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Ashford 2: - Week 1
Week One Overview
Post your Introduction
Why Productivity Matters
(1 post)...Ashford 2: - Week 1
Week One Overview
Post your Introduction
Why Productivity Matters
Benefits of Forecasting
1. Read course description, overview and learning outcomes.
2. Read Chapters 1, 2, 3, 4, and chapter supplements in your text. Study and review the
key terms at the end of each chapter. Work as many problems as possible to understand
the material. This is usually the best way to learn the course concepts.
To participate in the following Discussion Forums, go to this week's Discussion link in
the left navigation:
1. Why Productivity Matters
Read "Why Productivity Matters" on page 56 in your text. Answer questions 1 to
3 in 200 words or less. Respond to at least two of your classmates' postings.
It is sometimes easy to overlook the importance of productivity. National figures
are often reported in the media. They may seem to be hohum; there’s nothing
glamorous about them to get our attention. But make no mistake; they are key
economic indicators—barometers, if you will, that affect everybody. How? High
productivity and high standard of living go handinhand. If a country becomes
more servicebased, as the United States has become, some (but not all) high
productivity manufacturing jobs are replaced by lowerproductivity service jobs.
That makes it more difficult to support a high standard of living.
Productivity levels are also important for industries and companies. For
companies, a higher productivity relative to their competitors gives them a
competitive advantage in the market place. With a higher productivity, they can
afford to undercut competitors’ prices to gain market share, or charge the same
prices but realize greater profits! For an industry, higher relative productivity
means it is less likely to be supplanted by foreign industry.
1. Why is high productivity important for a nation? 2. Why do you suppose that
service jobs have lower productivity
than manufacturing jobs? 3. How can a company gain a competitive advantage
higher productivity than its competitors have?
2. Benefits of Forecasting
Read the M & L Manufacturing case on page 126 in your text. Prepare a weekly
forecast clearly labeling your calculations. Explain the benefits of a more
formalized approach to forecasting using course related principles in 200 words.
You must respond to at least two of your classmates' postings to receive full
M&L Manufacturing makes various components for printers and copiers. In
addition to supplying these items to a major manu facturer of printers and
copiers, the company distributes these and similar items to office supply stores
and computer stores as replacement parts for printers and desktop copiers. In all,
the company makes about 20 different items. The two markets (the major
manufacturer and the replacement market) require some what different
handling. For example, replacement products must be packaged individually
whereas products are shipped in bulk to the major manufacturer.
The company does not use forecasts for production planning. Instead, the
operations manager decides which items to produce, and the batch size, based
partly on orders, and the amounts in inventory. The products that have the fewest
amounts in inventory get the highest priority. Demand is uneven, and the
company has experienced being overstocked on some items and out of others.
Being understocked has occasionally created tensions with the managers of
retail outlets. Another problem is that prices of raw materials have been creeping
up, although the operations man ager thinks that this might be a temporary
Because of competitive pressures and falling profits, the man ager has decided
to undertake a number of changes. One change is to introduce more formal
forecasting procedures in order to improve production planning and inventory
With that in mind, the manager wants to begin forecasting for two products.
These products are important for several rea sons. First, they account for a
disproportionately large share of the company's profits. Second, the manager
believes that one of these products will become increasingly important to future
growth plans; and third, the other product has experienced peri odic outofstock
The manager has compiled data on product demand for the two products from
order records for the previous 14 weeks. These are shown in the following table.
*Unusual order due to flooding of customer's warehouse.
Questions1. What are some of the potential benefits of a more formalized approach to
2. Prepare a weekly forecast for the next four weeks for each prod uct. Briefly explain
why you chose the methods you used. (Hint: For product 2, a simple approach, possibly
some sort of naive/ intuitive approach, would be preferable to a technical approach in
view of the manager's disdain of more technical methods.)
To complete this assignment, go to this week's Assignment link in the left navigation:
Read the “HomeStyle Cookies” case on pages 6465 in your text. Answer
questions 17. Explain your analysis in a 24 page APA style paper. Avoid the
use of bullet points in your paper.
The baking company is located in a small town in New York State. The bakery is run by two
brothers. The company employs fewer than 200 people, mainly blue-collar workers, and the
atmosphere is informal.
The company’s only product is soft cookies, of which it makes over 50 varieties. Larger
companies, such as Nabisco, Sunshine, and Keebler, have traditionally produced biscuit
cookies, in which most of the water has been baked out, resulting in crisp cookies. The cookies
have no additives or preservatives. The high quality of the cookies has enabled the company to
develop a strong market niche for its product.
The cookies are sold in convenience stores and supermarkets throughout New York,
Connecticut, and New Jersey. The company markets its cookies as “good food”—no additives
or preservatives—and this appeals to a health-conscious segment of the market. Many
customers are over 45 years of age, and prefer a cookie that is soft and not too sweet. Parents
with young children also buy the cookies.
The Production Process
The company has two continuous band ovens that it uses to bake the cookies. The production
process is called a batch processing system. It begins as soon as management gets orders
from distributors. These orders are used to schedule production. At the start of each shift, a list
of the cookies to be made that day is delivered to the person in charge of mixing. That person
checks a master list, which indicates the ingredients needed for each type of cookie, and enters
that information into the computer. The computer then determines the amount of each
ingredient needed, according to the quantity of cookies ordered, and relays that information to
storage silos located outside the plant where the main ingredients (flour, sugar, and cake flour)
are stored. The ingredients are automatically sent to giant mixing machines where the
ingredients are combined with proper amounts of eggs, water, and flavorings. After the
ingredients have been mixed, the batter is poured into a cutting machine where it is cut into
individual cookies. The cookies are then dropped onto a conveyor belt and transported through
one of two ovens. Filled cookies, such as apple, date, and raspberry, require an additional step
for filling and folding.
The nonfilled cookies are cut on a diagonal rather than round. The diagonal-cut cookies require
less space than straight-cut cookies, and the result is a higher level of productivity. In addi- tion,
the company recently increased the length of each oven by 25 feet, which also increased the
rate of production.
As the cookies emerge from the ovens, they are fed onto spiral cooling racks 20 feet high and 3
feet wide. As the cook- ies come off the cooling racks, workers place the cookies into boxes
manually, removing any broken or deformed cookies in the process. The boxes are then
wrapped, sealed, and labeled automatically.
Most cookies are loaded immediately onto trucks and shipped to distributors. A small
percentage are stored temporarily in the company’s warehouse, but they must be shipped
shortly because of their limited shelf life. Other inventory includes individual cookie boxes,
shipping boxes, labels, and cellophane for wrapping. Labels are reordered frequently, in small
batches, because FDA label requirements are subject to change, and the company does not
want to get stuck with labels it can’t use. The bulk silos are refilled two or three times a week,
depending on how quickly sup- plies are used.
Cookies are baked in a sequence that minimizes downtime for cleaning. For instance, lightcolored cookies (e.g., chocolate chip) are baked before dark-colored cookies (e.g., fudge), and
oatmeal cookies are baked before oatmeal raisin cookies. This permits the company to avoid
having to clean the processing equipment every time a different type of cookie is produced.
The bakery prides itself on the quality of its cookies. Cookies are sampled randomly by a quality
control inspector as they come off the line to assure that their taste and consistency are
satisfactory, and that they have been baked to the proper degree. Also, workers on the line are
responsible for removing defective cookies when they spot them. The company has also
installed an X-ray machine on the line that can detect small bits of metal filings that may have
gotten into cookies during the production process. The use of automatic equipment for
transporting raw materials and mixing batter has made it easier to maintain a sterile process.
The bakery is run very efficiently and has minimal amounts of scrap. For example, if a batch is
mixed improperly, it is sold for dog food. Broken cookies are used in the oatmeal cookies. These
practices reduce the cost of ingredients and save on waste disposal costs. The company also
uses heat reclamation: The heat that escapes from the two ovens is captured and used to boil
the water that supplies the heat to the building. Also, the use of automation in the mixing
process has resulted in a reduction in waste compared with the manual methods used
Ideas for new products come from customers, employees, and observations of competitors’
products. New ideas are first examined to determine whether the cookies can be made with
existing equipment. If so, a sample run is made to determine the cost and time requirements. If
the results are satisfactory, marketing tests are conducted to see if there is a demand for the
There are a number of areas of potential improvement at the bakery. One possibility would be to
automate packing the cookies into boxes. Although labor costs are not high, automating the
process might save some money and increase efficiency. So far, the owners have resisted
making this change because they feel an obligation to the community to employ the 30 women
who now do the boxing manually. Another possible improvement would be to use suppliers who
are located closer to the plant. That would reduce delivery lead times and transportation costs,
but the owners are not convinced that local suppliers could provide the same good quality.
Other opportunities have been proposed in recent years, but the owners rejected them because
they feared that the quality of the product might suffer.
1. Briefly describe the cookie production process.
2. What are two ways that the company has increased productivity? Why did increasing the
length of the ovens result in a faster output rate?
3. Do you think that the company is making the right decision by not automating the packing of
cookies? Explain your reasoning. What obligation does a company have to its employees in a
situation such as this? What obligation does it have to the community? Is the size of the town a
factor? Would it make a difference if the company was located in a large city? Is the size of the
company a factor? What if it was a much larger company?
4. What factors cause the company to carry minimal amounts of certain inventories? What
benefits result from this policy?
5. As a consumer, what things do you consider in judging the quality of cookies you buy in a
6. What advantages and what limitations stem from the company’s not using preservatives in
7. Briefly describe the company’s strategy.
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