Exam One Review Sheet - Lecture notes 1-7 PDF

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Exam One Review Sheet and Topics on the Homework ARE ON the EXAM Topic 1Hard Rock Café Videos Forecasting at Hard Rock Video Summary- manufacturers use forecasting to forecast demand of products, number of employees to hire, expansion needs for facilities and forecast profits. Service sector- forecast capacity for long term, purchasing contracts in intermediate term, forecasting to schedule and purchase labor food and immediate supplies in the short term. Long term forecasting is done to determine growth of sales per store. Intermediate term contract for items such as raw materials are issued 8 months out, in short term food and labor must be forecasted. Accurate sales forecast is important. Sales forecast drives profit forecast, profit forecast drives cash flow forecasts. Moving averages, weight average, exponential smoothing, and regression analysis. Takes weighted average of last 3 years performances, 40 40 20, the heaviest weight to the prior year, take weighted average and set targets based on that. Unit level, 55 own cafes, monthly forecast of each café, then reviewed by managers, roll up the forecasts. The primary problem is the problem with knowing how many people walk through the door. Human Resource Strategy video summary- competent, motivated people. Competitive advantage in operation built through good HR strategy. Employees play a big part in providing mission to the families. Type of people brought on board right attractive, personable, reverent, impatient visual oriented, unique people who can make a difference. Turnover of employees is low compared to the rest of the industry. Lots of benefits and the company embraces individuality combined with great benefits, lots of training, internal promotions 10 year milestone you get rolex watches. Employee bill of rights that promotes climate of work balance, hire best qualified not best available. Every employee takes training , entry level management course Rock 101. Technical skill driven class, coaching, personal development class. Training including , service, memorabilia, mission, values and respect. Building a sense of community and team is another factor. Employees encouraged to involve themselves in community service. Effective training and treating employees as unique individuals is Hard Rock café’s strategy. Hard rock’s global strategy video summary- Hard Rock Café, is a multinational corporation, employing a strategy defined as a global strategy with multi-domestic attributes. With increasing global competition Hard Rock globalized to attract new markets, learn to improve operations, and attract and retain global talent. The firm uses the domestic model globally, and franchises where it makes sense to do so. Hard Rock franchises nearly half of its cafes to provide local responsiveness and to consider the various risks associated with the different locations. Based on the video, these risks include political risks, currency risks, social norms, brand fit, social costs, and business practices. The Hard Rock Café strategy has changed over time and has impacted some of the operations management decision areas. The company’s strategy has changed over time as it used to operate on a themed restaurant concept, with simple restaurants with entertainment, to now moving to operate on an “experience economy.” The company operates on an “experience economy” and it has changed into offering experience in worldwide venues that further enhance the strength of the brand. By changing the company strategy, Hard Rock Café has changed its impact on the goods and services design, location OM decision area, layout design decision area, quality, and scheduling decision areas. The design of good and services has changed as Hard Rock focuses on providing local taste by customizing

menus. The location strategy has changed as the company identifies 70% of the Café’s customers are tourists. The firm now develops non-standard tourist’s destinations. The layout strategy has evolved Hard Rock Café maintains an attractive layout and the décor is dynamic and unique, designed to reflect global experience strategy. The company’s merchandise stores sell location-specific merchandise which makes up a majority of the company’s sales. The quality decision OM area, each item should receive a seven out of seven; this guarantees quality for its customers. Scheduling is taken quite serious at Hard Rock café as Hard Rock Café now has 40 U.S locations, about a dozen in Europe, and the remainder scattered throughout the world. Based on the video and the case, some of the considerations taken into account when expanding into new markets are the individuals who are traveling on vacation also known as “tourists.” About 70% of Hard Rock’s guests are tourists and Hard Rock has expanded to “destination” cities. The company continuously focuses on new franchises and locations for their café and hotel locations. There are risks associated with doing business on a global basis including political risks, currency risks, social norms, brand fit, social costs and the differences between business practices and employment law. All of these risks should be considered when making decisions on opening overseas locations for both cafes and hotels. Although Hard Rock café is very successful, it does not mean it is preferred everywhere, and special consideration should also be given to the supply chain for the restaurant and retail store. Managing Hard Rock’s rock fest- Hard Rock Café’s Rockfest, which takes place in July, is a thirteen-hour concert, attended by over 100,000 fans, is planned within a nine-month period. Within the first three months, the scheduling is done on a monthly basis with monthly meetings, At the six-month period, progress is updated on a weekly basis and increases to twice a week when the event is a month away. The senior director of worldwide marketing identifies ten major tasks in Hard Rock’s work break down structure including talent booking, ticketing, marketing/PR, online promotion, show production, travel, sponsorships, operations, and merchandising. There are various challenges that a project manager might potentially face when planning Rockfest. Some of these challenges include bands not being able to get into the venue on time due to traffic, issues working with the city, scheduling, unforeseen issues on the day of the concert, ensuring assembly of the stage timely and adequately. Operations Management Hard Rock café video summary- 1. Design of goods and servicesThe OM decision of the design of goods and services is vital at Hard Rock Café. Food research is ongoing at Hard Rock Café, and the café must adapt its menu to the changing demographics it deems essential. Hard Rock’s tangible product is the food, and the intangible products are memorabilia, services and the music which are integrated into the café’s entire strategy. 2. Managing quality- Hard Rock Café takes quality very seriously and identifies quality as an essential factor to ensure the success of its product. The food is the product and quality are very important. Quality standards and controls are crucial for Hard Rock Café to attain success. Hard Rock Café conducts surveys by reviewing their menus and setting a benchmark of seven if the food is below a seven Hard Rock considers it to be a failure. The video focuses on the quality of the food. 3. Process and capacity of design- Hard Rock Café must address what processes and capacity will the products require and equipment and technology necessary for the processes. Processes can be addressed by focusing on the processing of a guest order from start to finish. Another way to look at processing is how the meals are prepared by kitchen staff. For equipment and

technology necessary to carry out the processes it is vital that equipment and technology will be compatible with the product, maintenance of costs and maintain quality. 4. Location strategy- The company systematically narrows their search from country to city to the last street corner. The global brand looks closely at the markets it should expand into, and this is a part of the location strategy. On a worldwide basis, the right markets need to be selected because the locations when they are chosen systematically remain open forever in the same location, mostly it is a long-term commitment. Hard Rock Café’s location strategy leases can span up to fifteen years, and it must be a profitable location because if not then the location will not be successful. 5. Layout strategy- Hard Rock Café’s layout strategy is defined as an experience strategy imperative for its success. The company must consider the kitchen flows for food prep, and restaurant and bar layout for maximum revenue. Memorabilia, music, lighting sound and screens, contemporary music and circulation designed to show off memorabilia and expose merchandise for sale and are carefully integrated into the restaurant's layout to maintain sales. 6. Human resources and job design- The company seeks peoples who are passionate about music and want to convey that message to Hard Rock Café’s customers. Human resources intend to ensure that the staff brings out their passion to Hard Rock Café’s consumers and visitors. 7. Supply-chain management- Hard Rock Café maintains a focus on understanding what goods are to be made or purchased. 8. Inventory, materials requirements planning, and JIT- Inventory Management at Hard Rock Café has 40 million invested in memorabilia. A specific group of people in the warehousing department who catalog memorabilia utilize an advanced inventory system technology to track the locations of where the items are displayed. 9. Intermediate and short-term scheduling- Hard Rock Café is composed of 23 departments and over 600 people. Scheduling factors include sales, sales from the prior year and understanding the business, any events, community events in the areas, seasonality, trends from weeks and building the sales forecast. 10. Maintenance- This operation management decision can be applied to Hard Rock Café because it has online presence. Due to the amount of numerous views each week on the Hard Rock Café website, the website must keep up with sales in correlation with the projected forecasts based on prior year information, seasonality, events, and historical trends. Scheduling at Hard Rock Café video summary- lowering costs, good scheduling costs enhances a companys reputation. Staff scheduling must take into account employee preferences, and changing sales forecast, seniority. Sales from prior year, community events, seasonality, previous week trends, sales forecast. Using linear programming, creates daily schedule for each employee. No over staffing, each server is assigned to one work stations, seniority, servers can trade schedules. The software takes care of most constraints. Where to place Hard rock’s café video summary- site location – selecting a new location is an important strategic decision with long term implications such as profits. For hard rock café,location decision begin with global view, right country, countries, cities, regions. Social norms, how well the brand fits with the country. Social risks, political risks, right blend of characteristics, big enough population , adequate disposable income, healthy volume of visitors, tourists, then decide where they are going to go. Focus on city center, night life location. . The

firm uses the domestic model globally, and franchises where it makes sense to do so. Hard Rock franchises nearly half of its cafes to provide local responsiveness and to consider the various risks associated with the different locations. Based on the video, these risks include political risks, currency risks, social norms, brand fit, social costs, and business practices. The company systematically narrows their search from country to city to the last street corner. The global brand looks closely at the markets it should expand into, and this is a part of the location strategy. On a worldwide basis, the right markets need to be selected because the locations when they are chosen systematically remain open forever in the same location, mostly it is a long-term commitment. Hard Rock Café’s location strategy leases can span up to fifteen years, and it must be a profitable location because if not then the location will not be successful. Topic 2 Productivity, 10 decision areas of operations management. Productivity and measurement problems- Productivity is the ratio of outputs (goods and services) divided by the inputs (resources such as labor and capital). Essentially the operation managers job is to ultimately enhance this ratio of outputs to inputs. Improving productivity means improving efficiency. Improving productivity can be achieved in two ways which include reducing inputs while keeping output constant or increasing output while keeping inputs constant. Both of these represent an increase in productivity. Inputs are identified as labor, land, capital, and management which are integrated into a production system. Production is the making of goods and services. High production may imply that more individuals are working and that employment levels are high (in turn low unemployment), but it does not necessarily imply high productivity. The measurement of the productivity is an effective way to evaluate a country’s ability to provide an improving standard of living for its citizens. If there are increase in productivity, then the standard of living will improve. On the other hand, only through increases in productivity can labor, land capital and management receive additional payment. If returns to labor, capital or management are increased without increased productivity, prices rise. Thus, downward pressure is placed on prices when productivity increases, because more is being produced with the same resources. On the other hand, there are problems associated with measuring productivity. The measurement of productivity can be direct. Productivity is measured by dividing units produced/input used. The measurement of productivity can be direct when productivity is measured by labor hours per ton of a specific type of steel. Labor hours are a common measure of input, other measures such as capital, materials or energy can be used as well. There are two types of productivity which can be identified as single factor productivity and multi-factor productivity. Single-factor productivity is the use of just one resource input to measure productivity. Multi-factor productivity includes all inputs, also known as total factor productivity. Multifactor productivity is computed by combining the input units and dividing output/labor+materials+energy+capital and misc. Using productivity measures aid the manager in understanding how well they are doing. There are measurement problems associated with measuring productivity. One of the measurement problems is that quality may change while the quantity of inputs and outputs remains constant. Another problem associated with measurement are external elements may cause an increase or decrease in productivity for which the system under study may not be directly responsible. The third problem is that precise units of measure may be lacking. Productivity measurement is difficult in the service sector, where the end product is much more difficult to define. Productivity measurements require specific inputs and outputs, but a free economy is producing worth what people want, what

includes convenience, speed, and safety. Productivity increases are dependent on three productivity variables which include labor, land, and management. Labor contributes about 10% of the annual increase to productivity while capital contributes about 38% of the annual increase and management contributes about 52% of the annual increase. Improvement in the contribution of labor to productivity is the result of a healthier, better-educated, and betternourished labor force. Some increase might be attributed to a short workweek. The three key variables for improved labor productivity are basic education appropriate for an effective labor force, the diet of the labor force, and social overhead that makes labor available, such as transportation and sanitation. Capital investment provides those tools for humans. Capital investment continues to increase. Taxes and annual inflation increase the cos of capital, making capital investment increasingly expensive. When the capital invested per employee drops, the productivity of the employee drops. Using labor rather than capital may reduce unemployment in the short run, but it also makes economies less productive and lowers wages in the long run. Management is a factor of production and an economic resource. Management is responsible for ensuring that labor and capital are effectively used to increase productivity. More effective use of capital contributes to productivity. Productivity and the service sector continues to be a challenge for accurate measurement of productivity improvement. Productivity of the service sector is difficult to improve because service sector work is: typically labor intensive, focused on unique individual attributes or desires, intellectual tasks performed by professional, difficult to mechanize and automate, and difficult to evaluate for quality. The more intellectual and personal the task, the more difficult it is to achieve increases in productivity. Overall, measuring the improvement of productivity continues to be a challenge for the service sector, but there are constant improvements. 10 decision areas- There are ten decision areas of operations management that are made by individuals who work in the disciplines such as operations, finance, and marketing. The first decision area is the design of goods and services. The issues associated with this decision area is the offering of the good or services and the design of the products. Designing goods and services defines much of the transformation process. Important factors such as costs, quality, and human resource decisions are often determined by design decisions, and designs usually determine the lower limits of costs and upper limits of quality. The second decision area is managing quality. The issues concerning the management of quality are defining quality and holding persons accountable for the quality. The customer’s quality operations must be determined and policies and procedures established to identify and achieve that quality. The third decision area is process and capacity design. The issues concerning the process and capacity design are the product process and capacity requirements and the equipment and technology for the processes. Process options are available for products and services. Process decisions commit management to specific technology, quality, human resource use, and maintenances. The fourth decision area is the location strategy. The issues concerning the location strategy are the location of the facility and identifying criteria for the location of the facilities. Facility location decisions for both manufacturing and service organizations may determine the firm’s ultimate success. Errors made in this decision area may overwhelm other efficiencies. The fifth decision area is the layout strategy. The issues concerning the layout strategy are the arrangement of the facilities and the size of the facility. Material flows, capacity needs, personnel levels, technology decisions and inventory requirements influence layout. The

sixth decision area is human resources and job design. The issues concerning human resources and job design are the reasonableness of the work environment and the production of the employees. People are an important and expense part of the total system design. The quality of work life provides, and the talent and skills require and their costs need to be identified. The seventh decision area is supply-chain management. The issues concerning supply-chain management are making or buying the component, and identifying suppliers and integrating suppliers into the strategy. This decision determines what is to be made and what is to be purchased. Consideration is given to the quality, delivery, and innovation, all at a satisfaction price. Trust between both buyer and suppliers is needed for effective purchasing agreements. The eighth decision a...