Running head: HAZEL CASE STUDY 1

Hazel Case Study

Dao Thi Kim Thanh

City University of Seattle

February, 12nd 2018

Author Note

This paper was prepared for BSM-405-02: Operations Management, taught by Professor

Joshua Dwight
HAZEL CASE STUDY 2

Hazel had worked for the Fortune 500 Company for 15 years but suddenly she and 400 of

her coworkers were fired because of the new CEO’s decision to downsize the company. Hazel

tried to find a new job but after 8 months she still could not find one. By chance, she got

involved in the lawn mowing service when her neighbors did not have anyone care for their

lawn. She mowed the lawn for 5 neighbors and still the job search. But as the rejection letter

built up she decided to start her own business of lawn care service. Many neighbors asked her to

care for their lawn and after first year she knew she could earn a living this way. She hired 2

part-time employees and believed she could expand her business (Stevenson, 2015, pg. 37)

1.

a. As an operation manager, Hazel is expected to have the ability of forecasting.

According to Stevenson (2015), foresting is the basic input in the decision-making process of

operation management because they provide information on future demand which is vitally

important for preparing other operation plans such as capacity and budgets (pg. 77). Therefore,

Hazel should be able to forecast the future demand for lawn mowing service in her neighborhood

and other areas as well. Based on the future demand she would be able to plan the capacity such

as whether to hire more workers or to buy additional equipment or not. Apart from the future

demand, she also should be able to predict other factors that affect her business. For example, the

weather is one factor that has a significant impact on whether she can perform her services or not

so she need to forecast the weather and plan accordingly. The growth in lawn care service in her

neighborhood and the potential competitors also need to be predicted so she could plan to

develop her business.

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b. The inventory items that Hazel might have is a truck for transportation of the machine,

trailers to store her equipment, her machines and other items necessary for performing the

services. Her equipment might include lawn mowing machine, water spraying machine,

gardening tools. She also needs to have gasoline for the machine, grass seeds, fertilizer and

pesticide, gloves. The replacement parts in case the machines broke down are also necessary

items in her inventory. In addition to this, the office supplier and computer system for her

recording of daily business transactions would also be in her inventory. An inventory decision

that she would make periodically would be what lawn care products to be used to increase her

services quality or considering buying a different kind of machine to improve efficiency.

c. She must schedule the time and the places she and her employees will perform the

service each day. To maximize the lawn care performed each day she also needs to plan carefully

the amount of time spent in each lawn. But depending on the condition of each lawn the time

spent will be different. In addition to this, her methods of ordering inventory are also one thing

need scheduling such as whether she will apply the just in time inventory method and only order

when she needs or she will buy surplus and store in inventory.

There are some factors that might disrupt and cause her to reschedule. Firstly, the weather

condition such as rain or snowfall has a significant impact on her schedule. Cancelling from her

clients or the personal issues of her employees such as illness also disrupt her plan. Beside of

that, the schedule could be intervened because of machine broke down.

d. The quality assurance is important for every business especially a small one like

Hazel’. While there are many lawn care services available it is the service quality that will bring

reputation and customers to Hazel and help her expand her business in the future. It can be said
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that Hazel service is of high quality since many customers “switched from professional lawn care

services” to come to her (Stevenson, 2015, pg. 38).

e. There are several maintenance activities that Hazel must perform. Firstly, she must

ensure that the fertilizers, grass seeds, pesticides are in good condition by controlling the

temperature and humid level of the barn. Secondly, the equipment must be frequently checked to

ensure it functions well and make replacements for the worn out parts. The service quality also

must be maintained as there are many cases in which the quality standard decline over time as

they focus on other things such as cutting cost or expanding their business and ignore to maintain

their service quality. Maintaining a close and strong relationship with customers by quickly

responding to their queries and would be also an important factor for her business

2.

Because the high degree of customer contact in providing service so every time the

service performed it will be judged by her clients (Stevenson, 2015, pg. 8). The lawn care service

could be judged by the appearance of the lawn after caring. Whether it is green and smooth and

the shrubberies are trimmed clearly or in other words how well their yard look. The health

condition of the lawns is also a customer’s concern and one indicator for judging Hazel’s service.

The attitude of lawn care workers such as whether they are dedicated and enthusiastic for caring

the lawns as well as the worker’s speed and their working efficiency can also be used to judge

her lawn care service. In addition to this when judging or considering using her lawn caring, the

price is also a factor that customer look at. The customer care service such as quick responses to

client concerns is also an additional point for Hazel business.

3.
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a. According to Mankiw (2001), each choice includes a tradeoff that is what people must

give up to get something. In the case of Hazel, the tradeoff between working for a company and

working for herself is the salary she can earn in that company and the profit received from the

lawn care service. Another tradeoff is between the chance to become her own boss but

accompanying with the fear of the uncertainty and the opportunities to be a normal employee but

she has to follow her boss’s rules and face with the risk of being fired.

b. If she decides to expand her business the tradeoff she faces is between the increased

revenue earned from the increase in the number of customers and the increased costs related to

various activities ranging from hiring more employees, buying more machines and equipment to

increased time needed to manage the larger business.

c. If she launches a website she would need to hire a web designer to set up the website

and an IT staff to operate it. Therefore, one of the possible tradeoffs is between the larger

number of clients the website brings, the more popularity of her business and the increased costs

and time to manage the website.

4.

If the ordinance is passed it would cause her a huge trouble because there are many types

of cost incurred in solving the grass clippings. She needs to find the ways to store the clippings

after cutting and then a place to throw them as the local landfills cannot handle them. There are 2

options for Hazel to deal with this problem.

One option would be to leave the grass clippings in her customers’ lawns. The advantage

of that option is that it would address her storage issue because she just needs to crop the lawns

and leave the grass clippings in place. It would save her the cost of buying portable trashcan to

store grass clippings and also the cost of transporting it to the storage place. In addition to this,
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the grass clippings on the lawns can provide a ready source of fertilizer while helping the soil

retains water which promotes root growth and a healthy lawn. However, not every customer like

there are grass clippings in their yard. They might not know the benefit of leaving grass clippings

on their lawn and think that Hazel’s service is not professional or only wants to cut cost. If she

cannot explain to them in an appropriate way that convinces them to believe in her service she

might lose clients. Moreover, applying this technique requires her to mow the lawn frequently

since it is not suitable to leave long grass clippings in the lawns as it will take longer to break

down and will block sunlight from reaching the grass underneath, and may limit grass growth.

A second option would be to store grass clippings at her place to produce compost. An

advantage of that choice is that it will handle the problem with grass clippings and leave the

lawns clear. Therefore, the trouble with clients can be avoided. She can continue to work as

before without major change in her schedule. The compost created can replace the fertilizer and

save her a certain amount of cost. However, the drawback is that it will obviously cost her a large

amount of money to buy dustbin to store clippings and other costs related to build a quite large

space to create her compost. The process of producing compost is time-consuming and therefore

inefficiency.

5.

In my opinion, Hazel should not send that student a check for that idea and also not to use

that idea because now the student is working for her competitor and she could already tell them

her idea. In deciding whether she should use the idea or not she should take into account the

tradeoff between the service improvement and a brighter prospect for her business such as more

customers and the possibility of being sued by her competitor for stealing trade secret or the
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possibility of being revealed business strategy which would cause serious trouble for her

business such as losing competitive advantage.

6.

a. According to Stevenson (2015), variation can be due to variety or variability (pg. 13).

The first possible variation is that Hazel might offer a variety of services so there is a certain

degree of variation exists in her business. For example, the service package offered might

include lawn mowing and weeding garden while other service package involves fertilizer lawn

and trimming shrubbery. The greater the variety of service the greater the variation in service

requirements (Stevenson, 2015, pg. 13). Another source of variation is the assignable variation

caused by defective inputs, incorrect work method or out of adjustment equipment (Stevenson,

2015, pg. 13). For Hazel lawn care service this type of variation can occur because of the wrong

method applied to care lawns. For example, each month in a year the lawn requires different

cutting height and the frequency of mowing is not the same throughout the year. If she does not

pay attention to each lawns’ condition and provide what it truly needs the health condition of

grass will decline. The last source of variation is the random one that always exists in all

processes and demand for services (Stevenson, 2015, pg. 13). Hazel will always have to contend

with the change in demand that in spite of forecasting there are always some degrees of

inaccuracy.

b. The variation misleads the accuracy of forecasting future demand. According to

Stevenson (2015) having the right capacity require having the accurate forecasts of demands the

ability to translate forecasts into capacity requirements and a process in place capable of meeting

expected demand (pg. 13). So once forecasting contains variation it will cause errors in a series
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of following activities such as planning capacity and supply to meet demand. That is the reason

variation causes the difficulties in matching supply and demand.

c. Because the random variation always exists Hazel cannot do anything to reduce it but

she can minimize the assignable variation by analysis and corrective action. For example, when

she applies the incorrect caring method or the wrong mowing height, she needs to study the

growth and development periods of the lawns and the cutting height as well as the frequency of

mowing which is suitable with each season to maintain a good health condition for the lawns

7.

According to Stevenson (2015) “sustainability measures often go beyond traditional

environmental and economic measures to include measures that incorporate social criteria in

decision making” (pg.28). Firstly, to run her business sustainable from the economic perspective

she should focus on the way to improve service productivity. That is the way to increase profit

and maintain a healthy business. In addition to this, it is important to build a strong relationship

with customers by enhancing after-sale customer service which would help her to bring new

clients without a major marketing campaign. In terms of the environmental factor, she should

find the ways to deliver her service but not cause harm to the environment. She can use

equipment operating by renewable energy such as solar power or wind power instead of fossil

fuel. She should replace the use of the pesticide which contaminates the soil and water resource.

Although the cost may be higher she can build her own brand name by performing

environmentally friendly service. From the social view, she could partner with some nonprofit

organization and donate a certain percent of her profit for charity. Nowadays people are more

aware of the responsibility for environment and society so business which engages in activities

contributing back to society will be appreciated and welcomed

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8.

Compared to the professional lawn care service Hazel’s services has several competitive

advantages. Firstly, it is the customer relationship. Hazel has built up a customer channel through

her neighbors which is a strong and close relationship than the professional lawn care services.

Hazel started her business by helping her neighbors to mow the lawn and then she decided to

expand her business when there were more people who “were glad to turn the work over her and

others switch from professional lawn care service” (Stevenson, 2015, pg. 37). By building a

close relationship she is more likely to build credibility over the professional lawn care services.

Secondly, the price is also one of her competitive advantages. Through the words of mouth from

her neighbors, it seems that she does not need to spend much money on marketing campaign like

professional lawn care services because clients come to ask her caring their lawns. Moreover,

because she only hires part-time workers the wage expenses would be smaller and she can save

more. Therefore, she is able to charge a lower price and still earn a profit. Thirdly, the location is

also one of her competitive advantages. Her target customer is her neighbors so she enjoys the

advantage of location near the market which results in lower transportation costs and quicker

delivery time. Hazel seems to be a good manager who motivates her workers to contribute ideas

to improve her business. It is also her competitive advantage.

9.

a. According to Stevenson (2015), productivity is a measure of effective use of resource

usually expressed as the ratio of output to input (pg. 56). If the productivity increase, she can

achieve a higher level of output from the same amount of input so she can consider lowering the

price to attract more clients and capture more market share or to keep the price and reaping a

greater profit. Therefore, increasing productivity is an alternative way to increased price

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b. Hazel could increase productivity by giving incentives for her employees. She should

make it clear that she supports productivity improvement and give rewards to those contribute to

making improvements. In addition to this, she can develop methods for achieving productivity

increase. The employee is a good source for new ideas so she should motivate them to contribute

ideas on how to make an improvement. Researching how other firms have increased

productivity and applying to her business in a suitable way is another way of improving

productivity. Technology is an important factor helping to increase productivity. Therefore, she

should consider buying new machine and equipment which help to perform the work more

quickly and smoothly

10.

In deciding whether to buy the new equipment or not she should consider the tradeoff

between increased productivity because the sidewalk edger will help her team adjust the height

and depth of the edger and perform the task quickly and with ease and the chainsaw would be a

great help in pruning and the risk of losing large amount of expense because the increased

number of customers cannot help cover her cost.

11.

There are both advantages and disadvantages of expanding her business. In terms of the

advantage, a primary benefit of business expansion is the ability to attract and retain new

customers. When she moves into a new market she can bring in the previously untapped market

and then the increased pool of potential customers which can dramatically improve sales,

resulting in increased profit. Furthermore, when she expands her business she could achieve the

economies of scale which means reduced costs per unit that arise from the increased total output

(Amedeo, 2017). It also spreads the risks of doing business and reduces the potential of one poor
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decision damaging her business. Besides reaching to new customers she also has the chance to

hire more qualified employees who can perform the work well or contribute creative idea to

improve her services. However the drawback of expanding business also should be taken into

consideration. One of the major disadvantages of business expansion is that it requires a huge

amount of capital and spares little resources for other business transactions. Therefore, she

should consider the potential return on investing from the new market before investing her

capital into the path of expansion. Moreover, rapid growth can lead to declining quality. When

she focuses on expanding to a new market and having more customers the schedule is tight and

the quality decline. It would affect her reputation and make her clients turn their back to her.

Hiring employees is also a challenge when expanding business. Professor Edward D. Hess said

in an interview that after studying 54 companies in 23 states, he found hiring errors as one likely

outcome of rapid growth (as cited in Heibutzki, n.d.).

12.

According to Stevenson (2015) mission is the reason for a business exists and mission

statement states the purpose of an organization. In my opinion, the statement c that there may be

some benefit to Hazel business and she should consider developing one would be the most

relevant answer .The mission statement is important to differentiate her business from other

business so makes clients remember her business’s name. It defines how she wants her

employees, customers, and other stakeholders perceive her business. Moreover, since she wants

to expand her business she needs a clear direction of what she wants her business to be in the

future. Because mission statement serves as a guild for all of her business decision making it is

important to develop one. Each goal and strategy will support the mission and direct the business

in one direction to achieve what she views as primary reason as being in business. Therefore, the
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mission also brings a sense of meaning to all stakeholders and it can sever as a source of

motivation for her workers.

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Reference:

Amadeo, K. (2017). Economics of Scale. The Balance. Retrieved from:

https://www.thebalance.com/economies-of-scale-3305926

Heibutzki, R. (n.d). The Disadvantages of Expanding a Business. Retrieved from:

http://smallbusiness.chron.com/disadvantages-expanding-business-22611.html

Mankiw, N. G. (2001). Principle of Microeconomics. Mason, OH: Cengage Publishing

Stevenson, W. J. (2015). Operations management (12th ed.). New York, NY: McGraw-

Hill/Irwin

Hi

After reading your post I have some comments for you

As a regular customer at Big C supermarket I am sure that the long waiting line is a big problem for its
manager especially in perk hours. What make me really do not understand is that although the checkout
lines are long, there are some checkout counters still close. In my opinion this fact worsen the situation
because it makes customers to think that the retailer do not respect its customers. It forces them to wait
and still decide not to open the available counters.

As my experience Big C should hire more employees to work in checkout counters if its problem is
insufficient staffs. It could only hire part time workers during busy periods to save labor cost but
according to Stevenson the tradeoffs might involve “training costs, quality issues, and perhaps slower
service than would be provided by regular workers” (pg.810). As long as it open all the available
checkout counter and the problem still persist they can consider open more checkout counter to
mitigate the problem.

Hi

After reading your post I have some comments regarding the ways to improve the waiting line in

the milk tea shop

It seems that there is one staff who handle all customers orders including receive the orders print

the bill and receive money from customers. I think the process of making the milk teas
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according to customers orders will be performed by inside employees. therefore in my opinion

the store could consider hiring more staffs who handle customer’s orders and perhaps

opening one more register to make the waiting line shorter. Another solution is to shift

the demand from busy time to slower time. Since the demand for milk teas varies by time

of day and time of week with evening time and weeken days are the busiest time the store

can consider use discounts or coupon for certain slow times.

Hi

After reading your post I have some comments for you

In my opinion CGV is one famous cinema which has already use the pricing s to shift the demand from
busy time to slower times. In the weekend and evening time the price is often much higher than during
work days. This strategy obviously help it much in shortening the waiting line. However it is undeniable
that the situation still occur in perk time of special days such as holiday. The most possible solution for
the cinema in these days is to hire more part time workers and open some extra register to reduce the
waiting line and close these register in normal days.

Another alternative solution would be for the manager to make the situation more acceptable to those
waiting in line or in other words to make people feel the waiting time is shorter than the actual time.
According to Stevenson (2015) studies has shown a significant differences between the actual time
customers spend waiting and their perceived time (pg. 811). For those waiting in line, if there is nothing
else occupy their thoughts they often focus on the fact that they are waiting and wasting their time,
which make they feel that the waiting time is longer than actual time. Therefore offering some things to
distract customers and make them feel comfortable or productive while waiting would be an effective
solution.

According to Stevenson (2015), constraints are limitations that restrict the alternatives available to
decision makers (pg. 824).

In project management there is a famous term called Triple Constraint. The key attributes of Triple
Constraint include Time, Scope and Cost. The key meaning implied in the triangle shape of this model is
that people cannot alter one side of it without in effect, altering other sides. For example if there is a
request to change the scope of the project mid-way of execution the other 2 attribute will be affected in
some way. If the manager want to increase the scope they should bear a higher amount of cost or the
time will get longer to finish the project. Applying this model in operation management in my opinion it
is appropriate to use this model in some manner. For example in inventory management, if the manager
want to improve the accuracy of inventory records, he/she should consider using more innovative
technology based management system. But it is inevitable that the company will incur a higher cost.

Stevenson, W. J. (2015). Operations management (12th ed.). New York, NY: McGraw-

Hill/Irwin
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