MBA PROGRAM

MASTER OF BUSINESS ADMINISTRATION

OPERATIONS MANAGEMENT (MBA 652) –TAKE HOME EXAMINATION

NAME: __________________________________________ID NO:

__________________SECTION: ___________

Three Proactive Response Strategies to

COVID-19 Business Challenges
Response strategies that match organizational infrastructure with emerging market trends offer
significant opportunities.
Since the COVID-19 crisis struck, organizations in vulnerable sectors worldwide have seen their
revenues drop substantially in a matter of weeks — in some cases, dwindling to almost nothing.
Countless companies have taken reactive steps to ward off major losses, such as establishing remote
work arrangements, securing supply chains, reducing employee workload, cutting costs, and applying
for government support.

After a burst of frenetic activity, some organizations finally have time to think about capturing
opportunities. But where to start?

Strategy 1: Same Products, Different Channel

One proactive business response to COVID-19 is to offer the same (or similar) products and services
through an online channel. This may occur through the digitization of physical products or, in the case
of services, through a technology-mediated delivery solution.

When Chinese cosmetics company Lin Qingxuan was forced to close 40% of its stores, including all of
its locations in Wuhan, sales plummeted by 90%. However, the company redeployed its beauty
advisers as online influencers, leveraging digital tools such as WeChat to engage customers virtually
and drive online sales. On Valentine’s Day, Lin Qingxuan launched a large-scale, livestream shopping
event featuring more than 100 beauty advisers; one adviser’s sales in just two hours equaled that of four
retail stores. The company’s February sales climbed 120% over last year’s.
When Nike was forced to shut more than 5,000 of its 7,000 directly owned and partner-operated stores
across China, its offline business ground to a halt — but

its online operations did not. Nike’s staff engaged with Chinese consumers digitally by offering at-
home workouts. Between December 2019 and the end of February, Nike reported more than 35%
growth in its online sales in greater China over the same period the previous year. As stores began to
reopen across the country, Nike’s digital business accelerated even more, approaching triple-digit

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growth levels. Nike now has a road map to follow as the virus makes its way across Europe and North
America.
Meanwhile, vineyards from Burgundy to Napa Valley are offering online wine-tasting lessons in
combination with wine purchases and have seen sales explode. Similarly, London’s Bimber Distillery,
a whiskey maker, has canceled its distillery tours, instead delivering tasting kits to customers and
running events online.
As more and more people are confined to their homes, there is a golden opportunity for educational
institutions to proactively expand the scale and scope of their operations. While many schools,
universities, and private-sector education providers have temporarily closed their doors, others have
quickly shifted their instruction online. For example, Zhejiang University (ZJU), a renowned university
in China, officially started online teaching on Feb. 24 — in line with the original term calendar.
Contingency teaching covers all ZJU students, including international students, and many courses are
open to learners worldwide. Two weeks into the experiment, the university was offering more than
5,000 courses to both undergraduate and graduate students. The course hub Learning at ZJU attracted
570,000 visits, and its livestreaming app achieved a total audience of 300,000. Meanwhile, around
2,500 graduate students at the university are expected to defend their theses online this spring.

Strategy 2: Same Infrastructure, Different Products

COVID-19 is dampening the demand for many products and services, resulting in an
underutilization of organizational infrastructure. Factories run under capacity; restaurants, bars, and
hotels sit empty; service providers go unused.

While the need for some products and services has fallen, however, demand for others is high and
even growing. Some organizations are taking advantage of this shift by deploying existing
infrastructure to produce different products or to offer new types of service.

As soon as it became clear that hand sanitizer was in short supply worldwide, companies such as
LVMH (perfumes), Pernod Ricard (alcoholic beverages), and Skyrora (rockets) switched to
producing it within a few days. Meanwhile, car manufacturers such as GM and Ford have modified
some idle production lines to manufacture medical devices like ventilators. With sales of cars in
China down 90%, automotive giant BYD Co. switched to producing millions of surgical face masks
per week. James Dyson, founder of Dyson, announced that the company had designed and built an
entirely new ventilator in just 10 days, after receiving a request from British Prime Minister Boris
Johnson.
Hotel chains such as Best Western and Hilton have pivoted, offering their rooms to hospital staff
and COVID-19 patients in the United Kingdom. Limited to no-contact takeout and delivery
services, restaurant sales have plummeted, while grocery stores have had to limit items per shopper
due to high demand. The Panera Bread chain, aligning to the changed market, has increased the
range of products it sells from its cafes, now including staple groceries along with salads and
sandwiches in a new Panera Grocery service.
Chinese company Huami, manufacturer of the Xiaomi fitness-tracking band, is shifting its current
focus from fitness to data. Reviewing its data on 115,000 users in Wuhan and neighboring areas
from July 2017 to February 2020, Huami found an anomaly in January’s sleeping heart-rate data.
(Similar patterns were found in other Chinese cities coincident with the virus’s local spread.)
Huami is now developing an early-warning system to flag similar future anomalies and possibly
preempt another major pandemic.

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 Strategy 3: Same Products, Different Infrastructure

Suddenly struggling to meet the demand for their products and services, some companies need to
quickly augment their infrastructure to increase production and/or delivery capacity. Finding new
infrastructure is easier said than done and often requires collaboration with external partners, but a
number of organizations worldwide are taking inventive steps to bridge such gaps.

Amazon recently announced that it is looking to hire an additional 100,000 employees in the United
States to meet increased demand from homebound online shoppers. It has now partnered with the
ride-booking company Lyft as both demand and fares for Lyft trips have fallen dramatically. Lyft is
encouraging its drivers to pursue positions as warehouse workers, delivery people, or grocery
shoppers to earn additional income, and applications for Amazon positions are available through the
Lyft driver web portal.
Walmart, meanwhile, hopes to hire up to 150,000 temporary employees in the United States to meet
increased demand. The company also plans to pay $550 million in bonuses to its current employees.
The application process for temporary employees will shrink from two weeks to a single day, and
the company is reaching out to the hospitality and restaurant sectors to hire people facing layoffs.
In Sweden, over 1,000 laid-off Scandinavian Airlines workers were offered fast-track training to help
the country’s health ccare system fight the coronavirus pandemic. In the U.K., easyJet and Virgin
Atlantic crew and staff — including thousands trained in CPR — were offered jobs in temporary NHS
Nightingale hospitals.
The sharing economy has been a popular business model in China for some time, as enterprises have
embraced shared bikes, cars, portable batteries — and, most recently, employees. When Alibaba’s
supermarket chain Hema found itself in urgent need of labor to meet demand, it turned to an innovative
“employee sharing plan” to “borrow” more than 3,000 employees made temporarily redundant from
jobs in restaurants, hotels, and movie theater chains. Borrowed employees were trained to work as
either goods sorters or packagers, and Hema worked out an employee salary split with employers.
In Germany, McDonald’s staff have been given permission to work at Aldi stores while the fast-food
chain’s restaurants are shut. Aldi has been overwhelmed by demand as grocery shopping has
significantly increased during the pandemic. The employee-leasing agreement is for a limited period
only, and all those who apply can simply return to McDonald’s once their restaurants reopen.

PART I: SHORT ANSWER QUESTIONS.

Read each questions carefully and present your work clearly and neatly. Each respective
questions has more than one sub-questions, admit accordingly in order to maximize your
marks. YOU ARE REQUIRED TO ANSWER ANY FOUR
QUESTIONS (4 Questions* 5 marks each=20 Marks).

1. Write short notes on the following terms by providing examples.

A. Robust design: Design and redesign capabilities of such technology
computerized design /CAD/ allow specifications to be tested singly or as part of a
system for aesthetic or functional analysis. Examples include use of robots,

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 repetitive assembly, loading and unloading machines, and painting and welding
operations
B. Concurrent engineering: is an approach that brings many people together in
the early phase of product design in order to simultaneously design the product
and the process. It ensures a timely and well-coordinated process that brings value
to the customer
C. Modular design: is an approach that brings many people together in the early
phase of product design in order to simultaneously design the product and the
process. It ensures a timely and well-coordinated process that brings value to the
customer.
D. Reverse engineering: This involves using competitors’ ideas and to buy a
competitor’s new product and study its design features. Using a process called
reverse engineering; a company’s engineers carefully disassemble the product and
analyze its parts and features
E. Work system design: which provides the structure for the productivity of the
company. The work system includes job design, work measurement, and worker
compensation. The company determines the purpose of each job, what the job
consists of, and the cost of the employees to do the job. A job must add value and
enable the company to achieve its objectives.

2. List and discuss at least seven operations management decision areas? Describe also the
recent challenges in operations management.

The recent challenges in operations Management: Rowe’s actions illustrate three of

today’s most important operations management issues: technology, quality, and mass
customization and lean organizations.

- Companies are looking at ways to harness technology to improve their operations

management by extensive collaboration and cost control. ISO 9000 is a series of
international quality management standards that set uniform guidelines for
processes to ensure that products conform to customer requirements. Six Sigma is
a quality standard that establishes a goal of no more than 3.4 defects per million
units or procedures. Mass customization provides customers with a product when,
where, and how they want it. It requires flexible manufacturing techniques and
continual customer dialogue. A lean organization is one that understands what
customers want, identifies customer value by analyzing all activities required to
produce products, and then optimizes the entire process from the customer’s
perspective

3. Write notes on the concepts of standardized and customized product by providing

examples. Then explain their benefits and drawback of each respective term.

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4. Discuss the concept of facility layout. Then distinguish process layouts and product
layouts by providing examples for each. When the flows of materials are variable which
type of layout (product or process) is recommendable? Reason out why?
• Concept of Facility Layout: Plant layout refers to the physical arrangement of
facilities. It is the configuration of departments, work centers and equipment in the
conversion process. The overall objective of the plant layout is to design a physical
arrangement that meets the required output quality and quantity most economically. In
the other words, the overall objective in designing a layout is to provide a smooth
workflow and control, reducing cost of material through the factory or uncomplicated
pattern for both consumers and workers in a service organization. According to James
Moore, “Plant layout is a plan of an optimum arrangement of facilities including
personnel, operating equipment, storage space, material handling equipment and all
other supporting services along with the design of best structure to contain all these
facilities”. Layout planning is determining the best physical arrangement of resources
within a facility. Proper layout planning is highly important for the efficient running
of a business. Otherwise, there can be much wasted time and energy, as well as
confusion.
• Difference between process layout and product layout:
• Process layouts (for job-shops): It is concerned with the grouping of machines,
processes or services according to their function i.e. similar equipment or
functions are grouped together. For example, Drilling, milling, routing, typing,
shipping etc. are activities that require such types of arrangements. The
primary efficiency criterion for evaluating process layout designs is material
and product handling cost. E.g.(hospital).
• Product layout focuses on the sequence of production or assembly operation
required for producing a part or a product of cement, oil refining, auto
assembly and so on. In contrast to process layouts, product layouts are not
flexible since they are designed specifically for making one product. Designed
to produce a specific product efficiently (e.g. assembly line)
• Based on the above differences, we can say that process layout can be used
when the flows of materials are variable.

5. What is TQM? Discuss components of TQM?

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 o Total Quality management is defined as a continuous effort by the management as
well as employees of an organization to ensure long term customer loyalty and
customer satisfaction. Total quality management ensures that every single employee is
working towards the improvement of work culture, processes, services, systems and
so on to ensure long term success. Elements of TQM include:
i) Top management policy: top management should issue statement about how
business strategy is tied to superior quality of its product and services
ii) Quality control for everyone
iii) Product design
iv) Quality material from supplier
v) Control in production: production organization must be committed to produce
perfect product
vi) Distribution, installation and use: packaging, shipping and installation must be
included in TQM.
6. All organizations have in common the following basic elements within their operations
system: input, transformation and output. Describe the inputs, transformation and outputs
for CPU University College. And then explain how the concept of operation management
works to improve the teaching learning process in the University College.
7. Define what process selection is. Differentiate intermittent and repetitive operations
clearly. Then explain the types of intermittent and repetitive operations and also their
benefits by providing examples. How do you relate them with mass customized and
standardized products?
- Process selection: - involves choice of technology and related issues and it has
major implications for capacity planning, layout of facilities, equipment, and
design of work systems.
- Differences between intermittent and repetitive operations: -The most
common differences between intermittent and continuous operations relate to two
dimensions: the amount of product volume produced, and the degree of product
standardization. i.e.,
Decision Intermittent operation Continuous operations

Product variety Great Small

Degree of standardization Low High
Organization of resources Grouped by function Line flow to accommodate
processing needs
Path of products through In a varied pattern, depending on Line flow
facility product needs
Factor driving production Customer orders Forecast of future demands

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Critical resource Labor intensive Capital

Type of equipment General purpose Specialized

Degree of automation Low High

Work-in-process inventory more Less

- Types of intermittent operations: Intermittent processing takes two forms

1. Batch Processing:
o produces the same item again and again, usually in a specified lot of sizes.
o Such system is employed when a business has a relatively stable line of
products, each of which is produced in periodic batches, either to customers
order or for inventory.
o Examples:
 Bakeries, education, and printing shops
o Advantage: needs less employee skill, training and supervision
2. Job-Shop Processing:
o Used to handle/produce small batches/lots of a large number of different
products most of which require a different set or sequence of processing steps.
o Examples:
 Commercial printing firms, publication
 Airplane manufacturers
 Machine tool shops, educational system
o Advantages: product flexibility and needs less initial investment
- Repetitive operations:
o It refers to production of discrete parts moving from workstation to
workstation at a controlled rate, following the sequence steps needed to build
the product
o This part of continuous process produces output that allows for some variety;
products are highly similar but not identical
o Examples include assembly of automobiles, televisions, computers,
calculators, cameras, appliances etc.
o Typically, these products are produced in discrete units.
o This form of processing is often referred to as repetitive manufacturing.

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 o The application of this process in service area is less common because service
tends to be more customized on a per unit basis
o But still it can be applied in car washes, mechanical caressers, mail service,
fast food operation etc.
8. Explain the term ergonomics and discuss its objectives and benefits in detail by providing
examples.
9. Write notes on Inventory. Explain why we want to hold inventory at point in time and
avoid holding inventory at other point in time.

PART II: WORKOUT

INSTRUCTION: Solve the following problem in a step wise manner. YOU ARE
REQUIRED TO ANSWER ANY TWO QUESTIONS (2 Questions* 5 marks each=10
Marks).

1. ABC Company has a demand of 250 units of a new product. Three potential locations,
namely, Mekelle, Bahir Dar and Addis Ababa have the following cost structures as shown
in the table below.
Mekelle Bahir Dar Addis Ababa

Fixed Cost $ 500 $ 1000 $ 1500

Variable Cost $5 $2 $1
Based on the information above, identify the range of output for which each alternative is
superior.

Solmutions: Solve for the crossover between Mekele and Bahir Dar:

=>5m+500=2m+1000

=>3m=500

=>m=166.66~167 units

Solve for the crossover between Bahir Dar and Addis Ababa

=>2B+1000 = 1B+1500

=>B=500 units

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We can interpret that the location at Mekele is suitable up to 167 units, location at Bahir Dar
is suitable up to between 167 to 500 units and location at Addis Ababa is suitable if the
demand is more than 500 units

2. A postal office has a package processing center at its head office. The main subsystems in
the package processing center are unloading, sorting, and delivery. The center has 30
employees who unload packages from big trucks that are used to transport packages from
Airport to the company’s head office. Another 20 employees then sort the packages to
make the packages ready for deliveries to different local postal offices in Addis Ababa,
and 40 more employees then load the Vans that are used for local deliveries. Un-loaders
work at the rate of 12 packages per minute, sorters work at a rate of 15 packages per
minute, and loaders take approximately 10 seconds to load each package.
Required:
a) Assuming that the subsystems are operating in series, what is the system capacity of
the package processing center?
b) Compute the systems efficiency of the package processing center, assuming that the
actual number of packages processed per minute during a particular observation was
200.
3. ETH is a manufacturing enterprise produces 200 units that sell for ETB (Ethiopian
Birr) 372/unit. Direct material usage is 1 kg per unit and the material costs ETB 195/kg.
40 hours are required to produce the units; payment is ETB 300/hour.
Indirect manufacturing overhead costs amount to ETB 11,000.
a) Compute the material productivity
b) Compute the multifactor productivity?
Solution:
a. Material productivity = (200unit*birr 372/unit)/ (1kg/unit*200unit birr195birr/kg) = 1.9
b. Multifactor productivity = (200unit *372 birr/unit)/(195birr+12000birr+birr 11,000)=
3.2
4. An office furniture manufacturer agreed to deliver 500 arm chairs to CPU University
College at the end of Week 5. Each arm chair requires a seat, a writing pad, and 4 legs.
These components can be bought or processed in house. The manufacturer has also
compiled the inventory record file as seen in the following table.
Arm Chair Writing Pad Seat Legs

On hand 50 80 60 200
(Beg. Inv.)

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 scheduled
10 @ 3 0@3 0 0
receipt

LLC 0 1 1 1

Lot size L4L 100 L4L Min200

Lead time 1 1 1 3
(week)

Based on the given information above, answer the following:

a) Develop MPS
b) Draw Product Structure Tree
c) Process MRP for the finished arm chair and legs

PART III: CASE ANALYSIS (10 Marks)

Tecno forms new corporate structure, merges factories

27 May 2017
By Dawit Endeshaw
The Reporter, Ethiopia

The assembler of the iconic Tecno Mobile and phone accessories in Ethiopia, Weiguo Yu and
Junjie Lui, has formed a new corporate structure by merging its two factories that are located
in Addis Ababa. From now on, the two companies will be renamed as Transsion
Manufacturing PLC. Following the new formation, Transsion PLC will be under the umbrella
Transsion Holdings-China. Tecno Mobile was established in 2008 in Hong Kong. Tecno
which was founded as Tecno Telecom Limited later changed its name to Transsion Holdings
with Tecno Mobile serving as one of its subsidiaries.

The Ethiopian version Transsion, in addition to Tecno and itel brand mobiles, will also
include Syinix home appliances. The company has officially announced the commencement
of the new corporate structure, on May 24, 2017 at Hilton Addis. Ethiopia is the only country
in Africa where Transsion Holding has a presence. At the launching event it was said that the
company will no longer handle its product under two separate companies. Following the
merger, Transsion will take all the liabilities and asset that were under the two plants.

The plants in Alem Gena and Gofa employ over 1,600 people. It has also a production
capacity of producing one million mobile phones and tablet computers in a month. Over the
past four months of this year, it has already exported products worth some 16.6 million
dollars. Last year, the company has managed to export 19.6 million dollars of mobile devices.

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For the current fiscal year, the company has targeted to increase its export to 40 million
dollars.

Forming its business in Ethiopia ten years ago, Tecno first launch its assembly line around
Meskel Flower. “What we had in mind when we first began our business in Ethiopia was
trade business – importing products and sell the imports to the local market,” Girma, one of
the founders and a partner of Tecno Mobile, said.

However, following a recommendation from the government we changed our business to

manufacturing, he said. The two factories are now under an audit process by experts from the
Ethiopian Revenues and Customs Authority. “I am sure the process will be finalized in a
month,” sources told The Reporter. Following this, the company will discontinue one of its
plants and will move to its plant inside the ICT village. It is to be recalled that the company is
investing close to 20 million dollars at the park.
In this respect, the company has secured a lease right of 30 years over 20,000sqm of land for
221 birr per square meter. The plant at the ICT village is now under construction by a
Chinese company called Vanlli. The first phase of the construction is expected to be finalized
next year.

One of the plants – either in Alem Gena or Gofa – will be a dedicated assembler of
refrigerators and other electronics items. The new plant in the ICT village will accommodate
around 2,000 workers. Along with this, the company has planned to boost its export value to
300 million dollars by the end of the second Growth and Transformation Plan (GTP-II).

Having the above information, you are requested to provide well elaborated answer to the following
questions. You shall support your answer with necessary justifications in accordance with the
scientific concepts and principles.

a) Evaluate this company location decisions by considering important factors such as

investment cost; availability and skills of labor; market, material, local government
regulations; availability and cost of land, availability and quality of transport
infrastructure, utilities supplies ….
b) What is the most appropriate new product design and development philosophy for
this company? Why?
c) What are the most appropriate approach/technique to new product design and
development for this company? Why?
d) Recommend productive process type for this company? Why?

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