Description
I need help completing a discussion board post for my Management course (Operation Management). Below are the exact requirements provided by my instructor:
Description:
In this module, you will learn about processes, facilities planning, and work systems. Regarding processes, you will focus on process selection, process strategies, and process layouts. Regarding facilities, you will focus on facilities layouts and product layouts. Finally, regarding work systems, the focus will be on quality of work life, job design, motion studies, work measurement, and operations strategy.
Learning Outcomes:
- Analyze the evolution of quality management.
- Examine the cost of quality for operations management.
- Evaluate the importance of quality control to the organization.
- Compare locational cost-profit-volume analysis and the transportation model.
- Differentiate factor rating and the center of gravity method.
- Argue the importance of location decisions to the organization.
———————Instructions———————
Quality Management and Location Planning
For this assignment, you will analyze the quality management practices and location decisions of a prominent organization in Saudi Arabia. Your chosen organization should have a significant presence in the country and operate in a sector important to the Saudi Arabian economy.
Quality Management Practices
- Trace the historical development of quality management practices within the organization, highlighting key milestones and changes over time. How has the organization’s approach to quality management evolved in response to changing market conditions, technological advancements, and regulatory requirements?
- Identify the various costs associated with quality management within the organization, including prevention, appraisal, internal failure, and external failure costs.
Location Decisions
- Analyze the organization’s approach to location decisions, including the factors it considers and the methods it uses to evaluate potential locations.
- Explain the factor rating and center of gravity methods used by the organization in its location decision-making process. Assess the organization’s use of these methods and provide recommendations for improving its location decision-making process.
- Defend or critic the organization’s location decisions based on the impact on its overall performance, including its market share, profitability, and competitive advantage.
Assignment Requirements:
Your well-written paper should meet the following requirements:
- Length: The paper should be Six Pages in length (6), excluding the title and reference pages.
- Formatting: Follow academic writing standards and APA style guidelines.
- Sources & Citations: Support your submission with course material concepts, principles, and theories from the textbook and at least Three (3) scholarly, peer-reviewed journal articles. Proper APA citation is required.
- Originality Check: You are strongly encouraged to check all assignments for originality using Turnitin before submission.
- Plagiarism Policy: Plagiarism is NOT tolerated. Plagiarism is strictly prohibited. Assignments with more than 15% similarity to existing work will receive a zero. Repeated offenses may lead to termination.
- Grading Rubric: Review the grading rubric to understand how your assignment will be evaluated.
- Course Alignment: Ensure your discussion incorporates textbook concepts, principles, and theories, aligning with class lectures and avoiding the use of advanced material not yet covered in the course.
- Discuss the concepts, principles, and theories from your textbook. Be sure to cite the textbook and use the lectures provided so that the analysis aligns with the material we’ve covered so far in the course.
Required Readings:
- Chapters 8, 9 & 10 in Operations Management
- Chapters 8, 9 & 10 PowerPoint Presentations
- Jiang, Y., Chao, Q., Chen, Y., Li, X., Liu, S., & Cong, G. (2024). UrbanLLM: Autonomous urban activity planning and management with large language models. arXiv.
Recommended Readings:
- Faisal, T., & Faisal, M.N. (2020). Assessment of total quality management implementation in Indian service industries. IUP Journal of Operations Management, 19(2), 7-28.
- Danach, K., Harb, H., Kwekha Rashid, A. S., Al-Tarawneh, M. A. B., & Aly, W. H. F. (2025). Location planning techniques for Internet provider service unmanned aerial vehicles during crisis. Results in Engineering, Vol 25, Iss , Pp 103833
Note: I’ve attached the slides for the relevant chapter, grading rubric, and the book below (https://www.dropbox.com/scl/fi/10efj01b5l2avuyn4n8…).
Instructor Expectations:
Please ensure you dedicate your utmost effort and attention to detail when completing this task. The instructor places a strong emphasis on proper citation and substantive analysis that extends beyond simply answering the questions. Your work should demonstrate depth, originality, and critical thinking by introducing new insights and supporting arguments with thorough research.
The instructor maintains high academic standards and expects students to consistently strive for excellence. Your assignment should reflect the following:
- Comprehensive Use of Sources:
- Incorporate textbook theories, concepts, and at least three (3) peer-reviewed journal articles to support your analysis.
- Proper APA citation is essential to demonstrate deep engagement with the material.
- Substantial Analysis:
- Move beyond surface-level responses by providing insightful, well-developed arguments.
- Offer unique perspectives and link theories to practical examples to enhance your discussion.
- Attention to Detail:
- Ensure your writing is clear, polished, and well-organized.
- Adhere to the required page count and APA formatting guidelines.
- Avoid vague terms:
Refrain from using words like “many,” “most,” or “some” unless they are absolutely true and backed by evidence. Ensure specificity in your statements. - Incorporate diverse sources:
Enhance your paper by including citations from various sources such as videos, movies, interviews, or other multimedia resources to enrich your arguments. - Strong introduction and thesis:
- Craft a compelling “zinger” (introductory sentence) and a clear thesis.
- These are crucial for quickly capturing your audience’s interest.
- Integration of course learnings:
- Apply what you’ve learned throughout the course effectively.
- Define the problem, conduct thorough research, present your perspective clearly, and maintain focus in your paper.
- Enhance your conclusion:
- Summarize key concepts effectively.
- Include a strong quotation or statistic to reinforce your message and create a lasting impression on your reader.
This assignment is not just about fulfilling a requirement—it is an opportunity to showcase academic excellence.
Additionally, your performance on this assignment will significantly influence my decision to collaborate with you on future coursework throughout my academic journey.
CT_Rubric_100
Description
100 Points
Rubric Detail
Levels of Achievement
Criteria
Exceeds Expectation
Meets Expectation
Some Expectations
Unsatisfactory
Content
33 to 35 points
29 to 32 points
26 to 28 points
0 to 25 points
Demonstrates
substantial and
extensive knowledge of
the materials, with no
errors or major
omissions.
Demonstrates adequate
knowledge of the
materials; may include
some minor errors or
omissions.
Demonstrates fair
knowledge of the materials
and/or includes some
major errors or omissions.
Fails to demonstrate
knowledge of the
materials and/or
includes many major
errors or omissions.
33 to 35 points
29 to 32 points
26 to 28 points
0 to 25 points
Provides strong thought,
insight, and analysis of
concepts and
applications.
Provides adequate
thought, insight, and
analysis of concepts and
applications.
Provides poor though,
insight, and analysis of
concepts and applications.
Provides little or no
thought, insight, and
analysis of concepts and
applications.
15 to 15 points
13 to 14 points
11 to 12 points
0 to 10 points
Sources go above and
beyond required criteria
and are well chosen to
provide effective
substance and
perspectives on the
issue under
examination.
Sources meet required
criteria and are
adequately chosen to
provide substance and
perspectives on the issue
under examination.
Sources meet required
criteria but are poorly
chosen to provide
substance and perspectives
on the issue under
examination.
Source selection and
integration of knowledge
from the course is clearly
deficient.
15 to 15 points
13 to 14 points
11 to 12 points
0 to 10 points
Project is clearly
organized, well written,
and in proper format as
outlined in the
assignment. Strong
sentence and paragraph
structure, contains no
errors in grammar,
spelling, APA style, or
APA citations and
references.
Project is fairly well
organized and written
and is in proper format as
outlined in the
assignment. Reasonably
good sentence and
paragraph structure, may
include a few minor
errors in grammar,
spelling, APA style, or APA
citations and references.
Project is poorly organized
and written and may not
follow proper format as
outlined in the assignment.
Inconsistent to inadequate
sentence and paragraph
development, and/or
includes numerous or
major errors in grammar,
spelling, APA style or APA
citations and references.
Project is not organized
or well written and is not
in proper format as
outlined in the
assignment. Poor quality
work; unacceptable in
terms of grammar,
spelling, APA style, and
APA citations and
references.
Analysis
Sources
Demonstrates
college-level
proficiency in
organization,
grammar and
style.
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Quality Control
Copyright ©2021 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
10-1
You should be able to:
LO 10.1
LO 10.2
LO 10.3
LO 10.4
Explain the need for quality control
Discuss the basic issues of inspection
List and briefly explain the elements of the control process
Explain how control charts are used to monitor a process, and
the concepts that underlie their use
LO 10.5 Use and interpret control charts
LO 10.6 Perform run tests to check for nonrandomness in process output
LO 10.7 Assess process capability
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McGraw-Hill Education.
10-2
Quality control
A process that evaluates output relative to a standard
and takes corrective action when output doesn’t meet
standards
If results are acceptable no further action is required
Unacceptable results call for correction action
Inspection alone is not sufficient to achieve a reasonable
level of quality
Most organizations rely upon some inspection and a great
deal of process control to achieve an acceptable level of
quality
LO 10.1
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McGraw-Hill Education.
10-3
LO 10.1
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McGraw-Hill Education.
10-4
Inspection
An appraisal activity that compares goods or services to
a standard
Inspection issues:
LO 10.2
How much to inspect and how often
At what points in the process to inspect
Whether to inspect in a centralized or on-site location
Whether to inspect attributes or variables
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McGraw-Hill Education.
10-5
LO 10.2
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McGraw-Hill Education.
10-6
Typical inspection points:
Raw materials and purchased parts
Finished products
Before a costly operation
Before an irreversible process
Before a covering process
LO 10.2
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McGraw-Hill Education.
10-7
Inspection Point
Characteristics
Accounting/billing
Accuracy, timeliness
Building and grounds
Appearance and safety
Main desk
Appearance, waiting times, accuracy of bills
Maid service
Completeness, productivity
Personnel
Appearance, manners, productivity
Reservations/occupancy Over/underbooking, percent occupancy
Restaurants
Kitchen, menus, meals, bills
Room service
Waiting time, quality of food
Supplies
Ordering, receiving, inventories
LO 10.2
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McGraw-Hill Education.
10-8
Effects on cost and level of disruption are a major
issue in selecting centralized vs. on-site inspection
Off-Site
Specialized tests that may best be completed in a lab
More specialized testing equipment
More favorable testing environment
On-Site
Quicker decisions are rendered
Avoid introduction of extraneous factors
Quality at the source
LO 10.2
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McGraw-Hill Education.
10-9
Quality control seeks quality of conformance
A product or service conforms to specifications
A tool used to help in this process:
SPC
Statistical evaluation of the output of a process
Helps us to decide if a process is “in control” or if corrective
action is needed
LO 10.2
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McGraw-Hill Education.
10-10
Two basic questions concerning variability:
Issue of process control
Are the variations random? If nonrandom variation
is present, the process is said to be unstable.
2. Issue of process capability
Given a stable process, is the inherent variability of
the process within a range that conforms to
performance criteria?
1.
LO 10.2
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McGraw-Hill Education.
10-11
Variation
Random (common cause) variation:
Natural variation in the output of a process, created by
countless minor factors
Assignable (special cause) variation:
A variation whose cause can be identified
A nonrandom variation
LO 10.2
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McGraw-Hill Education.
10-12
SPC involves periodically taking samples of process
output and computing sample statistics:
Sample means
The number of occurrences of some outcome
Sample statistics are used to judge the randomness of
process variation
LO 10.2
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McGraw-Hill Education.
10-13
FIGURE 10.4A The sampling distribution of means is normal, and it
has less variability than the process distribution, which might not be normal
LO 10.3
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McGraw-Hill Education.
10-14
Sampling and corrective action are only a part of the
control process
Steps required for effective control:
Define: What is to be controlled?
Measure: How will measurement be accomplished?
Compare: There must be a standard of comparison
Evaluate: Establish a definition of out of control
Correct: Uncover the cause of nonrandom variability and fix it
Monitor: Verify that the problem has been eliminated
LO 10.3
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McGraw-Hill Education.
10-15
Control chart
A time-ordered plot of representative sample statistics
obtained from an ongoing process (e.g. sample means),
used to distinguish between random and nonrandom
variability
Control limits
The dividing lines between random and nonrandom
deviations from the mean of the distribution
Upper and lower control limits define the range of acceptable
variation
LO 10.4
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McGraw-Hill Education.
10-16
Each point on the control chart represents a sample of n
observations
LO 10.4
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McGraw-Hill Education.
10-17
Type I error
Concluding a process is not in control when it actually is.
The probability of rejecting the null hypothesis when the null
hypothesis is true
Manufacturer’s risk
Type II error
Concluding a process is in control when it is not.
The probability of failing to reject the null hypothesis when the null
hypothesis is false
Consumer’s risk
LO 10.4
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McGraw-Hill Education.
10-18
LO 10.4
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McGraw-Hill Education.
10-19
LO 10.4
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McGraw-Hill Education.
10-20
Variables generate data that are measured
Mean control charts
Used to monitor the central tendency of a process
“x-bar” charts
Range control charts
Used to monitor the process dispersion
R charts
LO 10.5
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McGraw-Hill Education.
10-21
k
k
x=
xi
i =1
k
where
x = Average of sample means
x i = mean of sample i
R
R = i =1
k
where
i
R = Average of sample ranges
Ri = Range of sample i
k = number of samples
LO 10.5
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McGraw-Hill Education.
10-22
Used to monitor the central tendency of a process
x − chart Control Limits
UCLx = x + A2 R
LCLx = x − A2 R
where
A2 = a control chart factor based on sample size, n
LO 10.5
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McGraw-Hill Education.
10-23
Used to monitor process dispersion
R Chart Control Limits
UCLR = D4 R
LCLR = D3 R
where
D3 = a control chart factor based on sample size, n
D4 = a control chart factor based on sample size, n
LO 10.5
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McGraw-Hill Education.
10-24
LO 10.5
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McGraw-Hill Education.
10-25
LO 10.5
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McGraw-Hill Education.
10-26
To determine initial control limits:
Obtain 20 to 25 samples
Compute appropriate sample statistics
Establish preliminary control limits
Determine if any points fall outside of the control limits
If you find no out-of-control signals, assume the process is in control
If you find an out-of-control signal, search for and correct the
assignable cause of variation
Resume the process and collect another set of observations on
which to base control limits
Plot the data on the control chart and check for out-of-control
signals
LO 10.5
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McGraw-Hill Education.
10-27
Attributes generate data that are counted.
p-chart
Control chart used to monitor the proportion of defectives in
a process
c-chart
Control chart used to monitor the number of defects per unit
LO 10.5
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McGraw-Hill Education.
10-28
When observations can be placed into two
categories
Good or bad
Pass or fail
Operate or don’t operate
When the data consists of multiple samples of
several observations each
LO 10.5
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McGraw-Hill Education.
10-29
Total number of defectives
p=
Total number of observatio ns
p (1 − p )
ˆ p =
n
UCL p = p + z (ˆ p )
LCL p = p − z (ˆ p )
LO 10.5
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McGraw-Hill Education.
10-30
Use only when the number of occurrences per unit of
measure can be counted; non-occurrences cannot be
counted.
Scratches, chips, dents, or errors per item
Cracks or faults per unit of distance
Breaks or tears per unit of area
Bacteria or pollutants per unit of volume
Calls, complaints, failures per unit of time
UCL c = c + z c
LCL c = c − z c
LO 10.5
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McGraw-Hill Education.
10-31
At what points in the process to use control charts
What size samples to take
Sample frequency
What type of control chart to use
Variables
Attributes
LO 10.5
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McGraw-Hill Education.
10-32
Even if a process appears to be in control, the data may
still not reflect a random process
Analysts often supplement control charts with a run
test
Run test
A test for patterns in a sequence
Run
Sequence of observations with a certain characteristic
LO 10.6
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McGraw-Hill Education.
10-33
LO 10.6
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McGraw-Hill Education.
10-34
Once a process has been determined to be stable, it is
necessary to determine if the process is capable of
producing output that is within an acceptable range
Tolerances or specifications
Range of acceptable values established by engineering design or
customer requirements
Process variability
Natural or inherent variability in a process
Process capability
The inherent variability of process output (process width)
relative to the variation allowed by the design specification
(specification width)
LO 10.7
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McGraw-Hill Education.
10-35
Lower
Upper
Specification Specification
Process variability (width)
exceeds specifications
Lower
Specification
Lower
Specification
Upper
Specification
Process variability (width)
matches specifications width
Upper
Specification
Process variability (width) is less
than the specification width
LO 10.7
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McGraw-Hill Education.
10-36
UTL – LTL
Cp =
6
where
UTL = upper tole rance (specifica tion) limit
LTL = lower tole rance(spec ification) limit
LO 10.7
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McGraw-Hill Education.
10-37
Used when a process is not centered at its target, or
nominal, value
C pk = min C pu , C pl
UTL − x x − LTL
= min
,
3
3
LO 10.7
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McGraw-Hill Education.
10-38
Simplify
Standardize
Mistake-proof
Upgrade equipment
Automate
LO 10.7
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McGraw-Hill Education.
10-39
LO 10.7
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McGraw-Hill Education.
10-40
There are several risks of using capability
measures:
The process may not be stable
The process output may not be normally distributed
The process is not centered but Cp is used
LO 10.7
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McGraw-Hill Education.
10-41
Quality is a primary consideration for nearly all
customers
Achieving and maintaining quality standards is of
strategic importance to all business organizations
Product and service design
Increase capability in order to move from extensive use of
control charts and inspection to achieve desired quality
outcomes
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McGraw-Hill Education.
10-42
Management of
Quality
Copyright ©2021 McGraw-Hill Education. All rights reserved. No reproduction or
distribution without the prior written consent of McGraw-Hill Education.
You should be able to:
LO 9.1 Discuss the philosophies of quality gurus
LO 9.2 Define the term quality as it relates to products and as it relates to
services
LO 9.3 Identify the determinants of quality
LO 9.4 Explain why quality is important and the consequences of poor
quality
LO 9.5 Describe and give examples of the costs associated with quality
LO 9.6 Discuss the importance of ethics in managing quality
LO 9.7 Compare the quality awards
LO 9.8 Discuss quality certification and its importance
LO 9.9 Describe TQM
LO 9.10 Give an overview of problem solving
LO 9.11 Give an overview of process improvement
LO 9.12 Describe the Six Sigma methodology
LO 9.13 Describe and use various quality tools
Copyright ©2021 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
Quality
The ability of a product or service to consistently meet or
exceed customer expectations
For a decade or so, quality was an important focal point in
business. After a while, this emphasis began to fade as other
concerns took precedence
There has been a recent resurgence in attention to quality
given recent experiences with the costs and adverse attention
associated with highly visible quality failures:
Auto recalls
Toys
Produce
Dog food
Pharmaceuticals
LO 9.1
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McGraw-Hill Education.
Walter Shewart
“Father of statistical quality control”
Control charts
Variance reduction
W. Edwards Deming
Special vs. common cause variation
The 14 points
Joseph Juran
Quality Control Handbook, 1951
Viewed quality as fitness-for-use
Quality trilogy – quality planning, quality control, quality
improvement
LO 9.1
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McGraw-Hill Education.
Armand Feigenbaum
Quality is a “total field”
The customer defines quality
Philip B. Crosby
Zero defects
Quality is Free, 1979
Kaoru Ishikawa
Cause-and-effect diagram
Quality circles
Recognized the internal customer
LO 9.1
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McGraw-Hill Education.
Genichi Taguchi
Taguchi loss function
Taiichi Ohno and Shigeo Shingo
Developed philosophy and methods of kaizen
LO 9.1
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McGraw-Hill Education.
Performance – main characteristics of the product
Aesthetics – appearance, feel, smell, taste
Special features – extra characteristics
Conformance – how well the product conforms to design
specifications
Reliability – consistency of performance
Durability – the useful life of the product
Perceived quality – indirect evaluation of quality
Serviceability – handling of complaints or repairs
Consistency – quality doesn’t vary
LO 9.2
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McGraw-Hill Education.
Convenience – the availability and accessibility of the service
Reliability – ability to perform a service dependably, consistently, and
accurately
Responsiveness – willingness to help customers in unusual situations and
to deal with problems
Time – the speed with which the service is delivered
Assurance – knowledge exhibited by personnel and their ability to convey
trust and confidence
Courtesy – the way customers are treated by employees
Tangibles – the physical appearance of facilities, equipment, personnel, and
communication materials
Consistency – the ability to provide the same level of good quality repeatedly
Expectancy – meet (or exceed) customer expectations
LO 9.2
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McGraw-Hill Education.
Audit service to identify strengths and weaknesses
In particular, look for discrepancies between:
1.
Customer expectations and management perceptions of those
expectations
2. Management perceptions, customer expectations, and servicequality specifications
3. Service quality and service actually delivered
4. Service actually delivered and what is communicated about the
service to customers
5. Customers’ expectations of the service provider and their
perceptions of provider delivery
LO 9.2
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McGraw-Hill Education.
Quality of design
Intention of designers to include or exclude features in a product or service
Quality of conformance
The degree to which goods or services conform to the intent of the
designers
Ease-of-use and user instructions
Increase the likelihood that a product will be used for its intended purpose
and in such a way that it will continue to function properly and safely
After-the-sale service
Taking care of issues and problems that arise after the sale
LO 9.3
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McGraw-Hill Education.
Top management
Design
Procurement
Production/operations
Quality assurance
Packaging and shipping
Marketing and sales
Everyone in the
organization has some
responsibility for quality,
but certain areas of the
organization are involved
in activities that make
them key areas of
responsibility
Customer service
LO 9.3
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McGraw-Hill Education.
Enhanced reputation for quality
Ability to command premium prices
Increased market share
Greater customer loyalty
Lower liability costs
Fewer production or service problems
Lower production costs
Higher profits
LO 9.4
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McGraw-Hill Education.
Loss of business
Liability
Productivity
Costs
LO 9.4
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McGraw-Hill Education.
Appraisal costs
Costs of activities designed to ensure quality or uncover
defects
Prevention costs
All TQ training, TQ planning, customer assessment,
process control, and quality improvement costs to
prevent defects from occurring
LO 9.5
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Failure costs – costs incurred by defective
parts/products or faulty services
Internal failure costs
Costs incurred to fix problems that are detected before the
product/service is delivered to the customer
External failure costs
All costs incurred to fix problems that are detected after the
product/service is delivered to the customer
LO 9.5
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McGraw-Hill Education.
Substandard work
Defective products
Substandard service
Poor designs
Shoddy workmanship
Substandard parts and materials
Having knowledge of this and failing to correct
and report it in a timely manner is unethical.
LO 9.6
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McGraw-Hill Education.
Award categories
1.
2.
3.
4.
5.
6.
Education
Healthcare
Manufacturing
Nonprofit/government
Service
Small Business
Purpose of the award
1.
2.
3.
LO 9.7
Stimulate efforts to improve quality
Recognize quality achievements
Publicize successful programs
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McGraw-Hill Education.
Leadership
II. Strategic planning
III. Customer focus
IV. Measurement, analysis, and knowledge management
V. Workforce focus
VI. Operations focus
VII. Results
I.
LO 9.7
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McGraw-Hill Education.
International Organization for Standardization
ISO 9000
Set of international standards on quality management and quality
assurance, critical to international business
ISO 14000
A set of international standards for assessing a company’s
environmental performance
ISO 24700
Pertains to the quality and performance of office equipment that
contains reused components
LO 9.8
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McGraw-Hill Education.
ISO 9000
Quality principles
Principle 1
Customer focus
Principle 2
Leadership
Principle 3
Involvement of people
Principle 4
Process approach
Principle 5
System approach to management
Principle 6
Continual improvement
Principle 7
Factual approach to decision making
Principle 8
Mutually beneficial supplier relationships
LO 9.8
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McGraw-Hill Education.
Business leaders are increasingly recognizing the
importance of their supply chains in achieving their
quality goals
Requires:
Measuring customer perceptions of quality
Identifying problem areas
Correcting these problems
Supply chain quality management can benefit from a
collaborative relationship with suppliers
Helping suppliers with quality assurance efforts
Information sharing on quality-related matters
LO 9.8
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McGraw-Hill Education.
A philosophy that involves everyone in an organization
in a continual effort to improve quality and achieve
customer satisfaction
T
LO 9.9
Q
M
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McGraw-Hill Education.
1.
2.
3.
4.
5.
6.
Find out what the customer wants
Design a product or service that meets or exceeds
customer wants
Design processes that facilitate doing the job right the
first time
Keep track of results
Extend these concepts throughout the supply chain
Top management must be involved and committed
LO 9.9
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McGraw-Hill Education.
Continuous improvement
2. Competitive benchmarking
3. Employee empowerment
4. Team approach
5. Decision based on fact, not opinion
6. Knowledge of tools
7. Supplier quality
8. Champion
9. Quality at the source
10. Suppliers are partners in the process
1.
LO 9.9
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McGraw-Hill Education.
Continuous improvement
Philosophy that seeks to make never-ending
improvements to the process of converting inputs into
outputs
Kaizen
Japanese word for continuous improvement
LO 9.9
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McGraw-Hill Education.
The philosophy of making each
worker responsible for the quality of
his or her work
“Do it right” and “If it isn’t right, fix it”
LO 9.9
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McGraw-Hill Education.
Obstacles include:
Lack of company-wide definition of quality
Lack of strategic plan for change
Lack of customer focus
Poor intra-organizational communication
Lack of employee empowerment
View of quality as a “quick fix”
Emphasis on short-term financial results
Inordinate presence of internal politics and “turf” issues
Lack of strong motivation
Lack of time to devote to quality initiatives
Lack of leadership
LO 9.9
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McGraw-Hill Education.
Overzealous advocates may pursue TQM programs blindly,
focusing attention on quality
Programs may not be linked to the strategies of the
organization in a meaningful way
Quality-related decisions may not be tied to market
performance
Failure to carefully plan a program before embarking on it can
lead to false starts, employee confusion, and meaningless
results
Organizations sometimes pursue continuous improvement
Quality efforts may not be tied to results
LO 9.9
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McGraw-Hill Education.
Act
Plan
Study
Do
Plan-Do-Study-Act (PDSA) cycle
Plan
Begin by studying and documenting the current process.
Collect data on the process or problem
Analyze the data and develop a plan for improvement
Specify measures for evaluating the plan
Do
Implement the plan, document any changes made, collect
data for analysis
LO 9.10
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McGraw-Hill Education.
Act
Plan
Study
Do
Plan-Do-Study-Act (PDSA) cycle
Study
Evaluate the data collection during the do phase
Check results against goals formulated during the plan phase
Act
If the results are successful, standardize the new method and
communicate it to the relevant personnel
Implement training for the new method
If unsuccessful, revise the plan and repeat the process
LO 9.10
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McGraw-Hill Education.
LO 9.10
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McGraw-Hill Education.
Process improvement
A systematic approach to improving a process
Map the process
Collect information about the process and identify each step in
the process
Prepare a flowchart that accurately depicts the process
Analyze the process
Ask critical questions about the process
Ask specific questions about each step in the process
Redesign the process
LO 9.11
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McGraw-Hill Education.
Six Sigma
A business process for improving quality, reducing costs,
and increasing customer satisfaction
Statistically
Having no more than 3.4 defects per million
Conceptually
Program designed to reduce defects
Requires the use of certain tools and techniques
LO 9.12
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McGraw-Hill Education.
Principles
Reduction in variation is an important goal
The methodology is data driven; it requires data validation
Outputs are determined by inputs
Only a critical few inputs have a significant impact on outputs
DMAIC
Define:
Measure:
Set the context and objectives for improvement
Determine the baseline performance and capability of
the process
Analyze: Use data and tools to understand the cause-and-effect
relationships of the process
Improve: Develop the modifications that lead to a validated
improvement of the process
Control:
Establish plans and procedures to ensure that
improvements are sustained
LO 9.12
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McGraw-Hill Education.
Flowchart
Check sheet
Histogram
Pareto chart
Scatter diagram
Control chart
Cause-and-effect diagram
LO 9.13
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McGraw-Hill Education.
LO 9.13
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McGraw-Hill Education.
Brainstorming
Quality circles
Benchmarking
LO 9.13
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McGraw-Hill Education.
Quality circle
Groups of workers who meet to discuss ways of improving products
or processes
Less structured and more informal than teams involved in
continuous improvement
Quality circle teams have historically had relatively little
authority to make any but the most minor changes
LO 9.13
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McGraw-Hill Education.
1.
2.
3.
4.
5.
Identify a critical process that needs improvement
Identify an organization that excels in this process
Contact that organization
Analyze the data
Improve the critical process
LO 9.13
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McGraw-Hill Education.
Quality is a strategic imperative for organizations
Customers are very concerned with the quality of goods and services
they receive
Quality is a never-ending journey
It is important that most organizational members understand and
buy into this idea
Customer satisfaction ≠ customer loyalty
Quality needs to be incorporated throughout the
entire supply chain, not just the organization itself
LO 9.13
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McGraw-Hill Education.
Location Planning
and Analysis
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distribution without the prior written consent of McGraw-Hill Education.
8-1
You should be able to:
LO 8.1
Identify some of the main reasons organizations need to make
location decisions
LO 8.2
Explain why location decisions are important
LO 8.3
Discuss the options that are available for location decisions
LO 8.4
Discuss key considerations related to global location decisions.
LO 8.5
Outline the decision process for making location decisions
LO 8.6
Describe some of the key factors that guide service and retail
location decisions.
LO 8.7
Use the techniques presented to evaluate location alternatives.
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8-2
Location decisions arise for a variety of reasons:
Addition of new facilities
As part of a marketing strategy to expand markets
Growth in demand that cannot be satisfied by expanding
existing facilities
Depletion of basic inputs requires relocation
Shift in markets
Cost of doing business at a particular location makes
relocation attractive
LO 8.1
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McGraw-Hill Education.
8-3
Location decisions:
Are closely tied to an organization’s strategies
Low-cost
Convenience to attract market share
Affect capacity and flexibility
Represent a long-term commitment of resources
Affect investment requirements, operating costs, revenues, and operations
Impact competitive advantage
Importance to supply chains
LO 8.2
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McGraw-Hill Education.
8-4
Location decisions are based on:
Profit potential or cost and customer service
Finding a number of acceptable locations from which to choose
Position in the supply chain
End: accessibility, consumer demographics, traffic patterns, and local customs
are important
Middle: locate near suppliers or markets
Beginning: locate near the source of raw materials
Web-based retail organizations are effectively location independent
LO 8.2
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McGraw-Hill Education.
8-5
Location criteria can depend on where a business is in the
supply chain
Supply chain management must address supply chain
configuration:
Number and location of suppliers, production facilities,
warehouses and distribution centers
Centralized vs. decentralized distribution
The importance of such decisions is underscored by their
reflection of the basic strategy for accessing customer
markets
LO 8.2
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McGraw-Hill Education.
8-6
Existing companies generally have four options
available in location planning:
1.
2.
3.
4.
LO 8.2
Expand an existing facility
Add new locations while retaining existing facilities
Shut down one location and move to another
Do nothing
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8-7
Two key factors have contributed to the attractiveness
of globalization:
Trade agreements such as
North American Free Trade Agreement (NAFTA)
General Agreement on Tariffs and Trade (GATT)
U.S.-China Trade Relations Act
EU and WTO efforts to facilitate trade
Technology
Advances in communication and information technology
LO 8.3
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McGraw-Hill Education.
8-8
A wide range of benefits have accrued to organizations
that have globalized operations:
Markets
Cost savings
Legal and regulatory
Financial
Other
LO 8.4 Copyright ©2021 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
8-9
There are a number of disadvantages that may
arise when locating globally:
Transportation costs
Security costs
Unskilled labor
Import restrictions
Criticism for locating out-of-country
Productivity
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McGraw-Hill Education.
8-10
Organizations locating globally should be aware
of potential risk factors related to:
Intellectual property rights
Political instability and unrest
Terrorism
Economic instability
Legal regulation
Ethical considerations
Cultural differences
Quality
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McGraw-Hill Education.
8-11
Managerial implications for global operations:
Language and cultural differences
Risk of miscommunication
Development of trust
Different management styles
Corruption and bribery
Increased travel (and related) costs
Challenges associated with managing far-flung operations
Level of technology and resistance to technological change
Domestic personnel may resist locating, even temporarily
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McGraw-Hill Education.
8-12
Steps:
1.
Decide on the criteria to use for evaluating location alternatives
2. Identify important factors, such as location of markets or raw
materials
3. Develop location alternatives
a. Identify the country or countries for location
b. Identify the general region for location
c. Identify a small number of community alternatives
d. Identify the site alternatives among the community alternatives
4. Evaluate the alternatives and make a decision
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McGraw-Hill Education.
8-13
Factors Relating to Foreign Locations
Government
a.
Policies on foreign ownership of production facilities
Local content requirements
Import restrictions
Currency restrictions
Environment regulations
Local product standards
Liability laws
b. Stability issues
Cultural differences
Living circumstances for foreign workers and their dependents
Ways of doing business
Religious holidays/traditions
Customer preferences
Possible “buy locally” sentiment
Labor
Level of training and education of workers
Work ethic
Wage rates
Possible regulations limiting the number of foreign employees
Language differences
Resources
Availability and quality of raw materials, energy, transportation
infrastructure
Financial
Financial incentives, tax rates, inflation rates, interest rates
Technological
Rate of technological change, rate of innovations
Market
Market potential, competition
Safety
Crime, terrorism threat
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McGraw-Hill Education.
8-14
Primary regional factors:
Location of raw materials
Necessity
Perishability
Transportation costs
Location of markets
As part of a profit-oriented company’s competitive strategy
So not-for-profits can meet the needs of their service users
Distribution costs and perishability
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McGraw-Hill Education.
8-15
Labor factors
Cost of labor
Availability of suitably skilled workers
Wage rates in the area
Labor productivity
Attitudes toward work
Whether unions pose a serious potential problem
Other factors
Climate and taxes may play an important role in location
decisions
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McGraw-Hill Education.
8-16
Many communities actively attempt to attract new
businesses they perceive to be a good fit for the community
Businesses also actively seek attractive communities based
on such factors such as:
Quality of life
Services
Attitudes
Taxes
Environmental regulations
Utilities
Development support
LO 8.5
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McGraw-Hill Education.
8-17
Primary site location considerations are
Land
Transportation
Zoning
Other restrictions
LO 8.5
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8-18
Organizing operations
Product plant strategy
Entire products or product lines are produced in separate
plants, and each plant usually supplies the entire domestic
market
Market area plant strategy
Plants are designated to serve a particular geographic
segment of the market
Plants produce most, if not all, of a company’s products
LO 8.5
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8-19
Organizing operations
Process plant strategy
Different plants focus on different aspects of a process
Automobile manufacturers – engine plant, body stamping plant,
etc.
Coordination across the system becomes a significant issue
General-purpose plant strategy
Plants are flexible and capable of handling a range of
products
LO 8.5
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8-20
Examples
Logistics companies use GIS data to plan fleet
Publishers of magazines and newspapers use a GIS to
analyze circulation and attract advertisers
Banks use a GIS to help decide where to locate branch banks
Utility companies use a GIS to balance supply and demand,
and identify problem areas
Insurance companies use a GIS to determine premiums
based on population distribution, crime figures, and
likelihood of natural disasters such as flooding in various
locations, and to manage risk
LO 8.5
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McGraw-Hill Education.
8-21
GIS
A computer-based tool for collecting, storing, retrieving,
and displaying demographic data on maps
Aids decision makers in
Targeting market segments
Identifying locations relative to their market potential
Planning distribution networks
Portraying relevant information on a map makes it
easier for decision makers to understand
LO 8.5
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McGraw-Hill Education.
8-22
Considerations:
Nearness to raw materials is not usually a consideration
Customer access is
A prime consideration for some: restaurants, hotels, etc.
Not an important consideration for others: service call
centers, etc.
Tend to be profit or revenue driven, and so are
Concerned with demographics, competition, traffic volume
patterns, and convenience
Clustering
Similar types of businesses locate near one another
LO 8.6
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McGraw-Hill Education.
8-23
Common techniques:
Locational cost-volume-profit analysis
Transportation model
Factor rating
Center of gravity method
LO 8.7
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McGraw-Hill Education.
8-24
Locational cost-profit-volume analysis
Technique for evaluating location choices in economic terms
Steps:
1.
Determine the fixed and variable costs for each alternative
2. Plot the total-cost lines for all alternatives on the same graph
3. Determine the location that will have the lowest total cost (or
highest profit) for the expected level of output
LO 8.7
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McGraw-Hill Education.
8-25
Assumptions
Fixed costs are constant for the range of probable
output
2. Variable costs are linear for the range of probable
output
3. The required level of output can be closely estimated
4. Only one product is involved
1.
LO 8.7
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McGraw-Hill Education.
8-26
For a cost analysis, compute the total cost for each
alternative location:
Total Cost = FC + v Q
where
FC = Fixed cost
v = Variable cost per unit
Q = Quantity or volume of output
LO 8.7
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McGraw-Hill Education.
8-27
Fixed and variable costs for four potential plant
locations are shown below:
LO 8.7
Location
Fixed Cost
per Year
Variable Cost
per Unit
A
$250,000
$11
B
$100,000
$30
C
$150,000
$20
D
$200,000
$35
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8-28
Plot of Location Total Costs
LO 8.7
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McGraw-Hill Education.
8-29
Range approximations
B Superior (up to 4,999 units)
Total Cost of C = Total Cost of B
150,000 + 20Q = 100,000 + 30Q
50,000 = 10Q
Q = 5,000
C Superior (>5,000 to 11,111 units)
Total Cost of A = Total Cost of C
250,000 + 11Q = 150,000 + 20Q
100,000 = 9Q
A superior (11,112 units and up)
LO 8.7
Q = 11,111.11
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8-30
Factor rating
General approach to evaluating locations that includes quantitative
and qualitative inputs
Procedure:
Determine which factors are relevant
Assign a weight to each factor that indicates its relative importance
compared with all other factors
1.
2.
3.
4.
5.
6.
LO 8.7
Weights typically sum to 1.00
Decide on a common scale for all factors, and set a minimum acceptable
score if necessary
Score each location alternative
Multiply the factor weight by the score for each factor, and sum the results
for each location alternative
Choose the alternative that has the highest composite score, unless it fails
to meet the minimum acceptable score
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8-31
A photo-processing company intends to open a new branch store. The
following table contains information on two potential locations. Which is
better?
Scores
(Out of 100)
Factor
Weight
Alt 1
Alt 2
Proximity to
existing source
.10
100
60
Traffic volume
.05
80
80
Rental costs
.40
70
90
Size
.10
86
92
Layout
.20
40
70
Operating Cost
.15
80
90
1.00
LO 8.7
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8-32
A photo-processing company intends to open a new branch store. The
following table contains information on two potential locations. Which is
better?
Scores
(Out of 100)
Factor
Weight
Alt 1
Alt 2
Alt 1
Proximity to
existing source
.10
100
60
.10(100) = 10.0
.10(60) = 6.0
Traffic volume
.05
80
80
.05(80) = 4.0
.05(80) = 4.0
Rental costs
.40
70
90
.40(70) = 28.0
.40(90) = 36.0
Size
.10
86
92
.10(86) = 8.6
.10(92) = 9.2
Layout
.20
40
70
.20(40) = 8.0
.20(70) = 14.0
Operating Cost
.15
80
90
.15(80) = 12.0
.15(90) = 13.5
70.6
82.7
1.00
LO 8.7
Weighted Scores
Alt 2
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8-33
Center of gravity method
Method for locating a distribution center that minimizes
distribution costs
Treats distribution costs as a linear function of the distance and
the quantity shipped
The quantity to be shipped to each destination is assumed to be
fixed
The method includes the use of a map that shows the locations
of destinations
The map must be accurate and drawn to scale
A coordinate system is overlaid on the map to determine relative
locations
LO 8.7
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McGraw-Hill Education.
8-34
Figure 8.1
LO 8.7
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McGraw-Hill Education.
8-35
If quantities to be shipped to every location are equal, you can obtain
the coordinates of the center of gravity by finding the average of the xcoordinates and the average of the y-coordinates.
x
x=
i
n
y
y=
i
n
where
xi = x coordinate of destinatio n i
yi = y coordinate of destinatio n i
n = Number of destinatio ns
LO 8.7
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McGraw-Hill Education.
8-36
Suppose you are attempting to find the center of
gravity for the problem depicted in Figure 8.1c.
Destination
x
y
D1
2
2
D2
3
5
D3
5
4
D4
8
5
18
16
x 18
x=
= = 4.5
i
n
4
y 16
y=
=
=4
i
n
4
Here, the center of gravity is (4.5,4). This is
slightly west of D3 from Figure 8.1.
LO 8.7
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8-37
When the quantities to be shipped to every location are unequal, you
can obtain the coordinates of the center of gravity by finding the
weighted average of the x-coordinates and the average of the ycoordinates.
xi Qi
x=
Qi
yQ
y=
Q
i
i
i
where
Qi = Quantity t o be shipped to destinatio n i
xi = x coordinate of destinatio n i
yi = y coordinate of destinatio n i
LO 8.7
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8-38
Suppose the shipments for the problem depicted in Figure 8.1a are not
all equal. Determine the center of gravity based on the following
information.
LO 8.7
Destination
x
y
Weekly
Quantity
D1
2
2
800
D2
3
5
900
D3
5
4
200
D4
8
5
100
18
16
2,000
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8-39
x Q 2(800) + 3(900) + 5(200) + 8(100) 6,100
x=
=
=
= 3.05
2,000
2,000
Q
i
i
i
yQ
2(800) + 5(900) + 4(200) + 5(100) 7,400
y=
i=
=
= 3.7
2,000
2,000
Q
i
i
i
The coordinates for the center of gravity are (3.05, 3.7). You may round
the x-coordinate down to 3.0, so the coordinates for the center of
gravity are (3.0, 3.7). This is south of destination D2 (3, 5).
LO 8.7
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McGraw-Hill Education.
8-40
LO 8.7
Copyright ©2021 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
8-41
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