MGT 2070 Assignment #1 – Solutions
Note: I messed up the weights in the original assignment. All questions are equally weighted for
your mark (ie each question is worth 33 1/3%).
1.3 Carl Sawyer makes billiard balls in his Dallas plant. With a recent increase in taxes, his
costs have gone up and he has a newfound interest in efficiency. Carl is interested in determining
the productivity of his organization. He would like to know if his organization is maintaining the
manufacturing average of 3% increase in productivity. He has the following data representing a
month from last year and an equivalent month this year:
Units Produced
Labour (hours)
Resin (pounds)
Capital Invested ($)
Energy (BTU)
Last Year
1000
300
50
10,000
3,000
Now
1000
275
45
11,000
2,850
Show the productivity change for each category and then determine the improvement for labourhours, the typical standard for comparison.
Solution:
You should have some form of:
Productivity =
Outputs
Inputs
(one mark)
Then for each category, you must calculate the change in productivity. You cannot add the
categories together because they do not share the same units. It was only necessary to calculate
the improvement in productivity for the labour category:
Labour (hours)
Resin (pounds)
Capital Invested ($)
Energy (BTU)
Last Year
1000  300 = 3.33
1000  50 = 20
1000  10000 = 0.1
1000  3000 = 0.33
Now
1000  275 = 3.64
1000  45 = 22.22
1000  11000 = 0.09
1000  2850 = 0.35
(two marks per row)
Then for the improvement in the labour category:
0.30  3.33 = 0.091 or 9.1% improvement over last year. (one mark)
Total Marks: 10
Change
3.64 – 3.33 = 0.31
22.22 – 20 = 2.22
0.09 – 0.1 = -0.01
0.35 – 0.33 = 0.02
2.2 Identify how changes in the external environment affect the OM strategy for a company. For
instance, discuss what impact the following external factors might have on OM strategy:
b) Water- and air-quality legislation.
More restrictive legislation will tend to increase the costs of production and may prohibit the use
of some technologies. High costs of process modification in order to meet the new restrictions
may be less economic than simply closing a plant down. These are some possible answers –
others will be judged on their own merits.
Total Marks: 10
3.3 An international legal firm is planning to expand globally by opening a law office in one of
four countries: Italy, Portugal, Turkey or France. The chief partner entrusted with the decision,
Norean Sharpe, has identified eight critical success factors (CSFs) that she views as essential for
the success of any law office. She used a rating system of 1 (least desirable country) to 5 (most
desirable) to evaluate each CSF. Which country should be selected for the new law office?
Critical Success Factors
Level of Education
1. number of lawyers
2. national literacy rate
Political and legal aspects
3. stability of government
4. product liability laws
5. number of suits per year
Social and cultural aspects
6. similarity in language
7. acceptability of lawyers
Economic factors
8. number of courts
Italy
Candidate Country Ratings
Portugal
Turkey
France
5
2
5
1
2
1
4
4
5
2
4
5
3
1
2
5
3
5
5
1
2
4
1
4
1
3
4
1
3
1
5
2
All eight factors are weighted equally. The weights can be added or averaged, to yield the
following sums:
Sum
Average
Italy rates the highest in this case.
Italy
27
3.375
Portugal
21
2.625
Turkey
22
2.75
France
26
3.25