Copy - OTM_300_Ch01_Intro_Activity_Master

Activity Bank

Introduction to

Operations Management

Dr. Amir Fard Bahreini

MAIN MENU

Basic Definitions

Consumer Utility

The Need for Trade-offs

Efficient Frontier

System Inhibitors

Costs

Matching Supply with Demand

© McGraw Hill LLC. All rights reserved. No reproduction or distribution without prior written consent. © 2025 University of Wisconsin–Madison | Department of Operations and Information Management Slide created by Amir Fard Bahreini, all rights reserved.

Case Study : Fairphone

Company Background

+ Scenario

Reveal

Fairphone is a Dutch tech company founded with a mission to produce smartphones that are fairer to people and the planet. Its phones are built to be modular, repairable, and ethically sourced, standing out in an industry dominated by sleek but disposable devices. Customers can replace parts like the battery, screen, or camera themselves — a rarity in modern smartphones.https://en.wikipedia.org/wiki/Fairphone

To meet demand in North America, Fairphone is considering:

• Opening a small assembly facility in Canada
• Offering more customizable features (e.g., case materials, storage sizes)
• Partnering with new suppliers for modular components

But each option introduces trade-offs, operational risk, and new system complexities.

Issue

Reveal

Fairphone has received international praise for its sustainable design. But as interest grows, especially from environmentally conscious buyers outside Europe, the company faces operational bottlenecks: long lead times, limited customization options, and sourcing delays for conflict-free materials.

© McGraw Hill | © 2025 UW–Madison | Dept. of OIM | AFB • All rights reserved

Case Study : Fairphone

© McGraw Hill | © 2025 UW–Madison | Dept. of OIM | AFB • All rights reserved

Case Study : Fairphone

© McGraw Hill | © 2025 UW–Madison | Dept. of OIM | AFB • All rights reserved

Case Study : Fairphone

© McGraw Hill | © 2025 UW–Madison | Dept. of OIM | AFB • All rights reserved

Case Study : Fairphone

© McGraw Hill | © 2025 UW–Madison | Dept. of OIM | AFB • All rights reserved

Case Study : Fairphone

How does Fairphone’s approach to customer utility differ from mainstream smartphone makers?

07:00

Is it possible for Fairphone to remain on the efficient frontier as it scales globally? Why or why not?

Work with your team to discuss two of the following questions. You’ll have 7 minutes. Choose any two prompts on the left. Be ready to summarize your key points if called on.

What flexibility improvements might help Fairphone better respond to variability in demand or supply?

What Pareto improvements could they explore to reduce both cost and environmental impact?

Kick Off : You know what really grinds me gears?

Think of a time when a product or service frustrated you. Was the problem about performance, price, or convenience? What frustrated you most in a recent service experience? a) Poor quality (performance) b) Too expensive (price) c) Took too long (timing) d) Too far or hard to access (location)

© McGraw Hill | © 2025 UW–Madison | Dept. of OIM | AFB • All rights reserved

Activity: Utility Function Breakdown – "Design a Food Delivery App"

Prompt

+ Questions

Reveal

1. Define your target customer. Example: busy professionals, college students, retirees.
2. Pick one way your app will stand out in each of the following utility areas:

• Fit or Performance: How will your service be uniquely desirable?
• Price: Will you be premium or low-cost? Why?
• Inconvenience: How will you reduce location or timing barriers?

Write one sentence per component to describe your decision.

Imagine you're launching a new meal delivery app designed to compete with Uber Eats and DoorDash. Your goal is to design an operations strategy that appeals to a specific target segment.You must focus on three utility components:

• Consumption Utility (Fit or Performance)
• Price
• Inconvenience (Location or Timing)

© McGraw Hill | © 2025 UW–Madison | Dept. of OIM | AFB • All rights reserved

System Inhibitor Diagnosis – "What’s Slowing This Down?"

You’ll be assigned a short operations failure scenario. Your task is to identify the dominant system inhibitor at work:

• Waste
• Variability
• Inflexibility

Then, propose one operational fix that could reduce or eliminate the problem.

+ prompt

Each customer gets a 2-hour delivery window, but drivers often miss it due to routing errors.

Scenario B

A snowstorm delays one flight, but within hours, nearly every flight is delayed due to gate congestion and crew timeouts.

Scenario A

A retailer orders 3 months of pink sweaters. Sales drop after 2 weeks, and inventory sits unused

Scenario D

Customers wait 12 minutes during peak hours, but staff are idle in the afternoons.

Scenario C

Group Activity Instructions

• Form a team of 2–4 students near you.

• Read the prompt or scenario provided.

• Work together to analyze the problem and apply concepts fromthis chapter.

• Write brief answers or solutions based on your discussion.

• Be prepared to share your team’s insight if called on or during a quick class debrief.

• No submission is required unless specified under the question.

Focus on clarity over detail — it’s okay to make assumptions!

How to Identify Pareto Dominated Companies ?

• Start by identifying the companies that are the best (or tied for best) in at least one criterion — these companies are never Pareto dominated, so you can automatically include them on the efficient frontier.

• Next, assess the remaining companies using this question:

• "Is there another company that performs better in at least one criterion and no worse in all others?"

• If yes: The company is Pareto dominated.

• If no: The company is Pareto efficient (i.e., it lies on the efficient frontier).

Flow Chart

© McGraw Hill | © 2025 UW–Madison | Dept. of OIM | AFB • All rights reserved