PP1 Mass-Customization in a Supermarket
Suppose you have been hired as a consultant for a supermarket chain to advise on a plan
to prepare ahead of time and cook complete “package” meals to be sold as convenience
items for customers. A complete package meal will include one choice from each
module, i.e., 1 meat, 1 potato, 1 salad, and 1 bread item. The food menu will vary from
day to day, but a typical menu look s like:
Module 1 (Meat) : Roast leg of lamb / Filet mignon / Fried chicken
Module 2 (Potatoes): Rosemary potatoes / Pan roasted potatoes / Mashed potatoes
Module 3 (Salad ): Garden peas / Garden salad / Fruit salad
Module 4 (Bread): Roll, butter / French bread, butter / Biscuit, honey

(a) [5 pts] How many different complete package meals can be created? Show detailed
calculations.
(b) [15 pts] Write a memo to Brad Marlow, Manager of Special Services, proposing the
use of modular approach for delayed differentiation . Explain how it would work and
outline the potential benefits as well as the potential disadvantages of your idea.

PP2 Zrox Copiers
Zrox is planning to add a new line of copiers. The manufacturing process involves the
following activity times and precedence relationships:

Time Immediate
Activity (minutes) predecessor(s)
A 0.2 —
B 0.4 A
C 0.3 —
D 1.3 B, C
E 0.1 —
F 0.8 E
G 0.3 D, F
H 1.2 G

(a) [10 pts] Draw the process flow diagram. What are predecessors and immediate
predecessors of D? What are descendants and immediate descendants of D?
(b) [10 pts] Find all paths and their completion times. Identify the critical path and project
completion time. What are non-critical activities?

PP3 Cellular Layout
[10 pts] What are the advantages of cellular layout? How is group technology used in
cellular manufacturing?

PP4 Original vs Wrecked Cars
[10 pts] According to a study by the Alliance of American Insurers, it costs more than
three times the original purchase price in parts and labor to reconstruct a wrecked
Chevrolet. Explain the reasons for this large discrepancy in terms of the processes used to
assemble the original car and those required to reconstruct the wrecked car.

PP5 Mini-Case: De Mar
De Mar, a plumbing, heating, and air -conditioning company located in Fresno,
California, has a simple but powerful strategy: Solve the customer’s problem no matter
what, solve the problem when the customer needs it solved, and make sure the customer
feels good when you leave. De Mar offers guaranteed, same -day service for customers
requiring it. The company provides 24 -hour – a-day, 7-day-a -week service at no extra
charge for customers whose air conditioning dies on a hot summer Sunday o r whose
toilet overflows at 2:30 A. M. As assistant service coordinator Janie Walter puts it: “We
will be there to fix your A/C on the fourth of July, and it’s not a penny extra. When our
competitors won’t get out of bed, we’ll be there!”

De Mar guarantees the price of a job to the penny before the work begins. Whereas most
competitors guarantee their work for 30 days, De Mar guarantees all parts and labor for
one year. The company asse sses no travel charge because “ it’s not fair to charge
customers for driving out.” Owner Larry Harmon says: “We are in an industry that
doesn’t have the best reputation. If we start making money our main goal, we are in
trou ble. So I stress customer satisfaction; money is the by-product.” De Mar uses
selecti ve hiring, ongoing training and education, performance measures and
compensation that incorporate customer satisfaction, strong teamwork, peer pressure,
empowerment, and aggressive promotion to implement its strategy. Says credit manager
Anne Semrick: “The person who wants a nine -to -five job needs to go somewhere else.”

De Mar is pricing high. Yet customers respond because De Mar delivers value — that is,
benefits for costs. In 8 years, annu al sales increased from about $200,000 to more than
$3.3 million.

(a) [10 pts] Describe De Mar’s competitive strategy. Identify De Mar’s product as service
package–service and tangible parts.
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(b) [10 pts] How should De Mar’s marketing function support its competitive strategy?
How should De Mar’s personnel be hired and trained ?