BA 360 - Exam #1 Showghi
percent change =
((new - old) x 100)/old
Crash cost per time period
(crash cost - normal cost) / (normal time - crash time)
z =
(due date - expected date)/variance
slack =
(late finish - early finish) or (late start - early start)
due date (x) =
(variance)(z) + expected date
associated role
- core team member - subject matter - suppliers rep
Heritage of OM
- division of labor (Adam Smith) - standardized parts (Whitney) - scientific management (Taylor) - coordinated assembly line (Ford) - Gantt charts (Gantt) - motion study (Frank and Lillian Gilbreth) - quality control (Deming)
factors affecting mission
- environment, customers, benefit to society, public image, profitability and growth, philosophy and values
1. project planning
- establishing goals/objectives - defining project - creating work breakdown structure - determining needed resources - selecting and forming a team
competing on response
- flexibility: matching market changes in design innovation and volumes - reliability: in meeting schedules - timeliness: quickness in design, production, and delivery
role of a project manager (high visible)
- focal point of the project - leads the planning, executing, and closing of a project - ensures the project team receives motivation, direction, and information - schedule, budget, results
key characteristics of services
- intangible product, often unique, high customer interaction, produced and consumed at the same time, often knowledge based
how strategy is shaped
- integral strengths, mission, internal weaknesses, strategy, external opportunities, external threats
Companies Need to Consider
- national illiteracy rate - rate of innovation - rate of technology change - number of skilled workers - political stability - product liability laws - export restrictions - variations in language - work ethic - tax rates - inflation - availability of raw materials - invest rates - population - number of miles of highway - telecomm infrastructure
project's risk areas
- people/team - scope/deliveries - technology - financials - organization strategy - external factors
managerial roles
- project manager - functional manager - senior customer rep
productivity measurement problems
- quality: may change while quantity of inputs and outputs remain constant - extreme elements: may cause an increase or decrease on productivity - precise units: measurement may be lacking
project's stakeholders
- steering committee - sponsor - project manager - project team managers - subject matter expert - financial managers - customers - suppliers
executive roles
- steering team - chief project officer - sponsor
key characteristics of goods
- tangle, inventoried, low customer interaction, production usually separate from consumption
10. Maintenance
-Consider facility capacity, production demands, and personnel -Maintain a reliable and stable process
Steps in project crashing
1. Compute the crash coast per time period 2. Find critical path 3. If there is only one critical path, then select the activity on this critical path that can still be crushed and has the smallest crash cost 3a. if there is more than one critical path, then select one activity from each critical path such that each selected activity can still be crushed and the total cost of all slept activities is the smallest 4. Update all activity times
6 steps of PERT and CPM
1. Define the project and prepare the work breakdown structure 2. Develop relationships among the activities - decide which activities must precede and what follows) 3. Draw the network connecting all of the activities 4. Assign time and cost estimate to each activity 5. Compute the longest time path through network (CRITICAL PATH) 6. Use the network to help plan, schedule, monitor, and control the project
how to determine the critical path
1. Perform forward pass to find ES and EF 2. Perform a backward pass to find LS and LF 3. activities within the same ES and LS and the same LS and LF are on the CRITICAL PATH 4. all others have slack
key variables for improved labor productivity
1. basic education: appropriate for the labor force 2. diet: for the labor force 3. social overhead: that makes labor available (ex: transportation)
Strategies for Competitive Advantage
1. differentiation 2. cost leadership 3. response
2. Project Scheduling
1. ensure that all activities are planned for 2. their order of performance is accounted for 3. the activity time estimates are reported 4. The overall project time is developed
reasons to globalize
1. improve the supply chain (human expertise) 2. reduce costs 3. improve operations 4. understand markets (new opportunity) 5. improve products 6. attract and retain global talent
project phases and activities
1. initiation 2. planning/scheduling 3. execution 4. control 5. closure
Key productivity variables
1. labor: contributes about 10% of the annual increase 2. capital: contributes about 38% of the annual increase 3. management: contributes about 52% of the annual increase
efficiency principles
1. matching employees to the right job 2. providing the proper training 3. providing proper work methods and tools 4. establishing legitimate incentives for work to be accomplished
PERT makes 2 more assumptions
1. total project completion times follow a normal probability distribution 2. activity times are statistically independent (not related)
Medium range forecast
3 months to a year sales and production planning
o^2 = project variance
= sum of (variances of critical path activities)
9. Scheduling
Determine and implement intermediate- and short-term schedules Utilize personnel and facilities while meeting customer demands
EF =
ES + activity time
Earliest finish (EF)
Earliest time at which an activity can be finished
Earliest start (ES)
Earliest time at which an activity can start, assuming all predecessors have been completed
Qualitative models
Executive judgment, Delphi method, market research, survey of salesforce
Scheduling Techniques
Gantt chart, critical math patter (CMP), program evaluation and review technique (PERT)
7. Supply Chain Management
Integrate supply chain into the firm's strategy. Determine what is to be purchased, from whom, and under what conditions.
8. Inventory Management
Inventory ordering and holding decisions Optimize considering customer satisfaction, supplier capability, and production schedules and cost
LS =
LF - activity time
LF =
LS + activity time
Project management software
MacProject, Mindview, Microsoft Project, HP Project, Fast Track
LF =
Min(LS of all immediate following activity)
4. Location Strategy
Nearness to customers, suppliers, and talent. Considering costs, infrastructure, logistics, and government.
productivity and change
OM's objective is to improve productivity
Long range forecast
Over two years New product or operations planning Qualitative methods
Forecasting
Process of predicting a future event; underlying basis of all business decisions
6. Human Resources and Job Design
Recruit, motivate, and retain personnel with the required talent and skills; Integral and expensive part of the total system design
standard deviation
SD = (b-a)/6
Perform a critical path analysis
The critical path is the longest path through the network The critical path is the shortest time in which the project can be completed And delay in the critical path activities delays the project No slack time
project variance
The sum of variances of project's critical path activity
variability in activity times assumption
Time estimate follows beta distribution
Variance of times
V = ((b - a)/6)^2
it is not uncommon to face
being behind schedule on a project or the completion time has moved forward
US has global competition with everyone
but biggest competition is China
value
created when we buy things, add something, and then sell it
production/operations
creates product/service
W. Edwards Demming
credited with reaching Japan quality control methods post WWII; used statistics to analyze process workers involved in decisions
multi domestic strategy
customizing product and marketing for differing national conditions (ex: PizzaHut, now being called Escargot Pizza)
2. Managing Quality
determine customer's quality expectations and establish policies and procedures to identify/achieve quality
5. Layout Strategy
determine the efficient flow of materials, people, and info; integrate capacity needs, personnel levels, tech, and inventory
Frank and Lillian Gilbreth
developed work measurement methods applied efficiency methods at home
work units
devisor of work packages
work packages
division of tasks
CPM assumes a fixed time estimate for
each activity with no variability in times
management
ensures labor and capital are effectively used to increase production use of knowledge, application of technologies, knowledge of management
Frederick W. Taylor
father of scientific management began first motion and time series after studying how tasks were done created efficiency principles
Henry Ford
first moving assembly line for Model T unfinished product moved by conveyor belt
marketing
generates demand
project imagers should be
good coaches, organize activities from a variety of disciplines, good communicators
work breakdown structure (WBS)
hierarchical decomposition of the project into pages, deliverables, and work packages tree structure, which shows a subdivision of effort required to achieve an object
3. Process and Capacity design
how is a good or service produced; commits management to specific technology, quality resources, investments
theory of comparative advantage
if an external provider can perform an activity more productively than the purchasing firm, then the external provider should do the work
the operations managers' job
implement OM strategy to provide competitive advantage and increase productivity
international strategy
import/export of license (existing product, such as Harley Davidson)
accelerating due to
increased technological expertise, more reliable and cheaper transportation, rapid development and ubiquity of global telecommunication network
application of productivity measures
individual level, group, department, corporate, national, global
the economic system
inputs (labor, capital, management) -> transformation (economy) -> outputs (goods and services)
rating outsourcing providers
insufficient analysis is most common reason for failure (factor rating method and points and weights assigned for each factor)
product life cycle
introduction (increase market share), growth (establish price), maturity (compete on costs), decline (cost control critical)
Examples of forecasting
inventory, personnel, production, facilities
productivity increases when
investment increases
Latest start (LS)
latest time at which an activity can start so as to not delay the competition time of the entire project
Latest finish (LF)
latest time by which an activity has to be finished so as to not delay the competition time of the entire project
global operations strategy options
make cost reduction a priority; make differentiation and response a priority
operations of goods and services
manufacturers produce tangible products services are often intangible but have a tangible component pur services = counseling
ES =
max(EF of all predecessors)
strategy development process
mission and strategies cascade, superordinates, through the organization strategic unity and alignment is imperative
3. project controlling
monitoring of resources, costs, quality and budgets feedback enables plan revisions and shifting resources
m
most likely time
multiple resources input =
multi-factor productivity
project management
one of the most useful tools for managers
a
optimistic time (if everything goes accordingly to plan)
total factor productivity =
output / (labor + material + energy + capital + miscellaneous)
multifactor prodcutivty
output/total cost
productivity =
outputs (goods and services ) / inputs (labor and capital)
b
pessimistic time, assuming unfavorable conditions
1. Design of Goods and Services
product design determines functionality, sustainability and what is required of operations
Transnational Strategy
production and marketing at low cost locations based on differing national conditions (ex: coca cola)
global strategy
production at low cost locations (standardized product and use economies of scale, such as Caterpillar)
competing on cost
provide the maximize value as perceived by the customer (does not imply low quality!) (ex: SouthWest Airlines: no frills service, efficient equipment usage)
productivity investment
result of managing and intervening in transformation of work processes
task
set of activities that comprise a project
project crashing
shortening the duration of a project
Eli Whitney
showed that machine tools could make standardized parts to "exact situations"; standardized parts could be used in many things
one resource input =
single factor calc
expected time
t = (a + 4m + b)/6
mission statements
tell an organization where it is going
strategy
tells the organization how to get there; action plan on how to achieve mission; tactical approaches to achieve superior market position
PERT uses a probability distribution for activity times
to allow for variability
finance/accounting
tracks how well the organization is doing, collects the money, and pays bills
outsourcing
transferring activities that traditionally been internal to external suppliers
projects
unique and non-routine activities problem with a known solution scheduled for completion
competing of differentiation
uniqueness can go beyond the physical characteristics and service attributes to encompass everything that impacts a customers perception of value (ex: Apple products, Disney Magic Kingdom)
labor productivity =
units produced / labor-hours used
mutli-domestic operations
uses decentralized authority with substantial autonomy at each business
Short range forecast
usually less than 3 months, Job scheduling worker assignments quantitative//detail use