Operations Management
13th Edition
ISBN: 9781259667473
Author: William J Stevenson
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 1, Problem 5CQ
Summary Introduction
Case summary:
Person H and 400 co-workers were terminated from a company as a result of downsizing. She tried for another job for almost 8 months. However, she could not able to find a job. Hence, she thought making money by mowing the lawns of her neighbors. After so many rejections from the job search, she decided to make it as her business.
In the initial stages, it was little slow. However, after few months, most of the neighbors preferred Person H to mow their lawns over professional lawn care services. Other services performed by Person H are shrubbery, trimming, fertilizing lawns, and weeding gardens.
To determine: The possible trade-offs associated with the given scenario.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Which of the following scenarios accurately reflects the meaning of the profit leverage effect?
Group of answer choices
With a 7.6% profit margin, decreasing your cost of goods sold (COGS) by $10,000 increases your pre-tax profits by $10,000, but increasing your sales by $10,000 only increases your pre-tax profits by $760.
When operating with a 7.6% profit margin, your cost of goods sold will be $10,000 as long as your sales exceed $10,000.
With a 7.6% profit margin, every additional $10,000 in sales increases your pre-tax profits by $10,000, while every $10,000 saved in purchasing increases your pre-tax profits by just $760.
If your profit margin is 7.6%, every $10,000 saved in purchasing lowers your COGS sold by $760.
Mavis and John have joined forces to start M&J Food Products, a processor of packaged shredded lettuce for institutional use. John has years of food processing experience, and Mavis has extensive commercial food preparation experience. The process will consist of opening crates of lettuce and then sorting, washing, slicing, preserving, and finally packaging the prepared lettuce. Together, with help from vendors, they think they can adequately estimate demand, fixed costs, revenues, and variable cost per 5-pound bag of lettuce. They think a largely manual process will have monthly fixed cost of $50,000and a variable cost of $2.50 per bag. They expect to sell 75,000 bags of lettuce per month. They expect to sell the shredded lettuce for $3.25 per 5-pound bag. John and Mavis has been contacted by a vendor to consider a more mechanized process. This new process will have monthly fixed cost of $125,000 per month with a variable cost of $1.75 per bag. Based on the above scenario:
Should…
If you work at a medical practice that appears to be busy and well-run but always seems short on cash at the end of each month, what areas will you look at to improve the revenues of the practice? Billing rates, staff member salaries, and partnership draws are appropriate. As the practice’s administrator, the partners have asked you to review the problem and make recommendations. What recommendation would you make?
Chapter 1 Solutions
Operations Management
Ch. 1.6 - Prob. 1RQCh. 1.6 - Prob. 2RQCh. 1.6 - Prob. 3RQCh. 1.9 - There is a huge demand in the United States and...Ch. 1.10 - Prob. 1OTQCh. 1.10 - Prob. 2OTQCh. 1.10 - Prob. 3OTQCh. 1 - Prob. 1DRQCh. 1 - Prob. 2DRQCh. 1 - Prob. 3DRQ
Ch. 1 - List five important differences between goods...Ch. 1 - Briefly discuss each of these terms related to the...Ch. 1 - Prob. 6DRQCh. 1 - Prob. 7DRQCh. 1 - Why is the degree of customization an important...Ch. 1 - List the trade-offs you would consider for each of...Ch. 1 - Prob. 10DRQCh. 1 - Why might some workers prefer not to work in a...Ch. 1 - Prob. 12DRQCh. 1 - Prob. 13DRQCh. 1 - Prob. 14DRQCh. 1 - Prob. 15DRQCh. 1 - Prob. 16DRQCh. 1 - Prob. 17DRQCh. 1 - What are trade-offs? Why it careful consideration...Ch. 1 - Prob. 2TSCh. 1 - Prob. 3TSCh. 1 - Prob. 1CTECh. 1 - Prob. 2CTECh. 1 - Prob. 3CTECh. 1 - Prob. 4CTECh. 1 - Prob. 1CQCh. 1 - Prob. 2CQCh. 1 - What are some of the trade-offs that Hazel...Ch. 1 - The town is considering an ordinance that would...Ch. 1 - Prob. 5CQCh. 1 - Prob. 6CQCh. 1 - Prob. 7CQ
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- Jon Snow has invented a new and improved space heater unlike anything in the market. He has a prototype but after unsuccessfully pitching his idea to a large manufacturer group, Wildlings Worldwide, he has decided he will form his own manufacturing business. One of his concerns is raising enough capital so he can meet the high demand for his space heaters by the time winter comes. what are the risks? What business entity would you form and Why?arrow_forwardWhy do firms fail in attracting top talents? Discuss the most common errors that occurs in attracting the top talents? Use relevant examples to support your arguments.arrow_forwardItem 1 of 4 Is Valuation important/helpful in business? Explain Item 2 of 4 Give a situation in your day-to-day life in which you think you may apply valuation concepts and methods. Item 3 of 4 How does Valuation aid decision-making? Give at least three situations in which Valuation applies. Item 4 of 4 What is your preliminary/initial understanding/perception regarding the concept of value and valuation?arrow_forward
- ANSWER IF THE STATEMENTS IS TRUE OR FALSE THEN EXPLAIN 1.) Before starting your new venture, you should research and develop a decision framework and a business plan which will help you identify primarily the external factors that can affect the business. 2.) Development costs are related to the costs which should be essentially received by resource owners so as to presume that they will continue to supply them in a specific period of time.arrow_forwardHow to evaluate the success the solution suggestedarrow_forwardThe CEO of the business would like to improve the company’s bottom line by decreasing its expenses for this quarter. In a memo, the CEO suggests capitalizing of the larger repair cost and recognizing it over several months. Is there anything wrong or unethical about the CEO’s suggestion?arrow_forward
- In conducting interviews and observing factory operations to implement an activity-based costing system, you determine that several activities are unnecessary or redundant. For example, warehouse personnel were inspecting purchased components as they were received at the loading dock. Later that day, the components were inspected again on the shop floor before being installed in the final product. Both of these activities caused costs to be incurred but were not adding value to the product. If you include this observation in your report, one or more employees who perform inspections will likely lose their jobs. Required 1. As a plant employee, what is your responsibility to report your findings to superiors? 2. Should you attempt to determine if the redundancy is justified? Explain. 3. What is your responsibility to the employees whose jobs will likely be lost by your report? 4. What facts should you consider before making your decision to report or not?arrow_forwardDiscuss about any existing company showing the main issues and give recommendations to someone who want to start his own business.arrow_forwardYou have been named manager of a manufacturing firm for garments. You also discovered since joining the business that a number of fabric products are discarded. Any of these waste products may really be sold, but they are thrown as trash. Many customers err in their sewing practises, reducing their performance. The raw materials bought by a few manufacturers are costly. Any of these problems caused the business losses. After taking responsibility as a production manager, you told all workers to save and sell all fabric waste to get money for the business. You provided training for the workforce which helped to increase the company's productivity and benefit. You also already changed vendors and saved the business a lot of capital. The corporation was inspired with you and thanked your diligent work and you got a nice reputation. Explain the legal moves to minimise the loss for the businessarrow_forward
- To plan to compete against other firms, a firm needs to understand what physical, financial, and human resources it has, what it is good at, and how it is organized. TRUE OR FALSEarrow_forwardConsider the following additional information – R&D and selling expenses are substantially higher for Zderm because it is a new product. Jim has strongly supported development of the new product, including the high selling and R&D expenses. He has assured the Board of Directors that the Zderminvestment will pay off in improved profits for the firm. Discuss the ethical issues, if any, facing Jim as he reports to top management on the profitability of the firm’s two products.arrow_forwardWhat are the possible explanation for customer value proposition? Wants: Quality, Cheap, Aesthetically pleasing Fears: Durability, product recognition,pricing scheme Needs: Compact, Incombustible, Cost-effective BRIEF DESCRIPTION OF THE PROJECT (Bio-bricks)The construction industry represents the foundation of every infrastructure thatstands today. Each architecture depicts its time, history, and style. It shows how far thehumans have gone and how brilliant our minds can build something complex out ofscratch. From past to present-day architecture, it signifies uniqueness and creativity thatmade them remarkable. In today’s current architecture, it requires modern materials to beaccurate and sustainable. With that remark, Bio Industries is proposing Bio-Bricks. Bio-Bricks is an environmentally friendly brick that is made up from air-dried animal feces. The animal wastes are specifically from household pets such as dogs and cats; and animals fromfarms to support local farmers. 80% of the…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,Operations ManagementOperations ManagementISBN:9781259667473Author:William J StevensonPublisher:McGraw-Hill EducationOperations and Supply Chain Management (Mcgraw-hi...Operations ManagementISBN:9781259666100Author:F. Robert Jacobs, Richard B ChasePublisher:McGraw-Hill Education
- Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage LearningProduction and Operations Analysis, Seventh Editi...Operations ManagementISBN:9781478623069Author:Steven Nahmias, Tava Lennon OlsenPublisher:Waveland Press, Inc.
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Operations Management
Operations Management
ISBN:9781259667473
Author:William J Stevenson
Publisher:McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi...
Operations Management
ISBN:9781259666100
Author:F. Robert Jacobs, Richard B Chase
Publisher:McGraw-Hill Education
Purchasing and Supply Chain Management
Operations Management
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Cengage Learning
Production and Operations Analysis, Seventh Editi...
Operations Management
ISBN:9781478623069
Author:Steven Nahmias, Tava Lennon Olsen
Publisher:Waveland Press, Inc.