a new customer, it is sent to the person who did the customer verification and setup of new customer accounts.

This process must be completed before the order can be invoiced. The next steporder verification and proofreadingoccurs after invoicing is completed. The orders, with invoices attached, are given to a person who verifies that all required information is present and correct to permit typesetting. If the verifier has any questions, they are checked by computer or by calling the customer. Finally, the completed orders are sent to the typesetting department of the print shop. a. Develop a flowchart for this process (see Chapter7). b. Identify opportunities for improving the process using lean principles. 5. Research just-in-time practices and how they impact purchasing. How do you think just-in-time systems affect purchasing functions and practices? Answer this question in a short paper of no more than two typed pages. 6. Research and briefly describe one or two lean initiatives in service organizations and then make an argument for or against adopting lean principles in service businesses. What is different about applying lean in a factory versus a service situation? Describe your findings in a two-page paper. 7. Tooltron Manufacturing uses a Kanban system for a component. Daily demand is 800 units. Each container has a combined waiting and processing time of 1.2 days. If the container size is 50 and the alpha value ( ) is 15 percent, how many Kanban card sets should be authorized? What is the maximum authorized inventory? 8. Lous Bakery has established that JIT should be used for chocolate chips due to the high probability of the kitchen heat melting the chips. The average demand is 130 cups of chocolate chips per week. The average

setup and processing time is day. Each container holds exactly two cups. The current safety stock factor is 5 percent. The baker operates six days per week. a. How many Kanbans are required for the bakery? b. What is the maximum authorized inventory? c. If the average setup and processing time is reduced to 3/8 of a day due to better training and retention of experienced employees, what are the answers to (a) and (b)? 9. Due to rapid changes in technology, a telecommunications manufacturer decides to produce a router using just-in-time methods. Daily demand for the router is 10 units per day. The routers are built on racks that hold four at a time (i.e., the container size). Total processing and waiting time is 3.75 days. The process manager wants a safety factor of only 5percent. a. How many Kanbans are required? b. What is the maximum authorized router inventory? c. If you assume that one-half of the racks are empty and one-half full at any given time, what is the average inventory of routers? d. What are the answers to (a) to (c) if due to process improvements the total processing and waiting time is reduced from 3.75 to 2.75 days? 10. An automobile transmission manufacturer is considering using a JIT approach to replenishing its stock of transmissions. Daily demand for transmission #230 is 25 transmissions per day and they are built in groups of six transmissions. Total assembly and waiting time is three days. The supervisor wants to use an alpha value ( ) of 1, or 100 percent. a. How many Kanbans are required? b. What is the maximum authorized inventory? c. What are the pros and cons of using such a high alpha ( ) value?

Community Medical Associates Case Study

Community Medical Associates (CMA) is a large health care system with two hospitals, 25 satellite health centers, and 56 outpatient clinics. CMA had 1.5 million outpatient visits and 60,000 inpatient admissions the previous year. Just a few years ago, CMAs health care delivery system was having significant problems with quality of care. Long patient waiting times, uncoordinated clinical and patient information, and medical errors plagued the system. Doctors, nurses, lab technicians, managers, and medical students in training were very aggravated with the labyrinth of forms, databases, and communication links. Accounting and billing were in a situation of constant confusion and correcting medical bills and insurance payments. The complexity of the CMA information and communication system overwhelmed its people.

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Part 3: Managing Operations