Why is the degree of customization an important consideration in process planning?
> As you increase the length of time involved, what happens to future values? What happens to present values?
> A put option and a call option with an exercise price of $55 expire in two months and sell for $2.65 and $5.32, respectively. If the stock is currently priced at $57.30, what is the annual continuously compounded rate of interest?
> Explain why the after tax borrowing rate is the appropriate discount rate to use in lease evaluation. Refer to the following example for Questions 10–12. In May 2011, Air Lease Corporation (ALC) announced that it had signed lease agreements for 29 aircra
> Firms sometimes use the threat of a bankruptcy filing to force creditors to renegotiate terms. Critics argue that in such cases the firm is using bankruptcy laws “as a sword rather than a shield.” Is this an ethical tactic?
> What is homemade leverage?
> Both ROA and ROE measure profitability. Which one is more useful for comparing two companies? Why?
> You own a callable, convertible bond with a conversion ratio of 24.25. The stock is currently selling for $48 per share. The issuer of the bond has announced a call at a call price of 110. What are your options here? What should you do?
> Suppose a certain stock currently sells for $30 per share. If a put option and a call option are available with $30 exercise prices, which do you think will sell for more? Explain.
> What are the three factors that determine a company’s price−earnings ratio?
> Suppose the current exchange rate for the Polish zloty is Z 3.14. The expected exchange rate in three years is Z 3.23. What is the difference in the annual inflation rates for the United States and Poland over this period? Assume that the anticipated rat
> If a company moves to a JIT inventory management system, what will happen to inventory turnover? What will happen to total asset turnover? What will happen to return on equity (ROE)?
> Why does the value of a share of stock depend on dividends?
> What impact did this change in payables policy have on BlueSky’s operating cycle? Its cash cycle?
> Why will convertible bonds not be voluntarily converted to stock before expiration?
> Your company currently uses traditional capital budgeting techniques, including net present value. After hearing about the use of real option analysis, your boss decides that your company should use real option analysis in place of net present value. How
> A put option and a call option with an exercise price of $85 and three months to expiration sell for $2.40 and $5.09, respectively. If the risk-free rate is 4.8 percent per year, compounded continuously, what is the current stock price?
> Why is the use of debt financing referred to as financial “leverage”?
> Critically evaluate the following statements: Playing the stock market is like gambling. Such speculative investing has no social value other than the pleasure people get from this form of gambling.
> How can the return on a portfolio be expressed in terms of a factor model?
> Why is it not necessarily bad for the operating cash flow to be negative for a particular period?
> True or false: The unsystematic risk of a share of stock is irrelevant for valuing the stock because it can be diversified away; therefore, it is also irrelevant for valuing a call option on the stock. Explain.
> Companies pay rating agencies such as Moody’s and S&P to rate their bonds, and the costs can be substantial. However, companies are not required to have their bonds rated in the first place; doing so is strictly voluntary. Why do you think they do it?
> Define financial distress using the stock-based and flow-based approaches.
> Given that eGain Communications was up by almost 412 percent for 2011, why didn’t all investors hold eGain Communications?
> How does the number of periods in a moving average affect the responsiveness of the forecast?
> What advantages as a forecasting tool does exponential smoothing have over moving averages?
> What are the main uses of time study information?
> What is a time standard? What factors must be taken into account when developing standards?
> How are devices such as flow process charts and worker-machine charts useful?
> What are motion study principles? How are they classified?
> What is job design, and why is it important?
> What trade-offs are involved when deciding how often to rebalance an assembly line?
> As Foxconn cuts jobs as it shifts to greater use of automation, jobs will be created in other companies. In what types of companies would you expect to see jobs created?
> Determine the approximate number of tons of salt produced annually.
> Where would you place salt production in the product-process spectrum?
> Contrast the use of MAD and MSE in evaluating forecasts.
> What are some of the possible reasons why the company continues to use the old processing equipment instead of buying new, more modern equipment?
> Do you think that inadequate strategic planning was a factor that resulted in the company’s asking for trade protection?
> Briefly describe quality assurance efforts in round can production.
> What is group technology?
> What is cellular manufacturing? What are its main benefits and limitations?
> Why are product layouts atypical in service environments?
> Briefly outline the impact that job sequence has on each of the layout types.
> Briefly discuss the advantages and disadvantages of automation.
> Explain the importance of process selection in system design.
> Name two unethical behaviors related to process selection and two related to layout, and the ethical principles they violate.
> What factors would you consider in deciding whether to use wide or narrow control limits for forecasts?
> What are the major trade-offs in capacity planning?
> A new machine will cost $18,000, but result it will in savings of $2,400 per year. What will the payback time be in years?
> A new piece of equipment will cost $12,000 and will result in a reduced operation cost of $1,500 per year. What will the payback time be in years?
> For laundry service, what might have been the rationale for asking another hospital to join it?
> In the housekeeping situation, why not just forget about outsourcing, especially since the hospital ended up rehiring its employees anyway?
> Does restaurant outsourcing increase capacity? Explain.
> What are some important disadvantages or limitations of outsourcing for restaurants?
> What advantages are there when restaurants outsource?
> Any increase in efficiency also increases utilization. Although the upper limit on efficiency is 100 percent, what can be done to achieve still higher levels of utilization?
> What is the purpose of establishing control limits for forecast errors?
> Contrast design capacity and effective capacity.
> What is the benefit to a business organization of having capacity measures?
> Briefly discuss how uncertainty affects capacity decisions.
> Hazel is thinking of making some of her operations sustainable. What are some ideas she might consider?
> How do capacity decisions influence productivity?
> How can a systems approach to capacity planning be useful?
> Give some examples of building flexibility into system design.
> How do long-term and short-term capacity considerations differ?
> Why does service management present more challenges than manufacturing?
> What managerial challenges do services present that manufacturing does not?
> When a new business is started, or a patent idea needs funding, venture capitalists or investment bankers will want to see a business plan that includes forecast information related to a profit and loss statement. What type of forecasting information do
> Prepare a table similar to that shown in Problem 7b for cookies sold in a bakery. List what you believe are the three most important customer requirements (not including cost) and the three most relevant technical requirements (not including sanitary con
> a. Refer to Figure 4.4. What two technical requirements have the highest impact on the customerrequirement that the paper not tear? b. The following table presents technical requirements and customer requirements for the outputof a laser printer. First,
> Construct a list of steps for making a cash withdrawal from an automated teller machine (ATM). Assume that the process begins at the ATM with your bank card in hand. Then identify the potential failure points (i.e., where problems might arise in the proc
> List the steps involved in getting gasoline into your car for full service and for self-service. Assume that paying cash is the only means of payment. For each list, identify the potential trouble points and indicate a likely problem.
> What evidence is there of the importance of manufacturing innovation?
> Prepare a service blueprint for each of these post office transactions: a. Buy stamps from a machine b. Buy stamps from a postal clerk
> Prepare a service blueprint for each of these banking transactions: a. Make a savings deposit using a teller b. Apply for a home equity loan
> Can you think of other companies that have used new colors to extend or grow the market for their products?
> What capability would an organization have to have to not need forecasts?
> What functions in the organization are impacted by the differencesin product offerings among different countries?
> What effects do cultural differences have on the design of fast-food offerings in this reading?
> Explain the term “three Rs” and how the three Rs relate to sustainability.
> What is the purpose of value analysis?
> What is reverse engineering? Do you feel this is unethical?
> Can you suggest some actions the government (federal, state,or local) can take to stem the job loss?
> Contrast applied research and basic research.
> What are some of the factors that cause organizations to redesign their products or services?
> Who needs to be involved in preparing forecasts?
> Timely Transport provides local delivery service for a number of downtown and suburban businesses. Delivery charges are based on distance and weight involved for each delivery: 10 cents per pound and 15 cents per mile. Also, there is a $10 handling fee p
> Identify the three major functional areas of business organizations and briefly describe how they interrelate.
> From the following graph, determine the equation of the linear trend line for time-share sales for Glib Marketing, Inc. Annual Sales, Glib Sales, Inc. 600 500 400 300 200 100 3 5 6 7 8 10 Year 00 4) 2. Sales (units)
> A cosmetics manufacturer’s marketing department has developed a linear trend equation that can be used to predict annual sales of its popular Hand & Foot Cream. Ft = 80 + 15t where Ft = Annual sales (000 bottles) t is in years a. Are annual sales increas
> A dry cleaner uses exponential smoothing to forecast equipment usage at its main plant. August usage was forecasted to be 88 percent of capacity; actual usage was 89.6 percent of capacity. A smoothing constant of .1 is used. a. Prepare a forecast for Sep
> How might an executive’s comments to Wall Street analysts affect demand forecasts, and what are the consequences of doing so?
> Why might a company executive make bold predictions about future demand to Wall Street analysts?
> What are some of the consequences of poor forecasts? Explain.
> What are some of the ways Wegmans uses technology to gain an edge over its competition?
> Contrast the terms sales and demand.
> Explain how using a centered moving average with a length equal to the length of a season eliminates seasonality from a time series.
> What factors enter into the choice of a value for the smoothing constant in exponential smoothing?
> Who needs to be involved in formulating organizational strategy?
> How does the use of standard shipping containers and flat rate mailers help competitiveness?
