CBM 112 Without Sap Acctg. HRM Narciso

UNIVERSITY OF MINDANAO
Tagum College
College of Business Administration Education

Human Resource Management Program
Physically Distanced but Academically Engaged
Self-Instructional Manual (SIM) for Self-Directed Learning (SDL)
Course/Subject: CBM 112/ Operations Management with TQM
Name of Teacher: RAIZA MAE C. NARCISO, PhD
THIS SIM/SDL MANUAL IS A DRAFT VERSION ONLY; NOT FOR

REPRODUCTION AND DISTRIBUTION OUTSIDE OF ITS INTENDED USE.
THIS IS INTENDED ONLY FOR THE USE OF THE STUDENTS WHO ARE
OFFICIALLY ENROLLED IN THE COURSE/SUBJECT.
EXPECT REVISIONS OF THE MANUAL.
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DEPARTMENT OF BUSINESS ADMINISTRATION EDUCATION
Human Resource Management
Mabini Street, Tagum City
Davao del Norte
Telefax: (084)655-9591 Local 116
Table of Contents
Page
Part 1. Course Outline and Policies ...................................................... 1

Part 2. Instruction Delivery
CC’s Voice ............................................................................…….. 5
Course Outcomes ........................................................................... 5
Big Picture A: Unit Learning Outcomes ............................................. 5
Big Picture A in Focus: ULOa ………………………………………… 5
Metalanguage .......................................................................... 5
Essential Knowledge ............................................................... 6

Self-Help .................................................................................... 11
Let’s Check .................................................................................... 11

Let’s Analyze ......................................................................... 13
In a Nutshell .................................................................................... 15
Q&A List .................................................................................... 16
Keywords Index ......................................................................... 16
Big Picture A in Focus: ULO b ………………………………………… 17
Metalanguage .......................................................................... 17
Self-Help .................................................................................... 22
Let’s Check .................................................................................... 23

Let’s Analyze ......................................................................... 23
In a Nutshell ....................... ............................................................. 25
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Q&A List .............................................. ...... ................................ 26

Keywords Index ......................................................................... 26
Big Picture B: Unit Learning Outcomes ............................................. 27
Big Picture B in Focus: ULO a ………………………………………… 27
Metalanguage .......................................................................... 27
Self-Help .................................................................................... 32
Let’s Check .................................................................................... 32
Let’s Analyze ......................................................................... 33
In a Nutshell .................................................................................... 36
Q&A List .................................................................................... 36

Keywords Index ......................................................................... 36
Big Picture B in Focus: ULO b …………………………………………… 37
Metalanguage .......................................................................... 37
Self-Help .................................................................................... 53
Let’s Check .................................................................................... 53

Let’s Analyze ......................................................................... 55
In a Nutshell .................................................................................... 57
Q&A List .................................................................................... 58
Keywords Index ......................................................................... 58
Big Picture C: Unit Learning Outcomes ............................................. 59
Big Picture C in Focus: ULOa …………………………………………… 59
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Metalanguage .......................................................................... 59

Self-Help .................................................................................... 69
Let’s Check .................... .................... ............................................ 69
Let’s Analyze ......................................................................... 70
In a Nutshell .................................................................................... 72
Q&A List .................................................................................... 72
Keywords Index ......................................................................... 73
Big Picture C in Focus: ULO b …………………………………………… 74
Metalanguage .......................................................................... 74
Self-Help .................................................................................... 80
Let’s Check .................................................................................... 81
Let’s Analyze ......................................................................... 82
In a Nutshell .................................................................................... 85
Q&A List .................................................................................... 85
Keywords Index ......................................................................... 86
Big Picture D: Unit Learning Outcomes ............................................. 87
Big Picture D in Focus: ULO a …………………………………………… 87
Metalanguage .......................................................................... 87
Self-Help .................................................................................... 100
Let’s Check .................................................................................... 101
Let’s Analyze ......................................................................... 101
In a Nutshell .................................................................................... 103
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Q&A List .................................................................................... 104

Keywords Index ......................................................................... 104
Part 3. Course Schedule ......................................................................... 104
Online Code of Conduct .............................................................. 105
Monitoring of OBD and DED... .............. ........................................... 106
Course Outline : CBM 112 –Operations Management with TQM
Course Coordinator: Dr. Raiza Mae C. Narciso

Email: raiza_narciso@umindanao.edu.ph
Student Consultation: By appointment
Mobile: 0933-820-1418
Effectivity Date: June 2020
Mode of Delivery: Distance Education Learning (DED)
Time Frame: 54 Hours
Student Workload: Expected Self-Directed Learning
Requisites: BAHR 211
Credit: 3
Attendance Requirements: A minimum of 95% attendance is required at all
scheduled Virtual or face to face sessions.
Course Outline Policy
Areas of Concern Details

Contact and Non-contact Hours This 3-unit course self-instructional manual is designed
for distance education delivery mode with 54 expected
number of hours, which includes the scheduled virtual
sessions and online conduct of learning exercises. The
virtual class shall consist of a question and answer
session from students with concerns regarding the topic
via google meet.
Assessment Task Submission Submission of assessment tasks shall be strictly

observed based on the course schedule at the bottom of
this SIM. Assessment will be given via
www.quipper.com. Specific instructions will be given per
assessment. Thus, you are required to create an
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account at Quipper.
Turnitin Submission To ensure honesty and authenticity, all research

assignment tasks are required to be submitted through
Turnitin with a maximum similarity index of 30%
allowed. This means that if your paper goes beyond
30%, you will either opt to redo your paper or explain in
writing addressed to the course coordinator the reasons
for the similarity or you may be called for a disciplinary
action in accordance with the University’s OPM on
Intellectual and Academic Honesty.
Please note that academic dishonesty such as cheating

and commissioning other students or people to complete
the task for you have severe punishments (reprimand,
warning, expulsion).
Penalties for Late Assessments If you were not able to submit exercises on time and
should you want to ask for an extension due for some
important reasons, you shall make a letter of request for
extension which is subject for approval from your course
coordinator. You will also be required to present/attach
evidences which is necessary to strengthen your
request.
Once approved, the score will be reduced by 5% from

the possible highest points if the learning exercises was
submitted late.
Return of Assessments Assessment tasks shall be returned to you two (2)
weeks after the deadline of submission. This will be
returned through quipper portal.
Assignment Resubmission You should request in writing addressed to the course
facilitator your intention to resubmit an assessment task.
The resubmission is premised on the student’s failure to
comply with the similarity index and other reasonable
grounds such as academic literacy standards or other
reasonable circumstances e.g. illness, accidents
financial constraints.
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Re-marking of Assessment Papers You should request in writing addressed to the course
and Appeal coordinator your intention to appeal or contest the score
given to an assessment task. The letter should explicitly
explain the reasons/points to contest the grade. The
course coordinator shall communicate with the
complainant on the approval and disapproval of the
request.
If disapproved by the course coordinator, you can

elevate your case to the program head then the dean
with the original letter of request. The final decision will
come from the dean of the college.
Grading System Submission of the final grades shall follow the usual
University system and procedures.
Class Participation – 30%

- Quizzes/Assignments Participation (10%
- Research, Projects and Requirements (20%)
1 – 3rd Examination – 30%
st
Final Examination– 40%

Total – 100%
Preferred Referencing Style You are required to use the general practice of the
Harvard Referencing Style. The sample will be uploaded
in the quipper portal.
Student Communication You are required to create a student quipper account at

www.quipper.com. Then, the course coordinator shall
provide code for you to access the materials and
resources of the course. All communication formats:
chat, submission of assessment tasks, requests etc.
shall be through the portal and other university
recognized platforms.
Also, google meet will be used as an official means for

your scheduled virtual sessions. Thus, you are required
to use the official umindanao account as much as
possible.
Normal communication and announcement shall be via

FB messenger, the course facilitator shall create a
Group Chat within the first week of the start of the class.
You can also meet the course facilitator in virtual

through the scheduled virtual sessions to raise your
issues and concerns.
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Contact Details of the Dean Gina Fe G. Israel, EdD

Smart:0909-994-2314
deansofficetagum@umindanao.edu.ph
Contact Details of the Program Raiza Mae C. Narciso
Head Email: raiza_narciso@umindanao.edu.ph
Mobile: 09338201418
Students with Special Needs If you are a student with special needs, you shall
communicate with the course coordinator about the
nature of your special needs. Depending on the nature
of the need, the course coordinator with the approval of
the program head may provide alternative assessment
tasks or extension of the deadline of submission of
assessment tasks. However, the alternative assessment
tasks should still be in the service of achieving the
desired course learning outcomes.
Video Conference You are required to use the google meet for the
scheduled video conferencing. Please note that it is pre-
scheduled. Please refer to the course schedule given by
your subject teacher.
Help Desk Contact Dean’s Office
Globe:09158325092
Smart:
deansofficetagum@umindanao.edu.ph
Business Administration Education

Globe: 09955870420
Smart: 09107045559
FB page: UM Tagum College – DBAE
Cashiering Office
Globe: 09458941623
Smart: 09494254457
Sun: 09336032028
Records and Admission Center

Globe: 09752634831 / 09151825490
rac.tagum@umindanao.edu.ph
Student Accounts Office

Smart: 09075135112 / 09755119982
saotagum@umindanao.edu.ph
Library Contact 0927-395-1639
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Course Information – see/download course syllabus in the Black Board LMS
CC’s Voice: Hello prospective business practitioners! Welcome to this course CBM
112: Operation’s Management with TQM. By now, I am confident that
you really wanted to become a successful business professional and that
you have visualized yourself already doing business in your own specific
field of expertise.
CO: Before the actual business practice, you have to deal with several
challenges that needs the application of appropriate tools or methods for
basic productions and operations scenarios and solve actual business
problems through the use of quantitative and qualitative tools and
techniques which are the course outcomes of this subject. This particular
subject shall dicuss the nature, scope and limitation, and importance of
Operations, Production, and Total Quality Management in a business
entity. This comprise topics on productivity, project management,
forecasting, decision making environment, and Total Quality Management.
Specific cases/problems will be given to actualize and internalize your
comprehension of the topic for easy understanding
Let us begin!
Big Picture A
Week 1-3: Unit Learning Outcomes (ULO): At the end of the unit, you are expected to
a. Introduce and discuss operations Management and Productivity; and

b. Discuss the Global Environment and Identify the different Operations Strategy in
an International Environment.
Big Picture A in Focus: ULOa.

a. Introduce and Discuss Operations Management and Productivity
Metalanguage
In this section, the most essential terms relevant to the study of production management
and to demonstrate ULOa was operationally defined and discussed in the essential
knowledge to establish a common frame of reference as to how the texts work in your
chosen field or career. You will encounter these terms as we go through the study of
production management. Specific discussion per topic shall be provided in the later part
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to help you understand more about the scope in studying this course. There will be
computation as well, formula and sample was also provided to guide you in answering
the exercises in this unit.
1. Production. Production is the creation of goods and services.
2. Productivity. The concept refers to the amount of outputs (goods and services)
divided by inputs (like labor and capital resources).
3. Single-factor productivity. Indicates the ratio of one resource (input) to the (output)
generated products and services.
4. Multi-factor productivity. Indicates the ratio of many or all resources (inputs) to the
products and services (outputs) produced.
Essential Knowledge
To perform the aforesaid big picture (unit learning outcomes) for the first week of the
course, you need to fully understand the following essential knowledge that will be laid
down in the succeeding pages. Please note that you are not limited to exclusively refer
to these resources. Thus, you are expected to utilize other books, research articles and
other resources that are available in the university’s library e.g. ebrary,
search.proquest.com etc.
1. Hard Rock Café. This multi-national company is a world class restaurant which
later diversify its business to gaming, hotel, and casinos. Hard Rock Café was built
in the year 1971, it was the best dining restaurant in London due to its unique
themed food services which gives customers a rock and roll ambiance.
1.1 This rock and roll themed restaurant prepares and customized over 3,500 meals
every day. Hard Rock Café in Orlando, Florida, is one of the largest restaurants
in the world. Despite the demands of the customers, the operations manager in
HRC is incredibly competitive which consistently serve the “hot food hot and the
cold food cold”.
1.2 Having an efficient work layout and process are just some of the priorities of the
Operations Manager in HRC. This may also be the reason of the employee’s
effective and efficient work job. Operations and Production related process was
carefully and meticulously checked by the managers to ensure that the food
was served right on time with correct measures, temperatures etc.
1.3 In 1979, the famous singer Eric Clapton once visited the cafe and due5 to its
delight he gave his guitar as memorabilia to show satisfaction and delight of the
restaurant magnificent dining experience. Ever since, the idea on covering its
walls with rock and roll memorabilia commence. Many icons/artist who visited
the place did the same and left valuables to the café, which paves its way to
become a Restaurant with mini museum with valuable things hanging at the
wall. Some known artist was Madona/Michael Jackson etc.
1.4 The secret for maintaining its reputation lies in the effective work lay-out set by
the operations manager considering process from grilling, baking, frying, and
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more of it, which helped in ensuring quality in any aspect of service and goods
served to its customers.
1.5 Operations management is complex, difficult and exciting. It's impacting our
daily lives. The operations managers basically decide how well we live.
2. Operations Management. To define the operations management, it is a sequence
of activities that generate value by transformation of inputs into outputs in the form
of products and services.
2.1 Production. Production is the creation of goods and services.
3. How to organize the production of goods & services. Business entities always
considered the 3 major function that are vital in the creation of goods and services.
Most of its operation are primarily focused in these departments. These are
considered to be a vital key for productivity as well as in surviving organizational
competition.
3.1 Marketing function. This department/function primarily concerns the
identification, advertising and penetrating existing or target market. Thus, this
function is vital as it generates the demands of the product.
3.2 Production/Operation function. Obviously, without this the company does
not have anything to sell. This function mainly concerns the Creation of the
product.
3.3 Finance/Accounting function. This function tracks the inflow and outflow of
the company finances which concerns the payment of bills, collection of money
and many others.
4. Why Study Operations Management? Good Om managers are scarce and as a
result, career opportunities and pay are excellent. There are four major reasons
why studying OM is essential for businesses:
4.1 Operation’s Management belongs to the 3 major functions. Thus, it’s
essentially to know basic function of it since it’s related to all.
4.2 In order to know how goods and services are created and produced.
4.3 Operations manager always encounter challenges which requires
decision making, to understand them studying OM will be very helpful.
4.4 In business most specially in manufacturing industry and services
Operations Management holds a big portion of budget and deciding
matters on where to cut cost and other decision is vital.
5. Major Task of the Operation’s Manager. All managers still go back in doing the 5
distinct process of management known as POSDICON.
5.1 Planning. This function tackles about the setting of objectives, long-
term/ short-term plans, company policy, operations and procedures
which aims to attain the goals of the company.
5.2 Organizing – This refers to grouping of the different organizational
resources particularly the 6M’s which includes men, money, machineries,
market, method, and moment.
5.3 Staffing. This is a highly HR function that particularly targets on “putting
the right person in the right job”.
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5.4 Directing – This function concerns topic on Leadership, Motivation, and

Communication. This is a difficult function since you are dealing with
people which is highly unpredictable.
5.5 Controlling – The last process is about assessment and evaluation of
the other 4 distinct process to ensure conformity to the plans being set.
5.6 There are 10 major decision areas that an operation manager must. An
effective manager can be able to address these 10 decision areas to the
best of his/her knowledge. The job of an Operation Manager is very
demanding and challenging indeed.
10 Decision Areas Issues
1. Design of goods & What goods/services should we offer?
services How should we design these products?
2. Managing quality How do we define quality? Who is responsible for quality?
3. Process & Capacity What process & what capacity will these products require?
design What equipment & technology is necessary for these
processes?
4. Location Strategy Where should we put the facility? How large must the
facility be to meet our plan?
5. Layout strategy How should we arrange the facility? How large must the
facility be to meet our plan?
6. Human resources & How do we provide a reasonable work environment? How
job design much can we expect our employees to produce?
7. Supply-Chain Should we make/buy this component? Who should be our
Management suppliers & how can we integrate them into our strategy?
8. Inventory, material How much inventory of each item should we have? When
requirements planning do we reorder?
& JIT
9. Intermediate & Are we better off keeping people on the payroll during
short-term scheduling slowdowns? Which job do we perform next?
10. Maintenance How do we build reliability into our processes? Who is
responsible for maintenance?
6. Difference Between Goods and Services.
CHARACTERISTICS OF SERVICES CHARACTERISTICS OF GOODS
Intangible: Ride in an roller coaster Tangible: The coaster itself

Produced and consumed simultaneously: Product can usually be kept in inventory
Coffee Shop selling Frappe that is (beauty care products)
consumed as it is
Unique: Your investments and medical Similar products produced (iPods)

care are unique
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High customer interaction: Often what the Limited customer involvement in production
customer is paying for (consulting,
education)
Inconsistent product definition: Auto Product standardized (iPhone)
Insurance changes with age and type of
car
Often knowledge based: Legal, education, Standard tangible product tends to make
and medical services are hard to automate automation feasible
Services dispersed: Service may occur at Product typically produced at a fixed facility
retail store, local office, house call, or via
internet.
Quality may be hard to evaluate: Many aspects of quality for tangible
Consulting, education, and medical products are easy to evaluate (strength of a
services bolt)
Reselling is unusual: Musical concert or Product often has some residual value
medical care
7. Challenges in Productivity. In creating goods and providing of services,

several issues or challenges will be encountered which requires decisions
relating to operations and production. Other may use the cost-benefit
analysis or even the opportunity cost to address such challenges.
7.1 Some of the productivity challenge may include how to reduce input/raw
materials while output remains the same or how to maximize output if
there are no changes in input.
8. Starbucks improvement in productivity. Starbucks is known for providing a
world-class service with quality products. The brand itself always connotes a
quality goods and services that many coffee shops imitate. As part of
continuous improvement, the company conducted study and form 10 team of
analyst that studies ergonomics or process efficiency on how to save time in
their operations to cater the customer quickly which later leads to
satisfaction. Part of the changes they did are the following:
8.1 For purchases under $25 dollars, they do not require a signature on credit
card transactions: By this, they were able to save 8 seconds per credit
card transactions.
8.2 The team created an ice scoop that is equivalent to 1 order per drinks to
save time in scooping ice one by one: This saved 14 seconds per drink
8.3 Instead of having a barista they bought an expresso machine to automate
process: They were able to save 12 seconds per shot.
8.4 Despite the improvements made, Starbucks' Services and Development
boosted total sales per store from $250,000 to $1,000,000 in seven
years. Productivity has increased by 27% or around 4.5% per annum.
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9. Measurement in Productivity. Measuring productivity in operation helped

manager in identifying how effective the process is. Understanding productivity is
vital in improving our quality of life.
9.1 Productivity. The concept refers to the amount of outputs (goods and
services) divided by inputs (like labor and capital resources). Referring to
this, let us remember that productivity relates to output in the
manufacture of goods and does not imply the production amount of a
given product.
9.2 Single-factor productivity. Indicates the ratio of one resource (input) to
the (output) generated products and services. Refer to the computation
bellow:
Productivity = Units Produced/Input Used
9.3 Multi-factor productivity. Indicates the ratio of many or all resources
(inputs) to the products and services (outputs) produced; This is the Multi-
factor productivity formula for computing:
Productivity = Units Produced/ Labor + Material + Energy + Capital +
Miscellaneous
9.4 Change in Productivity. To measure the exact percentage of change in
productivity, the formula below is used:
% Δ = New Productivity – Old Productivity / Old Productivity
Example: Through a modern computerized title-search program, Collins Title needs

to determine the labour and multi-factor productivity. The business has a workforce of
four, each operating eight hours per day (for a $640 / day payroll cost) and $400
annual overhead expenses. Collins manages & finishes every day on eight names.
The new computerized title-search program would require 14 titles to be searched
every day. Also if the workers, their hours of service, and salaries remain the same,
the payroll costs are still $800.
Solutions:
Using single-factor productivity:
 Old Labor Prod. = 8 titles per day / 32 labor-hrs = .25 titles/labor-hr
 New Labor Prod. = 14 titles per day / 32 labor-hrs = .4375 titles/labor-hr
 % Δ = .4375 - .25 / .25 = .75 or 75% change
Using multi- factor productivity:

 Old MFP = 8 titles per day / $640 + 400 = .0077 titles/dollar
 New MFP = 14 titles per day / $640 + 800 = .0097 titles/dollar
 % Δ = .0097 - .0077 / .0077 = .2597 or 25.97% change
10. Variables in Productivity. Changes in productivity are dependent on three
products variable. If you want productivity to improve you must take note of the
following factors and focus attention on improving such variable. In a survey
conducted, the following result was the percentage of influence that such variable
contributes to productivity:
10.1 Labor. 10% of the improvement in productivity annually is caused by the
Human Resources working in the company. Labor contributes about
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10% of the annual increase. Labor productivity is a result of a good

employee-employer relationship, communication, and continuous
learning.
10.2 Capital. 38% of the improvement in productivity is caused by capital
investment. Business competition has been very stiff in this information
technology age, investment in Technology, advance equipment, system
and others are necessary to adopt in this highly competing environment.
Improvement in Labor is also caused by Capital, giving them advance an
updated tools or means in doing job can help them improve their
performance.
10.3 Management. 52% of the improvement in productivity is caused by
management leaders. Top and Middle management are responsible for
decisions involving the other two variables. Result of their decision or
even their leadership affects the business entirely. Dealing with people
and analyzing the connection of investing such capital is a big factor in
the increase of productivity. Thus, a large percentage of influence for the
improvement of productivity is caused by management.
Self-Help: You can also refer to the sources below to help you
further understand the lesson:
* Heizer, J. and Render, B. (2011). Principles of Operations management. 10th edition.

Upper Saddle River, NJ: Prentice Hall, pp 33-51.
* Schroeder, R. G., Goldstein, S. M. and Rungtusanatham, M. J. (2017). Operations

management in the supply chain: decisions and cases. 7TH edition. New York,
NY: McGraw-Hill Education, pp 2-15.
Let’s Check
QUIZ EXERCISE 1. Now that you know the most essential terms in the introduction of
production management. Let us try to check your understanding of these terms. In the
space provided, write the term/s being asked in the following statements (10 pts):
_______________1. Often produced and consumed simultaneously.
_______________2. Activities linked to the production of products and services, through

turning inputs into outputs.
_______________3. Indicates the ratio of one resource (input) to the goods & services
produced (outputs).
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_______________4. A variable that contributes about 38% of the annual increase.
_______________5. Refers to the creation of goods & services.
_______________6. Hard Rock Café in Makati City was established in what complete date?
_______________7. Grouping together of people, establishing relationship among them, and

defining the authority and responsibility the personnel have in the use of
the company’s material resources to attain predetermined goals and
objective.
_______________8. Indicates the ratio of many or all resources (inputs) to the goods and
services produced (outputs).
_______________9. Process of measuring and correcting the activities of subordinates and the
company itself to assure conformity to plans.
______________10. The ratio of outputs (goods and services) divided by the inputs (resources
such as labor and capital).
QUIZ EXERCISE 2. Write TRUE if the statement is Correct and write FALSE if it is incorrect
(10 points).
______________ 1. Hard Rock Café in Orlando, Florida , prepares over 1,500 meals
each day.
______________ 2. The use of productivity measures aids manager in determining how
well they are doing.
______________ 3. The formula in measuring productivity is Input / Output used.
______________ 4. The marketing function creates goods and services.
______________ 5. Productivity improvements are easy to achieve.
Let’s Analyze
ASSIGNMENT 1. Getting acquainted with the computations in the topic productivity.
Now, I will require you to solve the problem given considering the requirements.
PROBLEM: Klaus Mikaelson makes Volleyballs in his New Orlean plant. He has a
renewed belief in productivity with recent increases in the prices. Klaus had an interest
in assessing his organisation 's profitability. He would like to ask if his business
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achieves an annual production gain of three percent in manufacturing. He has the

following details reflecting a month from last year, and this year's corresponding month.
Last Year Now

Units produced (Volleyballs) 1,000 1,000
Labor (hours) 300 275
Pounds (lbs.) 50 45
Capital interest ($) 10,000 11,000
Energy (BTU) 3,000 2,850
REQUIREMENT (Place your solution for each category per box below):
1. Compute for the productivity of each category (up to 4 decimal point per answer).
Show your solution
2.Compute for the productivity percentage change for each category (up to 4 decimal
point per answer). Show your solution.
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3. Does the organization maintain the manufacturing average of 3% increase in

productivity? Elaborate your answer.
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In a Nutshell
The study of production management is indeed a pre-requisite to becoming a

successful business practitioner. It is a very complicated and demanding task which
requires patience and technical expertise including knowledge outside the classroom
and school.
Based from the definition of the most essential terms of production management and
the learning exercises that you have done, please feel free to write your arguments or
lessons learned below. I have indicated my arguments or lessons learned.
1. Business practitioners must have basic knowledge on the five management

function process: Planning, Organizing, Staffing, Directing, and Controlling
(POSDICON).
2. Argue which is the best measurement of productivity: Single-factor or Multi-factor?
Single-factor productivity is often used especially in the service sector. Measuring
labor productivity has been very important since human resources are considered
as one of the main reasons of its increase/decrease. However, Multi-factor
productivity is a holistic approach in measuring productivity since it does not
consider one input
but multiple inputs over time. Thus, it is very helpful as it results to achieve an
objective decision.
Your Turn
3. ______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
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Q&A LIST.
In this section, you may list down all emerging questions or issues to help you in
your review of concepts and essential knowledge. Answers will be specifically
tackled in the scheduled video conferencing.
Do you have any Questions or clarifications?
Questions/Issues Answers
1.
2.
3.
KEYWORDS INDEX.
Management Operations Single-factor Multi-factor

Process/Function Management Productivity Productivity
Products Project Manager Production Products
Planning Organizing Staffing Directing
Labor Capital Management Controlling
Goods Services Operations Manager
20
Big Picture A in Focus: ULOb.
b. Discuss the Global Environment and Identify the different
Operations Strategy in an International Environment
Metalanguage
For you to understand ULOb, you will need to have an idea of the Global Company
Profile: Boeing. This international company is a best example on how Boeing’s Global
Strategy yields competitive advantage.
1. Mission. The purpose or rationale for an organization’s existence.
2. Strategy. The organization’s action plan to achieve the mission. Firms achieve
mission in three conceptual ways: Differentiation, Cost leadership, and Response.
3. International Business. Refers to companies that venture in international trade or
investment.
4. Multi-national corporation. It a firm with significant presence in multinational
markets, operates or manages assets in more than one nation.
5. International Strategy. This firms involve in exporting and importing to expand
business in an international setting.
6. Multi-domestic strategy. Operations of this firms are highly decentralized, his is
highly sensitive to the culture and styles of the country where it operates.
7. Global Strategy. Opposite to Multi-domestic global strategy operation is centralized
no matter what country you are in.
8. Transnational Strategy. This is the best strategy yet the costliest one, this is a
combination of global and multi-domestic strategy where standardization of process is
maintained but local responsiveness was also focused on.
Essential Knowledge
Before you proceed further with the topic, it is highly important to rationalize discussion
on the global view of operations, developing missions and strategies, achieving
competitive advantage through operations, issues in operations strategy and global
operations strategy options.
1. Operation in a Global Setting. Thinking globally should be the mindset of all
operation’s managers at this time. In 1990s, a lot of problem was seen as
hindrance in improving productivity and these are: religions, ethnicity, colors
politics, and even cultural barriers. Gone are the days were discrimination is
prevalent that affects the productivity of the people working in a certain company.
21
The creation of Boeing 787 dreamliner is considered as one of the best strategy
applied both in global and engineering perspective. This breakthrough in
manufacturing and engineering raises the bar in supply chain management. The
787 dreamliner acquired a record breaking sales dues to its state-of-the-art
design branded as fast-selling commercial jets in history;
Using a virtual work station allows Boeing engineers to coordinate and collaborate
in real time even if sub-parts were made in other countries including partners in
Australia, Japan, Italy, Canada, and across the Unites States. Digital testing was
used in identifying errors before the actual production per sub-part of the
dreamliner;
Lastly, after digital testing, the parts were shipped at Everest Washington for the
final assembly;
35% of the Dreamliner was built by Japanese suppliers and others were
distributed from different countries. This implies that the trust of several Multi-
national companies in Japan is huge due to their robust design and quality
product which is vital in ensuring quality output; and
Therefore, domestic production is not anymore viable for Global companies in this
Globalized era. Many Businesses also considered other strategies in expanding
the market, exporting/importing is already an old strategy, venturing multi-
domestic, global, and transnational strategy for multi-national company is the new
normal.
2. Traditional method of operation is already outdated many engineers, scientist, and

business practitioners have challenged the old ways of doing things. Business
operation highly evolved for a better a fast process. Globalization therefore has
direct impact in company’s improvement in their product, extending services
throughout the market and offering something new to satisfy people’s insatiable
needs. A production that takes how many days, weeks, or months to accomplish
can now be produced in minutes, hours or days considering the concept of the
economies of scale. However, globalization strategies might give competitive
advantage to the company but it also complicates the work of the operation’s
manager. That is why Operation Manager is one of the highest paid job nowadays
because work is very demanding.
3. Various reason was identified why local business operation shift to international or
global operation. These are:
3.1 Cost Reduction. A lot of companies engage in global operation to reduce
cost and take advantage of the opportunity. Aside from that companies can
22
also purchase raw materials directly in other country at a lesser cost with high
quality.
3.1.1 Labor cost is one of the variables that needs to be focused on and some
countries like Philippines, China, and other Asian Countries offer lesser
cost of labor than in developed countries.
3.1.2 trade agreements have aimed to eliminate taxes and therefore to
decrease the costs of running facilities abroad:
3.1.2.1 World Trade Organization (WTO). An international organization
that promotes world trade by lowering barriers to the free flow of
goods across borders;
3.1.2.2 North American Free Trade Agreement (NAFTA). A free trade
agreement between Canada, Mexico, and the United States;
3.1.2.3 Maquiladoras. Mexican factories located along US – Mexico
border that receive preferential tariff treatment; and
3.1.2.4 European Union (EU). A European trade group that has 27
member states.
TRIVIA ► U.S. CARTOON CHARACTERS WERE CREATED IN MANILA
---------------------------------------------------------------------------------------------------------
Around 90% of U.S. televised cartoon were created by Filipinos to name some of it are: FRED
FLINSTONE, TOM & JERRY, ALADIN, and DONALD DUCK. Filipinos are flexible in adapting
other country’s culture plus the familiarity and expertise in the universal language paved way to
be one of the outsourced labor in Asian countries. Filipinos are also liked by foreign country due
to its talents, character, and intelligence.
Disney, Marvel, Warner Brother and Hanna-Barbera are the major universal studios that
outsourced Filipinos to create storyboards and sketches per episode and voice tracks to the
Philippines. Approximately, 20,000 sketches were drawn for a 30-minutes episode. These giant
companies were able to save a lot of labor cost from $500,000 dollars if US made to $130,000 if
Philippine-made or $160,000 if Korean-made.
Sources: Journal of Global Information Technology Management (2007): 1-6; The New York
Times (February 26, 2004): A29; and the Wall Street Journal (August 9, 2005): D8.
3.2 Supply Chain improvement. Going near to the main source of supply is also
a wise move for most companies, they were able to save shipping fees and
other costs involve in raw materials acquisition.
3.2.1 Auto mecca of Southern California were known for its world-class auto
styling studios in which most companies move there to learn auto-
design;
3.2.2 China is famous for its cheap production costs thus some known athletic
shoe like Nike transferred from South Korea to China to save labor and
production cost;
23
3.2.3 Grasse, France is where the world’s best essences was located. Most
known Perfume manufacturer has outlet or plant in there to acquire in
close contact the flowers in the Mediterranean which are used to extract
essence for perfumes.
3.3 Provide an Improve Product. Going global permits companies to understand
the culture of other countries inspiring them to innovate and improve current
existing product. Foreign markets can also be a tool to discover something
new in your business thereby contributing in a new and improved version of
your goods and services.
3.4 Understand Markets. Competition can lead to new opportunities. Due to
hypercompetition companies thrives to be better with its rival at all times. With
this, opportunity from service providers are also sufficient. Same with supply
chain improvement the following examples was also noted due to
understanding market competition:
3.4.1 Japan was known for its robust design and quality products. Thus, a lt of
Cell phone manufacturers outsourced computer aided design (CAD)
and computer aided manufacturing (CAM) in Japan.
3.4.2 For developed country like Japan, product life cycle works differently
compared to developing countries. Thus, engaging global operations
can also be a tool to extend the product life cycle of an existing product.
Example, a declining cellphone edition in Japan might be an
introductory edition in the Philippines. So instead of junking it why not
sell it to developing countries to make more profit out of it;
3.4.3 As discussed OM job becomes more demanding because of the
different variations in lifestyle, culture and economic activity in every
county. Thus understanding each is vital, for instance, Whirlpool designs
washing machines with dry washers in countries with four seasons while
in tropical country it’s optional. Likewise, refrigerators in some Asian
country like India or Bangkok were in bright colors because it was
displayed at the living room which became part of their decorations
while in others colors are in white, black, or cream.
3.5 Continuously Learn to Improve Operations. Learning is like a race with no
finish line. It’s fluid and allow a free flow of ideas.
3.5.1 When it comes to product design and inventory management Japanese
and Scandinavians are so good at that. In ergonomics, designing
product must always aim in making our life better, the connection of the
design and on how we use it must be beneficial to the customer
considering not to waste time and save motion.
3.5.2 The international operations will boost customer satisfaction and
response time.
24
3.6 Attract and Retain Global Talent. Potential employees can be kept intact if
companies gave them opportunities to grow and develop their potentials.
Wasting such talents is a big loss to global companies, in going global one
needs a highly competitive human resources also to understand well what’s
happening in the bigger picture.
4. Mission and Strategy Development. It is uncommon for companies to set a
mission and develop a strategy. To continue business operation, setting the
preliminaries are vital because every decision must be anchored in the big picture.
4.1 Mission. The purpose or rationale for an organization’s existence.
4.2 Strategy. The organization’s action plan to achieve the mission. Firms
achieve mission in three conceptual ways: Differentiation, Cost leadership,
and Response.
5. Conceptual ways in achieving mission. These strategies paved way for
companies to stay on track and develop its competitive edge over others:
5.1 Competitive Advantage. Something that you have that others do not have. It
is also something about the product leader that you have or the best service
that you offer that others cannot or do not give.
5.2 Differentiation. This strategy can also be matched with the competitive
advantage that you have. Adding value to the product is a tool to attain such
edge. This is attributed to the customer’s transcendent perspective in viewing
your product, the uniqueness and may go into both physical and service
characteristics. Exceeding customer’s perception of value.
5.3 Cost Leadership. This is about offering product in a just price. It does not
imply cheap prices for a product but it tackles about the relationship with
quality and cost. Using Cost Leadership does not imply low quality because it
particularly targets mass market, acquiring quality and affordable product.
5.4 Response. It is normal for a company to experience post-purchase services
and responding timely to customer’s concern is highly relevant. A lot of
company also cater to the specific needs of the customer in which response
strategy can be used in maintaining customer satisfaction.
6. Global Operations Strategy Options. Nowadays, companies that settle in
traditional business operation are associated with less sale records as compared
to a global firm. Going global does not always mean selling product outside the
country but also means improving product using global operations.
6.1 International Business. Refers to companies that venture in international
trade or investment.
6.2 Multi-national corporation. It a firm with significant presence in multinational
markets, operates or manages assets in more than one nation.
6.3 International Strategy. This firms involve in exporting and importing to
expand business in an international setting. In the Philippines, this is very
25
common in agricultural products were DOLE or SUMIFRU engages in such
activities. This has little local responsiveness and little cost advantage.
6.4 Multi-domestic strategy. Operations of this firms are highly decentralized, his
is highly sensitive to the culture and styles of the country where it operates.
Example is the leading fast food chain in the world, McDonalds. This
Restaurant offers variety of menu depending on the country they are in. For
instance, Mcdonalds in France offers wine, beer in Germany, Teriyaki in
Japan etc. The strategy has high local responsiveness with little or no cost
advantage.
6.5 Global Strategy. Opposite to Multi-domestic global strategy operation is
centralized no matter what country you are in. This is common in BPOs in
which they just expanded their business operation to ot her country. This has
significant cost reduction but little local responsiveness.
6.6 Transnational Strategy. This is the best strategy yet the most costly one, this
is a combination of global and multi-domestic strategy where standardization
of process is maintained but local responsiveness was also focused on. The
best sample for this is the Boeing 787 dreamliner were parts were made
across boarders but maintain business operation standard at home country.
This strategy has significant cost reduction and significant local
responsiveness.
26
Self-Help: You can also refer to the sources below to help you further
understand the lesson:

management in the supply chain: decisions and cases. 7TH edition. New York, NY:
McGraw-Hill Education, 18-32.
Let’s Check
QUIZ EXERCISE 3. Please encircle the letter of your correct answer that best reflects
your thinking (10 points).
1. A mission statement is beneficial to an organization because it:
a. is a statement of the organization’s purpose.
b. identifies important constituencies.
c. Details specific income goals.
d. ensures profitability.
2. The three strategic approaches to competitive advantage are _________,
_________, and ________.
a. international, mutidomestic, and transnational strategy
b. response, cost leadership, and differentiation
c. response, global, and multidomestic
d. mission, strategy, and competitive advantage
3. A company that is organized across boundaries, with decentralized authority and
substantial autonomy at each business via subsidiaries, franchises, or joint
venture has:
a. a global strategy c multidomestic strategy
b. a transnational strategy d. international strategy
4. The purpose or rationale for an organization’s existence.
a. Vision b. Goals c. Mission d. company philosophy
5. A Global Operations Strategy that produces goods considering the cultural
background of the country.
a. International Strategy c. Multidomestic Strategy
b. Transnational Strategy d. Global Strategy
Let’s Analyze
RESEARCH EXERCISE 1 - Provide your own discussion in the blank spaces. This
activity will be rated according to the rubrics below:
27
Note: Answer will be rated per item/requirement including references (5-point is the
highest – total of 25 points)
1. Based on the description and analysis for this topic, would Boeing be better described
as a global firm or a transnational firm? Discuss.
Answer:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
__________________________________________________________________
______________________________________________________________________
2. There are three primary ways to achieve competitive advantage. Provide an example
not included in the text for each, support your choices (use APA format 6 th edition in
proper citation and referencing).
Answer:
Differentiation _________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
________________________________________________________________
Cost Leadership ________________________________________________________
28
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
__________________________________________________________________
Response _____________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
__________________________________________________________________Refere
nce
In a Nutshell
The importance of understanding the global environment and operations strategy is vital.
In this unit, you will be required to state your arguments or synthesis relevant to the
topics presented. I will supply the first two items and you will continue the rest.
1. For many organizations, the operations function provides the competitive advantage.
2. The operation’s manager job is to implement an OM strategy, provide competitive
advantage, and increase productivity.
29
Your Turn
3.____________________________________________________________________
______________________________________________________________________
4.____________________________________________________________________
______________________________________________________________________
______________________________________________________________________
Q&A LIST.
In this section, you may list down all emerging questions or issues to help you in your
review of concepts and essential knowledge. Answers will be specifically tackled in
the scheduled video conferencing.
1.
2.
3.
KEYWORDS INDEX.
Multi-national International Business Productivity Variables World Trade

Corporations Organization
Goods Productivity Maquiladoras Mission
Production Services Differentiation Strategy
Cost Leadership Response European Union Global Strategy
30
International Strategy Multi-domestic Transnational Competitive
Strategy Strategy Advantage
North American Free Products Project Manager Production
Trade Agreement
31
DEPARTMENT OF BUSINESS ADMINSTRATION EDUCATION /
HUMAN RESOURCE MANAGEMENT PROGRAM
Contact: 09955870420 / 09107045559
Big Picture B
Week 4-5: Unit

Learning Outcomes (ULO): At the end of the unit, you are expected to
a. Identify the importance of Project Planning, Scheduling, and Controlling; and

b. Rationalize the concept of Network Techniques: PERT/CPM.
Big Picture B in Focus: ULOa.

a. identify the importance of Project Planning, Scheduling, and
Controlling
Metalanguage
In this section, the most essential terms relevant to the study of project management
and to demonstrate ULOa will be discussed. No matter what profession you are in the
ability to manage a project effectively is necessary since project is naturally formulated
once in a while. Remember that the outcome of your project can make or break your
company in general thus, it is a necessity to learn project management. Encountering
Challenges are just normal in project management, delays, fortuitous event, demanding
customer/client are just some of it but knowing how to manage it may lessen the
problem on planning, scheduling, and controlling. In this unit, you will learn of the three
phases of managing the projects, these are:
 Planning. Planning refers to the phase where goals, project description and
project team are planned/formulated. This is a crucial phase because output is
dependent on the input that you used, meaning task, labor, materials and others
shall be planned well for a smooth implementation;
 Scheduling: This phase tackles about the organization of the 6M’s of
management (men, money, market, machinery, method, market, and moment).
Success in project management also depends on how you handle well this
organizational resources; and
 Controlling: The last phase of project management yet the most challenging
one. Normally, when a project is near to its end, common bottlenecks will be
encountered (lack of supplies, budget constraints, client’s change of mind,
project behind schedule) and a sudden shift in client decision’s like fast tracking
the completion of project are usually common. At this phase, project manager
should be adaptive to the demands of time, so revising plan is not common at
this phase but as to how much cost and least time a project can be shorten were
just some of the questions that needs to be addressed in here.
Essential Knowledge
To discuss the aforesaid big picture (unit learning outcomes) for the next three (3)
weeks of the course, you need to fully understand the following essential knowledge
32
that will
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/ 09107045559
in the succeeding
pages. Please note
that you are not limited to exclusively refer to these resources. Thus, you are expected
to utilize other books, research articles and other resources that are available in the
university’s library e.g. ebrary, search.proquest.com etc.
1. PLANNING A PROJECT. Project is temporary in nature and it can refer to a set

of related activities that targets a specific outcome. For this to realize, big firms
formulate a project team organization that will focus on conducting the 3 phases
of project management. They are tasked to monitor the day-to-day operation of
the project; special attention will be given to such project until the very end of the
project. Below are the specific activities done in this phase:
In relation, there are four famous methods that project managers used in the 3
different phases, these are: Work Breakdown Structure, Gannt Chart, PERT and
CPM. The Project Management Institute (PMI) stated that “a project is a
temporary endeavor undertaken to create a unique product, service or result.”
First to note here is that project has a start and finishing activities; project are not
continuous with no end because it’s just temporary. Thus, project management
requires a different approach and attention in managing as compared to normal
operation in business.
1.1 Project
Organization. This is a team developed to assure that project planning,

scheduling, and controlling are well taken care of. Again, this is just a
temporary team unless a certain firm creates a particular unit tasked to
handle different projects, this is headed by a project manager which is
responsible in monitoring from the entire duration of project.
1.2 Project Organization Works Best when:

 Task will be specifically identified specially when objectives/goals are set
using the mnemonic SMART (Specific, measurable, achievable, realistic,
and time-bounded);
33
 Task
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is not
common and routinary to the usual operation of the business;
 Task involves complicated interrelated job that requires some unique
skill set; and
 project is related at all units in the organization.
 Project Manager’s Role. The role of project manager encompasses all
the necessary attributes that a good manager should have. This is a
demanding job since the outcome of the project can make or break the
company itself. They should be a good mentor with overflowing patience,
has good interpersonal skills, and should have a know-how of the
different fields that can be affected in the project operations. Most
specially, a Project manager should be accessible to everyone, and
ensuring that:
 Task are accomplished on schedule;
 Budget are not compromised and fit;
 Quality is not sacrificed despite the deadline and cost of raw materials;
and
 Human resources must always be treated with utmost respect, they must
feel valued, and motivated so that they will take pride in whatever task
given to them.
2. Work Breakdown Structure. One of the method used in Project planning that
portrays a ranked task of a project specifying the detailed activities of the major
task. Project team starts its job by identifying possible task that shall be
undertaken to complete the project.
2.1 Splitting up the project into bits and pieces can be hard, yet it is crucial in
project management and scheduling. At this stage, materials, people, and
cost are also estimated by the team.
2.2 WBS usually declines in size from highest to bottommost and is portrayed like
the one below:
Level
1 Project
2 Major Task in the project
3 Subtasks in major tasks
4 Activities (or “work packages”) to be completed
34
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Note: In order to create a WBS, use the Level ID as guide. In the

assessment, Level ID with Work description will be arranged together in a
table in random order.
3. Project Scheduling. In this phase, it ensures that the entire task was planned,
their connectivity is checked and estimated time of completion considering the
best, worst and the safest are identified. Some activities include:
3.1 Purposes of Project Scheduling. Whatever means that a project manager

used in completing the project, scheduling a project displays:
 The connectivity of all activities from beginning to end;
 The precedence relationships of the activties;
35
 Inspi
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res
the
identification of time and cost estimates in a realistic setting; and
 Aids in managing the organizational resources (5Ms) by identifying
bottlenecks.
3.2 Gantt Chart. Charts of preparation used to plan organizational resources and
assign time. This was developed by Henry L. Gantt which became popular
due to low-cost means of helping managers make sure that:
 Task are premeditated;
 The execution order has record keep;
 Expected time of completion is logged; and
 Entire project time completion is formulated.
Below is an illustration of a routine servicing of a Delta jetliner during a 40-
minute layover which can be used for scheduling repetitive operations. In this
case the chart helps points out potential delays.
4.
Controlling of the Project. Controlling is part of the basic management functions and
it’s always the last process or phase since it involves assessment or evaluation of
the activity or project. This contains the following activities like monitoring
organizational resources, project costs, and project schedule. Regular assessment
enables the project team to give recommendations on the possible revisions, status,
and shifting of resources.
4.1 This phase yields the following reports:
 Breakdown of normal and crash cost for every activity;
 labor productivity;
36
 tabl
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es
of
the distribution of cost;
 Work Costs and timetable summary;
 Expense/Expenditure report or forecast
 Reporting of variances;
 Analyzing and reporting Timeline; and
 Status of work update.
Below show several activities done for Project Controlling. Further discussions of
the technique used will be discussed in ULOb.
Upper Saddle River, NJ: Prentice Hall, pp 90 - 94.

NY: McGraw-Hill Education, 263 - 268.
Let’s Check
QUIZ EXERCISE 4. Encircle the letter that best describes the answer (10 points).
1. Which of the following statements regarding Gantt Charts is true?
a. Gantt charts give a timeline and precedence relationships for each activity of
a project
b. Gannt Charts use the four standard spines: Methods, Materials, Manpower,
and Machinery
c. Gantt Charts are visual devices that show the duration of activities in a project
d. Gantt Charts are expensive
37
2. / When
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monitors
resources,
costs, quality, and budgets which may result to making necessary revisions or
shifting of resources in order to meet time and cost demands, the firm is under
which specific phase of managing a project?
a. Planning c. Forecasting
b. Controlling d. Scheduling
3. Below are activities done in Scheduling a project, EXCEPT;
a. Assigning People c. Scheduling Resources
b. Schedule Deliverables d. Shifting of Resources
4. Which among the activities listed below would fall under planning the project?
a. Developing Work Breakdown Structure c. Sequencing Activities
b. Shifting Resources d. Monitoring
5. Planning charts used to schedule resources and allocate time.
a. PERT c. CPM
b. Gantt Charts d. Work Breakdown Structure
Let’s Analyze
ASSIGNMENT EXERCISE 2 - Work Breakdown Structure (20 points)

Instruction: Create two WBS using the data below.
Answer (Draw it in landscape format):
38
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ASSIGNMENT EXERCISE 3 – Gantt Chart (20 points)
39
Instruction:
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/ 09107045559
2 Gantt Charts using
the data below
Answer:
40
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In a /Nutshell
09107045559
Knowing Project
Management is
essential as anybody can be a project manager in a company. In this portion, you will be
required to state your arguments or synthesis relevant to the topics presented. I will
supply the first two items and you will continue the rest.
1. Differentiating Project to non-project must be done to effectively do the job well.
2. In making a Gantt Chart, labeling the time of completion must be written inside the
cell not in the borderline in order for shading to be clear and concise.
Your Turn
3. ______________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
4. ______________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
Q&A LIST.
In this section, students may list down all emerging questions or issues to help you in
discussed in the scheduled video conferencing.
1.
2.
KEYWORDS INDEX.
Project Work Breakdown Program Evaluation Project Controlling

Management Structure Review Technique
Gantt Charts Project Organization Project Scheduling Project Planning
41
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Big Picture B in
Focus: ULOb.
b. Rationalize the concept of Network Techniques: PERT/CPM.
Metalanguage
In this unit, you will learn how to use PERT/CPM technique in managing both small and
large projects. Controlling Project is done by several teams which works as one. Time,
cost, and performance were monitored by this team aligned in the set plan of the
project. When troubles are detected, immediate corrective action are considered which
includes plan revision, reallocation of budget, change in personnel, and many others.
The decision to shift or change the original plan must be made realistic by the project
team.
1. Project closing is concerned with formally ending a project.
2. Project crashing. Shortening the network of operation to reduce the period on
the critical path, thereby decreasing overall completion time.
3. Program Evaluation Review Technique. A technique for project management
which have three estimates of time for each task. Consider precedence
relationships and interdependencies.
4. Activity on node (AON). A network diagram designating activities by nodes.
5. Activity on arrow (AOA). A network diagram designating activities by arrows.
Essential Knowledge
To perform the aforesaid big picture (unit learning outcomes) for the next three weeks of
the course, you need to fully understand the following essential knowledge relating to
the techniques used in Project Controlling. Please note that you are not limited to
exclusively refer to these resources. Thus, you are expected to utilize other books,
research articles and other resources that are available in the university’s library e.g.
ebrary, search.proquest.com etc.
1. Project Management Techniques: PERT and CPM. The former was formulated
in the year 1950s that serve as aid to several managers in scheduling,
monitoring, and controlling huge and complicated project. The latter was
developed first in the year 1957 as a tool formulated by J.E Kelly of Remington
and M.R. Walker of DuPont for chemical plants. Autonomously, PERT was
developed in 1958 by Booz, Allen & Hamilton for the U.S. Navy, for Polaris
missile.
1.1 Program Evaluation Review Technique. A technique for project
management which have three estimates of time for each task. Consider
precedence relationships and interdependencies.
1.2 Critical Path Method. A technique for project management that requires
only one-single factor per task.
1.3 Critical Path. The longest time path (s) over a network computed.
42
2. / The
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Framework
of PERT and
CPM. PERT and CPM both follow six basic steps:
 Identifying of the project details and formulation of WBS;
 Identification of its precedence relationship;
 Illustrating the previous step by making a diagram;
 Identification of time estimates per activity;
 Identifying of the different path most especially the critical path, the
longest time path through the network; and
 Utilization of the network for planning, scheduling, and
monitoring/controlling the entire project.
3. Questions PERT & CPM Can Answer.
 The Expected Project Completion time;
 Critical activities and noncritical activities;
 Specific date of completion of the project;
 Project Status if behind, or ahead schedule;
 Project Cost monitoring if it is equal, lesser than or greater than the
budget;
 Availability of Resources to finish the project;
 If project will be shorten how much will be incurred in addition and what is
the least time a project can be finished.
4. Network Diagrams and Approaches. Project Network can be done in two
ways: Activity on node (AON) and Activity on arrow (AOA). To differentiate, in
AON nodes represents the activities while in AOA arrows represents the
activities. Thus, the nodes in AON have no time nor resources. For easy
understanding, we will use the AON as our official approach in doing the PERT
diagram:
4.1 Activity on node (AON). A network diagram designating activities by nodes.
4.2 Activity on arrow (AOA). A network diagram designating activities by
arrows.
4.3 Illustrated below are examples of AON and AOA illustration that helps you
differentiate both approach.
4.4 Note
that
in
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illustration
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(e) and (f)
below
under AOA approach provides a dummy activity (see broken arrow) just to
clarify relationships.
4.5
Dummy activity. This is an activity added that don’t possess any time and
resources but used for the purpose of maintaining the logic of the network. In
AON, two dummies are required most especially if the project has multiple
star and end activities. In AON, it is portrayed using a broken/dashed arrow.
5. Activity-on-node Example. Notice below that to make the diagram it is
important to identify the immediate predecessors for each activity.
PROBLEM ► Milwaukee Paper Processing, Inc., headquartered near downtown Milwaukee,
has long endeavored to escape the costs of building air pollution control systems at its facility.
Recently, the US Environmental Protection Agency (EPA) has given him 16 weeks to install a
complex system to filter the air. Milwaukee Paper received the warning that it will have to close
its factory unless it installs a complex system to filter the air Joni Steinberg, administrator of the
plant, wants to make sure that the installation of the filtration system goes smoothly and ends
on time.
APPROACH ► Milwaukee Paper has identified the eight activities that must be completed to
complete the project with the time required for each activity in weeks. These appear in the
table below.
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5.1 In the sample above, dashed line means having no predecessor (refer to
Activity A and B). So, it means that both can start simultaneously and are
connected to a dummy Start. Dummy Start is necessary in making PERT in
order to clarify the beginning of the project, this actually do not exist since it’s
a dummy. The start activity serves as the predecessor of A and B since both
doesn’t have any.
5.2 Next, as based on the table, activity C succeed activity A. Thus, C must be
connected to A by drawing an arrow and node. As for activity D since it has
two predecessors A and B arrows must be created from both predecessors
and must be connected to activity D.
5.3 Repeat the process, adding arrow from the predecessor of the activity
connecting it to the activity (its successor). Displayed below is the finished
AON project network of Milwaukee Paper Manufacturing.
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6. Variability in
Activity Times. In computing the estimated completion for every activity
handling three-time estimate let the project manager to safely gauge the variation
in finishing each of it. CPM implies that we have a set period of time for every
activity and that there is no variation in the operation times.
6.1 Three Time Estimates. In PERT, the 3-time estimate was used in probability
distribution:
 Optimistic time (a) – If everything goes according to schedule. This is
the optimal completion period for operation that could be obtained in a
PERT network.
 Pessimistic time (b) – Considering circumstances which are rather
adverse. This is the "worst" period of operation that a PERT network
might predict.
 Most likely time (m) – most realistic estimate. This is the most
probable period to perform an operation inside a more reasonable
approximation of a PERT network.
6.2 To compute the expected time per activity we used the formula:
6.3 Assign Time and Cost Estimates, using the formula above, we have:
6.4 Determining the Project Schedule. After computing the estimated activity
completion considering the three time estimates, this is now the time
estimates for Milwauke Paper Manufacturing.
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6.5 Although
the total time (weeks) when added equals to 25 weeks it does not entail that
it can be completed in 25 weeks in general. Remember that there are
activities that simultaneously started, unless the relationship is linear the
project completion time is always lesser than the added time (in weeks).
6.6 Project Schedule Determination. When you already computed the
expected time completion per activity you are now ready to identify the total
project computation using the forward pass and backward pass.
6.6.1 Note of the parts inside the Nodes. The Earliest time estimates are on
the upper part labeled as ES and EF. The latest time estimates are at
the bottom part labeled as LS and LF. Please refer to the image below:
6.6.2 Two-pass process were used in computing to evaluate certain time

schedules for each operation this comprises of a forward pass and a
backward pass. During the forward pass the early start and end times
(ES and EF) are calculated. By computing this, you will be able to
identify the project completion time of the entire project. The latest
times, (LS and LF) are identified in the backward pass.
6.6.3 This is the illustration of the PERT networks with activities containing
the activity symbol and activity duration in the Milwaukee Paper
Manufacturing.
6.6.4 Forward Pass/Earliest Start Time Rule. This section assumes that all
antecedents are accomplished accounting the earliest time that an
activity can start. Immediate predecessors should be accomplished
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before starting the succeeding activity. Please take note of the rule in
computing forward pass:
 ES = EF for activities with only one predecessor;
 For multiple predecessors, ES is the maximum of all EF values
of its predecessors. That is:
ES = Max (EF of all immediate predecessor)
6.6.5 Earliest Finish Rule. This is the earliest time that an activity can be
finished. EF is the sum of the ES and activity duration/Expected
completion of the activity. That is,
EF = ES + Activity duration
6.6.6 Shown below is an illustration for the computation using the Earliest
Start time Rule. As you can see, the last EF of an activity is the
number of weeks this project can be completed. In this case,
Milwaukee Paper Manufacturing project will be completed within 15
weeks and not 25 weeks since there are activities that will start
simultaneously. In the case that there are two or more ending
activities, the highest number shall be the ETC.
6.6.7
Backward Pass/Latest Finish Time Rule. Opposite with how to compute

using forward pass, backward pass starts with the ending activities.
The latest finish time rule is again based on the assumption that all its
immediate predecessors must be completed before an operation can
begin. Do note of the following:
 For ending activity/activities LF is/are equal to the Project
completion time of the project;
 LF is equal to the LS of its successor for single activity;
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  For multiple successors, LF is equal to the minimum of the

LS activities that immediately follows it. That is:
LF = Min (LS of all immediate following activities)
6.6.8 Latest Start Time rule. To compute the latest start, please refer to the
formula below:
LS = LF – Activity Time
6.6.9 Shown below is the complete computation using the forward pass and
backward pass as based on the formula given.
7. Calculating the slack time and identifying the critical Path (s). At this point,
you are now ready to identify which activity or path are critical and which is not.
Completing this activity is crucial as it is the basis for Crashing the project.
7.1 After performing the two-pass computation for the entire activity, it is time
now to calculate the slack time for each activity.
7.2 Slack Time. It applies to the permitted period to postpone an operation
without stopping the whole project. Both formula below will arrive with same
answer:
Slack = LS – ES or Slack = LF – EF
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7.3 Activities
with 0
slack (A, C, E, G, and H) are called critical activities which means the project
manager must closely monitor it since it does not allow any delay in the
activities. Example, if activity A’s completion time is 2 weeks it must be
finished on or before 2 weeks because if it lapsed, the entire project will be
affected, thus delaying it.
7.4 Activity B, D, and F are called non-critical activities since their slack time is
more than 0. Meaning, such activities can be delayed at its allowable time
(refer to the slack time). For example, activity F has slack of 6 meaning, it is
allowed to be delayed by 6 weeks without delaying the entire project.
However, if an adjacent activity has a slack time, delaying the two activities at
the same time is not allowed, this is what we called Total slack.
7.5 Total Slack. Refers to the total slack both adjacent activity can be delayed.
Refers to the total slack both adjacent activity can be delayed. Suppose
activity B is postponed by 1 week, and now has an EF of 4. This indicates
activity D currently has an ES of 4, and an EF of 8. Notice that these are the
values for LS and LF, respectively. That is, activity D will not have a slack
period now, either. Essentially, the 1-week slack that activities B and D had is
exchanged with them for that direction. Delaying any activity by one week
allows not only the activity to sacrifice its slack but also the other activity.
Usually they exchange complete slackness as two or more non-critical
events occur successively in a pathway.
7.6 Critical Path Analysis. In the result above, we can now identify several
paths that are present in this network. To identify the path, just follow the
arrows from starting to ending activities and to identify the weeks of
completion per paths, just add the activity duration, you may refer below:
 A-C-F-H = 9 weeks
 A-C-E-G-H = 15 weeks
 A-D-G-H = 13 weeks
 B-D-G-H = 14 weeks
7.6.1 Referring to path A-C-E-G-H, it is called as the critical path because it
is a continuous path across a network of projects that:
 Begins at the first activity of the project;
 Ends at the last activity in the project;
 All slack under this path is 0;
 It is the longest path through the network;
 The critical path is the shortest time in which the project can be
completed; and
 Any delay in critical path activities delays the project.
7.6.2 To reiterate, for non-critical paths which has activities with slack time,
delaying such non-critical activities will not delay the entire project. For
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example, in path A-C-F-H, noticed that activity F has 6 weeks’

allowable delay. Thus, if activity F will be delayed, it does not affect the
completion of the entire project because if:
A-C-F-H = 9 weeks + 6 weeks (delayed) = 15 weeks
7.6.3 For Total slack, noticed that path B-D-G-H has 14 weeks of
completion. Activity B and D has 1 slack time each which is called total
slack. Since the non-critical activities appear simultaneously delaying
both will delay the entire project. Thus, only one week delay will be
allowed for either B or D:
B-D-G-H = 14 weeks + 1 week (activity B-delayed) = 15 weeks
or
B-D-G-H = 14 weeks + 1 week (activity D-delayed) = 15 weeks
8. Probability of Project Completion. CPM aids the project manager to identify
the expected project completion time of Milwaukee Paper Manufacturing which is
15 weeks. But, Joni Steinberg considers that for each time estimate variation
occurs for each activity. This variation can affect the entire completion of the
critical path which can possibly the cause of the delay of the project.
8.1 The method below was used to calculate the variance per task completion
period:
Variance = [(b – a)/6]2
Note: Can you understand that there's more variance than in others? Notice
how the optimistic and pessimistic period stretches.
8.2 PERT takes note of the variance in critical path activities to better assess the
total project variation. The project variance is determined by summing up
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variances
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of critical
activities
along the critical path (see A-C-E-G-H).
Thus referring to the critical activities:

Project variance = 0.11 (A) + 0.11 (C) + 1.00 (E) + 1.78 (G) + 0.11 (H) = 3.11
Then compute for Project standard Deviation using the formula below:
Management also has an estimation not only of the project's projected

completion time but also of the standard deviation from that forecast.
8.3 PERT sets forth two more assumptions:
 Maximum delivery periods for the project meet standard distribution of
probability; and
 The periods of operation are statistically independent.
Using such premises, the usual bell-shaped curve shown below can be used
to reflect dates of completion of a project. This normal curve indicates a 50
percent probability that the delivery period of the manufacturer's project
would be less than 15 weeks, and a 50 percent risk that it will reach 15
weeks.
8.4 This is an opportunity to study your statistical skills and using a standard
distribution table This is an opportunity to evaluate your statistical skills and
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use
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normal
distribution table (Appendix 1: Normal Curve Areas of the book of Heizer and
Render, 2011)
Joni Steinberg would like to find out the possibility that her proposal would be finished on or before the
EPA 16-week deadline.
APPROACH ► To do so, she needs to determine the appropriate area under the normal
curve. This is the area to the left of the 16th week.
SOLUTION ►
Where Z is the number of

standard deviations, the
targeted date or value shall be
the mean or anticipated value
In the Normal Table in Appendix 1, the Z value of 0.57 to the right of the mean shows a
chance of 0.7157. Therefore, as seen below, there is a 71.57 percent likelihood that the
pollution control equipment will be placed in operation in 16 weeks or less.
8.5 What Project Management Has Provided So Far:

 The project’s completion time (expected) is 15 weeks;
 The computed percentage or chances to complete the project is 71.57%;
 The following are the activities under critical path (A, C, E, G, and H); and
 Non-critical activities includes activities B, D, F.
8.6 Project closing is concerned with formally ending a project. This contains
final touches of the entire work, termination of contracts, bills payment,
discussion and turnover of the finished project to the client/owner, and
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reassignment of the personnel and equipment used in the entire project. It is

vital to end the project with proper documentation because this can be used
as guide of the future similar project. Usual project closing ended in the
ribbon cutting activity which also signify the start of usage of the project
output by its owner/client. Managing project is demanding and needs
passion, it also needs large amount of investment and meticulous choose of
talents and quality inputs to fight challenges.
9. Cost–Time Trade-Offs and Project Crashing. Usually, several challenges will
be encountered in project management:
 Projects are behind schedule; and
 The deadline for delivery is pushed on
9.1 Either situation requires the project manager to fast track the remaining
activities by the new desired deadline. Cutting the date of completion is
called project crashing.
9.2 Project crashing. Shortening the network of operation to reduce the period
on the critical path, thereby decreasing overall completion time. In project
crashing, identifying the cheapest activity to be shortened is the wisest thing
to do.
9.3 Factors to Consider When Crashing a Project. There are some factors
that needs to be considered when crashing a project and these are:
 The cheapest amount of an activity to be crashed shall be considered;
 Total Crash time should be monitored; and
 The total cost of crashing should be as small as possible.
9.4 Steps in Project Crashing. Crashing a project involves these steps:
1. Compute the crash cost per time period. If crash costs are linear over
time:
CPM is a method that has a normal or typical duration for any operation
that we use in our computations. The average expense of the operation is
correlated with the particular duration. Another time in project
management, though, is the crash time, which is described as the
shortest time frame possible to complete an operation. The crash cost of
the operation is correlated with the crash time. We will typically shorten an
operation by introducing additional services (equipment, personnel etc.) to
it. Therefore, it is reasonable for an activity's crash cost to be greater than
its usual cost. The consequence for the Overall Crash Period (the time
required to shorten a project) and the Crash Cost per week of Milwaukee
Paper Manufacturing is seen in the next figure:
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2. Using
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current
activity
times, find the critical path and identify the critical activities
3. If there is only one critical path, then choose the activity that (a) may still
crash on this critical path, and (b) have the lowest crash cost per period.
This activity shall be crashed for one period.
When there is more than one critical path, then choose one activity from
each critical path such that (a) each chosen activity will always crash and
(b) the smallest of all selected activities is the overall crash cost per
period. Each operation crashes by one period. Notice that there could be
more than one critical path common to the same activity.
4. Update all activity times. If her desired due dates has been reached,
stop. If not, return to Step 2.
PROBLEM► Suppose Milwaukee Paper Manufacturing was only granted 13 weeks (rather than
16 weeks) to build the latest pollution control equipment or risk a court-ordered closure. If you
know, the critical path for Joni Steinberg was 15 weeks long, but she still needs to finish the
project in 13 weeks ' time.
APPROACH► To reach this due date of 13 weeks Steinberg has to decide which activities to
crash, and by how much. Steinberg is obviously involved in speeding up the project by 2 weeks,
at least at an added expense.
SOLUTION► The normal and crash times of the company, and the normal and crash costs, is
displayed in the following table. Remember, for example, that the average period of operation B is
3 weeks (the approximation used in the critical path calculation), and its crash time is 1 week. It
implies activity B will be reduced for up to two weeks if extra services are made available. The
expense of these additional services is $4,000 (= difference between the cost of crashing and the
normal cost). If we conclude that the crash cost is constant over time (the cost is the same per
week), the crash cost of Activity B is $2,000 a week (= $4,000/2).
Step 2, 3, and 4 can now be applied to

reduce Milwaukee Paper’s project
completion time at a minimum cost.
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The current critical path (using normal times) is Start A-C-E-G-H, where Start is just a dummy
activity beginning from. Activity A has the lowest crash cost per week of $750, among such critical
activities. Therefore, Joni Steinberg will crash activity A by 1 week to minimize the delivery period
of the project to 14 weeks. The cost is an additional 750$. Note the Activity A can no longer be
crashed further since it reached is crash limit to 1 week.
The original Start A-C-E-G-H path at this point remains critical, with a completion period of 14
weeks. However, with a completion period of 14 weeks, a new path Start B-D-G-H is critical now
too. On all critical paths, however, further crashing must be achieved.
We need to identify one activity on each of these critical pathways which could still be crashed.
We do would like to crash the least of the overall cost of crashing an activity on any path. We may
be tempted to simply pick the activities with the lowest crash cost per cycle for each path. When
we do so we should pick activity C from path one and activity D from path two. Therefore, the
overall risk of the crash will be $2000 (= $1,000+$1,000).
But we spot activity G being common to both paths. This is, we'll concurrently raising the
completion period of all paths by crashing activity G. While the $1,500 crash risk for activity G is
greater than that for operation C and D; we will also choose to crash G, because the overall
expense of crashing would still be just $1500 (compared to $2,000 if we crash C and D).
INSIGHT► Steinberg would crash activity A by 1 week, and activity G by 1 week to crash the
project to 13 weeks. The net total expense is $2,250 (= $750 + $1,500). It is significant, as often
project contracts provide incentives or fines for early or late completion.
9.5 Advantages of PERT/CPM:

 Helps in assessing complex projects;
 Just uses basic mathematical operation;
 Easy to understand due to illustration of graphical networks;
 Performing critical path and calculating slack time can help identify
activities to focus on;
 The details of the project and the illustrations show who is responsible for
the specific activities;
 Applicable for a wide variety of projects; and
 Effective for tracking not only plans but also prices.
9.6 Limitations of PERT/CPM:
 WBS formulation must be specifically identified and carefully analyzed to
check interdependencies of relationship for each activity;
 Precedence relationships must be specified and networked together;
 Experts may over or under estimate expected time of completion per
activity;
 There is an inherent danger of too much; and
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 Empha
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sis
being
placed on the longest, or critical, path.


Let’s Check
Now that you rationalize the concept of PERT and CPM, let’s try these simple
exercises.
ASSIGNMENT EXERCISE 4. Create two AON networks based on the two given
problem (17 points):
Answer:
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No. 1
No. 2
ASSIGNMENT EXERCISE. 5 Create an AON network and perform forward pass and
backward pass. Answer the Questions below:
Answer:
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Questions:
a. What is the Project completion minutes? ___________________
b. Identify the critical activities: ______________
c. Identify the non-critical activities: ______________
d. Identify the critical path: ___________________
Let’s Analyze
QUIZ EXERCISE 5. Let us raise the bar by answering the given problem below: 41
points
Answer:
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In a Nutshell
Now that you understand the workings of PERT and CPM, you are ready to master
dealing with projects soon in your career. PERT and CPM is an essential knowledge to
possess on being an effective project manager. In this unit, you will be required to state
your arguments or synthesis relevant to the topics presented. I will supply the first two
items and you will continue the rest.
1. In crashing project, you must be wise to choose the activity with the least additional
cost that can be incurred. Always be mindful with the total crash time and as to what
path you’ll have to crash (must be in critical path).
2. When to stop crashing? If there is no activity left to crash in at least one critical path
because continuing will not anymore lessen the time of completion.
Your Turn
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3.
Contact: 09955870420 ___________
/ 09107045559
__________________
_________________________________________
____________________________________________________________________________
____________________________________________________________________________
4. ______________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
Q&A LIST.
In this section, students may list down all emerging questions or issues to help you in
discussed in the scheduled video conferencing.
1.
2.
KEYWORDS INDEX.
Program Evaluation Critical Path Method Probability of Project Completion

Review Technique Completion
Z-Table Activity-on-nodes Activity-on-arrow Dummy activity
Expected Time of Project Variance Project Standard Variances
Completion Deviation
Slack Total Slack Project Crashing Crash Cost
Normal Cost Crash Time Normal Time Optimistic Time
Pessimistic Time Most Likely Time Forward Pass Backward Pass
Earliest Start Earliest Finish Latest Start Latest Finish
Big Picture C
Week 6 - 7: Unit Learning Outcomes (ULO): At the end of the unit, you are expected
to
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a. Rationalize the
concept and
importance of Forecasting;
b. Rationalize the three decision making environments and illustrate a decision tree;
and
Big Picture C in Focus: ULOa.

a. Rationalize the concept and importance of Forecasting
Metalanguage
In this section, the most essential terms relevant to the study of forecasting and to
demonstrate ULOa was operationally defined and discussed in the essential knowledge
to establish a common frame of reference as to how the texts work in your chosen field
or career. In business firms, managers are all interested to forecast future sales by
predicting future demands. In the past, forecasting has been difficult since the lack of
system entails manual thinking on how to do it, some may even base it on different
factors like movement of the animals but due to the advancement of technology life has
been better and advantageous to the business firms. A lot of choices are available in
forecasting, some do the simple and others prefer the complex method. Statistical
tools/methods have been very helpful in analyzing extensive data nowadays.
1. Forecasting. Process of predicting a future event.

2. Short-range forecast. A forecast plan that last for 1 year but usually done in 3
months.
3. Medium-range forecast. This category ranges from 3 months to 3 years. This time
forecast is useful for annual planning and other major plans.
4. Long-range forecast. This ranges from 3 years to 5 years or more depending on
the firm.
5. Economic forecasts. Address business cycle by predicting inflation rate, money
supply, housing starts, etc.;
6. Technological forecasts. Predict rate of technological progress which can result in
the birth of exciting new products, requiring new plants and equipment; and
7. Demand forecasts. Projection of demand for a company’s products or services.
8. Qualitative Forecasts. This forecast includes the use of expertise and experiences
from renowned experts in the company or outside the company.
9. Quantitative Methods. Forecasts that employ mathematically modeling to forecast
demand.
Essential Knowledge
To perform the aforesaid big picture (unit learning outcomes) for the last two weeks of
the course, you need to fully understand the following essential knowledge that will be
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laid /down
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09107045559
succeeding pages.
Please note that you
are not limited to exclusively refer to these resources. Thus, you are expected to utilize
other books, research articles and other resources that are available in the university’s
library e.g. ebrary, search.proquest.com etc.
1. Forecasting. Process of predicting a future event. Its result was used as the major
basis for all business-related matters such as but not limited to Human Resource,
Operations and Productions, and Capacity and Lay out.
Forecasting offers Walt Disney a strategic edge. In Disney, forecasting was very
helpful in assessing some crucial business operations like predicting queueing lines
for rides, opening the park early for peak season, identifying when to let cartoon
characters to parade to divert attention of the customers instead of being impatient
for long lines for rides. “Managing demand” is where Disney is good at, they have
several techniques applied to address issues and this was formulated out of the
forecasting that the park managers do every day. Their habit is to conduct daily
attendance, weather forecast, and seasonal assessment of seat sales and vacations
in order to prepare them especially on peak season. Few cast members were
working during slow days. In general, Forecasting is a major key why Disney
maintain its popularity all over the world, all that they do provides customer
satisfaction to tourist that is why it’s considered as the “happiest place on earth”.
2. Forecasting Time Horizons. There are three categories of time horizon that
businesses should consider in making a forecast:
2.1 Short-range forecast. A forecast plan that last for 1 year but usually done in 3
months. This is very important for managers to do this short-range forecast
since it aids them in deciding matters in purchasing, planning, human resource
management and others.
2.2 Medium-range forecast. This category ranges from 3 months to 3 years. This
time forecast is useful for annual planning and other major plans.
2.3 Long-range forecast. This ranges from 3 years to 5 years or more depending
on the firm. Usually this is done first since planning usually starts with the Big
Picture. This is used in strategic planning, Project Management, Business
Expansion and more. It is used in planning for new products, capital
expenditures, facility location or expansion, and research and development.
3. Types of Forecasts. There are three major types of Operation’s planning:
1.1 Economic forecasts. Address business cycle by predicting inflation rate,
money supply, housing starts, etc.;
1.2 Technological forecasts. Predict rate of technological progress which can result
in the birth of exciting new products, requiring new plants and equipment; and
1.3 Demand forecasts. Projection of demand for a company’s products or
services. These forecast is also called sales forecasts, drive a company’s
production, capacity, and scheduling systems and serve as inputs to financial,
marketing, and personnel planning.
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2. Strategic
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Importance of
Forecasting.
Forecasting is indeed crucial in business firms, because applying this makes you
one step ahead from your rival competitor. Forecast outcome drives major decisions
in different unit/department that is why it’s crucial.
3. Seven Steps in Forecasting. Forecasting follows seven basic steps.
 Identify the main use of forecasting;
 Choose the specific items that needs to be forecasted;
 Identify what time horizon to be considered in forecasting;
 Select your chosen forecasting model (s);
 Conduct data gathering in forecasting;
 Do the forecast; and
 Check, validate and implement results
4. Forecasting Approaches. Just like when you are conducting research, forecasting
has 2 approaches, these are:
4.1 Qualitative Forecasts. This forecast includes the use of expertise and
experiences from renowned experts in the company or outside the company.
Their intuition, and wisdom has been seen as relevant especially when there is
unclear or little historical data. Qualitative forecast also has four different
techniques:
4.1.1 Jury of executive opinion. Selected high-level experts were asked
convene to do the analysis by using different statistical models. This
technique needs cooperation and collaboration since it requires working
together. Two heads are better than one yes, however combining
intellectual persons in one room is indeed a challenge due to problems
like “Group think” the tendency to eradicate someone who does not
conform with the idea of the majority.
4.1.2 Delphi method. This technique is Panel of experts, queried iteratively.
This process goes on and on until agreement will be reached. Made up
of three groups of participants: decision makers (evaluate feedback and
decision-making), staff (administer survey) and respondents (people who
can make important judgments).
4.1.3 Sales force composite. To forecast using this technique, estimates was
anchored from the individual salesperson to aggregated, meaning from
micro to macro context. The individual salesperson forecast their sales
combined from local to national level. However, Sales representatives
might overly forecast it to make it sound positive to the top level.
4.1.4 Market Survey. Ask the customer about purchasing plans. Just like
conducting research, this is useful for various management planning.
The result of the survey can then be utilized for analysis in product
improvement and others.
4.2 Quantitative Methods. Forecasts that employ mathematically modeling to
forecast demand. When company operation is ‘stable’ and extensive historical
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data exist
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Quantitative
Methods is
best to use. This includes variety of mathematical techniques.
4.2.1 There are five quantitative forecasting methods, but only three will be
discussed in this unit, all of which use historical data. This method
assumes that history affects the future, no other factors was considered
just basing on the values.
4.2.2 Time-Series Components. A time series is based on an equally distributed
sequential data (weekly, monthly, quarterly, and so on). The decomposition of
time series is seen below:
4.2.2.1 Trend Component. Persistent, overall upward or downward

pattern. Changes due to population, technology, age, culture,
etc. Typically, several years’ duration.
4.2.2.2 Seasonal Component. Regular pattern of up and down
fluctuations due to weather, customs, etc. Occurs within a single
year.
4.2.2.3 Cyclical Component. Repeating up and down movements.

Affected by business cycle, political, and economic factors and
has multiple years’ duration. Often causal or
associative relationships.
4.2.2.4 Random Component. Has an erratic, unsystematic, ‘residual’
fluctuations due to random variation or unforeseen events. It
has short duration and is nonrepeating.
4.2.3 Naive Approach. This approach exemplifies that previous demand equates
to future demand period. For instance, If March sales were 70,000 then April
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sales will
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also be
70,000.
This is good when operation and other factors are stable, and this is also
good for small and starting businesses.
4.2.4 Moving Average Method. Moving Averages are a series of arithmetic
measures used where there are limited or constant conditions or there is no
pattern present. Used often for smoothing, which gives cumulative data
interpretation over time. The method below was used to calculate the moving
average:
Moving average=
∑ demand in previous n periods
n
Example: Donna's Garden Supply needs a 3-month moving average outlook,

plus a shed revenue prediction for next January.
4.2.4.1
Weighted Moving Average. This is utilized if trend, and pattern are present,
if there is an unstable operational process WMA is bet to use than
the first two techniques. In this, immediate past data were treated
more that the older data. The experts are the ones who will identify
the appropriate weights based on his/her judgements of course with
analysis of why they choose it.
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Example:
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Donna’s
Garden
Supply
wants
to
forecast storage shed sales by weighting the past 3 months, with more weight
given to recent data to make them more significant.
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4.2.5
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/ 09107045559
Problems
with
Moving Average. Increasing n smooths the prediction but allows it less prone
to changes. Does not well predict patterns and needs comprehensive
historical details.
4.2.6 Exponential Smoothing. A weighted moving average forecasting technique
in which an exponential function weights data points. Weights decline
steadily, with most current data weighted higher. Needs smoothing constant
(α) varying from 0.05 to .50 for business applications where the expert
subjectively selects. It entails little documentation of past records. The
method for processing data is seen below:
Example: A car dealer predicted 142 Ford Mustangs in February. The current
demand in February was of 153 cars. The dealer needs to estimate March
demand using the exponential smoothing model using a smoothing constant
selected by management, α = .20.
Predicted demand = 142 Ford Mustangs

Actual demand = 153
Smoothing constant a = .20
Thus,
4.2.7 Effect of Smoothing Constants. The smoothing constant usually varies

from.05 to.50. Older values become less important as it rises. Thus, where
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underlying
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average is
expected
to shift, choose high α values Prefer low α values where underlying average
is constant. The impact of smoothing constant on the data as used is seen
below:
4.2.8 Common Measures of Error. We cannot guarantee a 100 percent
assurance for all our forecast that is why margin of errors were considered.
However, to guide us in the future, measuring errors can be of great help. We
do the calculation by choosing the model that gives us the least forecast
errors by using the formula below:
4.2.8.1 Mean Absolute Deviation (MAD). A calculation of a model 's

overall prediction error. We use the formula below for solving the
MAD:
MAD=
∑ |Actual - Forecast|
n
Example: The Port of Baltimore has discharged huge quantities of

grain from ships over the past 8 years. The activity manager at the
port needs to check the usage of exponential smoothing and see
how well the method performs in unladed tonnage estimation. He
predicts the first quarter's unloaded grain estimate was 175 tons.
Two α-values will be examined: α = .10 and .50
Compare the actual data with the data we forecast (using each of
the two α values) and then find the absolute deviation and MAD.
Then,
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4.2.8.2
Mean Squared Error (MSE). The average of the squared differences

between the forecasted and observed values. In solving MSE we
used the formula below:
MSE=
∑ ( Forecast errors )2
n
The operations manager for the Port of Baltimore now wants to

compute the MSE with same data in the previous example. Below
is the computation for .10 smoothing constant. Try to compute for
the .50 smoothing constant.
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4.2.8.3 M
e
a
n Absolute Percent Error (MAPE). The measure of the total
difference between the projection and the actual values, calculated
as a percentage of the actual values. To measure MAPE follow the
following formulation:
n
∑ 100|Actuali−Forecasti|/ Actual i
MAPE= i=1
n
The Port of Baltimore wants now to calculate the MAPE when α

= .10 with same data in the previous example. Below is the
computation for .10 smoothing constant. Try to compute for the .50
smoothing constant.
4.2.8.4 C
o
m
p
a
r
i
s
o
n
of Forecast Error. As you can see, all of the three Forecast Error
Measurement arrived with same conclusion that the using α = .10
is better than using the α = .50 due to its lesser error. It is also
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important to note that in selecting smoothing constant the

underlying previous data should be the basis. To reiterate, choose
high values of α when underlying average is likely to change
Choose low values of α when underlying average is stable.


Let’s Check
RESEARCH EXERCISE 2. Provide your own discussion in the blank spaces. Cite and
give References following the APA format latest edition (10 points).
Note: Answer will be rated according to this points: Answer= 6 pts, References = 4 pts.
1. Give examples of an international industry in which demand forecasting is dependent
on the demand for other products. Elaborate.
Answer:
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
References
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Let’s Analyze
QUIZ EXERCISE 6. Answer the problem in the space provided.

Volkswagen 's iconic Beetle sales have risen steadily over the past 5 years at Car
dealerships in Nevada (see table below). In 2004 the sales manager had estimated that
revenue in 2005 would amount to 410 VW. Use exponential weight smoothing of α
= .30, develop forecast for year 2006-2010 and compute for MAD, MSE, and MAPE:
Year Sales Forecast
2005 450 410
2006 495
2007 518
2008 563
2009 584
2010 ?
Answer:
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In a Nutshell
The importance of rationalizing Forecasting is vital. In this portion, you will be required
to state your arguments or synthesis relevant to the topics presented. I will supply the
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first two items and
you will continue the
rest.
1. Predictions are never accurate, and unexpected external conditions will affect the
prediction.
2. Product family and aggregated forecasts are more accurate than individual product
forecasts. Same goes with short and medium-range forecast because of its
possibility to be affected by uncontrollable factors (political, environmental,
technological etc).
3. All forecasting error measurement arrives with same analysis, it’s up to you what
option to choose. But, the Mean Absolute Percentage Error gives a more thorough
result since it is presented in percentage. The lowest and highest error is clearly
identified unlike the other two measures who gives you an infinite number of errors.
Your Turn
4.____________________________________________________________________
______________________________________________________________________
5.____________________________________________________________________
______________________________________________________________________
______________________________________________________________________
Q&A LIST.
In this section, students may list down all emerging questions or issues to help you
in your review of concepts and essential knowledge. Specific discussion on
questions will be tackled on the scheduled video conferencing.
1.
2.
3.
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KEYWORDS
INDEX.
Forecasting Naïve Approach Moving Average Market Survey

Weighted moving Exponential Smoothing Constant Jury of Executive
Average Smoothing Opinion
Delphi Method Economic Forecasts Sales force Technological
Composite Forecasts
Demand Forecast Time-series Model Pattern Trend
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Big Picture C in
Focus: ULOb.
b. Rationalize the three decision making environments and
illustrate a decision tree;
Metalanguage
For you to discuss ULOb, you will need to have an idea of the concept on Decision
process in Operations. Operations Manager are not just guessing in their decisions,
they need to have basis and good at decision making by using models appropriate for
it. Identifying the exact tools is subjective to the personality of the decision maker
however the success and failure of both parties lies on the quality of their decisions.
There are several decision making environment and we must consider each of it
making decision under: uncertainty, risk and certainty.
1. Decision Tables. A tabular way of evaluating alternatives to actions and their state
of nature.
2. Maximax. This criterion was used to identify the best of all the best alternatives
considering the best-case scenario.
3. Maximin. Considering the worst-case scenario, this criterion selects options of the
best among the worst outcome.
4. Equally likely. If decision-makers are uncertain but still wants a safer decision, this
criterion was usually used.
5. Expected monetary value (EMV). The expected payout or value of a variable that
has different possible state of nature, each with an associated probability.
6. Expected value of perfect information (EVPI). The difference between the payoff
under perfect information and the payoff under risk.
7. Decision Tree. A graphical way of evaluating alternatives to judgment and
environment conditions.
Essential Knowledge
Before we proceed further with the topic, it is highly important that we rationalize
discussion on Decision Making Environments then illustrate it in a Decision Tree.
1. Decision Tables. A tabular way of evaluating alternatives to actions and their
state of nature. Tables of decision place reasoning on decision making.
1.1 Shown below is Getz Product decision table, portrayed are the alternatives,
pay-offs for the different states of nature. In each alternative, 2 states of
nature were considered and a conditional value were identified to check the
consequences or outcome of such decision.
Example ► Getz products now wishes to organize the following information

into a table. With a favorable market, a large facility will give Getz Products a
net profit of $200,000. If the market is unfavorable, a $180,000 net loss will
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occur. A small plant will result in a net profit of $100,000 in a favorable

market, but a net loss of $20,000will be encountered if the market is
unfavorable.
1.2 Types of Decision-Making Environments. The quality of decisions made are

of course dependent on the input they have and the current scenario they are
in. That is why a three decision-making environments were checked:
1.2.1 Decision making under uncertainty. When there is complete
uncertainty as to which state of nature in a decision environment may
occur, we rely on three decision methods. But in the end, as to which is
the best criterion to use among this three are dependent on your
personality:
1.2.1.1 Maximax. This criterion was used to identify the best of all the
best alternatives considering the best-case scenario. This
criterion chooses the highest possible gain. This criterion was
usually used by optimistic decision makers.
1.2.1.2 Maximin. Considering the worst-case scenario, this criterion
selects options of the best among the worst outcome. In short,
the alternative with the least possible loss or no loss at all was
chosen. This is commonly used by pessimistic decision
makers.
1.2.1.3 Equally likely. If decision-makers are uncertain but still wants
a safer decision, this criterion was usually used. The highest
average value of the states of nature were considered.
Assumes each state of nature is equally likely to occur.
1.2.1.4 Shown below is an example on how decision making under
uncertainty was used in decision making. As presented,
Maximax choice is to construct a large plant. Maximin choice
is to do nothing. Equally likely choice is to construct a small
plant. As you see, only the Equally likely has a computation in
which you’ll just have to get its row average.
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1.2.2 Decision Making Under Risk. If probabilities are known as to what

states of nature will likely to occur, then solving the Expected monetary
value (EMV) per alternatives is the best way to decide under risk.
Probabilities are identified by the expert who analyzes the current
situation or the states of nature, probability must all sum up to 1 or 100.
1.2.2.1 Expected monetary value (EMV). The expected payout or
value of a variable that has different possible state of nature,
each with an associated probability. To compute EMV, we use
the formula below:
Example► Getz Product’s Operation manager believes that the
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probability of a favorable market is exactly the same as that of an

unfavorable market, that is, each state of nature has a .50 chance of
occurring. He can now determine EMV for each alternative.
1.2.3 Decision Making Under Certainty. If the data/information is certain to

be given by an expert or consultant solving the Expected Value of
Perfect Information (EVPI) is a need. However, the problem now is the
worth of the perfect information that they’ll give us. Going back to Getz
Products sample, the manager of the project has been approached by a
marketing research company which proposes to help him determine
whether to build the plant to manufacture storage sheds. The marketing
firm is positive that they can provide certain data using technical
analysis. In other terms, Getz 's climate should change from one under-
risk decision-making to one decision-making under certainty. For the
details the communications consulting agency will bill Getz $65,000. Will
the business employ the operation manager? And if the research data
were absolutely correct, is it worth $65,000? Given the fact that they can
give you a logical analysis for such decision, the willingness to spend for
such information is the question now. This environment will enable us
to check whether the charge of $65,000 is worth it given the perfect
information.
1.2.3.1 Expected value of perfect information (EVPI). The
difference between the payoff under perfect information and
the payoff under risk. Mathematically expressed in:
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To find EVPI, we must first compute the expected value with

perfect information (EVwPI).
1.2.3.1.1 Expected value with perfect information (EVwPI).
The expected (average) return if perfect information is
available. To calculate this value, we choose the best
alternative for each state of nature and multiply its
payoff times the probability of occurrence of that state
of nature. Mathematically:
Example:
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1.2.4 Decision Tree. A

graphical way of evaluating alternatives to judgment and environment
conditions. EMV is the most commonly employed standard for an
interpretation of the decision tree.
1.2.4.1 The Decision Process in Operations. Analyzing problems with
decision trees involves five steps:
1. Problem identification;
2. Plan and illustrate it to the decision tree;
3. Identify probabilities to the states of nature;
4. Approximate pay-offs for each alternatives considering the
different states of nature; and
5. Compute for the EMV for each alternative starting from right
to left for each state-of-nature.
1.2.4.2 Fundamentals of making a Decision Tree. In making a decision
tree it is very vital to check the basic terms and nodes in
formulating it. You may refer below:
Using the Getz Product problem as exampled in the decision

making under risk portion, we have:
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Note: The short parallel lines indicate the branch "prune,"

because it is less attractive than another alternative
available which can be discarded.
1.2.4.2.1 Complex Decision Tree. When a series of choices

needs to be made, decision trees are much more efficient
tools than decision tables. Not to elaborate, below is an
example of a complex decision tree used in Getz
Products considering many alternatives and state of
nature.
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Self-Help: You
can also refer
to the sources below to help you further understand the lesson:
* Goetsch, D. L. and Davis, S. B. (2016). Quality Management for organizational

excellence: Introduction to Total Quality Management. 8th edition. Pearson
Education, Inc., River Street, Hoboken, New Jersey 07030, 272-278.
Let’s Check
ASSIGNMENT EXERCISE 6. Identify the term described in every items. Place it in the
blank space provided.
____________________1. This means an occurrence or a situation over which the
decision maker has little or no control.
____________________2. The first step in making a decision Tree is to assign
probabilities to the states of nature.
____________________3. This is the difference between the payoff under certainty
and the payoff under risk.
____________________4. The course of action or strategy that may be chosen by the
decision maker.
____________________5. The expected (average) return if perfect information is
available.
____________________6. A tabular means of analyzing decision alternatives and
state of nature. Decision tables force logic into decision-
making.
____________________7. A criterion that finds an alternative that maximizes the
maximum outcomes.
____________________8. A graphical means of analyzing decision alternatives and
states of nature. EMV is the most commonly used criterion
for decision tree analysis.
____________________9. A criterion that assigns equal probability to each state of
nature.
____________________10. The expected payout or value of a variable that has
different possible state of nature, each with an associated
probability.
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ASSIGNMENT
EXERCISE 7. Enumerate the following:
1. Decision Making Environments: ________________________________,
________________________________, and ___________________________.
2. Decision Methods under uncertainty: ________________________________,
________________________________, and ___________________________.
3. Decision Process in Operations:

 __________________________________________________________
 __________________________________________________________
 __________________________________________________________
 __________________________________________________________
 __________________________________________________________
Let’s Analyze
QUIZ EXERCISE 7. Solve the problem below and write your answer in the blank space
provided.
PROBLEM► T.S.T. Amer's Nevada stores have a 100-day season. T.S.T. The
probability of specific store traffic, based on historical reports of skiing conditions as
seen in the table below, has been created. T.S.T. Have 4 merchandising strategies,
each targeting a common brand name. Each plan yields a net income for each day as
described in the chart. He also has a meteorologist friend, who for a small fee will
accurately tell tomorrow’s weather so T.S. can implement one of his four merchandising
plans. Answer the requirements below:
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Answer:
a) Develop a decision tree that illustrates all the information in the table.
b) What is the Expected Monetary value – EMV (Show solution below)?

EMV A1 EMV A2
EMV A3 EMV A3
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c) What is the
Expected value with perfect information (EVwPI)?
d) What is the Expected Value of Perfect information (EVPI)?
e) Given the table above determine the appropriate decision under uncertainty
using Maximax, Maximin, and Equally Likely. Present it in a table:
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In a Nutshell
The importance of rationalizing decision-making environment using table and tree is
vital. In this portion of the unit, you will be required to state your arguments or synthesis
relevant to the topics presented. I will supply the first two items and you will continue the
rest.
1. Using decision making under uncertainty highly relies on the kind of personality the
decision maker have. For instance, if the decision maker is optimistic then he/she
will decide using Maximax. If he/she is pessimistic, he/she will use Maximin. Lastly,
if the person wants to be safe then Most likely would be his/her option.
2. “Doing Nothing” option should not be considered at all times. One must check the
situation you are in. Example, since we are experiencing a pandemic right now,
Schools and Universities must not consider “Doing Nothing” option regarding the
resumption of class just because vaccine is not yet available. Educational
Institutions must venture on flexible learning instruction to continue educating
students.
Your Turn
3.____________________________________________________________________
______________________________________________________________________
4.____________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
Q&A LIST.
1.
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2.
3.
KEYWORDS INDEX.
Expected Value with Decision Tree Decision Table Alternatives

Perfect Information
State of nature Maximax Maximin Equally Likely
Expected Value of Expected Monetary Prune Payoff
Perfect Information Value
Big Picture D
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Week 8 - 9: Unit
Learning
Outcomes (ULO): At the end of the unit, you are expected to
a. Discuss the Total Quality Management’s concept, tools, gurus, and the art of good
housekeeping as used in international business.
Big Picture D in Focus: ULOa.

a. the Total Quality Management’s concept, tools, gurus, and the art
of good housekeeping as used in international business.
Metalanguage
In this section, the most essential terms relevant to the study of Total Quality
Management and to demonstrate ULOc was operationally defined and discussed in the
essential knowledge to establish a common frame of reference as to how the texts work
in your chosen field or career. The total quality concept has been accepted at US in the
late 1980s and early 1990s. Yet, many statistical tools emerged such as the Six Sigma,
Lean, teamwork, continual improvement, customer satisfaction, and employee
involvement that aids business firm in the journey to total quality management. With
this, combining the different elements and statistical tools leads to the birth of the total
quality concept. This topic gives you a general concept about total quality management.
1. Total Quality Management. An all-inclusive and well thought-out means to
organizational management that searches to advance the quality of processes,
products, services and culture through continuing minor changes in reply to constant
feedback.
2. Cost of Quality. A tool that enables a corporation to determine the extent at which
its resources are used for activities that prevent bad quality, that evaluate the quality
of the goods or services of the enterprise, and that benefit from internal and external
failures.
3. THE 5S. This is a method used in good housekeeping that aims to organize offices,
rooms, warehouse and other workstation to achieve efficiency in the company
workflow.
Essential Knowledge
To perform the aforesaid big picture (unit learning outcomes) for the last two weeks of
the course, you need to fully understand the following essential knowledge that will be
laid down in the succeeding pages. Please note that you are not limited to exclusively
refer to these resources. Thus, you are expected to utilize other books, research articles
and other resources that are available in the university’s library e.g. ebrary,
search.proquest.com etc.
1. What is Quality. We have to consider quality first in order to grasp overall

output. Quality has been described by a variety of different entities and
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organizations
in several
different forms. Find the Definitions below:
 Performance that meets or exceeds expectations.
 Performance that meets the customer’s needs.
 Consistently meeting customer needs and expectations.
 Satisfying the customer today and getting better tomorrow.
1.1 Customers that are into businesses will define quality very clearly using
specifications, standards, and other measures. This makes the point that
quality can be defined and measured. Although few consumers could define
quality if asked, all know it when they see it. This makes the critical point that
quality is in the eye of the beholder. With this we can conclude that the
definition of quality lies in the wants of the customers.
1.2 Quality issues are dealt with people every day like eating in restaurants,
buying groceries, shopping for clothes, purchasing appliances, furniture and
others. Quality Perception is a key factor in which customers are classified in
the market. In purchasing something, criteria were usually set by the
customers and assessment began whether to buy it or not. If criteria were
met, then quality is determined.
1.3 One way of recognizing quality as a consumer-drive definition is to take the
example of restaurant dining. How do you assess restaurant quality? The bulk
of people present these requirements as:
 Service
 Response time
 Food preparation
 Environment or atmosphere
 Price
 Selection
This example gets at one aspect of quality—the results aspect. Does the
product or service meet or exceed customer expectations? This is a critical
aspect of quality, but it is not the only one. Total quality is a much broader
concept that encompasses not just the results aspect but also the quality of
people and the quality of processes.
2. Total Quality Management. An all-inclusive and well thought-out means to
organizational management that searches to advance the quality of processes,
products, services and culture through continuing minor changes in reply to
constant feedback. Moreover, it is a business approach that aims to improve the
organization 's productivity by continually enhancing the efficiency of its goods,
facilities, employees, procedures and environments.
3. Three Legged Stool of Total Quality of Management. Let us now discussed
the three-legged stool which is customer-focused to easily understand the
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concept of
total quality.
This ensures that the consumer as the primary arbiter on what is appropriate in
terms of pricing is in the "driver's seat" for total quality. Each of the three legs is a
specific feature of the philosophy of total quality (i.e. quantities, individuals, and
processes). The stool's "tests" leg makes the argument that it will and will
measure quality. The stool's "men" leg makes the argument that a good or
service cannot be checked for price. Instead, people who are motivated to do
their work the best way will invest in it. The stool's "processes" leg refers to
processes having to be changed, constantly and indefinitely. Where now is
deemed outstanding will be just average tomorrow. And "good enough" is rarely
sufficient enough.
4. Importance of Total Quality Management. Quality is used to quickly improve

the growth of the organization by better implementation and alignment.
Customer’s voice promotes the development of the product and services. This
can give the business firm a competitive edge over its rival. “No quality, no sales.
No sales, no profit. No profit, no jobs.” –VP of the United Auto Workers.
5. Six Different Perspectives of Quality. Every individual has different perception
of Quality, below are the different perspective on what quality is:
 Transcendent Perspective: means excellence, meeting beyond
expectations;
 Product Perspective: quantities of product attributes, the more features it
offers the more it’s perceived as quality;
 User Perspective: fitness for intended use means if the product is usable
to the customer.
 Value Perspective: quality vs. price, the price of the product is worth the
price.
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 Manuf
acturin
g Perspective: conformance to specifications, specs are functional.
6. Types of Quality
 Quality of Design. Based on market research;
 Quality of Conformance. Meeting the standards or user based
characteristics defined in the design phase after the product is
manufactured. Defect detection, Detect root cause analysis and defect
prevention.
 Quality of Performance. How sound the product functions or service
performs when put to use.
7. Cost of Quality. A tool that enables a corporation to determine the extent at
which its resources are used for activities that prevent bad quality, that evaluate
the quality of the goods or services of the enterprise, and that benefit from
internal and external failures. Below is a diagram which summarizes the various
quality costs.
7.1 Prevention Cost. This cost was incurred to prevent future cost that will be
incurred. Few examples include processes, conduct seminars and training,
Regular inspection, etc.;
7.2 Appraisal Cost. This is also called as inspection costs. These cost are
incurred during the manufacturing process, this is done to avoid defects and
post-purchase service from its customers to ensure high performance
product. Usually a sample per batch produced was inspected based on its
specification and criteria set, if approved then that batch will then be shipped
to the customers;
7.3 Internal failure costs. As a result of inspection some defects were identified
beforehand, these costs incurred for such defective product are known as
internal failure costs. Examples of internal failure costs include cost of
rework, rejected products, scrap etc;
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7.4 External
failure
costs. It is normal for customer to return the product due to some defects.
This activity is part of the post-purchase services of the firm. However, this is
not good to a company since it is part of the external failure cost in which the
company already had incur such cost. External costs of failure cover
replacements, substitutions, lack of revenue due to bad reputation, liability
for losses arising from the usage of faulty goods etc. Default product
shipments will annoy consumers, destroy reputation and may reduce sales
and profits.
8. Elements of TQM:
4.1 Ethics. A combination of written and unwritten codes of principles that govern
decisions and actions within a company.
4.2 Integrity. Consistency of actions, values, methods, measures, principles,
expectations and outcomes at workplace. TQM does not work in an
environment where employees criticize and backstab each other.
4.3 Trust. Builds cooperative environment. Relationship based on reliance.
9. Benefits of TQM. TQM creates a good corporate culture, better reviews from the
customer, and better performance from employees.
10. Gurus of TQM. The concept of TQM was created due to the individual
contribution of concepts by the different quality guru. It is a combination of
interrelated concepts that aims to formulate a complex approach in doing
business. There are three quality gurus who are considered as the pioneers in
developing the concept of total quality management these are: W. Edwards
Deming, Joseph M. Juran, and Philip B. Crosby. Aside from them notable gurus
were also acknowledged and these are: Armand V. Feigenbaum and a number
of Japanese experts, such as Kaoro Ishikawa.
10.1 W. Edwards Deming. Known as the father of Quality Control. Has been
honored by naming the highest award of quality in Japan known as the
Deming Prize. Known for its contributions of the following: 14 Points, Deming
Chain Reaction, Theory of Profound Knowledge, PDSA (Deming Cycle) as
shown below. Through a distinct phrase he does not define quality and
emphasized that the roles of top management to be the pioneer through
evolving processes and structures are quite significant. He stresses the
importance of identifying and measuring customer requirements, establishing
manufacturer relationships, leveraging functional teams to identify and solve
quality issues, enhancing employee expertise, employee participation, and
implementing continuous improvement.
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10.1.1 DEMING’S 14 POINT METHODOLOGY

1. Constancy of purpose
2. The new philosophy
3. Cease dependence on inspection
4. End lowest tender contracts
5. Improve every process
6. Institute training on the job
7. Institute leadership
8. Drive out fear
9. Breakdown Barriers
10. Eliminate exhortations
11. Eliminate arbitrary numerical targets (numerical quotas)
12. Permit pride of workmanship
13. Encourage Education
14. Top management’s commitment
10.1.2 DEMING’S 7 Deadly Diseases

1. Lack of purpose in developing goods and services that have a
market that is adequate to hold the organization in operation and
provide jobs;
2. Short-term profit stress; short-term analysis motivated by
apprehension of unfriendly efforts to take control, and demand from
bankers and shareholders to raise dividends;
3. Personal management review systems by goals with no tools or
services given to meet objectives; requires performance reviews,
quality ranking and annual assessments;
4. Job-hopping by managers;
5. sing just clear evidence and knowledge in decision-making, with
little to no understanding about what is uncertain to unclear;
6. Extreme medical costs; and
7. So much risks and obligations on the part of attorneys working on
contingency services.
10.2 Philip B. Crosby. He wrote the book Quality is free in 1979. He
Established the absolutes of quality management, the only performance
standard is zero defects and the basic elements of improvement. To him,
“Mistakes are caused by two factors: lack of knowledge and lack of
attention”. Education and training will remove the first cause, while the
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second
is cured
by a sincere dedication to success (zero flaws) while attention to detail.
10.2.1 Four Absolutes of Quality
 The definition – Quality is conformance to requirements, not
goodness.
 The system – Prevention, not appraisal
 The performance standard – Zero defects
 The measurement – The price of non-conformance to
requirements, not quality circles.
10.2.2 14 Step Methodology
1. Management commitment
2. Quality improvement Team
3. Quality Measurement
4. Cost of Quality
5. Quality awareness
6. Corrective action
7. Zero defects planning
8. Supervisor training
9. Zero defects day
10. Goal setting
11. Error-cause removal
12. Recognition
13. Quality Councils
14. Do it over again
10.3 Joseph Juran. Assisted the Japanese in their reconstruction processes
after WWII. He is the editor of the Quality Control Handbook (1951).
Popularized the Quality Trilogies: Quality planning, Quality control &
Quality improvement. For him, Quality control must be essential part of
management, quality is no mistakes, quality must be planned, there are no
shortcuts to quality, and make use of problems as sources of
improvement. The formula in getting it are the following:
 Create an awareness about the need and purpose an opportunity
for improvement;
 Set goals for improvements;
 Systematize paths to attain the goals (begin a quality council,
identify problems, choose projects, assign teams, delegate
facilitators and so on);
 Give training;
 Do projects to resolve problems;
 Inform progress;
 Provide recognition;
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

Communicate outcome
 Keep score; and
 Uphold thrust by making yearly improvements component of the
regular systems and processes of the company.
10.3.1 Quality Trilogies
 Quality Planning includes defining the requirements, needs
and desires of the client, recommending goods and services,
establishing targets, preparation, project management,
monitoring, identification and dissemination of outcomes and
changes in systems;
 Quality Control Concerns the creation of standards, the
recognition of measures and their processes, the comparing of
findings with existing requirements and the development of
discrepancies and the action taken toward discrepancies; and
 Quality improvement. This includes the usage of formal
annual improvement projects and plans, the need for change,
the coordination of initiatives, the recognition of triggers, the
procurement and testing of solutions and the establishment of
checks to insure that the improvements achieved are
sustained.
10.3.2 In his view, the approach to managing for quality consists of:
 The irregular problem is detected and acted upon by the
process of quality control;
 The constant problem needs a special process, namely,
quality improvement; and
 Such constant problems are traceable to a poor quality
planning process.
10.4 Walter A. Shewhart. “Grandfather of Quality Control” (20th century)
1891-1967 University of Illinois. Moved to California wed and get his
doctoral degree in physics. Member of the group “American Society for
Quality Control”. He mentored Juran & Deming and is known for using
Control Charts. He developed the Shewhart cycle: PDCA cycle. His work
created the foundation for statistical process control measures used
today.
10.5 Dr. Armand Feigenbaum (1922). Popularized several concept such as
the Total Quality Control-Principles, Practice and Administration (1961),
Company-wide Quality Control (Japanese version). He was the one to
first classify costs (prevention, Appraisal, Internal & External costs) and
provided the Steps to Quality: Quality Leadership, Modern Quality
Technology & Organizational commitment.
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10.5.1
Ten
points on TQM
1. Quality is consciousness programmed not only a technical
function;
2. Quality is not what an engineer or marketer says but it is that
what the customer speaks of;
3. Quality and cost are a sum, not differences;
4. Quality must be organized to identify everybody’s job in the
organization;
5. Quality is a technique of managing an organization. Good mgt.
means continuous stress on the quality
6. The quality improvement highlighting must take place through
all activities of the organization;
7. Quality is realized through assistance and contribution of each
and every person related to the organization. It is also an
ethic;
8. Continuous quality improvement needs extensive range of
new and existing quality technology of information
applications;
9. Total quality program approach leads to productivity and is
most effective and less capital intensive; and
10. Quality comes, if it is clear, customer oriented, effective and
structured.
10.6 Kaoro Ishikawa. Born in July 13, 1915 and died on April 16 1989.
Known as the father of Quality circles (1960). Popularized the Cause &
effect diagram/Ishikawa diagram/Fishbone diagram. For him Quality is
“development, design, production and service of a product that is most
efficient, most helpful, and constantly acceptable to the consumer”. The
first guru to accentuate the importance of the internal customer, the
next person in the production process. He emphasizes on quality as a
way of management, development of participative, bottom-up view of
quality.
10.6.1 7 basic tool that is indispensable for quality control:
1. Process flow chart
2. Check sheet
3. Histrogram
4. Pareto Chart
5. Cause & Effect diagram
6. Scatter diagram
7. Control Chart
10.6.2 Elements to Quality management
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 Quality starts with education and culminates with

education;
 The 1st step in quality is to know the customer’s
requirements;
 The perfect state of quality control happens when
inspection is no longer compulsory;
 Take out the root cause, not the symptoms;
 Quality control is the duty of all workers and all divisions;
 Do not mistake means with the objectives;
 Set quality first and set your sights on long-term profits;
 Market is the entry and way out of quality;
 Top management must not demonstrate annoyance
when facts are presented by subordinates;
 99% of problems in a company can be resolved with
easy tools for analysis and problem-solving.
10.6.3 Six Fundamental principles
1. Quality first
2. Customer orientation
3. Your customer
4. Using facts & data to make presentations
5. Humanity (philosophy) & full participatory mgt.
6. Cross-functional mgt.
11. THE 5S. This is a method used in good housekeeping that aims to organize offices,
rooms, warehouse and other workstation to achieve efficiency in the company
workflow. Simple to talk about but in reality this is one of the hardest method in TQM
since it requires a habit of letting go of unnecessary things and keeping what is
important. For us Filipinos, this is hard since we usually practice to keep things as
memoirs. 5S promotes:
 Foolproof systems
 Standard policies, rules and regulations
 Healthy work culture at the organization
 Reduces waste and nonvalue activity
 Worker’s morale increase
 Customer perception on company products improve
 Organizational efficiency increased
 Lesser waste and better quality
 Faster lead times
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11.1 Benefits of implementing 5S.

 Improved profitability
 More efficient workforce
 Better service
 Safer workplace
11.2 SEIREI (SORT). This means the identification of items that is still valuable to
the company. Only necessary ones are kept for continued use which means
that unnecessary ones should be disposed or kept in storage out in the office.
This process lead to fewer hazards and less clutter that might interfere with
productive work. Label the items as “Necessary”, “Critical”, “Most important”,
“Not needed Now”, “Useless” and so on.
11.2.1 Consequences of Not Practicing Sorting
1. The unnecessary messes the place and the necessary are hard to find;
2. Every place can only contain so much.
3. Mess sometimes causes misidentification.
11.2.2 Steps in Sorting.
1. Do a Red tagging activity, label all unneeded items with conspicuous
red tags.
2. Store the needed items in the following storage sites:
 Ready-access storage (needed in 1-6 months)
 Remote storage (needed in more than 6 months)
3. Discard/dispose the red-tagged (unnecessary items).
4. Discard remote storage items by the box load at the end of the storage
period.
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11.3 SET IN ORDER (SEITON). Refers to straightening and orderliness. After

sorting, the next step is to arrange the necessary things in an effective and
efficient manner by using the principles of ergonomics. The focus is on
efficient and effective storage methods and the requirement for a tidy
workplace. Also known as “demarcation and labeling of place”.
11.3.1 In the case of items which have been processed as needed, they
must be stored in the appropriate position to ensure quick and rapid
retrieval. Orderliness goals may involve any of the following:
 SPACES – Floors, walkways, operation areas, walls, shelves,
warehouses;
 PRODUCTS – raw materials, procured parts for machinery, in-
process inventory, assembly parts, semi-finished products,
finished products;
 EQUIPMENT – machines, tools, jigs, gauges, carts, conveyance
tools, work tables, cabinets, chars
11.3.2 Visual Methods of Orderliness
 The Signboard Strategy – indicate where, what, and how many
necessary items go where, to make the facility more orderly.
Specific places – “where things go”. Specific items – “what
things”. Specific amounts – “how many things”;
 The Painting Strategy – That involves separating the walking
areas of the warehouse (walkways) from its job areas (operational
areas) using some of the following: dividing lines, door lines,
product markings, carts, job tables and tiger signs (yellow & black
colored lines).
11.3.3 Consequences of not Practicing Setting in Order

 Things are rarely obtainable when needed;
 Items are misplaced in stores;
 Items that are defectives and good ones get mixed up;
 Accidents or near-accidents take place due to mess;
 Visual control of the shop floor is not feasible;
 At times, production is lost because an item necessary is
available but cannot be seen; and
 In some offices, important records may not be traceable. This can
lead to loss, and embarrassment.
11.4 SHINE (SEISO). Stands for sweeping and cleanliness. At the end of each
shift, a work area is cleaned up and everything is restored to its place.
Maintaining cleanliness should be a daily work not a special activity. It is the
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comprehensive cleaning of the area tools, machines and other equipment to

make certain that everything is returned to a “nearly new” status. Follow up
cleaning is compulsory in order to maintain this improvement. A “shining”
work environment will lead to great efficiency gains.
11.4.1 Phases of Shine
 Daily Cleanliness
 Determine cleanliness targets
 Determine cleanliness assignments
 Determine cleanliness methods and tools
 Implement cleanliness
 Cleanliness inspection
 Maintenance
11.5 STANDARDIZE (Seiketsu). Translate as “standards”. Standards refers to
making all the cleaning, control and improvement processes a customary
activity in the workplace, allowing for control and consistency. Standardize
can be interpreted as continuing to work on the first three 5S continually and
every day. Work practices should be consistent and standardized.
11.5.1 Consequences of not practicing Standardizing:
 Good health and safety need the practice of standardizing;
 Harmful chemicals, dusty chemicals, fumes and the likes can
make it an unsafe place to work in;
 Washing thoroughly and cleaning a place makes the workplace
enjoyable; and
 Personal hygiene is indispensable for healthy workplace.
11.6 SUSTAIN (Shitsuke). Shitsuke, means maintaining the process to retain
long-term kaizen goals and to retaining and reviewing standards. Sustaining
requires the practice of establishing clear and systematic processes, and
implementing them. This stage is explained by illustration, because it is not
the individual worker but the manager / owner himself who is eventually liable
for any 5S backsliding.
11.6.1 Consequences of not practicing Standardizing:
 If standardizing is not practiced, then the first 4-S would
backslide;
 Lack of standards will affect all activities related to safety and
quality;
11.6.2 The manager/owner of the business may employ the following
measures:
 The CEO shall assume full accountability for the introduction and
execution of 5S.
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

Discuss the 5S's before everybody understands it. Emphasize that
5S is the path to sustainability for the business because of its
realistic approach to reducing waste and creating savings.
 Promote business-wide engagement, including but not limited to:
5S Poster making contest, 5S badge making contest, 5S logo
contest, 5S Ideas contest, 5S Day, 5S Work Client plant walk, and
5S snapshots.
 Render management tasks and orderliness as visible as
practicable. When red-tagging and creating signboards, be
vigilant, diligent, fast and ruthless.
 Manage the aversion of people to 5S: offer opportunities at any
moment. Offer diligent reviews, and accept them. Be respectful.
Be nice. Right now and slack-off on 5S parameters. Stick to
hands-on strategy, here-and-now. Eventually, improvement
requires commitment and passion.
* Goetsch, D. L. and Davis, S. B. (2016). Quality Management for organizational

excellence: Introduction to Total Quality Management. 8th edition. Pearson
Education, Inc., River Street, Hoboken, New Jersey 07030, 1-12.
Let’s Check
QUIZ EXERCISE 8. Identify the terms being described. Provide answer in the blank
spaces.
________________1. The process of taking the required items that are remaining after
the removal of clutter and arranging them in an efficient manner
through the use of ergonomic principles.
________________2. He is known as the father of Quality circles (1960). Popularized
the Cause & effect diagram/Fishbone diagram.
________________3. Refers to making all the cleaning, control and improvement
processes a customary activity in the workplace, allowing for
control and consistency.
________________4. is an approach to doing business that attempts to maximize the
competitiveness of an organization through the continual
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improvement of the quality of its products, services, people,

processes, and environments.
________________5. He is known as the father of Quality Control.
________________6. A combination of written and unwritten codes of principles that

govern decisions and actions within a company.
________________7. Consistency of actions, values, methods, measures, principles,
expectations and outcomes at workplace. TQM does not work in
an environment where employees criticize and backstab each
other.
________________8. Builds cooperative environment. Relationship based on reliance.
________________9. The costs incurred to avoid or minimize the number of defects at
first place.
________________10. A method that permits an organization to decide on the level to
which its resources are used for activities that avoid poor quality,
that assess the quality of the organization’s products or services,
and that result from internal and external failures.
Let’s Analyze
RESEARCH EXERCISE 3. Search for answers in the questions below (References is

required). You should also provide your own analysis in the blank spaces. This activity
will be rated according to the rubrics below:
Note: Answer will be rated as follows: Answer = 5 points each; References = 5 points
1. Why is a single definition of TQM not enough?
Answer:
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________
2. How does Quality support the achievement of competitive advantage?
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Answer________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
3. Why is service quality especially important in today’s business environment?

Answer________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
References
In a Nutshell
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The importance of
rationalizing Total
Quality management is vital. In this unit, you will be required to state your arguments or
synthesis relevant to the topics presented. I will supply the first item and you will
continue the rest.
1. Unless quality is internalized at the personal level, it will never become rooted in the
culture of an organization. Thus, quality must begin at a personal level (and that means
you!).
Your Turn
2.____________________________________________________________________
______________________________________________________________________
3.____________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
4.____________________________________________________________________
______________________________________________________________________
______________________________________________________________________
Q&A LIST.
1.
2.
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3.
KEYWORDS INDEX.
Quality Total Quality Costs of Quality Gurus of TQM

Management
5S W. Edwards Demming Prevention Costs Appraisal Cost
COURSE SCHEDULES
Activity Date Where to submit

Virtual Class Orientation Week 1 via google meet
Video Conference (Big Picture A) Week 2-3 via google meet
Big Picture A: ULOa Activities Week 2 via Quipper.com
Big Picture A: ULOb Activities Week 3 via Quipper.com
1st Examination Week 3 via Quipper.com
Video Conference (Big Picture B) Week 4-5 via google meet
Big Picture B: ULOa Activities Week 4 via Quipper.com
Big Picture B: ULOb Activities Week 5 via Quipper.com
2nd Examination Week 5 via Quipper.com
Video Conference (Big Picture C) Week 6-7 via google meet
Big Picture C: ULOa Activities Week 6 via Quipper.com
Big Picture C: ULOb Activities Week 7 via Quipper.com
3RD Examination Week 7 via Quipper.com
Video Conference (Big Picture D) Week 8-9 via google meet
Big Picture D: ULOa Activities Week 8 via Quipper.com
Final Examination Week 9 via Quipper.com
Online Code of Conduct
(1) All teachers/Course Facilitators and students are expected to abide by an

honor code of conduct, and thus everyone and all are exhorted to exercise
self-management and self-regulation.
(2) Faculty members are guided by utmost professional conduct as learning

facilitators in holding OBD and DED conduct. Any breach and violation shall be
dealt with properly under existing guidelines, specifically on social media
conduct (OPM 21.15) and personnel discipline (OPM 21.11).
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(3) All students

are likewise guided by professional conduct as learners in attending OBD or
DED courses. Any breach and violation shall be dealt with properly under
existing guidelines, specifically in Section 7 (Student Discipline) in the Student
Handbook.
(4) Professional conduct refers to the embodiment and exercise of the University’s
Core Values, specifically in the adherence to intellectual honesty and integrity;
academic excellence by giving due diligence in virtual class participation in all
lectures and activities, as well as fidelity in doing and submitting performance
tasks and assignments; personal discipline in complying with all deadlines; and
observance of data privacy.
(5) Plagiarism is a serious intellectual crime and shall be dealt with accordingly.
The University shall institute monitoring mechanisms online to detect and
penalize plagiarism.
(6) All borrowed materials uploaded by the teachers/Course Facilitators shall be

properly acknowledged and cited; the teachers/Course Facilitators shall be
professionally and personally responsible for all the materials uploaded in the
online classes or published in SIM/SDL manuals.
(7) Teachers/Course Facilitators shall devote time to handle OBD or DED courses
and shall honestly exercise due assessment of student performance.
(8) Teachers/Course Facilitators shall never engage in quarrels with students

online. While contentions intellectual discussions are allowed, the
teachers/Course Facilitators shall take the higher ground in facilitating and
moderating these discussions. Foul, lewd, vulgar and discriminatory languages
are absolutely prohibited.
(9) Students shall independently and honestly take examinations and do

assignments, unless collaboration is clearly required or permitted. Students
shall not resort to dishonesty to improve the result of their assessments (e.g.
examinations, assignments).
(10) Students shall not allow anyone else to access their personal LMS
account. Students shall not post or share their answers, assignment or
examinations to others to further academic fraudulence online.
(11) By handling OBD or DED courses, teachers/Course Facilitators agree

and abide by all the provisions of the Online Code of Conduct, as well as all
the requirements and protocols in handling online courses.
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(12) By enrolling
in OBD or
DED courses, students agree and abide by all the provisions of the Online
Code of Conduct, as well as all the requirements and protocols in handling
online courses.
Monitoring of OBD and DED
(1) The Deans, Asst. Deans, Discipline Chairs and Program Heads shall be
responsible in monitoring the conduct of their respective OBD classes through
the Blackboard LMS. The LMS monitoring protocols shall be followed, i.e.
monitoring of the conduct of Teacher Activities (Views and Posts) with generated
utilization graphs and data. Individual faculty PDF utilization reports shall be
generated and consolidated by program and by college.
(2) The Academic Affairs and Academic Planning & Services shall monitor the
conduct of LMS sessions. The Academic Vice Presidents and the Deans shall
collaborate to conduct virtual CETA by randomly joining LMS classes to check
and review online the status and interaction of the faculty and the students.
(3) For DED, the Deans and Program Heads shall come up with monitoring
instruments, taking into consideration how the programs go about the conduct of
DED classes. Consolidated reports shall be submitted to Academic Affairs for
endorsement to the Chief Operating Officer.
Course prepared by:
RAIZA MAE C. NARCISO, PhD

Name of Course Facilitator/Faculty
Course reviewed by:
LUCELA B. REGIDOR, PhD

Assistant Dean
Approved by:
GINA FE G. ISRAEL, EdD

Name of Dean
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UNIVERSITY OF MINDANAO

College of Business Administration Education

Physically Distanced but Academically Engaged

Self-Instructional Manual (SIM) for Self-Directed Learning (SDL)

Course/Subject: CBM 112/ Operations Management with TQM

Name of Teacher: RAIZA MAE C. NARCISO, PhD

THIS SIM/SDL MANUAL IS A DRAFT VERSION ONLY; NOT FOR

Part 1. Course Outline and Policies ...................................................... 1

Essential Knowledge ............................................................... 6

Let’s Check .................................................................................... 11

Let’s Check .................................................................................... 23

Q&A List .............................................. ...... ................................ 26

Q&A List .................................................................................... 36

Let’s Check .................................................................................... 53

Big Picture C: Unit Learning Outcomes ............................................. 59

Big Picture C in Focus: ULOa …………………………………………… 59

Essential Knowledge ............................................................... 60

Big Picture D: Unit Learning Outcomes ............................................. 87

Big Picture D in Focus: ULO a …………………………………………… 87

Q&A List .................................................................................... 104

Course Outline : CBM 112 –Operations Management with TQM

Course Coordinator: Dr. Raiza Mae C. Narciso

Course Outline Policy

Areas of Concern Details

Assessment Task Submission Submission of assessment tasks shall be strictly

Turnitin Submission To ensure honesty and authenticity, all research

Please note that academic dishonesty such as cheating

Once approved, the score will be reduced by 5% from

If disapproved by the course coordinator, you can

Class Participation – 30%

Final Examination– 40%

Student Communication You are required to create a student quipper account at

Also, google meet will be used as an official means for

Normal communication and announcement shall be via

You can also meet the course facilitator in virtual

Contact Details of the Dean Gina Fe G. Israel, EdD

Business Administration Education

Records and Admission Center

Student Accounts Office

Course Information – see/download course syllabus in the Black Board LMS

a. Introduce and discuss operations Management and Productivity; and

Big Picture A in Focus: ULOa.

5.4 Directing – This function concerns topic on Leadership, Motivation, and

Intangible: Ride in an roller coaster Tangible: The coaster itself

Unique: Your investments and medical Similar products produced (iPods)

7. Challenges in Productivity. In creating goods and providing of services,

9. Measurement in Productivity. Measuring productivity in operation helped

Example: Through a modern computerized title-search program, Collins Title needs

Using multi- factor productivity:

10% of the annual increase. Labor productivity is a result of a good

* Heizer, J. and Render, B. (2011). Principles of Operations management. 10th edition.

* Schroeder, R. G., Goldstein, S. M. and Rungtusanatham, M. J. (2017). Operations

_______________1. Often produced and consumed simultaneously.

_______________2. Activities linked to the production of products and services, through

_______________4. A variable that contributes about 38% of the annual increase.

_______________5. Refers to the creation of goods & services.

_______________7. Grouping together of people, establishing relationship among them, and

achieves an annual production gain of three percent in manufacturing. He has the

Last Year Now

3. Does the organization maintain the manufacturing average of 3% increase in

The study of production management is indeed a pre-requisite to becoming a

1. Business practitioners must have basic knowledge on the five management

Management Operations Single-factor Multi-factor

______, and _.

______, and _.