JUNE 2014

QUESTION 1
Identify and elaborate on any five strategies and techniques for improving service productivity
1. Improving staff
-One way is through improving the knowledge, skills, attitudes and behavior of existing
and new staff involved in service delivery and performance through better systems of
recruitment, training, development, and motivation.
-staff in contact with customers handling the visible elements of the service can be
trained in handling queries and complaints, in product knowledge, in the operations of
internal systems.
-productivity bargaining schemes with considered measures of output and formulae for
sharing gains can be operated to provide incentives for improved productivity.
-for example, the company can send their staff for re-training.
2. Introducing systems and technology
-service organizations can reap productivity improvements if they become more systems
and technology oriented.
-the systems approach looks at the task as a whole.
-it attempts to identify key operations to be undertaken, examines alternative ways of
performing them, devises alternative methods, removes wasteful practices and improves
co-ordination within the systems as a whole.
a. Hard technology means substituting machinery and tools for people
-for example automatic vending equipment
b. Soft technology means substituting preplanned systems for individual service
operations.
c. Hybrid technology is where equipment is combined with planned systems to give
greater order, speed and efficiency to the service process.
3. Reducing service levels
-there are dangers in these approaches particularly where the service organization has
promised to deliver a higher level of service in the past.
-for example doctors could give less time to each patient
4. Substituting products for services
-productivity can be improved by providing a product substitute for the service
-for example new data transfer technology has removed the need for the telegram service
5. Introducing new services
-it is possible to design a more effective service that eliminates or reduces the need for
the less effective service
-for example transatlantic travel by air has largely replaced transatlantic travel by sea; the
credit card has replaced the former system for obtaining overdrafs.
QUESTION 2
a) Four types of process strategy in operations management.

i. Process focus
-low volume, high variety
-small quantity, large variety of products
-general purpose equipment
-broadly skilled operators
-scheduling complex and concerned with trade-off between inventory, capacity,
and customer service

ii. Repetitive focus

-modular
-long runs, standardized product from modules
-reduced training and number of job instructions
-scheduling based on building models from a variety of forecasts

iii. Product focus

-high volume, low variety
-operators less broadly skilled
-fixed costs high, variable costs low
-scheduling relatively simple, concerns establishing sufficient rate of output to
meet forecasts.

iv. Mass customization

-high volume, high variety
-large quantity, large variety of products
-finished goods made to order
-scheduling sophisticated to accommodate customization
b) Two analysis tools used in process strategy
1. Flowchart
- a picture of separate steps of a process in sequential order, including materials or
services entering or leaving process (inputs and outputs), decisions that must be made, people
who become involved, time involved at each step and process measurements
2. Failure mode effects analysis
- a step by step approach for identifying all possible failures in a design, a manufacturing or
assembly process, or a product or service; studying the consequences, or effects, or those
failures; and eliminating or reducing failures, starting with the highest-priority ones.

QUESTION 3
a) How managers achieve competitive advantage through differentiation, low costs and
response.

1. New market entrants

-new companies have certain advantages, such as not being locked into old equipment
and high motivation, as well as disadvantages, such as less expertise and title brand
recognition.
-some industries have lower barriers to entry
-for example cost less for a new company to enter the field.
2. Substitute products and services
-these are substitute that customer might use if prices become too high.
-for example internet telephone service can substitute products and service.
-the more substitute products and services in industry, the less control pricing and raise
profits margins.
3. Customer
-the power of customers grows if they can easily switch to a competitors products and
services, of if they can force a business and its competitors to compete on price alone in a
transparent market place where is little product differentiation.
4. Suppliers
-the more different suppliers a firm has, the greater control it can exercise over suppliers
in terms of price, quality, and delivery schedules.

b) Four importance of productivity to an organization

1. Business productivity is the ability of an organization to utilize its available resources

in order to produce profitable goods and services as desired by customers or clients. It is
the productivity that measures the performance of an organization, and it can also be used
for companies themselves in order to assess their own progress.
 2. Productiveness increase the overall efficiency of an organization. When the efficiency
of the organization increase, the production capacity of the company is utilized to the
optimum level. As is often indicated by business, the more products you make, the lower
overhead and higher profits.
3. Increased production due to efficiency utilization of organizational resources leads to a
lower cost production resulting in better sales and profits. If the confidence of investors
in organization the profits will be increase.
4. A company can increase its own business productivity by making suitable changes in
its business process and policies in order to improve the weak areas and capitalize on
strength for betterment. This results in increased profitability and stability which is vital
for the continued success of any business organization.

QUESTION 4
a) Four factors influencing location decision for a manufacturing company.

1. Raw materials
-the significance of raw materials in manufacturing industry is so fundamental that it
needs no emphasizing
 -the location of industrial enterprises is sometimes determined simply by location of
the raw materials.
-modern industry is so complex that a wide range of raw materials is necessary for
iits growth.
2. Power
-regular supply of power is pre-requisite for the localization of industries.
-coal, mineral oil and hydro-electricity are the three important conventional sources
of power.
-as petroleum can be easily piped and electricity can be transmitted over long
distances by wires, it is possible to disperse the industry over a larger area.
3. Labour
- no one can deny that the prior existence of a labour force is attractive to industry
unless there are strong reasons to the contrary.
-modern industry still requires a large number of workers in spite of increasing
mechanization.
-the location of any industrial unit is determined after a careful balancing of all
relevant factors , yet the light consumer goods and agro-based industries generally
require a plentiful of labour supply.
4. Transport
-transport by land or water is necessary for the assembly of raw materials and for the
marketing of the finished products.
-the development of railways in India, connecting the port towns with hinterland
determined the location of many industries around Mumbai.

b) The factor ratings for the two towns

FACTOR WEIGHT KUANTAN TEMERLOH KUANTAN TEMERLOH

LABOR 0.55 75 70 41.25 38.5
AVAILABILITY
RENTAL 0.15 65 80 9.75 12
 COSTS
OPERATING 0.10 70 70 7 8.5
COSTS
LABOR 0.20 70 70 14 15
TOTAL 1.00 72 74

From the table show that, Temerloh was the suitable outlets.

QUESTION 5
a) Five quality dimensions for goods

1. Tangibles
-the tangible refers to the appearance of the physical surroundings and facilities,
equipment, personnel and the way of communication.
-tangible dimension is about creating first hand impressions.
2. Reliability
 -how the company are performing and completing their promised service,
quality and accuracy within the given set requirements between the company
and customer.
-reliability is just as important as a goof first hand impression, because every
customer want to know if their supplier is reliable and fulfill the set requirements
with satisfaction.
3. Responsiveness
-the willingness of the company to help its customers in providing them with a
good, quality and fast service
4. Assurance
-the company employees skilled workers which are able to gain the trust and
confident of the customers.
5. Empathy
-company cares and gives individualized attention to their customers, to make
the customers feeling extra valued and special.

b) Four costs of quality

1. Appraisal cost
-measuring and monitoring activities related to quality.
-these costs are associated with the suppliers and customers evaluation of
purchased materials, processes, products, and services to ensure to
specifications.
2. Internal failure costs
-incurred to remedy defects discovered before the products or service is
delivered to the customer.
-these costs occur when the results of work fail to reach design quality standards
and are detected before they are transferred to customer.
3. External failure costs
-incurred remedy defects discovered by customers.
-these costs occur when products or services that fail to reach design quality
standards are not detected until after transfer.
4. Cost of quality and organizational objectives
-conducting quality improvements, and achieveing goals must be carefully
managed so that the long-term effect of quality on the organizational.
-these costs must be a true measure of the quality effort, and they are best
determined from an analysis provides of the costs.