IE 497B

A.Ravindran

Homework-2
(Due Sept. 21)

Fall 2007

1. The Following questions refer to the Beer Distribution Supply Chain Game played on
Sept. 11:
a) What, if anything, is unrealistic about this game?
b) How would you determine the cost of holding inventory
c) How would you determine the cost of a back order?
d) Why are there order delays?
e) Why are the production delays? Shipping delays?
f) Why have both distributors and wholesalers? Why not ship beer directly from the
factory to the retailer?
2. The time to make beds at a motel should fall into an agreed-on range of times. A
sample of four maids was selected, and the time needed to make a bed was observed
on three different occasions:
Service Time, Sec
Maid
Sample 1 Sample 2 Sample 3
Ann
120
90
150
Linda
130
110
140
Marie
200
180
175
Michael
165
155
140
a) Determine the upper and lower control limits for an X -chart and an R-chart with
a sample size of four.
b) After the control chart was established, a sample of four observations had the
following times in seconds: 185, 150, 192 and 178. Is corrective action needed?
3. Several complaints recently have been sent to the Gotham City police department
regarding the increasing incidence of congestion on the citys streets. The complaints
attribute the cause of these traffic tie-ups to a lack of synchronization of the traffic
lights. The lights are controlled by a main computer system, and adjusting this
program is costly. Therefore, the controllers are reluctant to change the situation
unless a clear need is shown.
During the past year, the police department has collected data at 1,000
intersections. The data were compiled on a monthly basis as shown below:

IE 497B
A.Ravindran

Homework-2
(Due Sept. 21)

Fall 2007

Month

Congestion
Incidence
January
14
February
18
March
14
April
12
May
16
June
8
July
19
August
12
September
14
October
7
November
10
December
18
a) Construct a p-chart based on the above data.
b) Should the system be modified if , during the next 3 months, reports of congestion
at these 1,000 intersections indicate the following:
Month

Congestion
Incidence
January
15
February
9
March
11
4. Multiple Choice Questions
1. The major input into a large public hospital from a service point of view would
be:
a.
b.
c.
d.

physicians services
patients
nursing services
federal reimbursement (Medicare/Medicaid)

2. Which of the following is not true of services?

a.
b.
c.
d.

The customer is the input

The customer takes an active part in the service
A service can be inventoried
Production and consumption can occur simultaneously

IE 497B
A.Ravindran

Homework-2
(Due Sept. 21)

Fall 2007

3. Which service offering is best described by the following service mix: a high
degree of customer interaction and a high degree of labor intensity?
a.
b.
c.
d.

Public university
Cruise ship
Plumbing repair
Chiropractor

4. An empty airline seat of hotel room not occupied best illustrates the characteristic
of a services
a.
b.
c.
d.

Time perish ability

Labor intensity
Intangibility
Simultaneous production and consumption

5. Which type of service falls under the category of high labor/low customization?
a. Service factory
b. Service shop
c. Mass service
d. Professional service
6. A hospital is an example of a service processes that has
a. A high degree of labor intensity and low degree of customization.
b. Low degree of labor intensity and low degree of customization.
c. High degree of labor intensity and high degree of customization.
d. Low degree of labor intensity and high degree of customization.
7. Which among the following strategies is used by fast-food restaurants to reduce
costs?
a. Increase advertising via the Internet.
b. Allowing the customer to play an active part in the service process.
c. Increase prices.
d. Increasing menu items to cater to varying tastes.
8. _______and_______ are among many of the unique characteristic of services that
are interrelated
a. Inventory stockout, time
b. Supply, demand
c. Customer participation, perishability
d. capacity, time

IE 497B
A.Ravindran

Homework-2
(Due Sept. 21)

Fall 2007

9. Distinctive characteristics of service operations include which of the following?

a. customer participation and perishability
b. intangibility and heterogeneity
c. (a) and (b)
d. none of the above
10. What type of service industry is high in judgment exercised by customer contact
personnel and low in customization?
a. college food service
b. professional services
c. telephone services
d. fast-food restaurant