Explain the challenge faced by Elizabeth in meeting her capacity needs. What should she have considered before moving into a larger facility? The challenge is that Elizabeth's constraint is in the market. She needs to find ways to deal with this constraint. She should have gained an understanding of what caused the growth before considering the move to make sure that it was possible to continue growth in the same manner. 2. What is wrong with the proposal made by the team of business students? Why? The proposal made by the team of business students does not match the operations decisions to the corporate strategy and core competencies of the bakery. A mismatch will increase the possibility of failure. 3. What type of operation does Biddy's Bakery currently have in place? What type of operation is needed to meet the proposal made by the team of business students? Explain the differences between these two operations. Biddy's Bakery currently has an intermittent operation in place. To meet the students' proposal, Biddy's Bakery would have to start using a continuous operation. Continuous operations use a capital intensive process with a line flow, while intermittent operations use a labor intensive process with a variety of flows. 4. Elizabeth senses that the business would be different if she accepts the proposal, but does not know how and why. Explain how it would be different. The business would be different for several reasons. To be effective, the bakery would have to use more equipment in order to efficiently and effectively produce in large volumes. The worker skills would not be important anymore. The degree of flexibility would be low. 5. What would you advise Elizabeth? I advise Elizabeth to not adopt the proposal suggested by the team of students for several reasons. First, the proposal does not match the corporate strategy of Biddy's Bakery. Second, the proposed changes are in conflict with the competencies of the bakery. The issue that needs to be addressed is the excess capacity. Since there is excess capacity, the constraint is in the market. TOC supports the use of the Thinking Processes (TP) to determine how to better meet customer needs in order to increase demand. (Please see the TOC Tips from chapter 2 of this manual for more information on the TP.)