The Ritz-Carlton video (7 minutes) is available in MyOMLab.
As an introductory note, students may appreciate the following:
The cost of poor service is tremendous, and the cost is magnified
by the negative impact unsatisfied customers have on prospective
customers, as noted in the following example from Southwest
Airlines:
How important is every Customer to our future? Our Finance
Department reports that our break-even Customer per flight in
1994 was 74.5, which means that, on average, only when Customer
#75 came on board did a flight become profitable.
Aside from that statistical data, let me share with you a downto-earth formula devised by our Dallas chief pilot, Ken Gile. It
utilizes our annual profit and total flights flown to clearly illustrate
how vital each Customer is to our profitability and our very
existence.
When you divide our 1994 annual profit by total flights flown,
you get profit per flight
$179,331,000 (annual profit)
= $287 (profit per flight)
624,476 (total flights flown)
Then, divide per flight by Southwest’s system-wide average
one-way fare of $58:
$287 (profit per flight)
= 5 (one-way fares)
$58 (average one-way fares)
The bottom line, only five Customers per flight accounted for
our total 1994 profit!
Source: Freiburg, Kevin, and Jackie Freiburg, “Nuts! Southwest Airlines’
Crazy Recipe for Business and Personal Success,” Bard Press, 1996, p. 120.
1. The Ritz-Carlton can monitor quality in the short run
by customer feedback. Questionnaires in the room, follow-up
letters and phone calls by independent services, tracking complaints, and ultimately by occupancy rates. There are, of course,
objective measures in many aspects of hotel operations. These
include room cleanliness, quality of food, accuracy of billing, and
reservations.
AACSB: Reflective thinking
2. For companies that expect quality to be more than a slogan we
suggest they follow the ideas of the text:
A philosophy of continuous improvement
Employee empowerment
Benchmarking
Just-in-time (JIT)
Knowledge of tools
LO 6.1: Define quality and TQM
AACSB: Reflective thinking
3. The lack of quality will manifest itself in room rate reductions,
extra supervision, complaints, and ultimately lower occupancy.
AACSB: Reflective thinking
4. Great question for class discussion: Control charts can be used
for tracking customer complaints, Pareto diagrams to find where to
focus improvement efforts, cause-and-effect diagrams to analyze
the source of causes, in the kitchen, reservations, billing, etc.
LO 6.6: Use the seven tools of TQM
AACSB: Reflective thinking
5. Some nonfinancial measures of quality might include those
noted above: room service, food quality, customer complaints, etc.
AACSB: Reflective thinking
----------------------------------
OPERATIONS MANAGEMENT - 2017 - COLLECTION
FREE DOWNLOAD
EBOOKS
Operations Management, 2015, 12th Edition, William J. Stevenson - Free Download Link
Operations Management, Sustainability and Supply Chain Management, 11th Edition, 2014, Jay Heizer, Barry Render - Free Download Link
Operations Management, Sustainability and Supply Chain Management, 11th Edition, 2014, Jay Heizer, Barry Render - Free Download Link
Operations Management: Sustainability and Supply Chain Management, 12th Edition, Jay Heizer, Barry Render, Chuck Munson, 2017
Principles of Operations Management: Sustainability and Supply Chain Management, 10th Edition, 2017
Operations Research: An Introduction, 10th Edition, Hamdy A. Taha, 2017
Introduction to Operations and Supply Chain Management, 4th Edition, Cecil B. Bozarth, Robert B. Handfield, 2016
Operations Management: Processes and Supply Chains, 11th Edition, Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman, 2016
Principles of Operations Management: Sustainability and Supply Chain Management, 10th Edition, 2017
Operations Research: An Introduction, 10th Edition, Hamdy A. Taha, 2017
Introduction to Operations and Supply Chain Management, 4th Edition, Cecil B. Bozarth, Robert B. Handfield, 2016
Operations Management: Processes and Supply Chains, 11th Edition, Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman, 2016
Free Online Course Materials
1. Operations Management Ebooks - Free Downloads
2. Slides - 11th Edition - Free Downloads
3. Slides - 12nd Edition - Free Downloads
4. Full List of Videos Case Studies - Link
5. All articles about Operations Management
http://top20mba.com/mba-cases/94-mba-operation-management
2017 Updates
6. QUIZ, Multiple choice questions and answers
7. CASE STUDY GUIDES
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1. Operations Management: Sustainability and SCM, 12th Edition, Jay Heizer, 2017
2. Operations Management, Sustainability and SCM, 11th Ed, 2014, Jay Heizer
3. Principles of Operations Management: Sustainability and SCM, 10th Ed, Jay Heizer, 2017
Free Download Link
4. Operations Management, 2017, 12th Edition, William J. Stevenson
4. Operations Management, 2017, 12th Edition, William J. Stevenson
Free Download Link
5. Operations Management: Processes and Supply Chains, 11th Edition, Lee J. Krajewski, 2016
5. Operations Management: Processes and Supply Chains, 11th Edition, Lee J. Krajewski, 2016
6. Operations Research: An Introduction, 10th Edition, Hamdy A. Taha, 2017
7. Introduction to Operations and SCM, 4th Edition, Cecil B. Bozarth, Robert B. Handfield, 2016
7. Introduction to Operations and SCM, 4th Edition, Cecil B. Bozarth, Robert B. Handfield, 2016
Videos – Youtube channel links
Good Luck and Success, Enjoy Your Study !
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