TOMS5302V – OPERATIONS MANAGEMENT

CAPSTONE ASSESSMENT ACTIVITY

Instructor: Dr. Aaron L. Nsakanda

NAME: Md Abu Sayed

STUDENT NUMBER: 101361431

Instructions:

This capstone assessment activity contains eleven questions. It is due on

Brightspace by 1159PM (EST) on Sunday of Week 7. The penalty for late
submission is 25% per additional hour.

By submitting your final report, you acknowledge the following:

“I certify that the submitted work is my own and that I have

not collaborated in any ways nor discussed with any other
students about this examination. I acknowledge that I will be
subjected to the Carleton University sanctions for any
violation of the academic integrity standards.”

Signature: ________________________________Date: 16 February 2025

Write your answers in the reserved space and rename your submitted file as
follows:

5302V_LastName
 Page | 2

Question # 1 (/7 points)

Many organizations offer a combination of goods and services to their
customers. The lecture introduced the differences between goods and
services. What are the implications of each the differences in managing
operations of manufacturing goods vs delivering services.
(provide your answer in less than a full page)

The differences between goods and services are covered in Module 1 as

well as the implications. The ways that producing goods and delivering
services differ greatly from one another that have a big impact on
operations management. A good is defined as a physical product that
can be seen, touched, or possibly consumed whereas a service is
defined as any primary or complementary activity that does not
directly produce a physical product1. Regarding operations management,
the following are some implications for producing goods and providing
services:

Forecasting of a product involves checking physical inventory to

correct any error between actuals and estimates which makes the
forecast horizon to be longer-term (weeks, months). For a service,
forecasts are variable. The time frame for which the forecasting can
be done is much shorter (daily or even hours at a time). Facility
location, layout, and design to produce a good needs to be accessible
to raw materials, suppliers, and merchandisers. Adequate space for
storage of the finished product is necessary as well as effective
layouts to ensure quality products and manufacturing efficiency.
Delivery of a service requires facilities to be located close enough
so that customers can encounter onsite and quicker way. The design
helps to allow customers to experience the entire service and all its
stages in full. Operations managers consider process design,
technology as well as quality when analyzing the differences between
goods and services. For goods, the process can be as automated and
mechanized as needed and the quality of the finished products can be
defined clearly and checked against standards, and regulations.
Services are very different as the customer is a part of the
experience. The quality of service is determined by the customer
during the exchange, therefore automated processes may be limited.
Technology for services involves more information based. These
variations depict in terms of patents that are available for products,
but not for service. In the supply chain management, product producing
firms focus mainly on the flow of goods whereas service delivery firms
tend to concentrate on people and other services. To ensure success,
many businesses opt to offer a combination of both services and
products to provide the most value to consumers.

1. Collier, D. A., & Evans, J. R. (2020). Operations and Supply

Chain Management; (2 ed.)
 Page | 3

Question # 2 (/6 points)

Jeffrey Immelt, the CEO of General Electric, proposed a green business
strategy and plan to his 35 top executives in 2004, and they voted against
it. Immelt refused to take no for an answer and overruled his executives.
The result of his efforts is now defined in GE’s highly successful
Ecomagination initiative. Ecomagination is a business strategy designed to
drive innovation and the growth of profitable environmental solutions while
engaging stakeholders. GE invests in innovation through its R&D efforts and
outside venture capital investments. The resulting goods and services enable
GE and its customers to reduce emissions while generating revenue from their
sales. Combining profits and energy savings, GE continues to invest in
environmental solutions, perpetuating the cycle. Specific green and
measurable targets have been established by year. For example, GE’s
greenhouse gas (GHG) target set in 2008 has been exceeded by 30 percent.

Why is sustainability a strategy and not a competitive priority? Explain

your reasoning. How can an organization such as GE strategically use
operations management to address the environmental challenges that result
from some of its obsolete durable goods? Provide examples of practices that
can be leveraged.
(provide your answer in less than a full page)

Sustainability is a big picture perspective on what a business will

accomplish over an extended period of time. Prof. Hill’s strategy
development framework defines as support to environmental, social, and
economic sustainability. On the other hand, competitive priorities are
the operational dimensions such as cost, flexibility, quality, and
delivery businesses. Sustainability is an organizational strategy, and
it is broader than a competitive priority1. Sustainability can help
maintain a business's profits by minimizing waste, conserving energy,
and finding new markets for recyclables. Process design is an
important operational decision that affects the cost of operations,
customer service, and sustainability.
For decades, the plastics business was widely used in industrial
compounds, which had been found to have negative consequences for
human health and the environment. In 2004, six of the GE’s core
businesses were deeply involved in environmental and energy-related
projects. GE initiated a greener business strategy and plan in
response to requests from its customers.
They initiated a data-gathering and educated themselves on the science
behind energy and environmental issues, including greenhouse gas
emissions. CEO Jeff Immelt himself became convinced that climate
change is a technical fact. What emerged was a wish list from
customers that included cleaner ways to burn coal, more efficient
wastewater treatment plants, better hydrogen fuel cells, and so on. At
the same time, GE talked to government officials and regulators to try
and get a sense for where public policy might be going.
 Page | 4

The team found tighter environmental controls, including caps on

greenhouse gas emissions, was inevitable. Although the company had
already been working on numerous energy efficient and environmental
projects, the team realized there were some gaps in technological
capabilities, and there was a lack of overarching strategy. A
realization emerged that GE could build strong businesses by helping
its customers to improve their energy efficiency and environmental
performance. As Immelt soon became fond of saying, `green is green.’
Thus, GE’s Ecomagination strategy was born.
First rolled out in 2005, GE established targets for doubling
investments in clean technology to $1.5 billion per year by 2010 and
growing annual revenues from eco-products to $20 billion from $10
billion in 2004. In its own operations, GE set out to cut greenhouse
gas emissions per unit of output by 30% by 2008, and to cut absolute
emissions by 1% by 2010 (as opposed to a forecasted increase of 40%
due to the growth of the business). These corporate goals were broken
into sub-goals and handed down to the relevant businesses. Performance
against goals was reviewed on a regular basis, and the compensation of
executives was tied to their ability to meet these goals.
By the end of its first 5-year plan, GE had met or exceeded most of
its original goals, despite the global financial crisis that hit in
2008. GE sold more than $20 billion worth of eco-products in 2010,and
those products were also the most profitable. GE reported that its
Ecomagination portfolio included over 140 products and solutions that
had generated $105 billion in revenues by 2011. One of the great
growth stories in the company has been its wind turbine business,
which they bought from Enron in 2002. In that year, it sold $200
million worth of wind turbines. By 2008, this was a $6 billion
business that had installed 10,000 turbines. By 2012, GE had installed
over 20,000 turbines worldwide and was predicting a surge in orders
from developing nations. Looking forward, GE planned to double green
technology to $10 billion by 2015, to grow Ecomagination revenues at
twice the rate of overall revenues.
Sources:
Fisher, D. (August 8, 2005): “GE Turns Green,” Forbes 80–85;
Kauffeld, R., Malhotra, A. and Higgins,S. (December 21, 2009: “Green
Is a Strategy,” Strategy 1 Business;
Bower, J.L., Leonard, H.B., and Paine, L.S. (October 14, 2011):
“Jeffrey Immelt and the Reinvention of GE,” Reuter;
General Electric, “Progress: Ecomagination Report 2011,”
http://files.gecompany.com/ecomagination/progress/GE_ecomagination_201
1AnnualReport.pdf.
 Page | 5

Question # 3 (/5 points)

What are the advantages and disadvantages of do-it-yourself process flow, such
as self-checkout of grocery stores? How does it impact customer experience and
operational efficiency, and what potential challenges might arise? (provide
your answer in less than ½ page)

Advantages:

Efficiency and Speed of Checkout: Customers can scan and bag their items on
their own without help from others. Shorter wait time, even in peak hours.

Convenience: Customers handle their own transactions. It provides more control

over the process and is very useful for those who buy a few items.

Reduced Labor Costs: Businesses can save on labor costs by employing fewer
cashiers. This can be beneficial in the long run for a business.

Privacy: Some customers like the privacy that self-checkout provides, as they
can handle their transactions without direct interaction with a cashier.

Customization: Can be customized to provide more information, such as product

recommendations or promotions, tailored to each customer's shopping habits.

Take Up Less Space: Stores can handle customer transactions with very little
space since multiple booths can be arranged into a relatively small area.

Disadvantages:

Technology Challenges: Not all customers are comfortable using the machines,
especially older individuals or those less familiar with technology.

Loss Prevention: More susceptible to theft and fraud. Some customers may
bypass scanning items or underreport their purchases.

Lack of Personal Interaction: Eliminates the personal interaction that

customers may appreciate when dealing with cashiers.

Job Displacement: Can result in job displacement for cashiers, potentially

leading to job losses in the retail industry.

Maintenance Costs: Self-checkout machines require regular maintenance and

updates to ensure they function correctly. This can be costly for businesses.

Accessibility: Customers may have physical or cognitive disabilities that make

it challenging to use these machines.

Customer Service Challenges: Customers may require assistance from store

staffs. This can create additional demands for store employees.

Many customers appreciate a brief conversation with clerks and the

personalized attention instead of using machine. In certain cases, this may
result in some customers choosing to do business elsewhere if traditional
checkouts are unavailable. The data suggests that the self-checkout framework
is here to stay, even though there are valid arguments for and against them.
According to Statistic Brain (www.statisticsbrain.com), younger customers
(those under 35) are becoming more aware of this type of checkout. Perhaps,
the best way to approach customers is for businesses to provide a combination
of self-checkout options and traditional ones that require clerks.
 Page | 6

Question # 4 (/6 points)

Our lecture on quality management introduces seven quality control tools
commonly used in practice as appraisal tools. Which of the Seven QC Tools
would be most useful in addressing each of the following situations? Explain
your reasoning. (Note: When you have a choice among multiple useful tools, you
should only provide the most suitable one)

a) A contracting agency wants to investigate why its contracts have had so

many changes. The company believes that the number of changes may be related
to the dollar value of the original contract or the days between the request
for proposal and the contract award. (provide your answer in less than 1/3
page)

Scatter diagram can be used to understand the relationship between the dollar
value of the original contract or the days between the request variables and
changes that occurred in the contract. It can help analyze the intrinsic link
between the number of changes in contracts and variables like the dollar value
of the original contract and the days between the request for proposal and the
contract award. The slope of the equation can be derived from plotting the
independent and dependent variables and finding the common intersection point.
These are the graphical elements of regression analysis that highlight
significant relationships between the variables. This serves as a means of
validating the causes and effect diagrams' conclusions.

b) A copy machine frequently experiences paper jams, and users are often
confused about how to fix the problem. (provide your answer in less than
1/3 page)

To address the copy machine frequent jam situation, cause and effect diagram
would be useful as it will help to find out or diagnose the paper jam source.
As cause and effect diagram has been used to know the root causes of the
problem. Here frequent paper jam can be the result of lack of maintenance,
breakdown etc. Cause analysis is a problem-solving tool that uses methods such
as the ‘5 Whys’ that may be crucial to figuring out the fundamental reasons
why the paper clogs. The purpose of this iterative interrogative strategy is
to investigate the cause-and-effect links that underline a given issue. It
would be advantageous to combine user testing and feedback gathering to
increase the correctness of user documentation. It is possible to determine
where there is misunderstanding and what needs to be improved by watching
actual users interact with the machine and documentation.

c) A bank needs to determine how many teller positions, drive-through

stations, and ATM machines it needs for a new branch bank in a certain busy
location. Its information includes the average numbers and types of
customers served by other similar facilities and demographic information to
suggest the level of customer traffic in the new facility.(provide your
answer in less than 1/3 page)

To understand the relationship between the variables, scatter diagram can be

used as it will help to understand the overall effect and case of the issue.
While histogram can be used sort out the data summarization. Histograms are a
fundamental statistical tool that visually depicts the frequency of an event
for a certain group, they can be utilized as QC tools in this situation. This
 Page | 7

also helps to conceal the translations by providing bits of information for

the example and related population.

Question # 5 (/16 points) – Kempfer Furniture Inc. mini-case

Carefully read the mini-case titled 'The Kempfer Furniture Inc.(available in the
attached document)' and thoroughly answer the following questions based on the case
details:

a) Identify four lean tools discussed in the lecture that you would recommend
Kempfer Furniture (KF) implement immediately. For each tool, explain your
rationale for choosing it, outline the specific benefits it would bring,
and indicate the relevant issue(s) it would address from Marta's notes in
Exhibit 1 by referencing the issue number to conserve pace. (provide your
answer in less than a full page)

Lean approach does elimination of waste, increased speed and response,

improved quality, and reduced cost. In addition, it aims to improve process
flow, less variation, smaller inventory and higher productivity. The overall
Marta’s Notes are not very impressive and can be addressed by lean tools
efficiently.
The lean tool ‘The 5S’ stands for Sort, Set in Order, Shine, Standardize, and
Sustain in a visual management system. By decreasing waste and increasing
productivity, this technology contributes to the creation of a well-organized
and productive work environment. Kempfer Furniture can sort and set in order
for sawdust, finished product, scattered inventory, shine the dull and seldom
sharpened blades, increase output, cut waste, and boost general efficiency by
putting The 5S into practice.
Single Minute Exchange of Dies (SMED) refers to the quick setup or changeover
of tooling and fixtures in processes so that multiple products in smaller
batches can be run on the same equipment. Kempfer Furniture can save a lot of
money and increase customer happiness by implementing SMED. Where customer
orders were often changed, and these changes didn't reach the factory floor,
resulting in rework and starting the order a new SMED can help. It will
eliminate the third party truckers waiting unnecessary and change the factory
practice to build one unit at a time.
Visual Controls are indicators for operating activities that are placed in
plain sight of all employees so that everyone can quickly and easily
understand the status and performance of the work system. Kempfer Furniture
can eliminate accidents like employees hit by a forklift truck out of its lane
on the loading dock, or tripped on scrap wood and broke his wrist, and slipped
on the sawdust on the floor and had a severe concussion.
Total productive maintenance (TPM) is focused on ensuring that operating
systems will perform their intended function reliably. The goal of TPM is to
prevent equipment failures and downtime—ideally, to have “zero accidents, zero
defects, and zero failures” in the entire life cycle of the operating system.
Kempfer can benefit using TPM a lot. The Marta’s notes provide accidents,
defect and non-maintained equipment, and non-effective operations of
equipment. Also, lack of workers’ ownership makes it difficult for smooth
operations.
Six Sigma is a data-driven approach to quality control that aids in process
improvement and defect reduction whereas lean six sigma drawing upon the best
 Page | 8

practices of both approaches. Lean Six Sigma can be used by Kemper Furniture
to find and remove waste, cut down on errors, and raise customer satisfaction.
It can help to improve cash flow, employee proper utilization, and many other
things. The waste of $3 million dollar production is a painful thing for a
company that needs to be addressed. Lean Six Sigma can solve this problem by
using statistical data that brings this issue to the finance management.
b) Identify four longer-term improvement initiatives that can be completed
after the first six months. Describe each initiative in a short paragraph
that outlines the reasoning of your choice and the pros of your
recommendation. (provide your answer in less than a full page)

Putting importance on sustainability and operational enhancements following a

six-month period of time, Kempfer Furniture Inc has identified four longer-
term initiatives. These can be completed and have potential for more
advancements:
Sustainable Material Sourcing: Kempfer Furniture can enter into a long-term
agreements with responsible and reliable providers for sustainable source
materials (such as certified wood and eco-friendly fabrics). By doing this,
the business guarantees a consistent supply of superior raw resources that
support sustainability objectives. This program addresses the increased
customer demand for eco-friendly furniture while lessening its negative
effects on the environment. Additionally, by providing unique eco-products, it
can give the business a competitive edge in the market and boost its
environmental credentials.
Product Life Extension Programs: Kempfer can cut waste and generate extra
income by putting it in place of a program that focuses on repair,
refurbishing, and reupholstering services for older furniture. To keep
furniture out of landfills, customers can return their older pieces for
restoration or updating. This program fosters customer loyalty, promotes
sustainability, and establishes the organization as an eco-friendly
enterprise. Additionally, it can give Kempfer a chance to set itself apart
from rivals by providing aftersales services aimed at prolonging the life of
its goods. Kempher can introduce a bring-it-back program where customers or
Kempher itself can bring the recycled products it its facilities.
Energy-Efficient Manufacturing Investments: Kempfer has the option to evaluate
its manufacturing procedures following the first six months and make
investments in renewable energy sources, such as solar power, or energy
efficient machinery for its production facilities. Kempfer can cut long-term
operating costs, emissions, and help achieve environmental goals by minimizing
the energy / carbon footprint of its activities. Over time, Kempfer will be
able to become a more responsible and efficient manufacturer by virtue of this
program, which also matches customer preferences and regulatory expectations
for sustainable enterprises.
The Forest Stewardship Council (FSC) accreditation for wood goods and the
Cradle-to-Cradle certification for sustainable practices are two well-known
sustainability certifications that Kempfer can initiate toward obtaining.
Furthermore, adding eco-labeling to the products can assist in educating
customers about the advantages their purchases have for the environment. These
certificates offer legitimacy, foster consumer trust among environmentally
concerned customers, and open new markets for sustainable products. Kempfer
would gain from greater exposure in the market for sustainable products, which
would promote brand loyalty and satisfy growing consumer demands. By combining
the possibility of both company expansion and a decrease in environmental
 Page | 9

effect, each of these projects strengthens Kempfer's position in the market

and satisfies sustainability obligations.

c) Using lean principles, can you simultaneously improve speed and quality
while reducing waste and costs? What are the trade-offs? Explain your
reasoning.
(provide your answer in less than a 2/3 page)

By implementing lean concepts, Kempfer Furniture Inc. can concurrently enhance

quality, speed, and cost-effectiveness. The goal of lean manufacturing is to
optimize operations by reducing waste, enhancing flow, and raising
productivity.
Increasing Speed Value Stream Mapping (VSM): Kempfer can find bottlenecks,
duplicated stages, and pointless activities that slow down production by
mapping and evaluating the complete production process. Increasing throughput
and accelerating production times can be achieved by optimizing the workflow.
Improving Caliber: Kempfer may establish a culture of quality throughout the
firm by including every employee in ongoing attempts to improve through Total
Quality Management (TQM). Overall product quality increases and rework
decreases when flaws are found early in the process and fixed.
Standardized Work: Consistent quality is ensured at every stage of production
by establishing explicit, repeatable procedures. Employee adherence to best
practices is aided by distinct procedures, which lowers variability and
defects.
Eliminating the Seven Wastes: Overproduction, waiting, transportation,
additional processing, excess inventory, motion, and defects are the seven
categories of waste that need to be eliminated in accordance with lean
principles. Kempfer can reduce waste and increase process efficiency by
concentrating on getting rid of these wastes.
Cutting Expenses: Lean Inventory Management, the expenses of handling,
storing, and possible obsolescence are reduced when excess inventory is
minimized using Just-In-Time (JIT) systems.
Minimizing Defects and Rework: Significant cost savings can be achieved by
lowering defects and improving quality, which will also reduce material waste
and the number of items that require rework.
The trade-offs could be:
Initial Investment in Technology and Training: Using lean concepts
necessitates making initial investments in new technologies, process redesign,
and personnel training. Even though there are substantial up-front expenses,
there are long-term savings.
Cultural Resistance: To foster a culture of continuous improvement, it is
necessary to engage and lead with strength since employees may be resistant to
changes to established procedures.
Standardization vs. Flexibility: Standardizing work increases quality, but it
can make it harder to handle special requests or modifications. Kempfer must
 P a g e | 10

strike a balance between meeting specific customer expectations and

operational efficiency.
Kempfer Furniture can decrease waste and expenses while increasing efficiency
and quality at the same time by putting lean principles into practice. Long
term advantages like increased customer satisfaction, decreased waste, and
enhanced operational efficiency exceed the difficulties, even when there are
trade-offs in terms of initial investment and cultural adjustment.

Question # 6 (/14 points) – Custom Molds Inc. mini-case

Carefully read the mini-case titled 'Custom Molds, Inc. (available in the attached
document)' and thoroughly answer the following questions based on the case details:

1. Custom Molds, Inc. operates two distinct processes to meet different

customer needs. For each process, identify the process structure used and
explain its associated strengths and limitations. Additionally, discuss the
competitive priorities each process is designed to fulfill, ranking these
priorities in order of importance. (limit your answer to less than a full
page)

Custom Molds, Inc. utilizes the Job Shop, and the Batch Production processes
to meet different customer needs.
Job Shop
A highly flexible and customized process intended to handle a wide range of
products including low-volume mold production. Custom Molds, Inc. utilizes
this process because of the great degree of versatility and design adaptation
of both personnel and equipment. It is customized to fit individual
requirements.
Strengths:
This structure is perfect for high customization and low-volume production
since it can readily accommodate a variety of orders, specifications, and
designs. The adaptable process produces various products without making major
adjustments or interruptions. It caters to unique customer requirements and
complex designs and has the ability to handle small batch sizes. Job Shop
focuses on the quality control and precision due to close monitoring of each
individual mold.
Limitations:
Because of the fluctuating nature of products and the requirement for frequent
setup adjustments, a Job Shop may have lower throughput. It may be more
expensive per unit because of its poorer efficiency, setup time and
specialized labor requirements. It has longer lead times and Can be
challenging to achieve consistent quality across diverse projects.
Competitive Priorities:
The highest priority is to satisfy the demands of customers who have certain
specifications and seek custom designs. Ensuring precision and accuracy in
each custom mold is the second priority. Being cost-efficient is not the
primary goal, as the emphasis is on high personalization and low volume. Same
as rapid delivery, could be moderate priorities.
Batch Production
 P a g e | 11

Standardized, larger Orders manufacturing, efficiency and cost-effectiveness

that a batch process offers here. Compared to a Job Shop, it is more
structured, but it also allows for product switching.
Strengths: Bigger quantities before switching setups and standardized
procedures lead to more efficient, faster cycle times, and consistent in
quality. This process can produce goods at a lower cost while retaining some
degree of flexibility.
Limitations: There is less customization available even if it still supports a
variety of product types. When transferring between batches, there are still
setup times that could result in downtime. May require larger inventory levels
for standard mold components. It Can be less responsive to rapid market shifts
or customer demands.
Competitive Priorities:
The higher priority is to lower expenses per unit by producing in large
batches. It has a faster throughput since it can complete larger orders more
rapidly is the moderate priority. It is still somewhat flexible to handle a
range of products. It can accept modest modifications to the product design.
However, consistent quality is the second priority.
Custom Molds, Inc. can serve a wider market by employing a dual-process
approach that strikes a balance between highly customized products and more
conventional, economically efficient manufacturing runs.

2. Using the information from the case, recommend four alternative options
(other than the status quo) that the management may pursue to address the
major issues identified in the case and the key factors to be considered to
evaluate each of them (in terms of pros and cons). (limit your answer to
less than a full page).
The major issues identified, and typical challenges faced by Custom Molds,
Inc., here are four alternative options that the management could pursue. A
brief pros, cons, and important factors to evaluate for each options are
presented. To recommend alternative options for the management of Custom
Molds, Inc., the core issues presented in the case need to be addressed. The
issues most likely related to balancing customization demands, production
inefficiencies, and potential scaling challenges.
Invest in Automation for Standardized Products: Investing in automated
technologies will enable Custom Molds, Inc. to manage the manufacture of its
increasingly standardized goods. For repetitive, less-customized items,
automated solutions can expedite production, lower labor costs, and boost
efficiency. Vital elements to consider, ROI (return on investment) and
automation payback duration impact on adaptability and capacity to manage
orders that are tailored and effects on the workforce and retaining expenses.
Outsource Non-Core Processes: Custom Molds, Inc. can concentrate on its key
strengths, which include design, customization, and final assembly by
outsourcing some non-core activities. That may include raw material processing
or component manufactures. Assessing the quality assurance methods of vendors
that are outsourced is a crucial factor. Cost-benefit analysis in contrast to
production conducted internally. They need to focus on the reliability of
suppliers and lead times.
Segment Production Lines by Order Type: Two segmentations can be formulated by
Custom Molds, Inc.; one production line or work center for highly
personalized, low-volume orders and another for standardized, high-volume
 P a g e | 12

orders. Every line would function in accordance with the requirements of the
goods being produced.
Develop a Strategic Partnership for Innovation: Creating a strategic alliance
with businesses that prioritize innovation, or a university could assist
Custom Molds, Inc. This unity can create new materials, technologies, or
manufacturing procedures that increase customization, lower prices, or
expedite production.
Custom Molds, Inc. ought to assess these choices considering the unique
operational requirements, customers, and strategic objectives. Each option
presents a distinct equilibrium of cost reduction, effectiveness, and the
capacity for innovation or expansion. The important elements, like the
expenses of the investments, flexibility, quality assurance, and long-term
gains will direct management in selecting the optimum course of action.

3. Which option do you recommend, and explain the reasons for your choice?
What changes should management consider in order to implement your
recommendation? (limit your answer to less than a ½ page)

Custom Molds, Inc. can adopt segmenting production lines based on order type
Option. The organization can emphasize both their highly personalized, low-
volume items and standardized, high-volume products by segmenting production
lines based on the kinds of the order. This manufacturing company can simplify
processes and lessen the difficulty of transferring between various production
kinds by allocating resources. This allocation can fulfil the individual needs
of each of the production requirements.

Custom Molds, Inc. can reliably meet delivery schedules and improve the lead
times for both kinds of customers facilitated by the division of manufacturing
lines. Standardized orders can be completed faster and with greater care than
customized orders, resulting in higher levels of customer satisfaction. Custom
Molds, Inc. can lessen bottlenecks that arise when highly tailored, low-volume
orders impede standardized, high-volume production by implementing this
segmented production lines. In this segmented production lines way, downtime
will be minimized, and resources will be used very effectively.

By establishing separate production lines, Custom Molds, Inc. can maintain the
flexibility required to handle tailored orders while also improving the
scalability for standardized products. With this strategy, the company can
satisfy a wide range of client requests without compromising on the efficiency
or quality. This strategy helps the business to achieve sustainable growth by
finding the ideal mix between efficiency for conventional products and
flexibility for unique orders.
 P a g e | 13

Question # 7 (/10 points) – Service blueprint creation

(You may use any drawing tool for this question, including submitting a
handwritten sketch)

BurgerShop wants to visually represent the interactions between its customers

who order to eat inside the restaurant (rather than opting for the drive-
through service) and its three staff members through a service blueprint: The
customer service associate, the fry cook specialist, and the grill chef. Based
on the following brief process descriptions, create a service blueprint.

The fry cook specialist receives customer orders from the customer service
associate, retrieves uncooked food, puts it in the fry vat, wraps the cooked
food in special packaging, and places the wrapped items on the service
counter.

The grill chef receives customer orders from the customer service associate,
retrieves uncooked food, places it onto the grill, builds a sandwich with
requested condiments, and delivers the sandwich to the service counter.

The customer service associate: takes orders from customers, transmits

appropriate orders to the fry cook specialist and grill chef, transacts
payment, retrieves drinks, wraps sandwiches, packages orders, and delivers
orders to customers.

Note: the service blueprint should incorporate all the necessary elements
discussed in the lecture, clearly outlining their delineation and interactions
In the absence of information, reasonable assumptions may be made.

(limit your answer to less than a full page)

Flowcharts, often called service blueprint or maps, generally highlight the

points of contact with the customers. Service blueprint often illustrates the
separation between the back office and the front office with a line of
customer visibility.

Below is how a service plan for BurgerShop can be created, based on the
interactions that consumers have with the three main staff members (the Grill
Chef, Fry Cook Specialist, and Customer Service Associate). The flow of
 P a g e | 14

activities between front-end customer engagements and back-end operations is

visually mapped in a service blueprint given at the end.

Customer Actions (Beyond the Line of Interaction):

Order Placement: Patron needs food and enters the restaurant and places the
order with the help of the customer service associate (CSA).

Receiving Order: After waiting in a line, the customer picks up the finished
order from the CSA. They may like it, return it or ask for change.

Payment Transaction: Following order likings, the consumer makes a payment.

Customer service associate interactions at the front counter:

Order Receiving: The associate enters the order that the consumer has placed
onto the computer.

Order Transmission: The associate notifies the Grill Chef and Fry Cook
Specialist of the necessary order instructions.

Drink Preparation: The CSA gets the requested drinks and gets them ready.

Order Assembly: After the foods are finished, the associate packages the
fries, drinks, and burgers into an order.

Order Delivery: The consumer receives the bundled order from the CSA.

Processing of Payments: The associate manages financial transactions.

Backstage Interactions:

Fry Cook Specialist:

Acquires the order data from the associate and takes out the raw food and puts
it in the fryer. Then packages fried fries with wrap and position on the
counter so that the CSA can deliver.

Grill Chef:

Acquires the CSA’s order details. Then grab raw food and cook the hamburger on
a grill. Assembles the sandwich in accordance with the needs of the client
adding condiments etc.) and keeps on the counter so that CSA can deliver.

The backstage/behind the line of visibility support processes include

inventory management which ensures that there is an adequate supply of raw
materials (meat, condiments, and packaging materials) on hand. Maintaining
kitchen equipment to ensure the grill and fryer are working. Food safety
checks to make sure the food is prepared according to the right guidelines and
that its quality is preserved.
P a g e | 15
 P a g e | 16

Question # 8 (/10 points) – Process chart analysis

Consider the following process chart that describes a mailing list process to
recent Sprott School of Business alumni to contribute to a scholarship fund.
The letters and envelopes were individually addressed (mailing labels were not
used). The letters are to be processed (matched with the correct envelope,
time estimated to be 0.2 minutes each), folded (0.12 minutes each), and
stuffed into the correct envelope (0.10 minutes each). The envelopes are to be
sealed (0.05 minutes each), and a large commemorative stamp is to be placed in
the upper-righthand corner of each envelope (0.10 minutes each).

A) Estimate how long it will take to process 2,000 letters. Assume that the
person doing this work is paid $17 per hour. How much will it cost to
process these 2,000 letters? limit your answer to less than a 1/3 page)

The total time to process for one envelope is 0.57 minutes. That
includes the letter processed (0.20 Min), folded (0.12 min), stuffed
into correct envelope (0.10 min), seal envelopes (0.05 min) and placed
the large commemorative stamp in the upper-righthand corner (0.10 min).

So, for 2000 letters, total time needed: 2000 x 0.57 minutes = 1,140
minutes.

Hence, 1,140 minutes / 60 = 19 hours

The total cost for 2,000 letters is: 19 hours x $17 = $323.00
 P a g e | 17

B) Evaluate the impact of each of the following process changes and

indicate the resulting savings or increases in time and cost for
processing 2,000 letters (note: evaluate each question separately):

1. Each letter has the same greeting, “Dear Alumnus or Alumna,” instead
of the person’s name.

Step No. Time (min) Step Description

1 0.12 Fold Letter
2 0.10 Stuff in to correct envelope
3 0.05 Seal envelope
4 0.10 Place stamp on envelope
Total: 0.37
Here, the process letter step is eliminated.

So, time to stuff one envelope is 0.37 minutes

Time for 2000 envelopes is 2000 x 0.37 minutes = 740 minutes

Hence, 740 minutes / 60 = 12.33 hours

So, the total cost for 2000 envelopes is: 12.33 hours x $17 = $209.61

2. Mailing labels are used and have to be put on the envelopes (0.10
minutes each).

Step No. Time (min) Step Description

1 0.12 Fold Letter
2 0.10 Stuff in to correct envelope
3 0.05 Seal envelope
4 0.10 Stick mailing label on envelope
5 0.10 Place stamp on envelope
Total: 0.47
Here, the stick mailing label on envelope step is added.

So, time to stuff one envelope is 0.47 minutes

Time for 2000 envelopes is 2000 x 0.47 minutes = 940 minutes

Hence, 940 minutes / 60 = 15.66 hours

So, the total cost for 2000 envelopes is: 15.66 hours x $17 = $266.33

3. Pre-stamped envelopes are used.

Step No. Time (min) Step Description

1 0.12 Fold Letter
2 0.10 Stuff in to correct envelope
3 0.05 Seal envelope
4 0.10 Stick mailing label on envelope
 P a g e | 18

Total: 0.37
Here, the place stamp on envelope step is eliminated.

So, time to stuff one envelope is 0.37 minutes

Time for 2000 envelopes is 2000 x 0.37 minutes = 740 minutes

Hence, 740 minutes / 60 = 12.33 hours

So, the total cost for 2000 envelopes is: 12.33 hours x $17 = $209.61

4. Envelopes are stamped by a postage meter that can stamp 200 letters
per minute.

Step No. Time (min) Step Description

1 0.12 Fold Letter
2 0.10 Stuff in to correct envelope
3 0.05 Seal envelope
4 0.10 Stick mailing label on envelope
5. 1/200=0.005 Using a Postage meter
Total: 0.375
Here, the using and postage meter is added.

So, time to stuff one envelope is 0.375 minutes

Time for 2000 envelopes is 2000 x 0.375 minutes = 750 minutes

Hence, 750 minutes / 60 = 12.50 hours

So, the total cost for 2000 envelopes is: 12.50 hours x $17 = $215.50

5. Window envelopes are used.

Step No. Time (min) Step Description

1 0.12 Fold Letter
2 0.10 Stuff in to correct envelope
3 0.05 Seal envelope
4 0.10 Place stamp
Total: 0.37
Here, the use of a postage meter is eliminated.

So, time to stuff one envelope is 0.37 minutes

Time for 2000 envelopes is 2000 x 0.37 minutes = 740 minutes

Hence, 740 minutes / 60 = 12.33 hours

So, the total cost for 2000 envelopes is: 12.33 hours x $17 = $209.61
 P a g e | 19

6. A pre-addressed envelope is included with each letter for

contributions (this adds 0.05 minutes to the stuffing step).

Step No. Time (min) Step Description

1 0.20 Process letter
2 0.12 Fold Letter
3 0.15 Stuff in to correct envelope
4 0.05 Seal envelope
5 0.10 Place stamp
Total: 0.62
So, time to stuff one envelope is 0.62 minutes

Time for 2000 envelopes is 2000 x 0.62 minutes = 1,240 minutes

Hence, 1,240 minutes / 60 = 20.66 hours

So, the total cost for 2000 envelopes is: 20.66 hours x $17 = $351.33

C) Would any of these changes likely reduce the effectiveness of the

mailing campaign? If so, which ones? Why?

Option 1, where each letter has the same greeting, “Dear Alumnus or
Alumna,” instead of the person’s name. The letter lacks personalization
because the name of the alumni is not mentioned.

D) Would the changes that increase time and cost likely increase the
effectiveness of the mailing? Why or why not?

The greatest options are the first and last ones; they cost more overall,
but the return on investment justifies the difference. Addressing the name
of the alumni makes the letter personally touched.
 P a g e | 20

Question # 9 (/10 points) – Quality improvement tools

(You may use any drawing tool for this question, including submitting a
handwritten sketch)

Consider the following tally sheet that tabulates recent complaints received
by a short-haul household furniture moving company (each line represents a
count, e.g. Broken glass complaint has 13 counts).

a) Draw a Pareto chart and discuss it to identify the most serious moving
problems. (limit your answer to less than a full page)

The Pareto chart below shows the x-axis labeled "Serious Moving Problem" and
the y-axis labeled "Number" with bars representing different moving problems
in descending order from highest to lowest frequency, with a cumulative
percentage line overlaid.

To construct a Pareto chart, here are a few details about; first we need to
arrange the issues according to frequency of occurrence in descending order
before we could make a Pareto chart. Plotting the problems on the x-axis and
the frequency number in the y-axis where the cumulative proportion of
occurrences line overlaid is then possible. We can use the generated chart to
determine which issues are the most important and should be dealt with first.

Based on the Pareto chart, the most significant moving problems is the
‘Missing items’ followed by ‘Furniture rubbed together while on truck’ item.
The first one represents about 24% of the total moving issue. Whereas the
 P a g e | 21

second one represents about 18%. These two represent almost half of the total
moving issues.
 P a g e | 22

a. The manager of this short-haul moving company is attempting to understand

the root causes of complaints. He has compiled the following list of issues
that occurred during problem deliveries:

truck broke down, ran out of packing boxes, multiple deliveries in one day
caused truck to be late, no furniture pads, employee dropped several items,
driver got lost en route to address, ramp into truck was bent, no packing
tape, new employee doesn’t know how to pack, moving dolly has broken wheel,
and employee late to work

Organize these causes into a 4M cause-and-effect diagram. (limit your

answer to less than a full page)

The cause-and-effect diagram is a very simple graphical technique for

presenting a chain of causes and effects and for sorting out causes and
organizing relationships between variables. The cause-and-effect diagram, also
called an Ishikawa or fishbone diagram, is a visual aid for determining the
underlying causes of problems. It begins with the problem statement in the
center of the diagram and branches out to identify potential causes, which can
be categorized into people, process, equipment, and environment. The below is
a 4M cause-and-effect diagram showing main causes like Machine, Delivery
process, Packaging and Employees where the main problem is Serious Moving
Problem. The root cause is a term used to designate the source of a problem.
Below shows the root cause. For instance, under the problem of "employee
dropped several items," potential causes could be fatigue, heavy equipment.
The resulting diagram will assist us in determining the main causes of the
issues and coming up with solutions to deal with them.
 P a g e | 23

Question # 10 (/8 points) – ABC Analysis

Consider the following data that shows the findings from an ABC analysis.

SKU Quantity Annual dollar Pct of Cumulative % Cumulativ

Number Description used per Unit Value usage Total of Dollar Value position e %of Class
7 Signatures 150000 $ 0.45 $ 67,500.00 83.02% 83.02% 1 14.29% A
3 Cover stock 10000 $ 0.75 $ 7,500.00 9.22% 92.24% 2 28.57% B
4 Glue (gallons) 75 $ 40.00 $ 3,000.00 3.69% 95.93% 3 42.86% B
1 Boxes 500 $ 3.00 $ 1,500.00 1.84% 97.77% 4 57.14% C
5 Inside covers 20000 $ 0.05 $ 1,000.00 1.23% 99.00% 5 71.43% C
6 Reinforcingtape (meters) 3000 $ 0.15 $ 450.00 0.55% 99.56% 6 85.71% C
2 Cardboard (square feet) 18000 $ 0.02 $ 360.00 0.44% 100.00% 7 100.00% C

$ 81,310.00

What key insights can be derived from the data presented in the ABC analysis,
in terms of a) item categorizations, and b)inventory management priorities?

(limit your answer to less than a 2/3 page)

ABC classification is used to categorize inventory products, commonly referred

to as ABC analysis. It reveals key insights by categorizing inventory items.
This analysis considers each product's relative value within the portfolio.
The inventory is divided into three separate classes (A - high-value, fast-
moving, B – moderately important, and C - low-value products).

The Pareto Principle of 80/20 rule is the foundation of ABC analysis. This
rule states that 20% of the causes account for 80% of the effects. When it
comes to inventory management, only 20% of a company's products usually
account for 80% of its sales.
 P a g e | 24

Class A Items: The data provided above shows “signatures” is a high income
stream which drives most of the revenue. It is categorized as a high-value
item. Signature comprises less than 20% (14.29%) of inventory goods but earns
more than 80% (83.02%) of overall sales revenue. Please see the exhibit below.

Class B Items: Items “Cover stock & Glue” fall within the category of modest
importance. About 30% of inventory is made up of Class B items, which account
for 15% (14.75% in this case)of overall sales income.

Class C Items: “Boxes, Inside covers, Reinforcing tape and Cardboard” fall in
this category are less expensive things barely affect sales. They make up
close to 60% of the total inventory but earn a modest portion of sales revenue
of close to 5% (4.06% here)of the whole.

For Inventory Management Priorities, This company/Business can consistently

prioritize accurate forecasting, tight inventory control, and frequent
monitoring of stock levels and focus on their attention on high revenue
generating items like Signatures ("A" category). They need to balance
resources with moderate value items ("B" category) and maintain an appropriate
stock level. They can cut excess inventory costs related to low value ("C"
category) stocks, and purchase bulk amount to minimize carrying cost. They may
check this inventory less frequently.
 P a g e | 25

Question # 11 (/10 points) – House of Quality

Consider the following diagram that displays the quality of housekeeping

services for Hotel TOMSIR. The rows represent customer desired traits. For
example, they want a fully stocked room, room serviced right the first time,
few if any interruptions, short interruptions when they occur, consistent
service, room ready when I arrive, room cleaned at my convenience, honor bar
billing is correct and timely, and my things should be safe and secure. The
hotel wants to reduce housekeeping cost/labor. The importance rating of each
of these items is provided, which ranges from 3 to 6. The technical features
are provided as the columns. Those are the defect rate, room cycle time,
possible number of interruptions, occupied interruptions, honor bar
discrepancy allowance rate, number of guest room doors open at one time, and
housekeeping productivity. The targets are less than 5 defects, less than 20-
minute room cycle, less than 4 interruptions per guest per day, less than one
occupied interruption per guest per day, less than 5 bar discrepancies per
1000 guests, less than 4 doors open at one time, and greater than 24 rooms
serviced per housekeeper. On the roof is a grid of diagonal lines with symbols
indicating if the technical features are strong positives, positive, negative,
or strong negatives. Inside the house's grid, symbols indicate whether each
combination is strong, medium, or weak. To the right are customer perceptions
of each of the customer's desired traits on a scale of 1 to 5, where 1 is
poor, and 5 is excellent. These average ratings are provided for our hotel and
competitors A and B.

a. What seem to be the two biggest opportunities for improvement relative to

competitors’ levels of performance? Briefly explain the rationale of your
choice.

Few if any interruptions: This trait directly addresses the customer's

desire for uninterrupted service. It represents a considerable possibility for
development. Most visitors want their stay as smoothly and uninterruptedly as
possible. A hotel can improve the overall visitor experience by offering
housekeeping services with less disruptions than its competitors.

Room serviced right the 1stt time: This is an additional important factor as
it has a direct bearing on the caliber of the service. It is the expectation
of the guests that their rooms will be properly and completely cleaned without
requiring additional housekeeping appointments. A hotel can differentiate
itself from the rivals and increase client satisfaction if they can reliably
meet this requirement.

b. Which technical feature is most strongly related to the goal of protecting

the safety and security of guests’ possessions?

Defect Rate (Random sample): This technical feature shows how frequently
faults are discovered in a sample of randomly selected rooms following
housekeeping staff maintenance. In this case, defects could be items like
misplaced or broken personal property, which would lead to a breach in
security and safety protocols. A low defect rate indicates that guests are
less likely to have concerns about the safety or security of their belongings
since housekeeping personnel are thorough and meticulous in their cleaning
procedures.
 P a g e | 26

c. Why would room cycle time and defect rate be negatively correlated?

A shorter room cycle time means that each room is receiving less attention,
which could lead to a greater defect rate. This is because increased pressure
to finish each area more quickly increases the likelihood of errors or
oversights. To clean a space more quickly, employees may feel pressured and
may be more prone to error or forget process stages. Another potential cause
for workers to become more agitated or fatigue, this could lead to a greater
failure rate. Shorter time tends to a reduction in focus or precision, which
might result in additional errors or flaws that lessen quality. Sometimes
employees rush through the cleaning process to finish it quickly. As a result,
they create risk of making mistakes or forgetting important tasks. Rushing
through the cleaning process often leads to missing details and potential
errors, resulting in a higher defect rate.

d. Which technical feature has the strongest associations with the largest
number of guest requirements?

Room cycle time: Refers to the total time it takes for a hotel room to be
occupied by guests, from the moment they check in until they check out. It
includes the time spent cleaning and preparing the room for the next guest;
essentially, the complete "life cycle" of a room between guest stays. The
amount of time needed to prepare a room following a guest's check-out is one
of the stages of the room cycle time. Guests become increasingly irritated if
this stage takes longer time. The aspects that pertain to the hotel's
functionality are referred to as technical features. One of the most important
technical components that relates to the needs of the guests is the room cycle
time. The other choices have less to do with what guests need.