Operations Management
17th Edition
ISBN: 9781259142208
Author: CACHON, Gérard, Terwiesch, Christian
Publisher: Mcgraw-hill Education,
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Chapter 1, Problem 8PA
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To determine: The dry cleaners that are not on the efficient frontier.
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A large city in the mid-West needs to acquire a street-cleaning machine to keep its roads looking nice year-round. A used cleaning vehicle will cost $85,000 and have a $20,000 market (salvage) value at the end of its five-year life. A new system with advanced features will cost $150,000 and have a $40,000 market value at the end of its five-year life. The new system is expected to reduce labor hours compared with the used system. Current street-cleaning activity requires the used system to operate 8 hours per day for 20 days per month. Labor costs $50 per hour (including fringe benefits), and MARR is 12% per year.]
A service that does not include any tangible component, such as with counseling is called a :
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tangible product
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Because service organizations require high-touch relationships with customers, which of the following characteristics of the service organization is most important to meeting this requirement?
Hiring and training
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- Two retailers compete on costs and the ambience of their retail stores. They are identicalin all other dimensions of customer utility. Retailer A is cheaper than retailer B. RetailerA also has the better ambience. Does this mean that retailer A is on the efficient frontier? Yes or no?arrow_forwardPrybloxx primarily uses one courier company, AJAX Couriers, for all their deliveries. In some circumstances, where AJAX is too busy and does not have capacity to fulfil deliveries or they do not cover certain areas, only then will Prybloxx make use of a different courier company. Prybloxx has recently had a significant influx of customer complaints regarding goods that have not been delivered, delivered long after the agreed delivery time or damaged once they arrive at the customer. Prybloxx is aware of the effect that this could have on demand for their product, customer goodwill and are now investigating insourcing the delivery of their product to customers. Prybloxx has noted that they have two alternatives in insourcing this department – they can either purchase a local courier company that is considered a going concern or they can purchase all of the required assets and set up such a department themselves. Mr. Pranoto (production manager) has requested that you prepare a report…arrow_forwardMake a reflection about this topic given maximum of 300-400 words. Topic: Service Qualityarrow_forward
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