OPERATIONS AND PRODUCTION MANAGEMENT

ASSIGNMENT NO 01
Q1. What is the impact of E-Business on Operations Management?
Ans. The world has shrunk into a global village and brought with itself numerous changes, such
as that of E-business. E-business, which is the administration and conduct of business over the
internet, in turn has had a significant impact on Operations Management.
As more and more companies are incorporating E business into their processes, customers are
becoming more empowered, business processes are becoming more collaborative and integrated
and supply chain is being expanded.
Operations are easier to conduct online as transaction costs become significantly lower and a
wider access to the market in turn attracts more customers. Demand forecasting is also possible
because of direct interaction with customers. Moreover, information is transferred at an
incredibly faster pace in the form of feedback, suggestions and/or complaints. Hence, online
customer support makes it possible for customer support costs to go down. This in turn helps
businesses improve.
Online banking, ATMs etc. have also revolutionized the way businesses operate resulting in
efficient and smooth processes. Moreover, quick information transfer helps in faster decision
making through collaboration via the internet.
Since E-business allows for better quality at significantly lower costs, the competition has also
increased and comparison shopping has become much easier. Availability of products and
services online has in turn increased demand and logistics and order fulfillment have become the
focus of the game. Production has moved overseas in the quest for cutting down costs and the
supply chain network has been also impacted. Instead of delivering products to distribution
centers, they are now being delivered directly to households.
Furthermore, outsourcing has become much easier through the internet and allowed for a wider
access to suppliers, customers etc. For example, Uber is just a software tool, they dont own any
cars, yet they are now the biggest taxi company in the world.
E businesses have revolutionized the way things work, competitive bidding allows for
availability of materials at lower costs through online auctions and e-marketing places.
All in all, operations management is now focused on tackling supply chain issues, order
fulfillment, transportation and delivery in order to manage operations effectively.

Q2. Write down at least 5 benefits of E business and its impact on operations in any one
industrial organization of your choice.
Ans. The numerous benefits of E business are as follows:
1. Better customer relationship: E business has allowed for an access to a much wider
market and a subsequent rise in customers as well. Through internet, it is now much
easier to communicate with customers and build better relationships with them.
2. More efficient processes: The internet has allowed for more efficient and quicker
processing of information through emails, online banking, social media platforms etc. All
of these result in much faster data processing and integration of the various sectors of the
market.
 3. Faster Decision Making: Information is available and accessed at a much faster pace
resulting in efficient decision making as well as smooth running of transactions.
4. Expanded supply chain: Production is being moved overseas in order to cut down costs,
supply chain is being expanded through the introduction of new intermediaries such as
infomediary (an Internet company that gathers and links information on particular
subjects on behalf of commercial organizations and their potential customers.), e retailer,
aggregator etc.
5. Information Technology Synergy: Since E business has allowed for faster and easier
integration and collaboration, information shared faster and quicker has allowed for a
likewise increase in productivity. Partnerships and alliances can collaborate and
communicate easily via the internet.
The industrial organization chosen as an example is Khaadi which is a multinational Pakistani
clothing fashion brand. Khaadi, like various other businesses, has incorporated E-business into
its key operations such as that of online shopping, customer support etc.
Customer Outreach: Through its website, Khaadi is now providing its products even to remote
areas of Pakistan and also abroad in countries such as Australia, London, and Saudi Arab etc.
Through its website, Khaadi is now reaching out to a wider market increasing its customer base
and paving way for new markets.
Customer support: Khaadi is providing customer support to its customers via its support pirtal
available on the website.
Efficient Processing: Transactions can now be held over the internet if customers want to make
online payment of Khaadi products.
New ways of doing business: Khaadi regularly engages its customers in various activities via its
social media platforms for winning products etc.
Global Outreach: Khaadi, like various other organizations, is going global and all of this is
possible via E business and technological advancements.
Q3. Problem 1 and 6 of Krajewski
Problem 1:
Part a:
Value of output= [75 students/class] [3 credit hours/student] [($200 tuition fee + $100 state support)/
credit hour]
= $67,500/class
Value of inputs= Labor+Materials+Overheads
= $6,500 + ($25/student * 75 students) + 30,000
=$6,500+$1,875+$30,000
= $38,375
Multifactor Productivity= Output Input
= $67,500/$38,375
=1.759
Thus, compared to the result of solved problem 1. Productivity has increased from 1.25 to 1.789
Part b:
Labor productivity:
Labor hours of input= [20 hours/week]*[16hours/week] = 320 hours/class
The value of output is same as in part a, thus:
Labor productivity = Output Input
= [$67,500/class] [320hours/class] = $210.9375/hour
Thus, the labor productivity ratio is $210.9375 per hour for the given requirement.

Problem 6:
Part a:
Multi productivity ratio for normal working hours:
Value of output: [2500 uniforms/week] * [$200/uniform] = $500,000/week
Value of input: [$120/uniform] * [2500 uniforms/week] = $300,000/week
Multi productivity ratio= Output/Input = [$500,000/week] / [$300,000/week] = 1.67
Multi productivity ratio for around-the-clock production:
Value of output: [4000 uniforms/week] * [$200/uniform] = $800,000/week
Value of input: [$144/uniform] * [4000 uniforms/week] = $576,000/week
Multi productivity ratio= Output/Input = [$800,000/week] / [$576,000/week] = 1.39
Percentage change in MP ratio = [1.39-1.67] 1.67 = 16.76%
Thus, the Multi productivity ratio has decreased by 16.76%
Part b:
Labor productivity for normal working hours= Output / Input
= $500,000 / 40 = $12,500 per hour
Labor productivity for around-the-clock production = Output / Input= $800,000 / 72= $11,111.111 per
hour
Percentage change in LP ratio= $11,111.1111 per hour- $12,500 per hour] $12,500 per hour = 11.11%
Thus, the labor productivity ratio has also decreased by 11.11 percent
Part c:
Weekly profits in normal working hours= Output-Input
= $500,000-$300,000
=$200,000
Weekly profits in around-the-clock production= Output-Input
=$800,000-$576,000
=$224,000
Thus, weekly profits have increased by $24,000 from $200,000 to $224,000.