Questions and Answers
What should be the first step in selecting an operations strategy?
It is necessary to communicate a new strategy throughout the organization.
True
Which of the following considerations is NOT directly controlled by the operations function?
Marketing's role is solely to ensure customer satisfaction through the delivery of products.
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What happens if the business dimensions change significantly?
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An oil tanker takes time to change its ________, similar to the operations function.
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What is the primary responsibility of the operations function in an organization?
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Match the market segments to their respective operation strategies:
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Successful operations must ensure _____ speed and reliability to improve customer value.
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Match the following customer value considerations with their definitions:
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Which of the following describes order qualifiers?
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The process choice matrix is applicable only to products, not services.
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What happens if a customer does not perceive increased value from improved quality?
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The best operational strategy is based on __________ and __________ of the market.
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Operations strategy has no impact on market segments.
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List two considerations that are crucial for enhancing customer value through operations.
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Which of the following statements best describes the process choice for a FIAT Panda?
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A Ferrari supercar is produced using a line process choice.
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What is the primary tactic to meet demand once an order is received?
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The distinguishing dimensions for using a low-volume batch process include _____ variety and _____ volume.
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Match the market segments with their respective operational strategies:
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What is the significance of capacity in meeting demand?
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All operations functions have unique strategies depending on the process choice.
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What key factor differs between the production of a FIAT Panda and a Ferrari?
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Study Notes
Operations Function and Process Choice
- Operations function likened to an oil tanker; slow to change direction.
- Initial process choice anchors the organization to a specific market segment.
- Process choice should originate from desired market positions, shaped by order qualifiers and order winners.
- Continuous revisiting of business dimensions is essential to adapt to market changes.
- Two paths if misalignment occurs: seek new markets fitting existing processes, or modify processes to align with changed business conditions.
- Communication of new strategies is vital across the organization.
- Process choice matrix applies similarly to both products and services, though terminology may differ.
Customer Value Definition
- Customer defines value based on needs and wants, encompassing the complete buying experience.
- Key generic considerations for customers include:
- Price
- Quality of product or service
- Delivery speed and reliability
- After-sales service and support
- Variety of offerings
- Consistency of all factors
- Brand recognition
- Operations function primarily manages considerations related to quality, delivery, service, variety, and consistency.
- Marketing generates initial sales; operations fulfill expectations, facilitating repeat business.
- Improvements in operations should translate to perceived value to justify higher prices.
Example of Different Market Segment Strategies
- Different market segments (e.g., economy vs. luxury cars) necessitate distinct operational strategies despite product similarities.
- Entry-level vehicles like FIAT Panda require line process choice due to low variety and high volume, while luxury cars like Ferrari use low-volume batch processes for high variety and low volume.
- Disparate production skills and equipment usage are essential for different market segments.
- Airlines apply various operational strategies for economy and first-class services, with different treatment of segments.
Strategies vs. Tactics in Operations
- Strategy defines 'what' needs to be accomplished; tactics dictate 'how' to achieve it.
- Common goal across all operations functions: complete orders promptly and accurately.
- Sufficient capacity is imperative to meet demand; tactics will detail the effective use of this capacity.
- Consideration of inventory storage can influence the choice of tactics to fulfill demand.
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Description
This quiz explores the critical aspects of operations strategy and its impact on market selection. Understand how to choose process choices based on specific market dimensions like order qualifiers and order winners. Enhance your knowledge about effectively navigating operational decisions in competitive environments.
