how many students would put their job in the category of “other,”
suggesting that many jobs do not fall neatly into any one functional area. Perhaps many in
the “other” category might best be called “operations” on further reflection. Customers,
both internal and external, are part of each process, and the goal is to manage the processes
to add the most value for them.
2. The hospital’s commitment to provide attention to patients arriving to the emergency unit
in less than 15 minutes and never to turn away patients who need to be hospitalized implies
that the facility must be designed to have extra capacity in both beds and emergency room
facilities. It must plan on having extra personnel in the emergency room and also plan on
having additional emergency personnel on call to take care of unprecedented heavy loads.
In line with the mission statement, maximum utilization of the facilities (i.e., beds and
emergency room personnel) would not be one of the performance objectives for the
hospital.
3. Core processes should link to a firm’s core competencies. Core processes are those
processes that provide the firm the best competitive advantage. Essential to the
definition a firm’s core processes is the concept of “interaction costs.” These costs
include the time and money that are expended whenever people and companies
exchange services, products, or ideas. If the transaction costs are higher to retain a
process within the firm’s organization than to outsource the process, the process
should be outsourced.
PROBLEMS
Trends and Challenges in Operations Management
1. Boehring University
a. Value of output:
students credit-hours $200 tuition $100 state support
75 3 $67,500 class
class student credit-hours
Value of input: labor + material + overhead
1-1
Copyright © 2025 Pearson Education, Inc.
,1-2 Using Operations to Create Value CHAPTER 1
$25
$6500 75 students $30, 000
student $38,375 class
class
Multifactor Productivity ratio:
Output $67,500
Productivity 1.76
Input $38,375
Compared to Solved problem 1, multifactor productivity has increased from 1.25
to 1.76.
b. Value of output is the same as in part a: $67,500 class
Labor-hours of input:
hours weeks hours
20 16 320
week class class
Productivity ratio:
Output $67,500
Labor Productivity $210.94 hour
Input 320 hours
The $192 season ticket price is not used in this calculation. It is a “red herring.”
2. Suds and Duds Laundry
a. Labor productivity
Number of Input Output Output/Input
Week Workers (Labor-hours) (Shirts) Ratio
1 2 24 68 2.83 shirts/hour
2 2 46 130 2.83 shirts/hour
3 3 62 152 2.45 shirts/hour
4 3 51 125 2.45 shirts/hour
5 2 45 131 2.91 shirts/hour
b. Output per person does not vary much whether it is Sud, Dud, or Jud working.
Productivity declines when all three are present. Perhaps there isn’t enough work to
keep three persons occupied, or perhaps there is not enough work space or equipment
to accommodate three workers.
Copyright © 2025 Pearson Education, Inc.
, Using Operations to Create Value CHAPTER 1 1-3
3. White Tiger Electronics compact disc players
Value of Output: $300
Value of Input: Labor + Materials + Overhead
Ouput $300
Productivity 2.000
Input $30 $70 $50
10% productivity improvement 2.00 110 . 2.200
Given productivity 2.20 , and the value of output $300, we solve for the cost of
inputs:
Ouput $300
Productivity 2.20
Input Input
$300
Input $136.36 or $136
2.2
The cost of inputs must decrease by $150 $136 $14 .
a. A $14 reduction in material costs is $14 $70 20.00%
b. A $14 reduction in labor costs is $14 $30 46.67%
c. A $14 reduction in overhead is $14/$50 = 28.00%
4. Symtecks
The output of a process is valued at $100 per unit. The cost of labor is $50 per hour
including benefits. The accounting department provided the following information
about the process for the past four weeks:
Week 1 Week 2 Week 3 Week 4
Units Produced 1124 1310 1092 981
Total Value 112,400 131,000 109,200 98,100
Labor ($) 12,735 14,842 10,603 9526
Labor (hrs) 254.7 296.8 212.1 190.5
Material ($) 21,041 24,523 20,442 18,364
Overhead ($) 8,992 10,480 8,736 7,848
Multifactor Productivity 2.63 2.63 2.75 2.75
Labor Productivity 4.41 units/hr 4.41units/hr 5.15 units/hr 5.15 units/hr
a. Use the multifactor productivity ratio to see whether recent process improvements
had any effect and, if so, when the effect was noticeable.
Value of output
1124units $100 $112, 400
Value of input: labor + material + overhead
$12,735 + $21,041 + $8,992 = $42,768
Productivity ratio:
Output
Labor Productivity
Input
Copyright © 2025 Pearson Education, Inc.
,1-4 Using Operations to Create Value CHAPTER 1
Output $112, 400
Week 1 Productivity 2.628
Input $42,768
Output $131, 000
Week 2 Productivity 2.628
Input $49,845
Output $109, 200
Week 3 Productivity 2.745
Input $39,781
Output $98,100
Week 4 Productivity 2.745
Input $35, 738
2.745 2.628
100% 4.45%
2.628
Improved 4.45% - noticeable in Week 3
b. Has labor productivity changed? Use the labor productivity ratio to support your
answer.
Labor-hours of input: Labor $50/hour
Labor costs
Week 1 = $12,735/$50 = 254.7
Week 2 = $14,842/$50 = 296.84
Week 3 = $10,603/$50 = 212.06
Week 4 = $9,526/$50 = 190.52
Productivity ratio:
Output
Labor Productivity
Input
Output 1124
Week 1 = Labor Productivity 4.4130 / hour
Input 254.7 hours
Output 1310
Week 2 = Labor Productivity 4.413/ hour
Input 296.84 hours
Output 1092
Week 3 = Labor Productivity 5.1495 / hour
Input 212.06 hours
Output 981
Week 4 = Labor Productivity 5.1491/ hour
Input 190.52 hours
5.1491 4.4130
100% 16.68%
4.4130
Improved 16.68%
Copyright © 2025 Pearson Education, Inc.
, Using Operations to Create Value CHAPTER 1 1-5
5. Alyssa’s Custom Cakes
a.
5 Birthday cakes x $50 per cake = $250
2 Wedding cakes x $150 per cake = $300
3 Specialty cakes x $100 per cake = $300
Total monthly revenue = $850
Multifactor productivity ratio = output/input
1.25 = $850/x
Solve for x = $850/1.25 = $680
Total costs = $680
Average cost per cake = $680/10 = $68/cake
b. Labor productivity
Birthday cake = $50/ 1.5 hours = $33.30/hour
Wedding Cake = $150/ 4 hours = $37.50/hour
Specialty Cake = $100/1 hours = $100/hour
c. Based on labor productivity, Alyssa should try to sell specialty cakes the most.
d. Yes, Alyssa should stop selling birthday cakes. Based on answer a, she loses $68
- $50 = $18 every time she sells a birthday cake.
6. Big Black Bird Company
The Big Black Bird Company problem is based on a product made by Raven
Industries. None of the numbers are representative of actual costs or volume.
a. Multifactor Productivity
Original Situation:
Value of output: 2500 uniforms $200 $500,000
Value of input: 2500 uniforms $120 $300,000
Productivity ratio:
Ouput $500,000
Productivity 167
.
Input $300,000
Overtime Situation:
Value of output: 4000 uniforms $200 $800,000
Value of input: 4000 uniforms $144 $576,000
Productivity ratio:
Ouput $800,000
Productivity 139
.
Input $576,000
Productivity decreases by:
1.67 1.39
100% 16.77%
1.67
b. Labor Productivity
Original Situation:
Value of output (from part a) is: $500,000
Labor-hours of input: 70 40 hours 30 40 hours 4000 hours
Copyright © 2025 Pearson Education, Inc.
,1-6 Using Operations to Create Value CHAPTER 1
Labor productivity $500,000 4000 hours $125 hour
Overtime Situation:
Value of output (from part a) is: $800,000
Labor-hours of input: 7 0 7 2 h o u rs 3 0 7 2 h o urs 7 2 0 0 h o u rs
Labor productivity =$800, hours = $111.11/hours
Labor productivity decreases by:
(125/111.11) / 125 x 100% = 11.1%
c. Gross profits
Original Situation: $500,000 $300,000 $200,000
Overtime Situation: $800,000 $576,000 $224,000
Weekly profits increased.
7. Mack’s Guitar Company
a. Labor productivity = output/input
Output = 100 guitars x 80% completion rate x price/guitar
= 80 guitars/ month x $250/guitar = $20,000
Input
Labor = 10/hours per guitar x 100 guitars = 1000 hours
Labor productivity is $20,000/1000 = $20/hour
Multifactor productivity ratio = output/input
Output = 100 guitars x 80% completion rate x price/guitar
= 80 guitars/ month x $250/guitar = $20,000
Input
Labor = $10/hour x 10/hours per guitar x 100 guitars = $10, 000
Material = $40/guitar x 100 guitars = $4, 000
Overhead = $4,000
Multifactor productivity ratio = $20, 000/$18, 000 = 1.11
b. Option 1. Increase sales price by 10%
Output = 100 guitars x 80% completion rate x ($250 x 1.1) = $22,000
Input
Labor is same as in part (a) = $10,000
Material is same as in part (a) = $4,000
Overhead is same as in part (a) = $4,000
Multifactor productivity ratio = $22,000/$18,000 = 1.22
Option 2. Improve Quality
Output = 100 guitars x 90% completion rate x $250/guitar = $22,500
Input
Labor is same as in part (a) = $10,000
Material is same as in part (a) = $4,000
Overhead is same as in part (a) = $4,000
Multifactor productivity ratio = $22,500/$18,000 = 1.25
Option 3. Reduce costs by 10%
Output = same as in part (a) = $20,000
Input
Copyright © 2025 Pearson Education, Inc.
, Using Operations to Create Value CHAPTER 1 1-7
Reduce costs by 10% yields 90% of the input costs from part (a).
= $18,000 x 0.90 = $16,200
Multifactor productivity ratio = $20,000/$16,200 = 1.23
Darren should choose Option 2 and improve quality because it yields the greatest
improvement in multifactor productivity.
8. Mariah Enterprises Productivity of Process Alpha and Process Beta
Excel used to perform all calculations
Process
Alpha Beta
Total Value of Output $17,150 $16,450
Total Cost of Labor $2,600 $3,000
Total Cost of Materials $5,500 $4,900
Total Cost of Overhead $6,000 $5,000
Labor Productivity $6.596 $5.483 unit $/ labor $
Multifactor Productivity $1.216 $1.275 unit $/ total $
Process Alpha has 20% [(6.596-5.483)/5.483] higher labor productivity.
Process Beta has 5% [(1.275-1.216)/1.216] higher multifactor productivity.
While process Beta generates more dollars of output per dollar invested in input,
it doesn’t use labor as efficiently as process Alpha.
9. Morning Brew Coffee Shop
Excel used to perform all calculations
a. Current labor and multifactor productivity
Regular Vienna
Currently Cappuccino total
Coffee coffee
Output in dollars $700.00 $300.00 $600.00 $1,600.00
Labor cost $320.00
Material cost $175.00 $75.00 $187.50 $437.50
Equipment cost $125.00
Overhead cost $225.00
Profit $492.50
Copyright © 2025 Pearson Education, Inc.
