PLEASE READ THE INSTRUCTIONS  This is an OPEN BOOK and OPEN NOTES test. However, you are NOT allowed to work with other individuals, share information, or otherwise collaborate in any way during the test. The time available to complete the test is 40 minutes. This test consists of: Multiple choice questions: 17 questions @ .22 points each …..…. 3.74 points For each question or statement, check the letter of the most appropriate response. Timed Test This Test has the time limit of 40 minutes. You are notified when time expires, and you may continue or submit. Warnings appear when half the time, 5 minutes, 1 minute, and 30 seconds remain. Multiple Attempts Not allowed. This Test can only be taken once. Force Completion This Test can be saved and resumed later. Remaining Time:  18 minutes, 32 seconds.  Question Completion Status: Question 1 1.   [2605]  All of the following are benefits of a multisite type of expansion except: Answer a. ability to reach a mass market quickly. b. reduced financial risk from local economic downturn. c. preemption of competitors by capturing premium locations. d. retention of control. 0.22 points    Question 2 1.   [2601]  A strategy that may be used by urban retailers to locate multiple sites close to each other in high-density areas despite the potential for cannibalization is called: Answer a. competitive clustering. b. marketing intermediaries. c. saturation marketing. d. saturation clustering. 0.22 points    Question 3 1.   [3609]  In the annual cost curve for the EOQ model, the ordering cost _________ with the order quantity. Answer a. increases linearly b. decreases linearly c. increases negative exponentially d. decreases negative exponentially 0.22 points    Question 4 1.   [2607]  Multinational expansion by a service firm is: Answer a. often driven by customer demand. b. vital for growth. c. not recommended for labor intensive operations. d. primarily a defense strategy. 0.22 points    Question 5 1.   [71109]  Frei argues that a manufacturing environment is different than a service environment. What makes service different than manufacturing? Answer a. Service and manufacturing environments are so similar that customers do not perceive any real differences. b. Manufacturing has more variables than a service offering and is therefore more complex. c. Customers judge quality of their experience primarily by how much variability is accommodated. d. Service has more variables than a manufacturing environment and is therefore more complex. 0.22 points    Question 6 1.   [73610] During the year (360 days), Dutch Farms sells 2,160 cases of cheese. Due to spoilage, Dutch Farms estimates that it costs the firm $12.50 per year to store a case of cheese. The cost to place an order runs about $15. The desired service level is 98 percent. The lead time is one day. Which of the following statements is accurate? Answer a. The EOQ is 72 which will require about 1 order per 12 days. b. The EOQ is.

1. PLEASE READ THE INSTRUCTIONS
This is an OPEN BOOK and OPEN NOTES test. However, you
are NOT allowed to work with other individuals, share
information, or otherwise collaborate in any way during the
test. The time available to complete the test is 40 minutes.
This test consists of:
Multiple choice questions: 17 questions @ .22 points each
…..…. 3.74 points
For each question or statement, check the letter of the most
appropriate response.
Timed Test
This Test has the time limit of 40 minutes. You are notified
when time expires, and you may continue or submit.
Warnings appear when half the time, 5 minutes, 1 minute,
and 30 seconds remain.
Multiple Attempts
Not allowed. This Test can only be taken once.
Force Completion
This Test can be saved and resumed later.
Remaining Time:
18 minutes, 32 seconds.
Question Completion Status:
Question 1
1.
[2605] All of the following are benefits of a multisite type of
expansion except:
Answer
a.
ability to reach a mass market quickly.

2. b.
reduced financial risk from local economic downturn.
c.
preemption of competitors by capturing premium locations.
d.
retention of control.
0.22 points
Question 2
1.
[2601] A strategy that may be used by urban retailers to locate
multiple sites close to each other in high-density areas despite
the potential for cannibalization is called:
Answer
a.
competitive clustering.
b.
marketing intermediaries.
c.
saturation marketing.
d.
saturation clustering.
0.22 points
Question 3
1.
[3609] In the annual cost curve for the EOQ model, the
ordering cost _________ with the order quantity.
Answer
a.

3. increases linearly
b.
decreases linearly
c.
increases negative exponentially
d.
decreases negative exponentially
0.22 points
Question 4
1.
[2607] Multinational expansion by a service firm is:
Answer
a.
often driven by customer demand.
b.
vital for growth.
c.
not recommended for labor intensive operations.
d.
primarily a defense strategy.
0.22 points
Question 5
1.
[71109] Frei argues that a manufacturing environment is
different than a service environment. What makes service
different than manufacturing?
Answer
a.

4. Service and manufacturing environments are so similar that
customers do not perceive any real differences.
b.
Manufacturing has more variables than a service offering and is
therefore more complex.
c.
Customers judge quality of their experience primarily by how
much variability is accommodated.
d.
Service has more variables than a manufacturing environment
and is therefore more complex.
0.22 points
Question 6
1.
[73610] During the year (360 days), Dutch Farms sells 2,160
cases of cheese. Due to spoilage, Dutch Farms estimates that it
costs the firm $12.50 per year to store a case of cheese. The
cost to place an order runs about $15. The desired service level
is 98 percent. The lead time is one day. Which of the following
statements is accurate?
Answer
a.
The EOQ is 72 which will require about 1 order per 12 days.
b.
The EOQ is 84 which will require about 1 order per 15 days.
c.
The EOQ is 54 which will require about 2 orders per month.
d.
The EOQ is 60 which will require about 1 order per 10 days.

5. e.
The EOQ is 40 which will require about 2 orders per month.
0.22 points
Question 7
1.
[2511] The following marketing phenomenon occurs when
there exists within two city blocks the following hamburger
outlets: McDonald's, Burger King, Sonic, and Wendys.
Answer
a.
competitive clustering.
b.
customized marketing.
c.
saturation marketing.
d.
relationship marketing.
0.22 points
Question 8
1.
[2112] Referencing Frei's article, when a company faces
customer induced variability, they have two choices - to
accommodate or to reduce it. Which of the following is true?
Answer
a.
Low cost service providers will typically try to accommodate
customer variability.
b.
High cost service providers will typically try to reduce customer

6. variability.
c.
Low cost service providers will typically try to reduce customer
variability.
d.
None of the statements are true.
0.22 points
Question 9
1.
[2514] Which of the following is not one of Kenichi Ohmae's
five "Cs" of strategic planning in a borderless world economy?
Answer
a.
Competitors
b.
Creativity
c.
Company
d.
Country
0.22 points
Question 10
1.
[2513] Which of the following is not a benefit to the franchisee
of a franchise?
Answer
a.
Brand name

7. b.
National advertising
c.
Economics of scale
d.
Autonomy
0.22 points
Question 11
1.
[72512] The disadvantage of saturation marketing lies in which
of the following areas?
Answer
a.
Increased advertising costs
b.
Cannibalization of business
c.
Increased supervision requirement
d.
Reduction in customer awareness
0.22 points
Question 12
1.
[3603] The cross-median approach is used for _________
location.
Answer
a.
single facility

8. b.
multiple facility
c.
(a) and (b)
d.
none of the above
0.22 points
Question 13
1.
[2606] When franchising which one of the following is not a
benefit to the franchiser?
Answer
a.
Proven business
b.
Rapid expansion
c.
Right to dictate conditions
d.
Fees from the franchisee
0.22 points
Question 14
1.
[3602] The optimization criteria governing the location of a
service facility is determined mainly by the:
Answer
a.
ownership of the service, i.e., public or private.

9. b.
kind of service, e.g. food, banking, or postal.
c.
number of facilities to be located.
d.
average size of the facilities to be located.
0.22 points
Question 15
1.
[3608] Service level influences _______ and ________.
Answer
a.
reorder point, safety stock
b.
reorder point, backorder quantity
c.
safety stock, backorder quantity
d.
backorder quantity, lead-time demand
0.22 points
Question 16
1.
[3604] When applying a cross-median approach for a facility
location decision, the optimal facility location will definitely be
represented by a line segment in which of the following
situations?
Answer
a.
The north-south median line has only one position and the east-

10. west median line has only one position.
b.
The north-south median line has only one position and the east-
west median line has multiple positions.
c.
The north-south median has multiple positions and the east-west
median line has multiple positions.
d.
The demand generators are evenly distributed.
e.
The demand generators are clustered in one area only.
0.22 points
Question 17
1.
[3515] In the ABC inventory classification, C items can best be
described as:
Answer
a.
expensive.
b.
among the most numerous.
c.
having a high stockout cost.
d.
requiring close attention.
S
ave and Submit

11. Globalization of Services
Chapter 14
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc.
All rights reserved.
*
Course Overview
Define, describe and classify services (Ch 1,2)
Strategic view of service design & development (Ch 3,4)
Process view of quality improvement
(Ch 6,7,8)
Encounter view of customers & employees (Ch 9)
VIEWS
SPECIAL TOPICS
TOOLS
Capacity planning & queuing models
(Ch 11,12,16)
Project management (Ch 15)
Information technology (Ch 5)
Supply Chains & Outsourcing (Ch 13)
Globalization (Ch 14)
Facility location

12. (Ch 10)
Inventory control
(Ch 18)
*
Expansion Strategies
Single Service Multiservice
Focused service: Clustered service:
Single * Dental practice * Stanford University
Location * Retail Store * Mayo Clinic
* Family restaurant * USAA Insurance
Focused network: Diversified network:
Multisite * Federal Express * Nations Bank
* McDonald’s * American Express
* Red Roof Inns * Accenture
*
FranchisingBenefits to the Franchisee
Management Training
Brand Name
National Advertising
Acquisition of Proven Business

13. Economics of Scale
Issues for the Franchisor
Franchisee Autonomy
Franchise Contract
Conflict Resolution
*
Generic International Strategies
Transnational
Strategy
Global
Strategy
Multi-domestic
Strategy
No
International
Strategy
Low
High
Force Towards Local Responsiveness
Force Towards Global
Integration
High
Low

14. *
The Borderless World
(Kenichi Ohmae)Customers - information has empowered
Competitors - nothing stays proprietaryCompany - fixed costs
require large marketsCurrency - become currency
neutralCountry - deprive competitor of home market
*
International Strategic Service Vision
(Extension of Chapter 3)
*
Service Delivery
System
Operating Strategy
Service Concept
Target Market Segments
Available technology?
Infrastructure?

15. Utility service?
Labor market norms and customs?
Space availability?
Interaction with suppliers?
Educating customers?
Appropriate managerial practice?
Participative?
Autocratic?
Labor market institutions?
Government regulations?
Unions?
Host government policies?
Language?
Front office?
Back office?
What are customer expectations?
Perception of value?
Service ethic?
Service encounter?
Language?
Acceptance of self-serve?

16. What are the usage patterns?
Cultural transferability?
What are the market segments?
Domestic?
Multinational?
Tourist?
What are important cultural differences?
Language?
Life style?
Disposable income?
What are the workforce demographics?
Skills?
Age distribution?
Attitudes?
Work ethic?
International Strategic Service Vision
(Extension of Chapter 3)
*
Service Delivery
System

17. Operating Strategy
Service Concept
Target Market Segments
Available technology?
Infrastructure?
Utility service?
Labor market norms and customs?
Space availability?
Interaction with suppliers?
Educating customers?
Appropriate managerial practice?
Participative?
Autocratic?
Labor market institutions?
Government regulations?
Unions?
Host government policies?
Language?
Front office?
Back office?

18. What are customer expectations?
Perception of value?
Service ethic?
Service encounter?
Language?
Acceptance of self-serve?
What are the usage patterns?
Cultural transferability?
What are the market segments?
Domestic?
Multinational?
Tourist?
What are important cultural differences?
Language?
Life style?
Disposable income?
What are the workforce demographics?
Skills?
Age distribution?
Attitudes?
Work ethic?

19. International Strategic Service Vision
(Extension of Chapter 3)
*
Service Delivery
System
Operating Strategy
Service Concept
Target Market Segments
Available technology?
Infrastructure?
Utility service?
Labor market norms and customs?
Space availability?
Interaction with suppliers?
Educating customers?
Appropriate managerial practice?
Participative?
Autocratic?

20. Labor market institutions?
Government regulations?
Unions?
Host government policies?
Language?
Front office?
Back office?
What are customer expectations?
Perception of value?
Service ethic?
Service encounter?
Language?
Acceptance of self-serve?
What are the usage patterns?
Cultural transferability?
What are the market segments?
Domestic?
Multinational?
Tourist?
What are important cultural differences?
Language?
Life style?
Disposable income?

21. What are the workforce demographics?
Skills?
Age distribution?
Attitudes?
Work ethic?
Hofstede DimensionsPower Distance
IndexIndividualismMasculinityUncertainty Avoidance
IndexLong-Term Orientation
*
International Strategic Service Vision
(Extension of Chapter 3)
*
Service Delivery
System
Operating Strategy
Service Concept
Target Market Segments
Available technology?

22. Infrastructure?
Utility service?
Labor market norms and customs?
Space availability?
Interaction with suppliers?
Educating customers?
Appropriate managerial practice?
Participative?
Autocratic?
Labor market institutions?
Government regulations?
Unions?
Host government policies?
Language?
Front office?
Back office?
What are customer expectations?
Perception of value?
Service ethic?
Service encounter?
Language?

23. Acceptance of self-serve?
What are the usage patterns?
Cultural transferability?
What are the market segments?
Domestic?
Multinational?
Tourist?
What are important cultural differences?
Language?
Life style?
Disposable income?
What are the workforce demographics?
Skills?
Age distribution?
Attitudes?
Work ethic?
Examples of Global Service Strategies
Globalization Global Service
Strategies
Factors
Multicountry Importing
Follow Your Service Beating the
Expansion Customers

24. Customers Offshoring Clock
Customer Train local Develop foreign
Develop Specialize in Provide
Contact workers language &
foreign back- office extended
cultural sensitivity
customers office service hours of
skills
components service
Customization Usually a Strategic
Re-prototype Quality and More need for
standard opportunity
locally coordination reliability &
service
coordination
Complexity Usually Strategic
Modify Opportunity for Time
routine opportunity
operations focus compression
Information Satellite On site advantage
Move Training Exploit
Intensity network
experienced investments opportunity
managers
Cultural Modify Accommodate
Could be Cultural Common
Adaptation service foreign guests
necessary to understanding language
achieve scale necessary
Labor Intensity Reduced Increased labor
Hire local Reduced labor Reduced labor
labor costs costs
personnel costs costs

25. Other Government Logistics
Inadequate Home office Capital
restrictions management
infrastructure employee investments
morale
*
LECTURE NOTES
OPS 5095 ONLINE FORMAT
WEEK TEN
In our final week, we cover the last special topic which is
globalization of services. Chapter 14 begins with a discussion
of generic expansion strategies and then reviews the concept of
franchising as a form of multisite expansion. Three
international expansion strategies are then presented including
1) global, 2) transnational, and 3) multi-domestic. These three
strategies are characterized by differing levels of local
autonomy in which the global strategy has the least local
autonomy and the multi-domestic strategy has the most. It is
important to realize that these strategies must be implemented
within a business environment which is itself becoming
globalized, as depicted by Kenichi Ohmae’s discussion of the
“borderless world”.
The strategic service vision framework which we originally
covered in Chapter 3 is updated for international issues (Table
14.1) and three important related challenges for overseas
business development are discussed including 1) cultural
transferability, 2) labor market norms, and 3) host-government

26. policy. Finally, five different types of global service strategies
are presented. Note that these five strategies are not mutually
exclusive and two or more can be combined into a single overall
strategy.
Remember to post your response to the Week Ten Discussion
Question by Thursday and then post at least one reply to other
students’ posts by Sunday.
Course Overview
Define, describe and classify services (Ch 1,2)Strategic view of
service design & development (Ch 3,4)Process-facility view of
quality improvement(Ch 6,7,8)Encounter view of customers &
employees (Ch 9)
VIEWSSPECIAL TOPICSTOOLS
Capacity planning & queuing models(Ch 11,12,16)Project
management (Ch 15)Information technology (Ch 5)Supply
Chains & Outsourcing (Ch 13)Globalization (Ch 14)Facility
location(Ch 10)Inventory control (Ch 18)
2
This Course Overview chart provides a logical model for the
entire course. The chart can be used as a “mental model” for
putting each chapter into perspective. Using this kind of model
can help you to better understand the relationships between
chapters/topics and it can also improve your future retention of
the material.
In the top block, we begin the course with a basic definition,
description, and classification of “services” (Ch 1,2). We then
proceed with the first of three levels of “views” – a high-level
strategic view of services and how they are designed and
developed (Ch 3,4). This is followed by a lower-level process
view in which we analyze quality (Ch 6,7,8). Finally, we move
to the lowest level “encounter view” in which we consider how
employees and customers interact in typical service encounters

27. (Ch 9).
After we finish the three basic views, we then proceed to
consider various kinds of “tools” which are used for particular
management and analytical purposes. These tools include
capacity planning and queuing models (Ch 11,12,16), project
management techniques (Ch 15), facility location models (Ch
10), and inventory control methods (Ch 18). Along the way, we
also consider certain “special topics” which supplement the
other chapters. These topics include information technology
(Ch 5), supply chains and outsourcing (Ch 13), and
Globalization (Ch 14).
1
Course Overview
Define, describe and classify services (Ch 1,2)
Strategic view of service design & development (Ch 3,4)
Process-facility view of quality improvement
(Ch 6,7,8)
Encounter view of customers & employees (Ch 9)
VIEWS
SPECIAL TOPICS
TOOLS
Capacity planning & queuing models
(Ch 11,12,16)
Project management (Ch 15)
Information technology (Ch 5)
Supply Chains & Outsourcing (Ch 13)
Globalization (Ch 14)
Facility location
(Ch 10)
Inventory control
(Ch 18)

28. 2