OSC Exam 1 with all Correct & 100% Verified Answers |
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WIP (work-in-progress) is: ✔Correct Answer-The name for the inputs that are not yet outputs
What is the output for a law firm? ✔Correct Answer-A case that is resolved in some way
(maybe it was dropped, or settlement achieve, or a court decision rendered)
What is the input for a hospital? ✔Correct Answer-A sick or injured patient
What resource(s) does an airline use to create their output? ✔Correct Answer-All of them,
passengers, pilots, airports
Let's say a restaurant sells a meal for $20;spends 20% ($4) for the food ingredients;spends 40%
($8) for the labor directly involved in cooking and serving one meal;gets 60 customers per each
of 30 days per month; andincurs monthly fixed costs of $12,000.
What is the restaurant's monthly profit? ✔Correct Answer-2,400, variable cost is ($4 + $8)
(60/day) (30 days/mo) = $21,600. total sales is ($20/dish) (60 dishes/day) (30 days/mo) =
$36,000/mo.Profit = $36,000 - $21,600 - $12,000 = $2,400
Starting with the base case below, let's say a restaurant takes out non-value-adding process
steps and thereby cuts direct labor time by 5%. (Coincidentally, workers are happier, however
we don't factor that effect into our analysis here.) By how much does it increase its absolute
profit? Same base case as question 5 ✔Correct Answer-Total sales = ($20/dish) (60
dishes/day) (30 days/mo) = $36,000/mo.Variable cost = [$4 + (0.95 x $8)] (60/day) (30 days/mo)
= $20,880.Profit = $36,000 - $20,880 - $12,000 = $3,120.
% increase in profit = ($3,120 - $2,400) / $2,400 = 30%
Starting with the base case below, let's say a restaurant implements a lean op's initiative such
that it is able to increase capacity (the maximum throughput rate) by 5% without an increase in
fixed costs (that is, variable cost per meal does not change but the number of meals sold
increases by 5% but with no increase in fixed costs). Assuming the demand exists to take
advantage of the 5% capacity boost, by how much does the restaurant increase its absolute
profit? same base case ✔Correct Answer-answer= 30%. The new revenue is $20 x (1.05 x
1800) = $37,800 while the new variable cost is $12 x (1.05 x 1800) = $22,680 and fixed costs
remain at $12,000 yielding total costs of $34,680 and profit of $$3120 which is an increase of
$720 which is 30% of $2400.
Starting with the base case below, let's say a restaurant improves its inventory management
practices and thereby reduces the variable cost of ingredients by 5%. By how much does it
increase its absolute profit? ✔Correct Answer-answer 15%, Total sales = ($20/dish) (60
dishes/day) (30 days/mo) = $36,000/mo.
, Variable cost = [(0.95 x $4) + $8] (60/day) (30 days/mo) = $21,240.
Profit = $36,000 - $21,240 - $12,000 = $2,760.
% increase in profit = ($2,760 - $2,400) / $2,400 = 15%
Starting with the base case below, let's say a restaurant executes a successful marketing
campaign and thereby increases its demand by 5%. The higher demand necessitates renting
additional restaurant space and adding equipment and personnel, such that all costs go up by
the corresponding 5% (both fixed costs and variable costs go up by 5%). Under these
assumptions, does the demand increase yield the "multiplier effect" on profit similar to what we
found for the 5% operational improvement? ✔Correct Answer-No, the marketing campaign
yielding a 5% increase in demand yields the same 5% increase in profit.
IDEO is a firm that designs products. (If you haven't already seen it, below is a link to a video
describing how they went about designing a new shopping cart.) Here is a quote from IDEO's
founder, Dave Kelley:
"The point is, we're not expects in any given area. We're expects on the process of how you
design stuff. So we don't care if you give us a toothbrush, a tractor, a space shuttle, a chair, it's
all the same to us." What does Dave Kelley mean by this? ✔Correct Answer-They have found
what they believe to be the best set of process steps for designing new products, and they
methodically follow those process steps regardless of the type of product they are designing.
In the article "The Cost Conundrum," what was the conundrum? ✔Correct Answer-Healthcare
costs across two seemingly similar cities were vastly different
Which of the following was the key explanation for the conundrum in "The Cost Conundrum"
article? ✔Correct Answer-Lack of incentive compatibility across the supply chain.
What is the cause of Double Marginalization? ✔Correct Answer-Myopic profit maximization
Which of these is associated in the TIRP article with a lack of transparency in the supply chain?
✔Correct Answer-Bullwhip effect (e.g., swings in diaper demand at P&G)
In going through life, you will continually face "bottlenecks" that constrain you from achieving
your most-aggressive goals (whatever those goals may be). If you were to model good
operations practice, how would you approach this issue? ✔Correct Answer-All of the answers,
Recognize that when you alleviate a bottleneck, another will likely (invariably?) materialize.
Find (identify) the bottleneck. Figure out how how to alleviate the bottleneck.
In a system with two subsequent stages, stage 1 has two processors, each with a capacity of 10
units per hour, and stage 2 has three processors, each with a capacity of 7 units per hour. Which
of these two stages is the bottleneck? ✔Correct Answer-Stage 1
What happens in a system in which the job arrival rate (R) exceeds the system capacity (m c)?
(For example, a Professor sometimes comes across a student who represents such a system: the
Latest Version |Already Graded A+
WIP (work-in-progress) is: ✔Correct Answer-The name for the inputs that are not yet outputs
What is the output for a law firm? ✔Correct Answer-A case that is resolved in some way
(maybe it was dropped, or settlement achieve, or a court decision rendered)
What is the input for a hospital? ✔Correct Answer-A sick or injured patient
What resource(s) does an airline use to create their output? ✔Correct Answer-All of them,
passengers, pilots, airports
Let's say a restaurant sells a meal for $20;spends 20% ($4) for the food ingredients;spends 40%
($8) for the labor directly involved in cooking and serving one meal;gets 60 customers per each
of 30 days per month; andincurs monthly fixed costs of $12,000.
What is the restaurant's monthly profit? ✔Correct Answer-2,400, variable cost is ($4 + $8)
(60/day) (30 days/mo) = $21,600. total sales is ($20/dish) (60 dishes/day) (30 days/mo) =
$36,000/mo.Profit = $36,000 - $21,600 - $12,000 = $2,400
Starting with the base case below, let's say a restaurant takes out non-value-adding process
steps and thereby cuts direct labor time by 5%. (Coincidentally, workers are happier, however
we don't factor that effect into our analysis here.) By how much does it increase its absolute
profit? Same base case as question 5 ✔Correct Answer-Total sales = ($20/dish) (60
dishes/day) (30 days/mo) = $36,000/mo.Variable cost = [$4 + (0.95 x $8)] (60/day) (30 days/mo)
= $20,880.Profit = $36,000 - $20,880 - $12,000 = $3,120.
% increase in profit = ($3,120 - $2,400) / $2,400 = 30%
Starting with the base case below, let's say a restaurant implements a lean op's initiative such
that it is able to increase capacity (the maximum throughput rate) by 5% without an increase in
fixed costs (that is, variable cost per meal does not change but the number of meals sold
increases by 5% but with no increase in fixed costs). Assuming the demand exists to take
advantage of the 5% capacity boost, by how much does the restaurant increase its absolute
profit? same base case ✔Correct Answer-answer= 30%. The new revenue is $20 x (1.05 x
1800) = $37,800 while the new variable cost is $12 x (1.05 x 1800) = $22,680 and fixed costs
remain at $12,000 yielding total costs of $34,680 and profit of $$3120 which is an increase of
$720 which is 30% of $2400.
Starting with the base case below, let's say a restaurant improves its inventory management
practices and thereby reduces the variable cost of ingredients by 5%. By how much does it
increase its absolute profit? ✔Correct Answer-answer 15%, Total sales = ($20/dish) (60
dishes/day) (30 days/mo) = $36,000/mo.
, Variable cost = [(0.95 x $4) + $8] (60/day) (30 days/mo) = $21,240.
Profit = $36,000 - $21,240 - $12,000 = $2,760.
% increase in profit = ($2,760 - $2,400) / $2,400 = 15%
Starting with the base case below, let's say a restaurant executes a successful marketing
campaign and thereby increases its demand by 5%. The higher demand necessitates renting
additional restaurant space and adding equipment and personnel, such that all costs go up by
the corresponding 5% (both fixed costs and variable costs go up by 5%). Under these
assumptions, does the demand increase yield the "multiplier effect" on profit similar to what we
found for the 5% operational improvement? ✔Correct Answer-No, the marketing campaign
yielding a 5% increase in demand yields the same 5% increase in profit.
IDEO is a firm that designs products. (If you haven't already seen it, below is a link to a video
describing how they went about designing a new shopping cart.) Here is a quote from IDEO's
founder, Dave Kelley:
"The point is, we're not expects in any given area. We're expects on the process of how you
design stuff. So we don't care if you give us a toothbrush, a tractor, a space shuttle, a chair, it's
all the same to us." What does Dave Kelley mean by this? ✔Correct Answer-They have found
what they believe to be the best set of process steps for designing new products, and they
methodically follow those process steps regardless of the type of product they are designing.
In the article "The Cost Conundrum," what was the conundrum? ✔Correct Answer-Healthcare
costs across two seemingly similar cities were vastly different
Which of the following was the key explanation for the conundrum in "The Cost Conundrum"
article? ✔Correct Answer-Lack of incentive compatibility across the supply chain.
What is the cause of Double Marginalization? ✔Correct Answer-Myopic profit maximization
Which of these is associated in the TIRP article with a lack of transparency in the supply chain?
✔Correct Answer-Bullwhip effect (e.g., swings in diaper demand at P&G)
In going through life, you will continually face "bottlenecks" that constrain you from achieving
your most-aggressive goals (whatever those goals may be). If you were to model good
operations practice, how would you approach this issue? ✔Correct Answer-All of the answers,
Recognize that when you alleviate a bottleneck, another will likely (invariably?) materialize.
Find (identify) the bottleneck. Figure out how how to alleviate the bottleneck.
In a system with two subsequent stages, stage 1 has two processors, each with a capacity of 10
units per hour, and stage 2 has three processors, each with a capacity of 7 units per hour. Which
of these two stages is the bottleneck? ✔Correct Answer-Stage 1
What happens in a system in which the job arrival rate (R) exceeds the system capacity (m c)?
(For example, a Professor sometimes comes across a student who represents such a system: the
