Mapping CLOs to Exam Questions

Course Learning Outcomes	Question
CLO1: Discuss concepts of operations management that are critical in operational decision making.	1
CLO2: Contrast different operations management qualitative and quantitative analysis tools to gain competitive business advantage.	2, 3
CLO4: Develop relationships of operations to business strategies in retail, services, and manufacturing industries.	4, 5

QUESTION- 1. (6 points total; 2 points for each part)

Case Study 1: The Global Expansion of Zenith Luxury Resorts

Zenith Luxury Resorts is a premier hospitality group known for its “Total Immersion” brand, which promises guests a seamless blend of high-end comfort and local cultural experiences. After decades of success in Western Europe, Zenith is planning a massive expansion into the Middle Eastern market, specifically targeting Dubai and Abu Dhabi. This move presents a significant challenge for the product design team, as they must navigate the tension between brand standardization and local customization. Currently, Zenith operates with a highly standardized “Brand Blueprint” that dictates everything from the thread count of linens to the specific sequence of service at breakfast. However, market research suggests that guests in the UAE have distinct preferences regarding privacy, architectural aesthetics, and culinary offerings that differ significantly from the European model. To maintain its competitive advantage, the “building committee”—comprised of the VP of Operations, the Director of Design, and the Head of Quality Assurance—is evaluating how to adapt their “service product” without diluting the core brand identity.

The group is also under pressure to accelerate their product development cycle, as competitors are moving quickly to capture the post-pandemic luxury travel surge. Much like the boat designers at Regal Marine, Zenith’s architects are now utilizing advanced Virtual Reality (VR) and CAD systems to allow stakeholders to visualize hotel layouts and guest flows before construction begins. This technology is expected to reduce the time-to-market and help the team identify potential “defects” in the service design, such as inefficient passenger or supply flows, early in the process. On the quality front, Zenith is shifting away from traditional retrospective guest surveys toward a more dynamic “Net Promoter Score” (NPS) system, similar to that used in the cruise industry. They are particularly concerned with their “advocate” to “detractor” ratio and how local cultural nuances might impact these scores. The executive team believes that empowering frontline staff to resolve guest issues immediately—allowing them to authorize “recovery gifts” up to $250—will be critical in building a culture of quality in this new market, echoing the practices found in elite healthcare settings. As Zenith prepares for its first UAE opening, the leadership must decide how much of the “standardized” European experience should be sacrificed for “localization” and what specific quality tools should be implemented to monitor the success of this transition. Study Chapter 5 and Study Chapter 6 for more information on these strategic trade-offs.

Case Questions:

1. Based on the standardization vs. localization dilemma, evaluate whether Zenith should maintain its European “Brand Blueprint” or fully adapt to local UAE preferences. What are the operational risks of each approach?

• Analyze how the use of VR and CAD technology in the design phase specifically addresses the “Quality of Design” and “Quality of Conformance” for a service-based organization like Zenith.
• If Zenith’s initial NPS in Dubai is lower than their European average despite high employee empowerment, what specific quality management tools (e.g., Fish-bone diagram or Pareto chart) should the manager use to identify the root cause, and why?

QUESTION- 2. (6 points total; 2 points for each part)

Case Study 2: The Factor-Rating Dilemma in European Expansion

Oliver Munday, the Vice President for Cafe Development, views his role as a bridge between high- level global strategy and the street-level reality of site selection. While the job involves traveling the world to identify countries for expansion, the core of the work is grounded in a rigorous, research-driven front end and a detail-oriented back end that spans from negotiation to the first year of sales. Currently, the expansion focus is heavily weighted toward Europe, Latin America, and Asia, where the brand must meticulously evaluate how its identity fits into diverse social norms and varied economic landscapes. To streamline this process, Munday utilizes a factor- rating system to compare potential cities. For the upcoming expansion, four European cities— identified only as A, B, C, and D for competitive reasons—are under consideration based on a weighted index of seven critical factors.

The weighting for these factors is heavily skewed toward the “front-end” metrics that ensure long-term viability. Demographics, the visitor market, and transportation infrastructure are each assigned a weight of 20, representing 60% of the total decision-making criteria. The remaining 40% is distributed equally at 10 each among local restaurant/nightclub competition, political risk, the real estate market, and a comparable market analysis. In City A, the transportation infrastructure is perfect, scoring a 100, and political risk is exceptionally low with a score of 90. However, City A struggles with the real estate market, scoring only a 65, which could complicate the 10-to-15-year commitment typical of these projects. City D presents a different profile; it leads the group in demographics with a score of 90 and shows a strong comparable market analysis at 80. Yet, City D is significantly weaker in the visitor market and restaurant competition, scoring 75 and 65 respectively.

The decision becomes complex when comparing these to City C, which boasts a dominant visitor market score of 90 and a robust real estate market at 85, but suffers from high political risk and lower demographic scores. Munday must determine which of these cities offers the highest weighted average to justify the massive capital expenditure. The “incognito walking” around these cities helps provide a qualitative “feel” for the nightlife concentration in city centers, but the final choice must be backed by these hard numbers. As the group moves forward, they must also consider if the specific transportation scores—derived from airport age, passenger numbers, and direct flight hubs—truly support the high-volume traffic required for success. The factor- rating method allows the team to quantify subjective social norms and objective economic

indicators into a single, actionable score. This ensures that the location chosen is not just a popular destination today, but a sustainable business hub for the next decade. Study Chapter 8 for more information on how factor-rating scores are calculated and weighted.

Critical Decision-Making Questions:

1. Based on the provided data for Cities A through D, calculate the total weighted score for each city. Which city should Munday recommend for the next cafe opening, and why?
2. Why is “Political Risk” weighted at only 10 at this time, and under what global economic conditions might Munday be forced to increase this weight significantly?
3. Evaluate the 20% weight given to “Transportation.” How does the specific data regarding direct flights and airport hubs directly impact the success of a “City Center” location strategy?

QUESTION- 3. (6 points total; 2 points for each part)

Case Study 3: The Horizon Medical Pavilion

The Horizon Medical Pavilion is currently undergoing a massive $150 million expansion to address

a critical capacity shortage that has left the facility “bursting at the seams”. The executive leadership, led by the Director of Operations, has decided to abandon the traditional “racetrack” layout, where patient rooms line long, linear hallways and supply rooms are tucked into interior corridors. In the old facility, motion and time studies revealed that nurses were walking up to 3 miles per shift, with nearly 30% of their time spent simply moving between the central nursing station, supply closets, and patient bedside. To solve this, Horizon is implementing a radical “tri- pod” circular design. In this new configuration, each pod contains 12 pie-shaped patient rooms arranged around a decentralized local nursing station. This ensures that no patient room is more than 15 feet from a care provider, a move expected to save at least 20% in staff travel time. The design also incorporates “servicescape” elements intended to improve patient outcomes, such as 14-foot ceilings, oversized windows for natural lighting, and private rooms with warm, serene color palettes.

Beyond the physical architecture, the Pavilion is grappling with how to integrate new technology into the layout. As the cost of mobile computing drops, the Director is considering moving away from a central desk to “computers on wheels” or bedside terminals. This shift suggests that the central nursing pod could be further reduced in size, allowing for more “local” supply storage of linens and medical equipment within 14 feet of the bedside. However, the transition has not been without its critics. Some senior staff argue that the circular pods, while efficient for walking, may lead to a sense of isolation for staff who are used to the social interaction of a central desk. Furthermore, the cost of building a non-linear, 11-story structure is significantly higher than a traditional rectangular building. The Pavilion must now decide if the long-term gains in labor efficiency and the “servicescape” impact on patient recovery speed justify the initial $100 million-

plus capital investment. Management is also reviewing daily trip data: if a nurse currently makes 8 trips to each of the 12 rooms, 22 trips to medical supply, and 10 trips to the break room, they must calculate exactly how many miles this new layout will save over a standard 10-hour shift. Study Chapter 9 for more information on service and office layouts.

Case Questions:

1. Evaluate the trade-offs between a traditional linear “racetrack” layout and the new circular “pod” design. Which layout better supports the “servicescape” goals of the Horizon Medical Pavilion?
2. If the Pavilion moves to a completely decentralized model (computers in every room), how should the physical “central nursing station” be repurposed to maximize operational efficiency?
3. Calculate the potential impact of decentralized supply storage (linens and medical supplies) on staff productivity. How does reducing the distance from 60 feet to 14 feet change the “efficiency” of a nurse’s daily workflow?

QUESTION- 4. (6 points total; 2 points for each part)

Case Study 4: The Perishable Paradox of Fast-Moving Goods

Inventory is a major investment and an expensive asset in most firms, where holding costs often exceed 25% of product value, yet in the prepared food industry, these costs can be much higher because the raw materials are highly perishable. Frito-Lay has flourished by managing a multi- billion-dollar portfolio of 41 products through 36 product-focused plants in the U.S. and Canada. In this environment, poor inventory management is not only a financial drain but can yield an unsatisfactory product that ruins market acceptance, a qualitative risk that quantitative models must account for. To maintain a competitive advantage, Frito-Lay utilizes a rapid inventory flow where potatoes move from farm to processing to retail in a matter of hours, keeping freshness high and holding costs low. At their Florida plant, 150,000 lbs of potatoes are consumed in a single shift, meaning the storage area holds only 7.5 hours’ worth of raw materials. This represents a stark contrast to a process-focused facility, such as a machine or cabinet shop, where work-in-process (WIP) may sit for days or weeks. While the raw materials flow according to a Just-in-Time (JIT) philosophy, the facility itself represents a major capital investment that requires high utilization to be efficient. This demand for utilization necessitates a different quantitative approach for maintenance, repair, and operating supplies, known as MRO inventory. Unlike potatoes, MRO items like motors, switches, and gears are costly specialized components that must be stocked to prevent equipment failure.

The operations manager must contrast the use of a Fixed-Quantity (Q) model for non-perishable MRO supplies with a more aggressive replenishment strategy for raw materials. Seasoning inventory averages 7 days, while corn meal averages 4 days, and oil inventory lasts only 4.5 days. Contrast this with the finished product, which moves into the distribution chain in less than 1.4 days. From a quantitative perspective, the dollar investment in each of the four types of inventory—raw materials, WIP, finished goods, and MRO—must be ranked to optimize the cash conversion cycle. Qualitatively, the company keeps many regional plants open to ensure that the product-focused facilities stay close to the consumer, even though it prevents them from making all 41 products at every location. Students should analyze how this decentralization affects total holding costs versus the benefit of product freshness. When the raw materials are moved via truck from the farm to the regional plants, the lead time is virtually zero, yet the MRO supplies may have long lead times from specialized vendors. This creates a tension between the quantitative drive for lean inventory and the qualitative need for process reliability. The manager must decide if the high holding costs of MRO are a necessary insurance policy against the much higher cost of a plant shutdown. By contrasting these two different inventory needs, students can determine the optimum balance for a high-volume snack food producer. Study Chapter 12 and Study Chapter 14 for more information.

Decision-Making Questions:

1. Contrast the quantitative holding cost of MRO inventory with the qualitative cost of a plant shutdown. Which should be prioritized to maintain a competitive advantage?
2. How does Frito-Lay’s use of 36 regional plants act as a qualitative strategy to offset the

quantitative risks of high holding costs and perishability?

• Using the data provided on potatoes and seasoning, determine if a Fixed-Period (P) or Fixed-Quantity (Q) inventory system is more appropriate for raw materials. Justify your answer based on lead times and perishability.

QUESTION- 5. (6 points total; 2 points for each part)

Case Study 5: The Aerodynamic Strategy of Alaska Airlines

Alaska Airlines operates in a challenging geographic landscape of rugged beauty and extreme weather, yet it consistently secures the industry’s top rankings for on-time performance. This success is not accidental; it is the direct result of a strategic Lean initiative that permeates the entire corporate culture. Ben Minicucci, the Executive VP for Operations, has tied the company’s business strategy—centered on operational excellence and reliability—to Lean principles such as continuous improvement, performance metrics, and employee empowerment. To institutionalize this, the airline established a dedicated seven-person Lean Department that provides extensive training, including one-week workshops and two-week classes for Six Sigma

Green Belt and Black Belt certification. By making performance relevant to empowered employees, Alaska Airlines ensures that the people closest to the work are the ones identifying and eliminating waste. While fuel costs remain a massive external variable, the airline focuses its Lean strategy on areas it can control: capital utilization, ground equipment efficiency, and aircraft turnaround times.

As the Director of Seattle Airport Operations has observed, Lean is used here to expose non- standard work and force a focus on variations in documented best practices. This strategic focus has led to over 60 ongoing projects, incorporating Kaizen events—referred to as Accelerated Improvement Workshops—and Gemba Walks, known as “waste walks.” The results of these projects are quantifiable and directly impact the airline’s bottom line. For instance, applying 5S to aircraft ground equipment ensures that tools are exactly where they are needed on the tarmac, reducing search time. By synchronizing arrival and departure sequences, the time required to open the front door after arrival dropped from 4.5 minutes to just 1 minute. Improvements in the “push back” tow bar disconnect procedure and deicing processes have shaved several minutes off each departure. In an industry where every 1% improvement in productivity leads to a recurring $5 million savings, the 7% productivity gain achieved by Alaska over five years represents a massive financial advantage. Even the deplaning process has been re-engineered using solar-powered “switchback” staircases for rear-door unloading, saving another two minutes, or roughly 17%, off previous times. This integration of Lean into the business strategy allows Alaska Airlines to offer a premium service reliably and efficiently. Study Chapter 16 for more information on how Lean eliminates waste and drives competitive performance.

Case Questions:

1. Based on the Alaska Airlines case, evaluate how the “Focus on Continuous Improvement” acts as a strategic driver for the company’s overall business goal of being the industry leader in on-time performance.
2. Analyze the relationship between Lean “Waste Walks” (Gemba Walks) and the $5 million recurring savings associated with each 1% productivity improvement. How does this link operational actions to financial strategy?
3. Discuss how the use of the “switchback” staircase for rear-door unloading demonstrates the Lean principle of eliminating waste in the “aircraft turnaround” process. What are the broader strategic implications for capital utilization?

End of Operations Management Final Exam Spring 2026