,Solution manual for Operations and Supply Chain
Management , 3rd Edition David A. Collier
Notes
1- The file is chapter after chapter.
2- We have shown you 10 or five pages.
3- The file contains all Appendix and Excel
sheet if it exists.
4- We have all what you need, we make
update at every time. There are many new
editions waiting you.
5- If you think you purchased the wrong file
You can contact us at every time, we can
replace it with true one.
Our email:
, Solution and Answer Guide: Collier/Evans, Operations and Supply Chain Management 2024, 9780357901649;
Chapter 1: Operations Management and Value Chains
Solution and Answer Guide
COLLIER/EVANS, OPERATIONS AND S UPPLY CHAIN MANAGEMENT 2024, 9780357901649;
CHAPTER 1: OPERATIONS MANAGEMENT AND VALUE CHAINS
TABLE OF CONTENTS
Review Questions ..............................................................................................................................1
Discussion Questions and Experiental Activities ..................................................................................7
Cases ............................................................................................................................................... 19
Teaching Note: Walker Digital Music Services ........................................................................................ 19
Teaching Note: Mickey Mouse: To Talk or Not? ..................................................................................... 24
Teaching Note: Zappos, A Subsidiary of Amazon ................................................................................... 25
Teaching Note: Diamond Global Supply Chain—Hudson Jewelers ........................................................ 31
REVIEW QUESTIONS
1. Explain the concept and importance of operations management.
Solution
Creating and delivering goods and services to customers depends on an effective system of linked
facilities and processes, and the ability to manage them effectively around the world. Operations
management (OM) is the science and art of ensuring that goods and services are created and delivered
successfully to customers. OM includes the design of goods, services, and the processes that create them;
the day-to-day management of those processes; and the continual improvement of these goods, services,
and processes. Three issues are at the core of operations management: efficiency, cost, and quality.
2. Describe how operations management is used in work throughout business organizations.
Solution
Many people who are considered “operations managers” have titles such as chief operating officer, hotel
or restaurant manager, vice president of manufacturing, customer service manager, plant manager, field
service manager, or supply chain manager. The concepts and methods of OM can be used in any job,
regardless of the functional area of business or industry, to better create value for internal customers
(within the organization) and for external customers (outside the organization). OM principles are used in
accounting, human resources management, legal work, financial activities, marketing, environmental
management, and every type of service activity.
3. What are Industry 4.0 and Service 4.0? Give an example in manufacturing and health care or other service
industries.
Solution
© 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 1
website, in whole or in part.
, Solution and Answer Guide: Collier/Evans, Operations and Supply Chain Management 2024, 9780357901649;
Chapter 1: Operations Management and Value Chains
Industry 4.0 is the information-intensive transformation of manufacturing in a connected environment of
big data, people, processes, services, systems, and IoT-enabled industrial assets. In manufacturing,
autonomous robots can quickly pick products at a warehouse to reduce costs and optimize floor space.
Other manufacturing examples are 3D printing, computer-aided design software and three-dimensional
displays of the part or product, and a multitude of welding, materials moving, and assembly robots tied to
an automated or semi-automated control system. Smart appliances tied electronically to home comfort
systems, automated truck routing and dispatching systems are other examples.
Service 4.0 is applying digitization to services that create higher productivity, innovation, and value chain
advantages in service industries. Service 4.0 devices include cell phones, automated banking machines, CT
and MRI scanners, electronic hotel keys and security systems, home security systems, surgical robots
assistants, online banking, digital health care systems, electronic restaurant menus, and so on.
4. State three of the key activities that operations managers perform and briefly explain them.
Solution
Students should describe three of the following in their own words.
• Forecasting: Predict the future demand for raw materials, finished goods, and services.
• Supply chain management: manage the flow of materials, information, people, and money from
suppliers to customers.
• Facility layout and design: determine the best configuration of machines, storage, offices, and
departments to provide the highest levels of efficiency and customer satisfaction.
• Technology selection: use technology to improve productivity and respond faster to customers.
• Quality management: ensure that goods, services, and processes will meet customer expectations
and requirements.
• Purchasing: coordinate the acquisition of materials, supplies, and services.
• Resource and capacity management: ensure that the right amount of resources (labor, equipment,
materials, and information) is available when needed.
• Process design: select the right equipment, information, and work methods to produce high-quality
goods and services efficiently.
• Job design: decide the best way to assign people to work tasks and job responsibilities.
• Service encounter design: determine the best types of interactions between service providers and
customers, and how to recover from service upsets.
• Scheduling: determine when resources such as employees and equipment should be assigned to
work.
• Sustainability: decide the best way to manage the risks associated with products and operations to
preserve resources for future generations.
5. Define a good and a service.
Solution
© 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 2
website, in whole or in part.
, Solution and Answer Guide: Collier/Evans, Operations and Supply Chain Management 2024, 9780357901649;
Chapter 1: Operations Management and Value Chains
Companies design, produce, and deliver a wide variety of goods and services that consumers purchase. A
good is a physical product that you can see, touch, or possibly consume. A service is any primary or
complementary activity that does not directly produce a physical product. See the key terms below for
the difference between durable and nondurable goods.
6. Explain how goods differ from services.
Solution
See Section 1-3:
• Goods are tangible, services are intangible.
• Customers participate in many service processes, activities, and transactions.
• Service demand is normally more difficult to predict than for goods due to weather, human behavior,
etc.
• Services cannot be stored as inventory. Service capacity is the substitute for goods inventory.
• Services require service management skills whereas the production of physical goods requires only
backroom skills (not front room, high customer contact skills).
• Service facilities are typically close to the customer. Convenience has value.
• Patents do not protect services.
7. Define the concept of value.
Solution
See Section 1-4. The underlying purpose of every organization is to provide value to its customers and
stakeholders. The decision to purchase a good or service or a customer benefit package is based on an
assessment by the customer of the perceived benefits in relation to its price. The customer’s cumulative
judgment of the perceived benefits leads to either satisfaction or dissatisfaction. One of the simplest
functional forms of value is:
Value = Perceived benefits/Price (cost) to the customer
© 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 3
website, in whole or in part.
, Solution and Answer Guide: Collier/Evans, Operations and Supply Chain Management 2024, 9780357901649;
Chapter 1: Operations Management and Value Chains
8. How can an organization increase value to its customers?
Solution
See Section 1-4. To increase value, an organization must
(a) increase perceived benefits while holding price or cost constant;
(b) increase perceived benefits while reducing price or cost; or
(c) decrease price or cost while holding perceived benefits constant.
In addition, proportional increases or decreases in perceived benefits as well as price result in no net
change in value. Management must determine how to maximize value by designing processes and
systems that create and deliver the appropriate goods and services customers want to use, pay for, and
experience.
9. Describe a customer benefit package.
Solution
“Bundling” goods, services, and digital content in a certain way to provide value to customers not only
enhances what customers receive but can also differentiate the product from competitors. A customer
benefit package consists of a primary good or service coupled with peripheral goods and/or services, and
sometimes variants.
10. What is a peripheral good or service? Provide some examples.
Solution
Peripheral goods or services are those that are not essential to the primary good or service but enhance it.
Examples: auto leasing package, designer checks, fast delivery service, airline baggage service and in-cabin
food service, hotel exercise room, and so on.
11. Define “biztainment” and provide an example.
Solution
Biztainment is the practice of adding entertainment content to a bundle of goods and services in order to
gain competitive advantage. Student will find examples everywhere.
• Manufacturing—old and new factory tours, showrooms, customer training and education courses,
virtual tours, short films on how things are made, driving schools, history lessons on the design and
development of a physical good
• Retail— on-line shopping with entertaining graphics (emoji), simulators, product demonstrations,
climbing walls, music, games, contests, holiday decorations and walk-around characters, blogs,
interactive store designs, aquariums, movie theaters, makeovers
• Restaurants—toys, themes, electronic menus, contests, games, characters, playgrounds, live music
• Agriculture—pick-your-own food, mazes, make-your-own wine, grape-stomping, petting zoos, farm
tours
• Lodging—kids’ spas, health clubs, casinos, cable television, arcades, massage, free on-line games, arts
and crafts classes, pools, family games, wildlife, miniature golf
© 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 4
website, in whole or in part.
, Solution and Answer Guide: Collier/Evans, Operations and Supply Chain Management 2024, 9780357901649;
Chapter 1: Operations Management and Value Chains
• Telecommunications—text and video messaging with funny graphics (emoji), music and TV
downloads, cool ring tones, designer phones, cell phone apps
12. Explain the difference between value chains and supply chains.
Solution
Many organizations use the terms “value chain” and “supply chain” interchangeably; however, a value
chain is broader in scope than a supply chain and is easier to apply to service-providing organizations as
well as to goods producing firms. A value chain is a network of facilities and processes that describes the
flow of materials, finished goods, services, information, and financial transactions from suppliers, through
the facilities and processes that create goods and services, and those that deliver them to the customer.
Value chains involve all major functions in an organization. This includes not only operations but also
purchasing, marketing and sales, human resource management, finance and accounting, information
systems and technology, distribution, and service and support. A supply chain is the portion of the value
chain that focuses primarily on the physical movement of goods and materials, and supporting flows of
information and financial transactions through the supply, production, and distribution processes.
13. Define and explain the three major types of processes in business?
Solution
These are:
1. Value-creation processes, focused on producing or delivering an organization’s primary goods or
services that create value for customers, such as filling and shipping a customer’s order, assembling a
dishwasher, or providing a home mortgage.
2. Support processes, such as purchasing materials and supplies used in manufacturing, managing
inventory, installation, health benefits, technology acquisition, day care on-site services, and research
and development.
3. General management processes, including accounting and information systems, human resource
management, and marketing.
14. What is a distribution center?
Solution
A distribution centers (DC) is a warehouse that acts as an intermediary between factories and customers,
shipping directly to customers or to retail stores where products are made available to customers.
15. Contrast the three different frameworks for describing value chains.
Solution
1. An input-output framework: Inputs are transformed into value-added goods and services through
processes that are supported by such resources as equipment and facilities, labor, money, and
information.
2. A pre- and post-production services framework: focuses on gaining customers (pre-) and keeping
customers (post-).
3. A hierarchical supply chain perspective: A goods-producing supply chain generally consists of
suppliers, manufacturers, distributors, retailers, and customers arranged in a hierarchical structure.
© 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 5
website, in whole or in part.
, Solution and Answer Guide: Collier/Evans, Operations and Supply Chain Management 2024, 9780357901649;
Chapter 1: Operations Management and Value Chains
16. Define sustainability and explain its three dimensions.
Solution
Sustainability refers to an organization’s ability to strategically address current business needs and
successfully develop a long-term strategy that embraces opportunities and manages risk for all products,
systems, supply chains, and processes to preserve resources for future generations.
Environmental Sustainability
• Waste management: Reduce waste and manage recycling efforts
• Energy optimization: Reduce consumption during peak energy demand times
• Transportation optimization: Design efficient vehicles and routes to save fuel
• Technology upgrades: Develop improvements to save energy and clean and reuse water in
manufacturing processes
• Air quality: Reduce greenhouse gas emissions
• Sustainable product design: Design goods whose parts can be recycled or safely disposed of
Social Sustainability
• Product safety: Ensure consumer safety in using goods and services
• Workforce health and safety: Ensure a healthy and safe work environment
• Ethics and governance: Ensure compliance with legal and regulatory requirements and transparency
in management decisions
• Community: Improve the quality of life through industry–community partnerships
Economic Sustainability
• Performance excellence: Build a high-performing organization with a capable leadership and
workforce
• Financial management: Make sound financial plans to ensure long-term organizational survival
• Resource management: Acquire and manage all resources effectively and efficiently
© 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 6
website, in whole or in part.
, Solution and Answer Guide: Collier/Evans, Operations and Supply Chain Management 2024, 9780357901649;
Chapter 1: Operations Management and Value Chains
17. What percent of U.S. economy jobs are in the service sector?
Solution
According to Exhibit 1.13 all of goods producing (manufacturing, agriculture, forestry, fishing, hunting) are
about 20% of U.S. jobs while the U.S. service sector represents 80% of all jobs. Does this surprise your
students? Ask them, what are some service sector industries? Where does their family and friends work?
Service industries include transportation, local, state and federal governments; education, retail and
wholesale trade, health care, professional services like consulting and engineering; childcare, legal
services, amusement and recreational services, hotels and lodging, finance, insurance, and real estate,
communications, public utilities, and many more. Facts on these industries may surprise the students. For
example, membership organizations represent 2% of U.S. Jobs. There are over 33,000 PACs within 100
miles of Washington, DC, for example.
18. Describe the importance of data and business analytics in operations and supply chain management?
Solution
In OM, data are used to evaluate operations performance, quality, order accuracy, customer satisfaction,
delivery, cost, environmental compliance, and many other areas of the business. Leveraging such data is
fast becoming a necessity in creating competitive advantage.
Business analytics is a process of transforming data into actions through analysis and insights in the
context of organizational decision making and problem solving. Business analytics is used to understand
past and current performance (descriptive analytics), predict the future by detecting patterns and
relationships in data (predictive analytics), and identify the best decisions (prescriptive analytics).
19. Summarize the historical development of OM.
Solution
Exhibit 1.11 offers a chronology of major themes that have changed the scope and direction of operations
management over the last half-century.
20. Select one of the following challenges facing OM: customers, technology, workforce, globalization,
sustainability, or optimizing supply chains, and explain its short- and long-term impact.
Solution
Sustainability, for example, requires both short- and long-term thinking and practices. Exhibit 1.13 lists
sustainability practices such as waste management and workforce health and safety. Purchasing
managers must evaluate suppliers on environmental, social and economic sustainability goals and daily
practices. Regardless of what challenge a student may select, operations and logistic managers are
responsible for many key strategic and tactical decisions concerning these six challenges.
DISCUSSION QUESTIONS AND EXPERIENTAL ACTIVITIES
21. Describe a customer experience you have personally encountered where the good or service or both were
unsatisfactory (e.g., defective product, errors, mistakes, poor service, service upsets, etc.). How might the
organization have handled it better, and how could operations management have helped?
Solution
© 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 7
website, in whole or in part.
, Solution and Answer Guide: Collier/Evans, Operations and Supply Chain Management 2024, 9780357901649;
Chapter 1: Operations Management and Value Chains
The objective of this type of question is for the student to describe what they know and you, the
instructor; help put it into an OM context or framework. This question is also designed to help students
internalize the concept of customer satisfaction and dissatisfaction, and potential operations
management activities and decisions that can influence their experiences. For undergraduates, these
experiences focus on what they know best such as restaurants, airlines, bookstores, automobile sales or
repair, retail stores, and university processes. Graduate students may also include their work and business
experiences, and personal experiences such as home mortgages, vacations, and childcare. As the
instructor focus on the role of OM and its processes, training requirements, product and service quality,
and tie to Chapter 1 ideas.
22. Search recent articles in your local newspaper and business magazines such as Fortune, Business Week,
Fast Company, and so on and identify OM concepts and issues that are discussed. How do these fit into
the classification in the box “What Do Operations Managers Do?” in this chapter?
Solution
The objective of this question is simply to show how OM ties to company success and begin to identify key
OM topics and areas of study. Remember the students are in Chapter 1; some have no idea what OM is;
others think it’s all about manufacturing; and others think it has nothing to do with other functional areas
or their career; so it’s time to sell OM! OM applies to ALL functional areas and types of organizations!
23. Interview a manager at a local company about the work he or she performs. Identify (a) the aspects of the
job that relate to OM (like the OM activities in the box on page 3, “What Do Operations Managers Do?”)
and (b) examples of value-creation, support, and general management processes.
Solution
Some of the key activities that operations managers perform include
• Forecasting: Predict the future demand for raw materials, finished goods, and services.
• Supply Chain Management: Manage the flow of materials, information, people, and money from
suppliers to customers.
• Facility Layout and Design: Determine the best configuration of machines, storage, offices, and
departments to provide the highest levels of efficiency and customer satisfaction.
• Technology Selection: Use technology to improve productivity and respond faster to customers.
• Quality Management: Ensure that goods, services, and processes will meet customer expectations
and requirements.
• Purchasing: Coordinate the acquisition of materials, supplies, and services.
• Resource and Capacity Management: Ensure that the right amount of resources (labor, equipment,
materials, and information) is available when they are needed.
• Process Design: Select the right equipment, information, and work methods to produce high quality
goods and services efficiently.
• Job Design: Decide the best way to assign people to work tasks and job responsibilities.
• Service Encounter Design: Determine the best types of interactions between service providers and
customers, and how to recover from service upsets.
© 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 8
website, in whole or in part.
Management , 3rd Edition David A. Collier
Notes
1- The file is chapter after chapter.
2- We have shown you 10 or five pages.
3- The file contains all Appendix and Excel
sheet if it exists.
4- We have all what you need, we make
update at every time. There are many new
editions waiting you.
5- If you think you purchased the wrong file
You can contact us at every time, we can
replace it with true one.
Our email:
, Solution and Answer Guide: Collier/Evans, Operations and Supply Chain Management 2024, 9780357901649;
Chapter 1: Operations Management and Value Chains
Solution and Answer Guide
COLLIER/EVANS, OPERATIONS AND S UPPLY CHAIN MANAGEMENT 2024, 9780357901649;
CHAPTER 1: OPERATIONS MANAGEMENT AND VALUE CHAINS
TABLE OF CONTENTS
Review Questions ..............................................................................................................................1
Discussion Questions and Experiental Activities ..................................................................................7
Cases ............................................................................................................................................... 19
Teaching Note: Walker Digital Music Services ........................................................................................ 19
Teaching Note: Mickey Mouse: To Talk or Not? ..................................................................................... 24
Teaching Note: Zappos, A Subsidiary of Amazon ................................................................................... 25
Teaching Note: Diamond Global Supply Chain—Hudson Jewelers ........................................................ 31
REVIEW QUESTIONS
1. Explain the concept and importance of operations management.
Solution
Creating and delivering goods and services to customers depends on an effective system of linked
facilities and processes, and the ability to manage them effectively around the world. Operations
management (OM) is the science and art of ensuring that goods and services are created and delivered
successfully to customers. OM includes the design of goods, services, and the processes that create them;
the day-to-day management of those processes; and the continual improvement of these goods, services,
and processes. Three issues are at the core of operations management: efficiency, cost, and quality.
2. Describe how operations management is used in work throughout business organizations.
Solution
Many people who are considered “operations managers” have titles such as chief operating officer, hotel
or restaurant manager, vice president of manufacturing, customer service manager, plant manager, field
service manager, or supply chain manager. The concepts and methods of OM can be used in any job,
regardless of the functional area of business or industry, to better create value for internal customers
(within the organization) and for external customers (outside the organization). OM principles are used in
accounting, human resources management, legal work, financial activities, marketing, environmental
management, and every type of service activity.
3. What are Industry 4.0 and Service 4.0? Give an example in manufacturing and health care or other service
industries.
Solution
© 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 1
website, in whole or in part.
, Solution and Answer Guide: Collier/Evans, Operations and Supply Chain Management 2024, 9780357901649;
Chapter 1: Operations Management and Value Chains
Industry 4.0 is the information-intensive transformation of manufacturing in a connected environment of
big data, people, processes, services, systems, and IoT-enabled industrial assets. In manufacturing,
autonomous robots can quickly pick products at a warehouse to reduce costs and optimize floor space.
Other manufacturing examples are 3D printing, computer-aided design software and three-dimensional
displays of the part or product, and a multitude of welding, materials moving, and assembly robots tied to
an automated or semi-automated control system. Smart appliances tied electronically to home comfort
systems, automated truck routing and dispatching systems are other examples.
Service 4.0 is applying digitization to services that create higher productivity, innovation, and value chain
advantages in service industries. Service 4.0 devices include cell phones, automated banking machines, CT
and MRI scanners, electronic hotel keys and security systems, home security systems, surgical robots
assistants, online banking, digital health care systems, electronic restaurant menus, and so on.
4. State three of the key activities that operations managers perform and briefly explain them.
Solution
Students should describe three of the following in their own words.
• Forecasting: Predict the future demand for raw materials, finished goods, and services.
• Supply chain management: manage the flow of materials, information, people, and money from
suppliers to customers.
• Facility layout and design: determine the best configuration of machines, storage, offices, and
departments to provide the highest levels of efficiency and customer satisfaction.
• Technology selection: use technology to improve productivity and respond faster to customers.
• Quality management: ensure that goods, services, and processes will meet customer expectations
and requirements.
• Purchasing: coordinate the acquisition of materials, supplies, and services.
• Resource and capacity management: ensure that the right amount of resources (labor, equipment,
materials, and information) is available when needed.
• Process design: select the right equipment, information, and work methods to produce high-quality
goods and services efficiently.
• Job design: decide the best way to assign people to work tasks and job responsibilities.
• Service encounter design: determine the best types of interactions between service providers and
customers, and how to recover from service upsets.
• Scheduling: determine when resources such as employees and equipment should be assigned to
work.
• Sustainability: decide the best way to manage the risks associated with products and operations to
preserve resources for future generations.
5. Define a good and a service.
Solution
© 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 2
website, in whole or in part.
, Solution and Answer Guide: Collier/Evans, Operations and Supply Chain Management 2024, 9780357901649;
Chapter 1: Operations Management and Value Chains
Companies design, produce, and deliver a wide variety of goods and services that consumers purchase. A
good is a physical product that you can see, touch, or possibly consume. A service is any primary or
complementary activity that does not directly produce a physical product. See the key terms below for
the difference between durable and nondurable goods.
6. Explain how goods differ from services.
Solution
See Section 1-3:
• Goods are tangible, services are intangible.
• Customers participate in many service processes, activities, and transactions.
• Service demand is normally more difficult to predict than for goods due to weather, human behavior,
etc.
• Services cannot be stored as inventory. Service capacity is the substitute for goods inventory.
• Services require service management skills whereas the production of physical goods requires only
backroom skills (not front room, high customer contact skills).
• Service facilities are typically close to the customer. Convenience has value.
• Patents do not protect services.
7. Define the concept of value.
Solution
See Section 1-4. The underlying purpose of every organization is to provide value to its customers and
stakeholders. The decision to purchase a good or service or a customer benefit package is based on an
assessment by the customer of the perceived benefits in relation to its price. The customer’s cumulative
judgment of the perceived benefits leads to either satisfaction or dissatisfaction. One of the simplest
functional forms of value is:
Value = Perceived benefits/Price (cost) to the customer
© 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 3
website, in whole or in part.
, Solution and Answer Guide: Collier/Evans, Operations and Supply Chain Management 2024, 9780357901649;
Chapter 1: Operations Management and Value Chains
8. How can an organization increase value to its customers?
Solution
See Section 1-4. To increase value, an organization must
(a) increase perceived benefits while holding price or cost constant;
(b) increase perceived benefits while reducing price or cost; or
(c) decrease price or cost while holding perceived benefits constant.
In addition, proportional increases or decreases in perceived benefits as well as price result in no net
change in value. Management must determine how to maximize value by designing processes and
systems that create and deliver the appropriate goods and services customers want to use, pay for, and
experience.
9. Describe a customer benefit package.
Solution
“Bundling” goods, services, and digital content in a certain way to provide value to customers not only
enhances what customers receive but can also differentiate the product from competitors. A customer
benefit package consists of a primary good or service coupled with peripheral goods and/or services, and
sometimes variants.
10. What is a peripheral good or service? Provide some examples.
Solution
Peripheral goods or services are those that are not essential to the primary good or service but enhance it.
Examples: auto leasing package, designer checks, fast delivery service, airline baggage service and in-cabin
food service, hotel exercise room, and so on.
11. Define “biztainment” and provide an example.
Solution
Biztainment is the practice of adding entertainment content to a bundle of goods and services in order to
gain competitive advantage. Student will find examples everywhere.
• Manufacturing—old and new factory tours, showrooms, customer training and education courses,
virtual tours, short films on how things are made, driving schools, history lessons on the design and
development of a physical good
• Retail— on-line shopping with entertaining graphics (emoji), simulators, product demonstrations,
climbing walls, music, games, contests, holiday decorations and walk-around characters, blogs,
interactive store designs, aquariums, movie theaters, makeovers
• Restaurants—toys, themes, electronic menus, contests, games, characters, playgrounds, live music
• Agriculture—pick-your-own food, mazes, make-your-own wine, grape-stomping, petting zoos, farm
tours
• Lodging—kids’ spas, health clubs, casinos, cable television, arcades, massage, free on-line games, arts
and crafts classes, pools, family games, wildlife, miniature golf
© 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 4
website, in whole or in part.
, Solution and Answer Guide: Collier/Evans, Operations and Supply Chain Management 2024, 9780357901649;
Chapter 1: Operations Management and Value Chains
• Telecommunications—text and video messaging with funny graphics (emoji), music and TV
downloads, cool ring tones, designer phones, cell phone apps
12. Explain the difference between value chains and supply chains.
Solution
Many organizations use the terms “value chain” and “supply chain” interchangeably; however, a value
chain is broader in scope than a supply chain and is easier to apply to service-providing organizations as
well as to goods producing firms. A value chain is a network of facilities and processes that describes the
flow of materials, finished goods, services, information, and financial transactions from suppliers, through
the facilities and processes that create goods and services, and those that deliver them to the customer.
Value chains involve all major functions in an organization. This includes not only operations but also
purchasing, marketing and sales, human resource management, finance and accounting, information
systems and technology, distribution, and service and support. A supply chain is the portion of the value
chain that focuses primarily on the physical movement of goods and materials, and supporting flows of
information and financial transactions through the supply, production, and distribution processes.
13. Define and explain the three major types of processes in business?
Solution
These are:
1. Value-creation processes, focused on producing or delivering an organization’s primary goods or
services that create value for customers, such as filling and shipping a customer’s order, assembling a
dishwasher, or providing a home mortgage.
2. Support processes, such as purchasing materials and supplies used in manufacturing, managing
inventory, installation, health benefits, technology acquisition, day care on-site services, and research
and development.
3. General management processes, including accounting and information systems, human resource
management, and marketing.
14. What is a distribution center?
Solution
A distribution centers (DC) is a warehouse that acts as an intermediary between factories and customers,
shipping directly to customers or to retail stores where products are made available to customers.
15. Contrast the three different frameworks for describing value chains.
Solution
1. An input-output framework: Inputs are transformed into value-added goods and services through
processes that are supported by such resources as equipment and facilities, labor, money, and
information.
2. A pre- and post-production services framework: focuses on gaining customers (pre-) and keeping
customers (post-).
3. A hierarchical supply chain perspective: A goods-producing supply chain generally consists of
suppliers, manufacturers, distributors, retailers, and customers arranged in a hierarchical structure.
© 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 5
website, in whole or in part.
, Solution and Answer Guide: Collier/Evans, Operations and Supply Chain Management 2024, 9780357901649;
Chapter 1: Operations Management and Value Chains
16. Define sustainability and explain its three dimensions.
Solution
Sustainability refers to an organization’s ability to strategically address current business needs and
successfully develop a long-term strategy that embraces opportunities and manages risk for all products,
systems, supply chains, and processes to preserve resources for future generations.
Environmental Sustainability
• Waste management: Reduce waste and manage recycling efforts
• Energy optimization: Reduce consumption during peak energy demand times
• Transportation optimization: Design efficient vehicles and routes to save fuel
• Technology upgrades: Develop improvements to save energy and clean and reuse water in
manufacturing processes
• Air quality: Reduce greenhouse gas emissions
• Sustainable product design: Design goods whose parts can be recycled or safely disposed of
Social Sustainability
• Product safety: Ensure consumer safety in using goods and services
• Workforce health and safety: Ensure a healthy and safe work environment
• Ethics and governance: Ensure compliance with legal and regulatory requirements and transparency
in management decisions
• Community: Improve the quality of life through industry–community partnerships
Economic Sustainability
• Performance excellence: Build a high-performing organization with a capable leadership and
workforce
• Financial management: Make sound financial plans to ensure long-term organizational survival
• Resource management: Acquire and manage all resources effectively and efficiently
© 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 6
website, in whole or in part.
, Solution and Answer Guide: Collier/Evans, Operations and Supply Chain Management 2024, 9780357901649;
Chapter 1: Operations Management and Value Chains
17. What percent of U.S. economy jobs are in the service sector?
Solution
According to Exhibit 1.13 all of goods producing (manufacturing, agriculture, forestry, fishing, hunting) are
about 20% of U.S. jobs while the U.S. service sector represents 80% of all jobs. Does this surprise your
students? Ask them, what are some service sector industries? Where does their family and friends work?
Service industries include transportation, local, state and federal governments; education, retail and
wholesale trade, health care, professional services like consulting and engineering; childcare, legal
services, amusement and recreational services, hotels and lodging, finance, insurance, and real estate,
communications, public utilities, and many more. Facts on these industries may surprise the students. For
example, membership organizations represent 2% of U.S. Jobs. There are over 33,000 PACs within 100
miles of Washington, DC, for example.
18. Describe the importance of data and business analytics in operations and supply chain management?
Solution
In OM, data are used to evaluate operations performance, quality, order accuracy, customer satisfaction,
delivery, cost, environmental compliance, and many other areas of the business. Leveraging such data is
fast becoming a necessity in creating competitive advantage.
Business analytics is a process of transforming data into actions through analysis and insights in the
context of organizational decision making and problem solving. Business analytics is used to understand
past and current performance (descriptive analytics), predict the future by detecting patterns and
relationships in data (predictive analytics), and identify the best decisions (prescriptive analytics).
19. Summarize the historical development of OM.
Solution
Exhibit 1.11 offers a chronology of major themes that have changed the scope and direction of operations
management over the last half-century.
20. Select one of the following challenges facing OM: customers, technology, workforce, globalization,
sustainability, or optimizing supply chains, and explain its short- and long-term impact.
Solution
Sustainability, for example, requires both short- and long-term thinking and practices. Exhibit 1.13 lists
sustainability practices such as waste management and workforce health and safety. Purchasing
managers must evaluate suppliers on environmental, social and economic sustainability goals and daily
practices. Regardless of what challenge a student may select, operations and logistic managers are
responsible for many key strategic and tactical decisions concerning these six challenges.
DISCUSSION QUESTIONS AND EXPERIENTAL ACTIVITIES
21. Describe a customer experience you have personally encountered where the good or service or both were
unsatisfactory (e.g., defective product, errors, mistakes, poor service, service upsets, etc.). How might the
organization have handled it better, and how could operations management have helped?
Solution
© 2024 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible 7
website, in whole or in part.
, Solution and Answer Guide: Collier/Evans, Operations and Supply Chain Management 2024, 9780357901649;
Chapter 1: Operations Management and Value Chains
The objective of this type of question is for the student to describe what they know and you, the
instructor; help put it into an OM context or framework. This question is also designed to help students
internalize the concept of customer satisfaction and dissatisfaction, and potential operations
management activities and decisions that can influence their experiences. For undergraduates, these
experiences focus on what they know best such as restaurants, airlines, bookstores, automobile sales or
repair, retail stores, and university processes. Graduate students may also include their work and business
experiences, and personal experiences such as home mortgages, vacations, and childcare. As the
instructor focus on the role of OM and its processes, training requirements, product and service quality,
and tie to Chapter 1 ideas.
22. Search recent articles in your local newspaper and business magazines such as Fortune, Business Week,
Fast Company, and so on and identify OM concepts and issues that are discussed. How do these fit into
the classification in the box “What Do Operations Managers Do?” in this chapter?
Solution
The objective of this question is simply to show how OM ties to company success and begin to identify key
OM topics and areas of study. Remember the students are in Chapter 1; some have no idea what OM is;
others think it’s all about manufacturing; and others think it has nothing to do with other functional areas
or their career; so it’s time to sell OM! OM applies to ALL functional areas and types of organizations!
23. Interview a manager at a local company about the work he or she performs. Identify (a) the aspects of the
job that relate to OM (like the OM activities in the box on page 3, “What Do Operations Managers Do?”)
and (b) examples of value-creation, support, and general management processes.
Solution
Some of the key activities that operations managers perform include
• Forecasting: Predict the future demand for raw materials, finished goods, and services.
• Supply Chain Management: Manage the flow of materials, information, people, and money from
suppliers to customers.
• Facility Layout and Design: Determine the best configuration of machines, storage, offices, and
departments to provide the highest levels of efficiency and customer satisfaction.
• Technology Selection: Use technology to improve productivity and respond faster to customers.
• Quality Management: Ensure that goods, services, and processes will meet customer expectations
and requirements.
• Purchasing: Coordinate the acquisition of materials, supplies, and services.
• Resource and Capacity Management: Ensure that the right amount of resources (labor, equipment,
materials, and information) is available when they are needed.
• Process Design: Select the right equipment, information, and work methods to produce high quality
goods and services efficiently.
• Job Design: Decide the best way to assign people to work tasks and job responsibilities.
• Service Encounter Design: Determine the best types of interactions between service providers and
customers, and how to recover from service upsets.
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website, in whole or in part.
