2.Apply Hill’s strategy framework to a goods-producing or service-providing organization of your choice. This will require research to identify corporate objectives and competitive priorities. See the McDonald’s example in Chapter 3 for guidance and make sure that you emphasize OM concepts, capabilities, and execution. Report your findings.
3.Edwards Machine Tools needs to purchase a new machine. The basic model is slower but costs less, while the advanced model is faster but costs more. Profitability will depend on future demand. The following table presents an estimate of profits over the next three years.
Demand Volume:
Given the uncertainty associated with the demand volume, and no other information to work with, how would you make a decision?
Use the Excel template Decision Analysis and explain your reasoning.
4.A hospital is evaluating whether to outsource or perform in-house a large set of blood and urine laboratory tests. The fixed cost of the laboratory equipment located in the hospital is $800,000 and the weighted average variable cost per test if performed in-house is $28.75. A third-party lab located three miles from the hospital will perform the same tests with more advanced and faster equipment. The lab distributes the results electronically to the hospital at a price of $31.00. If the annual volume last year was 250,000 tests, should the hospital do all lab tests in-house or outsource?
Use the Excel template Break-Even to determine the best decision.
