Saeed Abdalla Ghanim Saif Alzaabi.docx

DDM 501: Operations Management (Spring 2021) Individual Assignment 1 Submitted By: Student Name Student ID Saeed Abdalla Ghanim Saif Alzaabi Emba200305

Answer to Question 1 Part a) Labor Productivity = Total Output / Total Input (Labor Cost) Cincinnati – 10,000 units / $3,500 = 2.86 units/$ Frankfurt – 12,000 units / $4,200 = 2.86 units/$ Guadalajara – 5,000 units / $2,500 = 2 units/$ Beijing – 8,000 units / $800 = 10 units/$ If we will consider the in-process will be completed labor productivity will be as follows: Cincinnati – 11,000 units / $3,500 = 3.14 units/$ Frankfurt – 14,200 units / $4,200 = 3.38 units/$ Guadalajara – 8,000 units / $2,500 = 3.20 units/$ Beijing – 14,000 units / $800 = 17.5 units/$ Part b) Multifactor Productivity = Total Output / Input (Energy + Labor + Materials + Miscellaneous) Cincinnati – 10,000 units / ($3,500+$3,500+$1,000+$250+$1,200) = 1.06 units/$ Frankfurt – 12,000 units / ($4,200+$3,000+$1,500+$2,500+$3,000) = .85 units/$ Guadalajara – 5,000 units / ($2,500+$2,000+$1,200+$2,000+$2,500) = .49 units/$ Beijing – 8,000 units / ($800+$2,500+$800+$5,000+$500) = .83 units/$ If we will consider the in-process will be completed Multifactor productivity will be as follows: Cincinnati – 10,000 units / ($3,500+$3,500+$1,000+$250+$1,200) = 1.16 units/$ Frankfurt – 12,000 units / ($4,200+$3,000+$1,500+$2,500+$3,000) = 1.00 units/$ Guadalajara – 5,000 units / ($2,500+$2,000+$1,200+$2,000+$2,500) = .78 units/$ Beijing – 8,000 units / ($800+$2,500+$800+$5,000+$500) = 1.46 units/$ Part C) If Omar needed to close one of the plants, I would choose to close plant Guadalajara because it is the facility that has lowest labor productivity and the lowest multifactor productivity. 1

Answer to Question 2 a. Make:   25,000 40 300 25,000 12,000 $37,000     Buy:   50 300 $15,000*  Buy the part. b.     $50 100 45 300 100 5,000 9,000 $14,000*      Buy from the New Supplier. c. for 2,000 parts; Make:   25,000 40 2,000 $105,000   Old:   50 2,000 100,000  New:   5,000 45 2000 100 $90,500*    Same decision: Buy from the New Supplier. For 5,000 pars; Make:   25,000 40 5,000 $225,000*   Old:   50 5,000 250,000  New:     50 100 45 5,000 100 $225,500    Decision changes: Make. d. Make vs. New Supplier   25,000 40 5,000 45 100 x x     25,000 40 5,000 45 4,500 x x     25,000 40 500 45 x x    24,500 5 x  4,900 x  Old vs. New Supplier   50 5,000 45 100 x x    50 5,000 45 4500 x x    5 500 x  100 x  • If demand for component 100,  choose old supplier. • If demand for component 100  but 4,900,  choose new supplier. • If demand for component 4,900,  make it. 2

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Answer to Question 3 Key infrastructural and structural elements in Netflix’s supply chain strategy Before 2011 company was offering movies to the consumers via mail hence key structural element at that time was 60 distribution centers. These distribution centers were working to meet the need of consumers across the US. DVDs were used to meet the movie need of buyers. But after that period company has adopted new technologies. The implementation of information technology makes its supply chain system more virtual rather than physical. Now consumers are getting facilities to use the internet to get virtual services. The key structural element and the infrastructural element after 2011 were digital movies and internet access. This was the choice of Netflix to move towards the virtual atmosphere and make more profit ( Lobato, 2018 ). This strategy supported in eliminating the distribution cost so that firm can generate the high revenues. Changes in the customer order winners for Netflix Changes in the customer’s order winner came when the company moved from physical to digital market. This case clearly describes the benefit that has been received by Netflix from turning to digital services. Now Netflix does not require managing its physical network which is considered to be expensive. The firm becomes able to cut its cost and this saved money is being used by the firm in its expansion to other markets where internet access is available. Now the company is not thinking about keeping its DVDs physically as it provides immediate services to consumers via the internet. Now consumers are more educated and using the internet frequently. They prefer to get online services first hence this virtual service of Netflix adds value to them hence they will not go back to the traditional supply chain system ( Madanapalli& et.al. 2019 ). Netflix should abandon its physical distribution system or not The revenue of Netflix is getting down every year on its mailing services hence it should abandon its distribution centers. The number of subscribers of Netflix is increasing with rapid speed. These internet services allow the business to expand its operations and make a connection with the big audience in this entertainment industry. Now consumers can get all movies on the internet that was earlier available to DVD only ( Reed & Kranch, 2017 ). The easy access facilities and great content are giving benefit to Netflix in dealing with huge users and getting multiple 3

awards. In this manner, the firm is growing well. Now people less prefer to buy DVDs and if the company is keeping its physical distribution centers then it would have to bear its cost as well hence it would be better to close it. 4

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