Operations Management



Question 1 Impact of social networks on operations implementation

Note Professor Nicholas Christakis’ TED Talk : The hidden influence of social networks.

Professor Nicholas Christakis refers to emotional contagion in human populations. He moves on to suggest emotional contagion may be a form of communication. Of course, we might conclude animals
stampeding is a reflection of the result of animals communicating with each other. He, also, notes by showing a human network of ‘happy’ and less happy people where the less happy people are at
the fringe of the network. Without any morale interpretation, how would you implement a health policy program that aims to direct…move….people to ‘healthier’ eating habits by positioning less
healthy eating habits to the social fringe?


The high cost of discount culture’
(ISBN# 978 110 113 4931)

a) Ellen Ruppel Shell observes Americans have been overly conditioned to price and have overlooked important notions as quality and service. There is a caveat here about service in spite of what
I, just, said. While there are many other cultures and societies who value high degrees of service more than many Americans, there are, also, many cultures that do not place much value in
superior service. This is changing, though.

I note Chinese culture. Overseas Chinese do not place much emphasis on service quality. For example, if at a restaurant, a group of Chinese order a meal and receive delivery of a dish from a
slightly grumpy waiter, the Chinese aren’t bothered by this. However, if the dish is supposed to be hot…piping hot, but it is tepid, the customers will complain vociferously.

Shell notes Robert Schindler, a marketing professor at Rutgers. Schindler observe, “ “ ‘Price promotions…are designed to evoke excitement by mimicking play and bringing out the customer’s
inner child…’ He continues, ‘ …nine for the price of ten’ loyalty cards at Starbucks and other retail emporia seduce customers to buy more just to ‘score ‘ free product. Buying more overpriced
coffee than you need or want makes no rational sense…but that’s the point. We buy with our emotions…’ “

Parenthetically, Professor Jesse Schell points out the need to convince the consumer, the customer they WANT to do an activity rather than being placed in a position to HAVE TO do an activity. The
want-to emotion might be interpreted as Schindler’s view of the ‘inner child.’ The same goes for Schell’s notion of giving customers, The Market …at plan. (note Schell’s cookie example)

Schindler follows up his observation by noting, “ …Price points have magical properties…” Consumers receive pleasure from….buying. Ah hah! As such, under what circumstances are you going to
attract customers to a premium-priced good or service?

We’re fighting the “Wal-Mart” syndrome where consumers prefer low prices over quality, let alone any concern about the environment for workers who produce products for Wal-Mart.

How would you craft a corporate/organization policy that would justify premium prices for a premium product at …Wal-Mart? I, particularly, call your attention to Shell’s Chapter 3 as a starting
point to answering this question.

a) Cite a recent New York Times article that addresses this issue as it applies to Millennials. Then connect Schindler’s observations to the NYT article. Describe the operational issue needed to
counteract the Millennial preference for on-line shopping? This NY Times article notes T.J. Maxx and Ross Stores as specific examples.


b) The conflict between ‘accessibility’ and quality has only been a prominent social issue for the recent decades…..your lifetime. The notion of ‘accessibility’ as it relates to one perspective
of a Democratic society has resulted in ….IKEA. Sociologist, Richard Sennett observes the relationship between acquiring skills built on experience empowers workers ….and raises prices. For sure,
an American as Eli Whitney ( you may want to do an Internet search about Whitney) started the American Industrial Revolution by introducing the notion of interchangeable parts for rifles. His
manufacturing approach minimized the need for craftsmen and artisans to produce a workable firearm. I didn’t say a HIGH QUALITY firearm. I, just, said a firearm.

Do you believe high quality products will return to the American consumer market? Please fully explain your decision. Shell’s Chapter 7 is helpful to amplify her observations of Chapter 6….about

Question 3: Technical Methods and Analysis

a) re: forecast error measurement parameters/methods

Please identify and describe the various forecast error measurement parameters/methods recalled in class. (eg. Regression analysis, exp. Smoothing, moving avg., etc.)

Continuing with this topic, please describe the advantages and disadvantages of each of at least 4 of these forecast error measurement parameters/ methods, when you use them in an analysis or
presentation, and what objective are you trying to achieve through the use of each of these parameters/methods of forecast error measurement.

b) i) As we know, there are many similarities between hospital operations, the petroleum/oil industry, and extractive industries. Please discuss the similarities of these industries, their
supply chains, and their value chains.

You may want to recall Joe Pine’s talk about experiential marketing (you can do an internet search for this talk as well as other experiential marketing talks).

Hint: We studied high operating leverage businesses. These are operations where overhead costs are high…fixed costs are high. There were organizations in the manufacturing sector as well
as the service sector that fit this description. Please describe how high operating leverage firms are able to make a profit and add value.

ii) With regards to high operating leverage industries, please recall the Western Mining case we studied early in the term. One comment in the case noted Western Mining was a ‘price taker’
rather than a ‘price maker.’ Please describe what is meant by these terms. You may, also, recall the four basic economic markets. Which economic market do you feel has the greatest possibility of
being a price maker. Describe your reasoning for your choice.

Question 4 Innovator’s Dilemma (ISBN# 978 087 584 5852) and The Signal and The Noise, Chaps 3 & 8 (ISBN# 978 159 420 4111)


a) One of the many considerations in high-technology industries
(think computers, semi-conductors, memories, communications, bio-technology…for starters) face the dilemma of aggressively pursuing the current technology trajectory….the build-a-better-mousetrap
approach. It makes a lot of sense. The firm has a tremendously large existing base of customers who depend on the current technology. There is a counter approach to seek the development and
implementation of a disruptive technology (DT). This DT will have …at least initially, few customers, may have a greater probability of failure than an existing technology, and encounter customer
resistance because of the potential inconvenience to switch to another technology paradigm.

explain the considerations …your considerations…for developing and introducing a new vaccine for an, yet, undetermined flu strain.



b) Nate Silver in his The Signal and The Noise observes in Chapters 3 and 8 a key feature in data analysis is too often missing. Without this analysis component, data and statistics are, mere,
noise. identify this key feature in data analytics and why it was prominently lacking in strongly ‘blue’ states.


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