MGT 2070 Assignment #1 – Solutions Note: I messed up the weights in the original assignment. All questions are equally weighted for your mark (ie each question is worth 33 1/3%). 1.3 Carl Sawyer makes billiard balls in his Dallas plant. With a recent increase in taxes, his costs have gone up and he has a newfound interest in efficiency. Carl is interested in determining the productivity of his organization. He would like to know if his organization is maintaining the manufacturing average of 3% increase in productivity. He has the following data representing a month from last year and an equivalent month this year: Units Produced Labour (hours) Resin (pounds) Capital Invested ($) Energy (BTU) Last Year 1000 300 50 10,000 3,000 Now 1000 275 45 11,000 2,850 Show the productivity change for each category and then determine the improvement for labourhours, the typical standard for comparison. Solution: You should have some form of: Productivity = Outputs Inputs (one mark) Then for each category, you must calculate the change in productivity. You cannot add the categories together because they do not share the same units. It was only necessary to calculate the improvement in productivity for the labour category: Labour (hours) Resin (pounds) Capital Invested ($) Energy (BTU) Last Year 1000 300 = 3.33 1000 50 = 20 1000 10000 = 0.1 1000 3000 = 0.33 Now 1000 275 = 3.64 1000 45 = 22.22 1000 11000 = 0.09 1000 2850 = 0.35 (two marks per row) Then for the improvement in the labour category: 0.30 3.33 = 0.091 or 9.1% improvement over last year. (one mark) Total Marks: 10 Change 3.64 – 3.33 = 0.31 22.22 – 20 = 2.22 0.09 – 0.1 = -0.01 0.35 – 0.33 = 0.02 2.2 Identify how changes in the external environment affect the OM strategy for a company. For instance, discuss what impact the following external factors might have on OM strategy: b) Water- and air-quality legislation. More restrictive legislation will tend to increase the costs of production and may prohibit the use of some technologies. High costs of process modification in order to meet the new restrictions may be less economic than simply closing a plant down. These are some possible answers – others will be judged on their own merits. Total Marks: 10 3.3 An international legal firm is planning to expand globally by opening a law office in one of four countries: Italy, Portugal, Turkey or France. The chief partner entrusted with the decision, Norean Sharpe, has identified eight critical success factors (CSFs) that she views as essential for the success of any law office. She used a rating system of 1 (least desirable country) to 5 (most desirable) to evaluate each CSF. Which country should be selected for the new law office? Critical Success Factors Level of Education 1. number of lawyers 2. national literacy rate Political and legal aspects 3. stability of government 4. product liability laws 5. number of suits per year Social and cultural aspects 6. similarity in language 7. acceptability of lawyers Economic factors 8. number of courts Italy Candidate Country Ratings Portugal Turkey France 5 2 5 1 2 1 4 4 5 2 4 5 3 1 2 5 3 5 5 1 2 4 1 4 1 3 4 1 3 1 5 2 All eight factors are weighted equally. The weights can be added or averaged, to yield the following sums: Sum Average Italy rates the highest in this case. Italy 27 3.375 Portugal 21 2.625 Turkey 22 2.75 France 26 3.25