Economics 202

600 Words Sep 19th, 2014 3 Pages
ESSAY #1.
Read the following case study from the book. Please answer the questions at the end in more detail. The maximum number of pages is two. Answer as best as you can. Let me know if you have any questions.

Business Case: Efficiency, Opportunity Cost and the logic of lean Production at Boeing
Pg. 44 Ch.2

In the summer and fall of 2010, workers were rearranging the furniture in Boeing’s final assembly plant in Everett, Washington, in preparation for the production of the Boeing 767. It was a difficult and time-consuming process, however, because the items of “furniture”—Boeing’s assembly equipment—weighed on the order of
200 tons each. It was a necessary part of setting up a production system based on
“lean
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Lean production is also designed to be highly responsive to changes in the desired mix of output—for example, quickly producing more sedans and fewer minivans according to changes in customers’ demands.

Toyota’s lean production methods were so successful that they transformed the global auto industry and severely threatened once-dominant American automakers.
Until the 1980s, the “Big Three”—Chrysler, Ford, and General Motors— dominated the American auto industry, with virtually no foreign-made cars sold in the United States. In the 1980s, however, Toyotas became increasingly popular in the United States due to their high quality and relatively low price—so popular that the Big Three eventually prevailed upon the U.S. government to protect them by restricting the sale of Japanese autos in the U.S. Over time, Toyota responded by building assembly plants in the United States, bringing along its lean production techniques, which then spread throughout American manufacturing.
Toyota’s growth continued, and by 2008 it had eclipsed General Motors as the largest automaker in the world.

QUESTIONS FOR THOUGHT

1. What is the opportunity cost associated with having a worker wander across the factory floor from task to task or in search of tools and parts?

2. Explain how lean manufacturing improves the economy’s efficiency in allocation.

3. Before lean manufacturing innovations, Japan

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