Operations Management Competitive Priorities

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Questions and Answers

What does competing based on cost primarily involve?

Offering products at a low price relative to competitors (correct)

Focusing on innovative designs regardless of cost

Providing extensive customer service alongside low prices

Offering high-quality products at low prices

What is the role of operations strategy in relation to competitive priorities?

To develop a plan that supports chosen competitive priorities (correct)

To focus solely on innovative product features

To set prices without regard to market conditions

To minimize all costs regardless of competition

How can a low-cost strategy affect profit margins?

It can lead to higher profit margins even at competitive prices (correct)

It is only effective in niche markets

It consistently results in lower profit margins

It requires significantly higher operational costs

Which competitive priority requires operations managers to understand the market situation?

Cost leadership Signup and view all the answers

What characteristic might NOT be associated with a company competing on cost?

High levels of customer service Signup and view all the answers

What does product design primarily involve?

Defining features and characteristics of a product Signup and view all the answers

Which of the following is NOT a key aspect of product design?

Identifying target customer demographics Signup and view all the answers

How does product design relate to consumer response?

Product design incorporates emotional responses of consumers Signup and view all the answers

What is a distinguishing factor between service design and goods design?

Service design focuses on intangible products, while goods design is tangible Signup and view all the answers

Which professionals are involved in the product design process?

Marketing analysts, art directors, and finance experts Signup and view all the answers

In addition to physical products, what else is included in product design?

The design of services Signup and view all the answers

Why is product design considered exciting and creative?

It combines multiple disciplines and approaches Signup and view all the answers

Which of the following statements about product design is true?

Product design impacts a company's success greatly Signup and view all the answers

What is a distinguishing feature of service design compared to product design?

Incorporate aesthetic and psychological benefits Signup and view all the answers

Which of the following steps is NOT part of the product design process?

Market elimination Signup and view all the answers

What role does marketing play in product design?

It acts as a communication link between customers and product design Signup and view all the answers

How often do companies need to innovate and release new products?

Regularly to remain competitive Signup and view all the answers

Which of the following represents a potential source of product ideas?

Customer, competitors, and suppliers Signup and view all the answers

In which aspect does the service design of Canyon Ranch differ from that of Gold's Gym?

Target demographic and service atmosphere Signup and view all the answers

The design process is described as circular because:

It continuously incorporates new ideas and revisions Signup and view all the answers

What is a critical factor for companies in product development in some industries, such as the auto industry?

Predictable cycles of new product releases Signup and view all the answers

What primarily influences the volume produced in intermittent operations?

A forecast of future demands Signup and view all the answers

Which of the following is an example of a standardized product?

Television sets Signup and view all the answers

What is a characteristic of project processes?

Involvement of the customer in design Signup and view all the answers

Which of the following distinctions is used to categorize processes?

Product volume and product standardization Signup and view all the answers

What is typical for repetitive operations compared to intermittent operations?

Mass production of standardized products Signup and view all the answers

Which type of operation would likely be applied in making a unique wedding cake for a customer?

Project process Signup and view all the answers

Which aspect is NOT typically associated with intermittent operations?

Mass production Signup and view all the answers

Which process type is characterized by producing large quantities of similar products?

Continuous process Signup and view all the answers

What technique is used for evaluating a process in terms of its steps from inputs to outputs?

Process flow analysis Signup and view all the answers

Which symbol is commonly used in flowcharts to represent decision points?

Triangle Signup and view all the answers

Why are storage areas or 'buffers' used in a multistage process?

To allow independent operation of stages Signup and view all the answers

What is the primary purpose of a process flowchart in process design?

To illustrate the sequence of production steps Signup and view all the answers

In a multistage process, if the first stage produces a product in 40 seconds and the second in 60 seconds, what must the first stage do?

Stop until the second stage finishes its work Signup and view all the answers

What does a simple flowchart typically indicate about a process?

The flow of materials between stages Signup and view all the answers

How can a company that employs both batch and project processing be best described?

Versatile in its processing methods Signup and view all the answers

What might happen if stages in a multistage process do not have proper buffers?

There may be an idle period in production Signup and view all the answers

Study Notes

Competitive Priorities

Operations managers need to understand the company's market to identify & prioritize competitive strategies.
Four primary competitive priorities are: cost, quality, delivery, and flexibility.
A cost competitive strategy focuses on producing goods at a low cost relative to competitors.
This strategy can lead to higher profit margins even with competitive pricing.
Low cost does not necessarily mean low quality.

Product Design

Product design is the process of defining all features & characteristics of a product.
This includes appearance, materials, dimensions, performance standards, and even service elements.
Product design is crucial for success or failure of a company.
Service design focuses on meeting customer needs, aesthetics, and psychological benefits.

Design of Services

The design elements are crucial for both tangible goods and intangible services.
Service design is unique as it designs both the service and the entire service concept.
Customer needs are the foundation for service design.
Service design includes aesthetic and psychological benefits, such as friendliness and ambiance.

Product Design Process Steps

Idea generation, product screening, preliminary design & testing, and final design are common steps.
Customer insights, competitor analysis, and supplier feedback are important sources of design ideas.
Customer demand and market trends influence the timing of new product releases.

Intermittent and Repetitive Operations

Intermittent Operations produce a variety of products, often to order, in smaller volumes.
Repetitive Operations focus on standardized products, often produced in large volumes.
The amount of product volume and degree of product standardization are key differentiators between the two operations.

The Continuum of Process Types

Further sub-categorization of operations includes project processes, batch processes, line processes, and continuous processes.
Project processes are used for one-of-a-kind products based on customer specifications.
Batch processes involve producing batches of similar products.
Line processes are used for mass production of standardized products.
Continuous processes run continuously with little interruption, used for high volume production.
A company might utilize multiple processes to cater to different needs and market demands.

Process Flow Analysis

Process flow analysis is a technique for evaluating a process, from inputs to outputs, to improve design.
Process flowcharts map out the steps involved in a process, identifying potential problem areas.
The flowchart details the sequence of steps, flow of materials or information, and storage points.
Flowcharts can be simple or detailed, using symbols to represent different elements.

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Description

This quiz covers key concepts in operations management, focusing on competitive priorities such as cost, quality, delivery, and flexibility. It also explores the importance of product and service design in achieving organizational success. Test your knowledge on how these principles influence strategic decision-making in a competitive market.