Identify how changes in the external environment affect the OM strategy for a company. For? instance, discuss what impact the following external factors might have on OM? strategy:
?a) Major increases in oil prices.
?b) Water- and? air-quality legislation.
?c) Fewer young prospective employees entering the labor market.
?d) Inflation versus stable prices.
?e) Legislation moving health insurance from a pretax benefit to taxable income.
?a) Select all of the correct impacts that major increases in oil prices might have on OM strategy below. ?(Check all that? apply.)
A. For the energy inefficient? company, change in the cost? structure, result in higher selling prices.
B. For a producer with high energy? costs, change in the cost? structure, result in higher selling prices.
C. For the energy inefficient? company, change in the competitive position.
D. For a producer with high energy? costs, change in the competitive position.
?b) Select all of the correct impacts that? water- and? air-quality legislation might have on OM strategy below. ?(Check all that? apply.)
A. Closing of numerous plants including paper mills and steel mills.
B. Increasing production cost.
C. Difficulty in using the specific technologies.
D. Difficulty in predicting both the cost of production and the market demand.
?c) Select all of the correct impacts that fewer young prospective employees entering the labor market might have on OM strategy below. ?(Check all that? apply.)
A. Tighter job market.
B. High unemployment rates.
C. Change in the income of employees in the lower pay classifications.
D. Added capital investment for new equipment or processes.
?d) Select all of the correct impacts that inflation versus stable prices might have on OM strategy below. ?(Check all that? apply.)
A. The manufacturing process stabilizes.
B. The OM function focuses on more standardization.
C. Change in the income of employees in the lower pay classifications.
D. Difficulty in predicting both the cost of production and the market demand.
?e) Select all of the correct impacts legislation moving health insurance from a pretax benefit to taxable income might have on OM strategy below. ?(Check all that? apply.)
A. Decrease in the? take-home pay of employees by the amount of the taxes.
B. Change in the income of employees in the lower pay classifications.
C. Increase in the? take-home pay of employees by the amount of the taxes.
D. Operations managers get pressure to increase wages of employees in the lower pay classifications.