PRELIMS 1

Tandoc, Catrina O.
1. Define the term operations management. Briefly explain the strategic role of operations.
Operations Management is a systematic direction, control, and evaluation of the entire
range of processes that transform inputs into finished goods or services. It is also the
activities that transform resources into good and services. Operations Management
attempts to balance cost with revenue to achieve the highest net operating profit. The role
of operation strategy is to provide a plan for operations functions to make a product that
can satisfy the wants and needs of all customers.

2. State the important objectives of operation management.

Operations Management actually have objectives that serves as their guides in order to
formulate better results and it is maximum customer satisfaction through quality,
reliability, cost and delivery time, minimum scrap or rework resulting in better product
quality, minimum possible inventory levels, maximum utilization of all kinds of resources
needed, minimum cash outflow, maximum employee satisfaction, maximum possible
production, higher operating efficiency, maximum production cycle time, maximum
possible profit or return on investment, concern for protection of environment and
maximum possible productivity. But there is an important or primary objective of
operations management and it is to utilize the resources to create such products that can
satisfy the needs and wants of the customers.

3. Explain the key concepts of Operation Management with schematic diagram.

INPUTS Transformation OUTPUT
Process
Or
OPERATIONS INPUTS/RAW
EMPLOYEES
MANAGEMENT MATERIALS

OUTPUTS/ END TRANSFORMATIO

SUPPLIERS
PRODUCTS N PROCESS

RETAILERS/
CUSTOMERS MONEY
WHOLESALERS
 PRELIMS 2
Tandoc, Catrina O.
Choose an organization, a company, or a business…then
SAN MIGUEL CORPORATION

1. Study the vision and mission statement.

Vision

“We are San Miguel. Guided by a strong sense of social, environmental and economic
responsibility, our business will lead efforts to deliver on national goals, setting the pace of
progress in the Philippines.”

Mission

“To provide goods and vital services well within the reach of every Filipino, making
everyday life a celebration.”

2. Assess the external environment and list 3 most significant opportunities and 3 most
significant threats. Briefly explain why you consider each as either an opportunity or a
threat.
External Environment of San Miguel Corporation

● It covers the protection of land, water, and air

Opportunities Threats

- Innovation - Competition

- Product and service expansion - Price wars

- New ventures for company - Product substitution

It gives a sneak peek into the opportunities that lies ahead. Using this, it helps to
analyze possible threats to business and make changes to the business policies and growth
plans

3. Assess the internal environment and list 3 most significant strengths and 3 most
significant weaknesses. Briefly explain why you consider each as either a strength or a
weakness.
Internal Environment of San Miguel Corporation

● Compose of elements including current employees, management, corporate culture,

and the behavior of each employees.
Strengths Weaknesses

- Pricing - No online presence

- Loyal customers - Management bench is not deep

- Strong management team - Lack of scale

It showcases its weaknesses and provide a chance to reverse them and using this, it
can draft the strategic growth plans based on strengths. It also helps to create matching
and converting strategy.
MIDTERM 1
 MIDTERM 2

Direction: Analyze the problems carefully. Show your complete solution for every question.

PROBLEM 1, write the letter of your final answers on the summary given.
PROBLEM 2, write what is being asked on the space provided.

Summary of Answers:

Problem 1:

1. B 4. B
2. B 5. C
3. A
Problem 2:

1. a. Maximax – 2,500,000 – LARGE

b. Maximin – 500,000 - SMALL
c. Minimax Regret – 900,000 - MEDIUM
2. a. What is the expected pay-off? P1,040,000
b. What is the decision recommended under expected pay-off criterion? MEDIUM
3. What is the expected value of perfect information? P310,000
Problem 1
The operation of school canteen can sell either halo-halo or mami (hot noodle soup)

on any given day. The contribution margin (pay-off) that the canteen could earn from

halo-halo and mami is affected by the weather, as follows:

Item sold Contribution Margin

Hot weather Cold weather
Halo-halo P 15,000 P 6,000
Mami 11,400 12,000
1. If the probability of hot weather on a given day at this time is 60%, what is the expected
pay off for selling halo-halo?
A. P11,400
B. P 9,000
C. P13, 560
D. P11,640

SOLUTION:

Halo-halo (Hot Weather) = 15,000 x 0.60

= 9,000

2. What is the expected pay-off for selling mami if the probability of hot weather on a given
day at this time is 60%?
A. P11,400
B. P 6,840
C. P13, 800
D. P11,640

SOLUTION:

Mami (Hot Weather) = 11,400 x 0.60

= 6,840

3. If the probability of hot weather on a given day at this time is 60%, which item(s) should
the company sell?
A. Halo-halo, because this item is salable when weather is hot.

B. Mami, because it has the higher expected pay-off.

C. Halo-halo and mami, so the cant

D. 60% halo-halo and 40% mami

SOLUTION:

Halo-halo (hot weather) P 9,000

Mami (Hot Weather) P 6,840

4. If the canteen’s management could have perfect information, i.e., it could know with the
certainty that the probability of hot weather on a given day at this time is 60%, what is the
expected pay-off?
A. P 9,000

B. P 13,800

C. P 15,000

D. P 11,400

SOLUTION:

Halo-halo (Hot Weather) P 9,000

Halo-halo (Hot Weather) 4,800

P 13,800

5. Refer to No. 4. What is the expected value of perfect information?

A. P 13,800

B. P 11,640

C. P 2,160

D. P 9,000

SOLUTION:

Expected value given perfect information (item #4) P 13,800

Less: Expected value of the best course of action without

perfect information (item #3) 11,640

Expected value of perfect information P 2,160

Problem 2:
Franz Computers is in the stage of determining the size of the computer system to be used
in its computer shops. The pay-off table with the corresponding decision alternative and
state of nature follows:

Decision Low Consumer Moderate Consumer High Consumer

 acceptance (20%) Acceptance (50%) acceptance (30%)
Put up a small 500,000 700,000 1,200,000
system
Put up a medium- 300,000 1,000,000 1,600,000
sized system
Put up a large (200,000) (50,000) 2,500,000
system
Franz Computer’s management believes that there is a 20% that consumer acceptance of
their computer services will be low; a 50% chance that it will be moderate, and a 30%
chance that it will be high.

Requirements:

1. Show the amount and decision recommendation under each of the following criteria:
a. Maximax = P , Decision- Small? Medium? Large?

Maximax
Decision Low Moderate High Maximum
Small 500,000 700,000 1,200,000 1,200,000
Medium 300,000 1,000,000 1,600,000 1,600,000
Large (200,000) (50,000) 2,500,000 2,500,000
Amount= 2,500,000 (maximum) Decision= Put up a large system (Large)
b. Maximin= P , Decision- Small? Medium? Large?

Maximin
Decision Low Moderate High Minimum
Small 500,000 700,000 1,200,000 500,000
Medium 300,000 1,000,000 1,600,000 300,000
Large (200,000) (50,000) 2,500,000 (200,000)
Amount= 500,000 (maximum) Decision= Put up a small system (Small)

c. Minimax regret= P , Decision- Small? Medium? Large?

Minimax Regret
 Decision Low Moderate High
Small 500,000 - 500,000 1,000,000 - 700,000 2,500,000 – 1,200,000
Medium 500,000 - 300,000 1,000,000 - 1,000,000 2,500,000 – 1,600,000
Large 500,000 - (200,000) 1,000,000 – (50,000) 2,500,000 – 2,500,000

Regret Table
Decision Low Moderate High Worst Regret
Small 0 300,000 1,300,000 1,300,000
Medium 200,000 0 900,000 900,000
Large 700,000 1,050,000 0 1,050,000
Amount= 900,000 (minimum) Decision= Put up a medium-sized system
(Medium)
2. a. What is the expected pay-off?
Small = 0.20 (500,000) + 0.50 (700,000) + 0.30 (1,200,000) = 810,000

Medium = 0.20 (300,000) + 0.50 (1,000,000) + 0.30 (1,600,000) = 1,040,000

Large = 0.20 (-200,000) + 0.50 (-50,000) + 0.30 (2,500,000) = 685,000

b. What is the decision recommended under expected pay-off criterion?

Medium, because it has the highest expected pay-off.

3. What is the expected value of perfect information?

Note: For problem like this,

A. Expected pay-off (highest) xx P 1,040,000

B. Expected value of the best course of action

(per state of nature) (xx) 1,350,000

EPVI xx 310,000

Solutions:

A. Expected pay-off (highest)

Small= .20 (500,000) + .50 (700,000) + .30 (1,200,000) = 810,000
 Medium= .20 (300,000) + .50 (1,000,000) + .30 (1,600,000) = 1,040,000

Large= .20 (-200,000) + .50 (-50,000) + .30 (2,500,000) = 685,000

B. Expected value of the best course of action

Low= 500,000 (.20) = 100,000

Moderate= 1,000,000 (.50) = 500,000

High= 2,500,000 (.30) = 750,000

Total 1,350,000

FINALS 1
Tandoc, Catrina O.
1. What is the management’s role in continual improvement? (10)
 The role of continuous improvement is certainly important in any form of management
strategy. In forming a new business, they use continuous improvement to improve their
production even more and companies are never satisfied with the use of status quo. They
are the one who oversees the continuous improvement or the process to make sure that
their employees do their work at optimum level. Their job is to monitor, measure, test and
improve the organizational process. Managers are the one who can make a good decision
suitable for an organization and they can enhance production efficiency.

2. How Total Quality Management addresses company quality issues? (10)

To address the quality issues of total quality management, they must have the PDCA
Cycle which is “plan, do, check and act” and they should also implement policies and rules
to promote product, process and systematic improvements. When issues arise, the first
thing that they need to do is to “plan”. Plan what they are going to do to prevent this kind of
issue and throughout this phase, they can eventually identify the root cause of various
problems. During this “doing” phase, ideas and opinions are being analyzed to know how
effective they are to help employees solve the said problems. They need to know the data
that was taken before and after and to know if there is an improvement happening and this
type of phase is what we called “checking”. When all employees can identify what is the
root cause of these issues, the last thing that they need to do is to “act”. Act according to
what ascertain issue might happen in the company over the period of time.

3. Who is the key to the proper implementation of TQM within the company? And why?
Explain your answer.
The key to the proper implementation of total quality management (TQM) are the
managers or leaders and especially the employees. Implementing total quality management
(TQM) is very not easy to do. It requires a lot of patience, resources, ideas, opinions and
determination to do this. The keen managers should analyze what circumstances might
face the company before implementing the application of total quality management (TQM).
Leaders/managers need to embrace the total quality management to ensure to do the
production perfectly, have better communication to all employees and knew what
responsibility he has to make. 

FINALS 2
1. What are the benefits of PERT/CPM?
2. Give simple illustration or example of a Gantt Chart being used by a company in
conducting their new project.
3. Comparisons between CPM and PERT?

PERT CPM
PERT is that technique of projects CPM is that technique of project
management which is used to manage management which is used to manage
uncertain activities of any project. only certain (i.e., time is known)
activities of any project.

It is event-oriented technique which It is activity-oriented technique which

means that network is constructed on the means that network is constructed on the
basis of event. basis of activities.

It is a probability model. It is a deterministic model.

It majorly focuses on time as meeting It majorly focuses on Time-cost trade off

time target or estimation of percent as minimizing cost is more important.
completion is more important.

It is appropriate for high precision time It is appropriate for reasonable time

estimation. estimation.

It has Non-repetitive nature of job. It has repetitive nature of job.

There is no chance of crashing as there is There may be crashing because of certain

no certainty of time. time foundation.

It doesn’t use any dummy activities. It uses dummy activities for representing
sequence of activities.

It is suitable for projects which required It is suitable for construction projects.

research and development.