BBM241 Operations and Productivity Assignment Solution - University

This assignment solution analyzes the differences between services and manufacturing, highlighting that services are intangible and customer-involved, while manufacturing produces tangible goods. It examines the operations of Real Dairy Australia, detailing its inputs, processes (blending, material handling, logistics), and outputs (milk, butter). The core processes of input, transformation, and output are defined, alongside the importance of operations strategy and competitive priorities in enhancing customer relationships and driving new service development. The impact of global competition on productivity is discussed, emphasizing knowledge sharing and efficiency improvements. Furthermore, the assignment includes a productivity calculation example for a gardener, illustrating the effects of new equipment and break-even analysis. References to relevant academic sources are also provided.

Operations and Productivity 1
OPERATIONS AND PRODUCTIVITY
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Operations and Productivity 2
1 Differences between services and Manufacturing
Services Manufacturing
End products are services End products are goods
Product is intangible Product is tangible
Products cannot be kept in inventory Products can be kept in inventory
Production deeply involves customer Production does not involve
customer
Products are only produced on
demand
Can be produced before demand
(Linton, 2019)
2 Real Dairy Australia Pty Ltd; inputs, processes, and outputs
The firm has various inputs including ;
Labor.
Raw materials.
Equipment
Money
Some of the main processes that take place in Real Dairy Australia Pty Ltd are ;
Blending.
Material handling
Raw material processing
Logistics
Warehousing
(Real Dairy, 2020).
The outputs of the firm are saleable goods like milk, butter, valuable information on
the processes involved, and feedback tot e production team (Lenzen & Lundie, 2012, p. 7).

Operations and Productivity 3
3 Core processes in a firm and their relationship
The core processes in a firm are input, transformation, and output. Input is the
foundation of all other processes. Input is the raw material that leads to the start of
transformation (Management Mania, 2019). Conversion is the process of manipulating the
inputs to add value to them.
4 Operations strategy and the Importance of Competitive Priorities
Operations strategy is the process by which an operation implements a business
strategy and contributes to the establishment of customer-based enterprises.
Competitive priorities enhance customer relationships. Competing priorities also
promote new service development and order fulfillment. Competing priorities also boost
relationships with suppliers (Diaz-Garrido, et al., 2011, p. 123).
5 Effect of global competition on productivity
Global competition increases productivity. The opening up of markets to global scales
enables sharing of knowledge skills and information that helps firms to improve their
production efficiencies and customer satisfaction rates in a bid to outdo the competition.
6 Productivity
a) The gardener takes 1.2hrs to mow a typical lawn; his day is 8 hours long.
Productivity = value of work/hours worked
1/1.2= 0.833lawns/hour.
Daily productivity = hourly productivity * hours
0.8333*8= 6.6667lawns/day.
The productivity of the gardener= 6.6667 lawns/day.

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b) After purchasing new equipment, the gardener's productivity will be
1lawn/hour
But given the time he takes to prepare in the morning, his day will become
7hours long
His daily productivity will, therefore, be 1*7= 7lawns/day.
His productivity will increase by 0.333lawns/day.
c) With a payback period of 180days in which the gardener is to pay back
1500 dollars.
It means he has 180*7= 1260hours to payback.
Each hour must, therefore, earn an additional 1500/1260=1.2dollars
The charges per hour = initial cost payback charge
55+1.2= 56.2dollars.
New charges = 56.2dollars/hour.
.

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References
AMATO, L. H. & AMATO, C. H., 2001. The Effects of Global Competition on Total Factor
Productivity in U.S. Manufacturing. Review of Industrial Organization,, December, 19(4),
pp. 407-423.
Diaz-Garrido, E., Martín-Peña, M. L. & Sánchez-López, J. M., 2011. Competitive priorities
in operations: Development of an indicator of strategic position. CIRP Journal of
Manufacturing Science and Technology, 4(1), pp. 118-125.
Lenzen, M. & Lundie, S., 2012. Constructing enterprise input-output tables - a case study of
New Zealand dairy products. Journal of Economic Structures, 1(6), pp. 1-15.
Linton, I., 2019. Five Differences Between Service and Manufacturing Organizations.
[Online]
Available at: https://smallbusiness.chron.com/five-differences-between-service-
manufacturing-organizations-19073.html
[Accessed 06 February 2020].
Management Mania, 2019. Core Processes. [Online]
Available at: https://managementmania.com/en/core-processes
[Accessed 06 February 2020].
Real Dairy, 2020. Services. [Online]
Available at: https://www.realdairy.com.au/services/
[Accessed 06 February 2020].

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