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"A" in PDSA cycle

"Act" - act on the basis of the results by communicating results to other members of the company and implementing the new procedure if it has been successful.

"D" in PDSA cycle

"Do" - implementing the plan, documenting all changes made and collecting data for evaluation.

"P" in PDSA cycle

"Plan" - evaluate current process and make plans based on any problems found. document current procedures, collect data, identify problems.

"S" in PDSA cycle

"Study" - study data collected in "do" phase and evaluate whether plan is achieving goal.

Why is the marketing plan essential to the creation of the aggregate plan?

"The marketing plan provides insight into operations goals and activities for the year."

Differences between Intermittent & Repetitive Ops:

(1) the amount of product volume produced, and (2) the degree of product standardization.

Which formula would indicate that a fast-food restaurant was performing at, above, or below its benchmark?

(Actual output) / (standard output)

Which formula would compute process velocity?

(Throughput time) / (Value Added Time)

three steps in designing process layouts:

1. Gather information 2. Develop a block plan or schematic of the layout 3. Develop a detailed layout

Which total quality management (TQM) process was developed to stress management's responsibility for quality?

14 points for quality improvement

When developing a detailed layout, what tools would be used?

3-D models and CAD software

process width is typically used when computing the process capability index Cp

6σ

"The annual cost of goods sold for a company is $8,400,000 and the average inventory is $1,200,000. What is the number of weeks of supply?"

7 (COGS / AvgInventory)

kaizen

A Japanese term that describes the notion of a company continually striving to be better through learning and problem solving.

subscription revenue model

A Web site that charges a subscription fee for access to its contents and services.

An employee who will not help a customer because "it is not my job" violates the JIT belief of

A broad view of operations

kanban card

A card that specifies the exact quantity of product that needs to be produced.

process flowchart

A chart showing the sequence of steps in producing the product or service.

histogram

A chart that shows the frequency distribution of observed values of a variable.

progress chart

A chart that visually shows the planned schedule compared to actual performance.

load chart

A chart that visually shows the workload relative to the capacity at a resource.

"Which type of aggregate plan is preferable when a company produces custom or special purpose equipment, one-of-a-kind items, or highly perishable products?"

A chase aggregate plan

flexibility

A company can quickly adapt to the changing needs of its customers.

range (R) chart

A control chart that monitors changes in the dispersion or variability of a process.

p-chart

A control chart that monitors the proportion of defects in a sample.

x-bar chart

A control chart used to monitor changes in the mean value of a process.

c-chart

A control chart used to monitor the number of defects per unit.

percentage of dollar volume shipped on schedule

A customer service measure appropriate when customer orders vary in value.

Fitness for Use

A definition of quality that evaluates how well the product performs for its intended use.

fitness for use

A definition of quality that evaluates how well the product performs for its intended use.

robust design

A design that results in a product that can perform over a wide range of conditions.

plan-do-study-act (PDSA) cycle

A diagram that describes the activities that need to be performed to incorporate continuous improvement into the operation.

bottleneck

A facility, department, or resource whose capacity is less than the demand placed on it.

operating characteristic (OC) curve

A graph that shows the probability or chance of accepting a lot given various proportions of defects in the lot.

control chart

A graph that shows whether a sample of data falls within the common or normal range of variation.

service package

A grouping of physical, sensual, and psychological benefits that are purchased together as part of the service.

Six Sigma quality

A high level of quality associated with approximately 3.4 defective parts per million.

job enlargement

A horizontal expansion of the job through increasing the scope of the work assigned.

production card

A kanban card that authorizes production of material.

fixed-position layout

A layout in which the product cannot be moved due to its size and all the resources have to come to the production site.

purchase order

A legal document committing the company to buy the goods and providing details of the purchase.

mixed-model line

A line designed to produce many versions of a product.

single-model line

A line designed to produce only one version of a product.

numerically controlled (NC) machine

A machine controlled by a computer that can perform a variety of tasks.

theory of constraints (TOC)

A management philosophy that extends the concepts of optimized production technology (OPT).

shifting demand

A marketing strategy that attempts to shift demand from peak periods to nonpeak periods to smooth out the demand pattern.

exchanges

A marketplace that focuses on spot requirements of large firms in a single industry.

sales revenue model

A means of selling goods, information, or services directly to customers.

vertical integration

A measure of how much of the supply chain is actually owned or operated by the manufacturing company.

manufacturing resource planning (MRP II)

A method for the effective planning and integration of all internal resources.

automated order entry system

A method using telephone models to send digital orders to suppliers.

supply chain

A network of all the activities involved in delivering a finished product or service to the customer.

sourcing strategy

A plan indicating suppliers to be used when making purchases.

level aggregate plan

A planning approach that produces the same quantity each time period. Inventory and back orders are used to absorb demand fluctuations.

virtual private network (VPN)

A private Internetbased communications environment that is used by the company, its suppliers, and its customers for day-to-day activities.

load-distance model

A procedure for evaluating location alternatives based on distance. Model used to compare the relative effectiveness of different layouts.

partnering

A process of developing a long-term relationship with a supplier based on mutual trust, shared vision, shared information, and shared risks.

variable

A product characteristic that can be measured and has a continuum of values (e.g., height, weight, or volume).

attribute

A product characteristic that has a discrete value and can be counted.

end item

A product sold as a completed item or repair part.

single sampling

A random sample is drawn from every lot. Each item in the sample is examined and is labeled as either "good" or "bad."

Lot-size inventory

A result of the quantity ordered or produced.

flowchart

A schematic of the sequence of steps involved in an operation or process.

design for manufacture (DFM)

A series of guidelines to follow in order to produce a product easily and profitably.

product life cycle

A series of stages that products pass through in their lifetime, characterized by changing product demands over time.

ISO 9000

A set of international quality standards and a certification demonstrating that companies have met all the standards specified.

operation sequencing

A short-term plan of actual jobs to be run in each work center based on available capacity and priorities.

strategic business plan

A statement of long-range strategy and revenue, cost, and profit objectives.

standard deviation

A statistic that measures the amount of data dispersion around the mean.

mean (average)

A statistic that measures the central tendency of a set of data.

postponement

A strategy that shifts production differentiation closer to the consumer by postponing final configuration.

performance rating factor

A subjective estimate of a worker's pace relative to a normal work pace.

paced line

A system in which the product being worked on is physically attached to the line and automatically moved to the next station when the cycle time has elapsed.

computer-aided design (CAD)

A system that uses computer graphics to design new products.

material requirements planning (MRP)

A system that uses the MRP, inventory record data, and BOM to calculate material requirements.

immediate predecessor

A task that must be performed immediately before another task.

A quality circle is:

A team of volunteer production employees and their supervisors who meet regularly to solve quality problems

time study

A technique for developing a standard time based on actual observations of the operator.

work sampling

A technique for estimating the proportion of time a worker spends on a particular activity.

Johnson's rule

A technique for minimizing makespan in a two-stage, unidirectional process.

input/output control

A technique for monitoring the flow of jobs between work centers.

process flow analysis

A technique used for evaluating a process in terms of the sequence of steps from inputs to outputs with the goal of improving its design.

Pareto analysis

A technique used to identify quality problems based on their degree of importance.

optimized production technology (OPT)

A technique used to schedule bottleneck systems.

computer-integrated manufacturing (CIM)

A term used to describe the integration of product design, process planning, and manufacturing using an integrated computer system.

quality function deployment (QFD)

A tool used to translate the preferences of the customer into specific technical requirements.

flexible manufacturing system (FMS)

A type of automated system that combines the flexibility of intermittent operations with the efficiency of continuous operations.

project process

A type of process used to make a one-at-a-time product exactly to customer specifications.

line process

A type of process used to produce a large volume of a standardized product.

global positioning systems (GPS)

A type of wireless technology that uses satellite transmission to communicate exact locations.

job enrichment

A vertical expansion of the job through increased worker responsibility.

precedence diagram

A visual representation of the precedence relationships between tasks.

psychological criteria

A way of defining quality that focuses on judgmental evaluations of what constitutes product or service excellence.

expected value (EV)

A weighted average of chance events, where each chance event is given a probability of occurrence.

radio frequency identification (RFID)

A wireless technology that uses memory chips equipped with radio antennas attached to objects used to transmit streams of data.

nonbottleneck

A work center with more capacity than demand.

logistics

Activities involved in obtaining, producing, and distributing materials and products in the proper place and in proper quantities.

What is one advantage of a periodic review system?

All items are reviewed during the same time interval.

yield management

Allocates scarce resources to maximize yield.

closed-loop MRP

An MRP system that includes production planning, master production scheduling, and capacity requirements planning

concurrent engineering

An approach that brings together multifunction teams in the early phase of product design in order to simultaneously design the product and the process.

Malcolm Baldrige National Quality Award

An award given annually to companies that demonstrate quality excellence and establish best practice standards in industry.

respect for people

An element of JIT that considers human resources as an essential part of the JIT philosophy.

kaizen blitz

An improvement tool that utilizes cross-functional teams to plan and deliver improvements to specific processes during two- or three-day marathon sessions

process capability index

An index used to measure process capability.

parent item

An item produced from one or more children (components).

scheduled receipt

An open order that has an assigned due date.

deterministic time estimate

Assumption that the activity duration is known with certainty.

jidoka

Authority given to workers to stop the production line if a quality problem is detected.

ALDEP

Automated layout design program

value chain management (VCM)

Automation of a firm's purchasing or selling processes.

Which statement is true about capacity requirements planning (CRP)?

Available capacity is compared to calculated workloads of relevant items.

throughput time

Average amount of time it takes a product to move through the system.

It the goal is to reduce the amount of inventory in the system, the number of Kanban cards should

Be decreased

Which instrument would use an allocation process for space requirements in an industry scenario?

Block plan

capacity-constrained resource

Bottleneck caused by inefficient usage.

group technology (GT)

Brings the efficiencies of a product layout to a process layout.

fluctuation inventory

Buffer stock/reserve stock — Provides a cushion against unexpected demand.

How do just-in-time (JIT) and lean systems add value?

By reducing waste

______ uses deterministic time estimates.

CPM

explosion process

Calculates the demand for the children of a parent by multiplying the parent requirements by the children's usage as specified in the BOM.

assignable causes of variation

Causes that can be identified and eliminated such as poor quality in raw materials, an employee who needs more training, or a machine in need of repair

A company manufactures shoes using a quality management system. The company needs to put a process in place to measure any defects. The company would like to measure the number of defects and observe the number of occurrences to isolate the particular defect. Which quality tool should the company use to focus on correcting this particular issue?

Checklist

Philip B. Crosby

Coined phrase "quality is free" and introduced concept of zero defects

How does a just-in-time (JIT) system influence all functional areas within a company?

Companies are able to reduce waste. Companies develop new ways to generate revenue.

affiliate revenue model

Companies receive a referral fee for directing business to an affiliate.

e-purchasing

Companies that connect on-line MRO suppliers to businesses that pay fees to join the market, usually for long-term contractual purchasing.

"A company decides and makes plans to enter into a new market. Which project life cycle phase does this strategy directly relate to?"

Conception

Which project life cycle phase includes identifying the need for a project?

Conception

bottom-round management

Consensus management by committees or teams.

transportation crossdocking

Consolidation of LTL shipments to gain economies of scale.

Walter A. Shewhart

Contributed to understanding of process variability and developed concept of statistical control charts

Which quality control tool should be used to monitor the current status or end result of a process?

Control Chart

supply chain management

Coordinates and manages all the activities of the supply chain.

fixed costs

Costs a company incurs regardless of how much it produces.

prevention costs

Costs incurred in the process of preventing poor quality from occurring. Costs of preparing and implementing a quality plan.

Taguchi loss function

Costs of quality increase as a quadratic function as conformance values move away from the target.

internal failure costs

Costs of scrap, rework, and material losses. associated with discovering poor product quality before the product reaches the customer site.

variable costs

Costs that vary directly with the amount of units produced.

concepts of TQM

Customer focus, continuous improvement, employee empowerment, use of quality tools, product design, process management, managing supplier quality.

Five-step plan of six sigma

DMAIC: Define, Measure, Analyze, Improve, Control

layout planning

Deciding on the best physical arrangement of all resources that consume space within a facility.

How can the EPQ model be economically reconciled with just-in-time (JIT) production?

Decrease ordering cost (S).

Joseph M. Juran

Defined quality as "fitness for use" and developed concept fo cost of quality

priority rule

Determines the priority of jobs at a work center.

Kaoru Ishikawa

Developed cause-and-effect diagrams and identified concept of "internal customer"

tier two supplier

Directly supplies materials or services to a tier one supplier in the supply chain.

tier three supplier

Directly supplies materials or services to a tier two supplier in the supply chain.

An ________ provides a single interface for managing all routine activities performed in manufacturing

ERP system

crossdocking

Eliminates the storage and order-picking functions of a distribution warehouse.

supply chain intelligence (SCI)

Enables strategic decision making along the supply chain.

Which group of keywords or phrases describes the critical role that marketing plays in the total quality management (TQM) process?

Enhance competition; understand consumer preferences; maintain communication with operations

What are two ways management can assist employees' focus in a just-in-time (JIT) processing environment?

Ensure that workers receive multi-functional training. Develop an incentive system to reward workers for their efforts.

time-phased

Expressing future demand, supply, and inventories by time period.

Which role do third-party logistics providers play in the supply chain?

External distributors

Two types of quality failure costs

External failure costs and internal failure costs

The three types of lot size rules are

FOQ, L4L, POQ

focused factories

Facilities that are small, specialized, and focused on a narrow set of objectives.

planning factors

Factors include the lot size rule, replenishment lead times, and safety stock requirements.

"A manufacturing firm uses warehouses and shippers in their supply chain. At which stage of the firm's inventory management system would the statement "percentage of line items shipped on schedule" be used?"

Finished goods

Which definition used for quality evaluates how well a product performs its intended function?

Fitness for use

What was the first US company to receive the Deming Prize?

Florida Power & Light

critical chain approach

Focus on the final due date that is based on the theory of constraints.

Genichi Taguchi

Focused on product design quality and developed taguchi loss function

green supply chain management

Focuses on the role of the supply chain with regard to its impact on the environment.

What would be an organization's next step afer it has revised or implemented new operations?

Follow up to make sure the new operation resolves quality problems

poka-yoke

Foolproof devices or mechanisms that prevent defects from occurring.

Who developed a formula for determining the cost of poor quality?

Genichi Taguchi

Which continuous improvement method does Cpk measure?

How close one is to a target and how consistent one is with the average performance

group technology (GT) or cell layouts

Hybrid layouts that create groups of products based on similar processing requirements.

Which total quality management (TQM) process consists of 13 published standards and guidelines?

ISO 9000

The three-step procedure for making capacity planning decisions

Identify Capacity Requirements, Develop Capacity Alternatives, Evaluate Capacity Alternatives

aggregate plan

Includes the budgeted levels of finished products, inventory, backlogs, workforce size, and aggregate production rate needed to support the marketing plan.

What are two strategic objectives for every member of the supply chain?

Increasing cost effectiveness Becoming more efficient

_____________ is the demand for finished products; it does not depend on the demand for other products.

Independent demand

e-distributors

Independently owned net marketplaces having catalogs representing thousands of suppliers and designed for spot purchases.

industry consortia

Industry-owned markets that enable buyers to purchase direct inputs from a limited set of invited suppliers.

ERP _____ benefits refer to the improved visibility of corporate data, improved customer responsiveness, better integration between systems, standardization of computing platforms, improved flexibility, global sharing of information, and better visibility into the supply chain management process.

Intangible

self-directed teams

Integrated teams empowered to control portions of their process.

Armand V. Feigenbaum

Introduced concept of total quality control. 40 steps. Company-wide quality control.

early supplier involvement (ESI)

Involving suppliers in the early stages of product design.

"Why might a company avoid using demand-based options such as inventory and backorders over a long period of time?

It is more risky

How does the status of overall customer satisfaction support supply chain objectives?

It measures efficiency.

Why is capacity requirements planning (CRP) important?

It provides the ability to compare available production capabilities to the planned workload

Why is kanban significant to the "pull" system?

It specifies the exact quantity of a product that needs to be produced.

"What are two common drawbacks of implementing an enterprise resource planning (ERP) solution?"

It takes a long time to implement and to see any benefits, It requires extensive, often complex, training.

Which function does marketing play in a just-in-time (JIT) organization?

JIT marketing focuses on customer-driven quality.

The philosophy of JIT originated in:

Japan

common causes for TQM failure

Lack of a genuine quality culture, Lack of top management support and commitment, Over- and underreliance on statistical process control (SPC) methods

product layouts

Layouts that arrange resources in sequence to allow for an efficient buildup of the product.

hybrid layouts

Layouts that combine characteristics of process and product layouts.

process layouts

Layouts that group resources based on similar processes or functions.

flexible layouts

Layouts that remain desirable many years into the future or can be easily modified to meet changing demand.

Hand tools, lubricants, and cleaning supplies are usually examples of what?

MRO inventory

"A company is experiencing an unusual amount of deliveries that are either late or an incorrect quantity. Which type of system is used to identify and manage this type of problem?"

MRP (material requirements planning)

global priority rule

Makes a priority decision based on information that includes the remaining work centers a job must pass through.

local priority rule

Makes a priority decision based on jobs currently at that work center.

MRP II

Manufacturing Resource Planning

"How does inventory management differ for manufacturing organizations compared to service organizations?"

Manufacturing organizations must maintain tangible inventory.

________ develops a plan that enables the company to satisfy the goals of the strategic business plan.

Marketing

MRP

Material Requirements Planning

_____ is an information system that uses the concept of backward scheduling.

Material requirements planning (MRP)

Which concept of variation measures the central tendency of a set of data?

Mean

job flow time

Measurement of the time a job spends in the shop before it is finished.

process performance metrics

Measurements of different process characteristics that tell how a process is performing.

job tardiness

Measures how long after the due date the job is completed.

job lateness

Measures whether the job is done ahead of, on, or behind schedule.

average number of jobs in the system

Measures work-in-process inventory.

program evaluation and review technique (PERT)

Network planning technique used to determine a project's planned completion date and identify the project's critical path.

______ motivation is related to improving inadequate business performance, reducing high-cost structures, improving customer responsiveness, simplifying complex processes, supporting global expansion, and standardizing best practices throughout the enterprise.

Operational

What do assignable causes of variation indicate?

Out-of-control signals were found in the process.

action notices

Output from an MRP system that identifies the need for an action to be taken.

What are two reasons a company might be hesitant to provide overtime as a capacity-based option

Overtime is not a long-term solution, overtime is typically a 50% wage premium

backward integration

Owning or controlling sources of raw materials and components.

forward integration

Owning or controlling the channels of distribution.

_____ uses probabilistic time estimates.

PERT

Decision points.

Part of a decision tree -- These are the points in time when decisions, such as whether or not to expand, are made. They are represented by squares, called "nodes."

time-based compensation systems

Pay based on the number of hours worked.

Gantt chart

Planning and control chart designed to graphically show workloads or to monitor job progress.

product specifications

Preset ranges of acceptable quality characteristics.

In which organizational layout would one expect to see items arranged by type?

Process

_____ layouts provide much flexibility and allow for the production of many products with differing characteristics

Process

methods analysis

Process concerned with the detailed process for doing a particular job.

probabilistic time estimate

Process that uses optimistic, most likely, and pessimistic time estimates.

flow operations

Processes designed to handle high-volume, standard products.

outsource

Processes or activities that are completed by suppliers.

insource

Processes or activities that are completed in-house.

intermittent operations

Processes used to produce a variety of products with different processing requirements in lower volumes.

repetitive operations

Processes used to produce one or a few standardized products in high volume.

make-to-order strategy

Produces products to customer specifications after an order has been received.

assemble-to-order strategy

Produces standard components that can be combined to customer specifications.

make-to-stock strategy

Produces standard products and services for immediate sale or delivery.

____ layouts provide great efficiency when producing one type of product.

Product

ISO 9004:2000, Quality Management Systems—Guidelines for Performance:

Provides guidelines for establishing a quality management system. It focuses not only on meeting customer requirements but also on improving performance.

routing

Provides information about the operations to be performed, their sequence, the work centers, and the time standards.

ISO 9000:2000, Quality Management Systems—Fundamentals and Standards:

Provides the terminology and definitions used in the standards. It is the starting point for understanding the system of standards.

advertising revenue model

Provides users with information on services and products and provides an opportunity for suppliers to advertise.

which two factors affect a service location decision?

Proximity to customer, Quality-of-life issues

What is a key factor of a location analysis for a service company?

Proximity to customers

What is a major factor in the decision to locate a business near its primary market territory?

Proximity to customers

Which two capacity measurement concepts should a firm consider when conducting a location analysis?

Proximity to sources of supply, site considerations

The system of Kanbans used to coordinate delivery of goods by suppliers does not include

Purchase approvals by the production manager

What are two product system differences between the push and pull processes?

Push moves the product forward in anticipation for demand. Pull eliminates excessive inventory.

quality trilogy

Quality Planning Quality Control Quality Improvement

One common name for TQM based team work is:

Quality circle

value for price paid

Quality defined in terms of product or service usefulness for the price paid.

support services

Quality defined in terms of the support provided after the product or service is purchased.

For Juran's quality trilogy, which part stresses that processes should be set up to ensure that the quality standards can be met?

Quality planning

process velocity

Ratio of throughput time to value-added time. measures how much wasted time exists in a process

requisition request

Request indicating the need for an item.

internal setup

Requires the machine to be stopped in order to be performed.

What is the third basic element in the just-in-time (JIT) system if the first element is total quality management (TQM) and the second is JIT manufacturing?

Respect for people

What is the name of the model that has been created to examine the four different supply chain perspectives of reliability, flexibility, expenses, and assets/utilization

SCOR (Supply Chain Operations Reference)

project buffer

Safety time placed at the end of the critical path.

forward scheduling

Schedule that determines the earliest possible completion date for a job.

infinite loading

Scheduling that calculates the capacity needed at work centers in the time period needed without regard to the capacity available to do the work.

finite loading

Scheduling that loads work centers up to a predetermined amount of capacity.

Which strategy is used by some emergency rooms to overcome customer frustrations about long waiting times?

Screen patients and fast-track those with minor ailments

indented bill of material

Shows the highest-level "parents" closest to the left margin and the "children" indented toward the right. Subsequent levels are indented farther to the right.

Multiple-sampling plans

Similar to double-sampling plans except that criteria are set for more than two samples.

problem-solving teams

Small groups of employees and supervisors trained in problem-solving techniques who meet to identify, analyze, and propose solutions to workplace problems.

retail crossdocking

Sorting product from multiple vendors onto outbound trucks headed for specific stores.

project activities

Specific tasks that must be completed and that require resources.

Which factor determines how long it takes a qualified operator to perform a duty of the job requirements under the assumption that the operator is working at a sustainable pace with the proper tools for the process?

Standard Time

descriptive statistics

Statistics used to describe quality characteristics and relationships.

W. Edwards Deming

Stressed management's responsibility for quality and developed "14 points" to guide companies in quality improvement. often referred to as the "father of quality control."

planned orders

Suggested order quantities, release dates, and due dates created by an MRP system.

net marketplaces

Suppliers and buyers conduct trade in a single Internet-based environment.

single-source suppliers

Suppliers that supply an entire family of parts for one manufacturer.

tier one supplier

Supplies materials or services directly to the processing facility.

______ is the capability of collecting business intelligence along the supply chain.

Supply chain intelligence (SCI)

______ is designed to improve decision making in the supply chain.

Supply chain management (SCM) software

repetitive processing systems

Systems used to produce high volumes of a few standardized products.

intermittent processing systems

Systems used to produce low volumes of many different products.

from-to matrix

Table that gives the number of trips or units of product moved between any pair of departments.

REL chart

Table that reflects opinions of managers with regard to the importance of having any two departments close together.

ERP ______ benefits refer to reductions in inventory and staffing, increased productivity, improved order management, quicker closing of financial cycles, reduced IT and purchasing costs, improved cash flow management, increased revenue and profits, reduced transportation and logistics costs, and improved on-time delivery performance.

Tangible

two important aspects of Six Sigma

Technical tools, People involvement

______ motivation relates to the replacement of disparate systems; improved quality and visibility of information; integration of business processes and systems; replacement of older, obsolete systems; and the acquisition of systems that can support future business growth.

Technological

information technology (IT)

Technology that enables storage, processing, and communication of information within and between firms.

process capability

The ability of a production process to meet or exceed preset specifications.

balance delay

The amount by which the line efficiency falls short of 100 percent.

makespan

The amount of time it takes to finish a batch of jobs.

master production schedule (MPS)

The anticipated production schedule (build schedule) for the company expressed in specific configurations, quantities, and dates.

mean observed time

The average of the observation times for each of the work elements.

consumer's risk

The chance of accepting a lot that contains a greater number of defects than the LTPD limit.

producer's risk

The chance that a lot containing an acceptable quality level will be rejected.

remanufacturing

The concept of using components of old products in the production of new ones.

policy constraint

The condition that results when a specific policy dictates the rate of production.

market constraint

The condition that results when market demand is less than production capacity.

price and availability

The current price of the item and whether the quantity is available when needed.

action bucket

The current time period.

independent demand

The demand for an item is unrelated to the demand for other items.

range

The difference between the largest and smallest observations in a set of data.

just-in-time manufacturing

The element of JIT that focuses on the production system to achieve value-added manufacturing.

average outgoing quality (AOQ)

The expected proportion of defective items that will be passed to the customer under the sampling plan.

statistical quality control (SQC)

The general category of statistical tools used to evaluate organizational quality.

projected available

The inventory balance projected into the future.

standard time

The length of time it should take a qualified worker using appropriate process and tools to complete a specific job, allowing time for personal fatigue and unavoidable delays.

What is meant by "duration of the change"?

The length of time one expects to need the different level of capacity

pessimistic time estimate

The longest time period in which the activity will be completed.

cycle time

The maximum amount of time each workstation has to complete its assigned tasks.

In JIT a Kanban card is used to signal

The need for more parts

Your firm starts the week with 5 employees and each employee can ship 10 computers a day. At the end of the week you need to ship 300 computers. Daily demand fluctuates and you are using a chase aggregate plan. What is the impact on your employees?

The number of employees will vary over the week.

output rate

The number of units we wish to produce over a specific period of time.

theoretical minimum number of stations

The number of workstations needed on a line to achieve 100 percent efficiency.

point of departure

The percentage of normal capacity the company is currently using.

reliability

The probability that a product, service, or part will perform as intended.

line balancing

The process of assigning tasks to workstations in a product layout in order to achieve a desired output and balance the workload among stations.

product design

The process of defining all of the product's characteristics.

reverse engineering

The process of disassembling a product to analyze its design features.

service design

The process of establishing all the characteristics of the service, including physical, sensual, and psychological benefits.

acceptance sampling

The process of randomly inspecting a sample of goods and deciding whether to accept the entire lot based on the results.

sales and operations planning

The process that brings together all the functional business plans (marketing, operations, engineering, and finance) into one integrated plan.

throughput

The quantity of finished goods that can be sold.

transfer batch

The quantity of items moved at the same time from one resource to the next.

process batch

The quantity produced at a resource before the resource is switched over to produce another product.

distributor crossdocking

The receiving and consolidating of inbound products from different vendors into a multi-SKU pallet.

manufacturing crossdocking

The receiving and consolidating of inbound supplies and materials to support just-in-time manufacturing.

magnitude of the change

The relative size of the change needed.

optimistic time estimate

The shortest time period in which the activity can be completed.

simplicity

The simpler a solution, the better it is.

out of control

The situation in which a plot of data falls outside preset control limits.

acceptable quality level (AQL)

The small percentage of defects that consumers are willing to accept.

lead time

The span of time needed to perform an activity or series of activities.

supply chain velocity

The speed at which product moves through a pipeline from the manufacturer to the customer.

vendor-managed inventory (VMI)

The supplier maintains an inventory at the customer's facility.

JIT system

The three elements are just-in-time manufacturing, total quality management, and respect for people.

product structure tree

The visual representation of the BOM, clearly defining the parent-child

Which two areas should managers consider in order to adapt to the business dynamics affecting their company?

Their control over internal operations & Their influence and leverage over supplies

ISO 9001:2000, Quality Management Systems—Requirements:

This is the standard for the certification of a firm's quality management system. It is used to demonstrate the conformity of quality management systems to meet customer requirements.

Managers become more of a supportive function in the JIT environment. Aside from being a coach, motivator, assisting with teamwork and problem solving, what is the most important thing managers can give to employees to help facilitate implementing JIT?

Time

The important thing in Quality Function Deployment competitive evaluation is

To identify customer requirements that should be pursued and how we fare relative to our competitors

"What is the primary purpose in using the master production schedule (MPS) in the marketing department of an organization?"

To manage the demand for promised deliveries

expedite

To rush orders that are needed in less than the normal lead time.

What is the common theme in total quality management (TQM) across all functions in an organization?

To satisfy customer needs

An alpha (α) risk is also called:

Type I error

crashing

Typically represents project activities.

general warehouse

Used for long-term storage.

distribution warehouse

Used for short-term storage, consolidation, and product mixing

automation

Using machinery to perform work without human operators.

the only definition that combines economics with consumer criteria

Value for price paid

A control chart for ______________ is used to monitor characteristics that can be measured.

Variables

incoming inspection

Verifies the quality of incoming goods.

queue

Waiting line.

Who developed quality control charts?

Walter Shewhart

When is capacity measurement at the best operating level?

When the average unit cost is minimized

job rotation

Workers shift to different jobs to increase understanding of the total process.

Deming Prize

a Japanese award given to companies to recognize efforts in quality improvement

cause-and-effect diagram

a chart that identifies potential causes of particular quality problems

transaction fee model

a company receives a fee for executing a transaction

cost

a competitive priority focusing on low cost

quality

a competitive priority focusing on the quality of goods and services

lean systems

a concept that takes a total system approach to creating efficient operations

economies of scale

a condition in which the average cost of a unit produced is reduced as the amount of output is increased

diseconomies of scale

a condition in which the cost of each additional unit made increases

undertime

a condition occurring when there are more people on the payroll than are needed to produce the planned output

uniform plant loading

a constant production plan for a facility with a given planning horizon

linear program (LP)

a constrained optimization problem in which all the functions involving decision variables are linear

less-than-or-equal-to constraint

a constraint such as 3x ₁ + 5x ₂ ≤ 22, often used to model a limitation on the amount of a resource that can be used

greater-than-or-equal-to constraint

a constraint such as 4x ₁ + 7x ₂ ≥ 50, often used to model a requirement that must be satisfied

equality constraint

a constraint such as 6x ₁ + 3x ₂ = 30, used to specify that a requirement must be met exactly

percentage of orders shipped on schedule

a customer service measure appropriate for use when orders have similar value

percentage of line items shipped on schedule

a customer service measure appropriate when customer orders vary in number of line items ordered

Black Belts

a designation received by individuals highly trained in quality improvement principles and techniques and who's job is to identify and solve quality problems

management science

a field of study that focuses on the development of quantitative techniques to solve operations problems

electronic data interchange (EDI)

a form of computer-to-computer communications that enables sharing business documents

formulation

a formal, algebraic statement of a constrained optimization problem

capacity-based options

a group of options that allow the firm to change its current operating capacity

demand-based options

a group of options that respond to demand fluctuations through the use of inventory or back orders, or by shifting the demand pattern

withdrawal card

a kanban card that authorizes withdrawal of material

checklist

a list of common defects and the number of observed occurrences of these defects

business strategy

a long-range plan for a business

operations strategy

a long-range plan for the operations function that specifies the design and use of resources to support the business strategy

Simplex Method

a mathematical algorithm developed by George Dantzig that, when implemented in software, can solve LPs very quickly

constrained optimization problem

a mathematical model in which one is trying to maximize or minimize some quantity, while satisfying a set of constraints

productivity

a measure of how efficiently an organization converts inputs into outputs — Ratio of outputs over inputs.

inventory turnover

a measure of inventory policy effectiveness

weeks of supply

a measure of inventory policy effectiveness

human relations movement

a philosophy based on the recognition that factors other than money can contribute to worker productivity

just-in-time (JIT)

a philosophy designed to achieve high-volume production through elimination of waste and continuous improvement

continuous improvement (kaizen)

a philosophy of never-ending improvement

broad view of JIT

a philosophy that encompasses the entire organization

periodic counting

a physical inventory is taken periodically, usually annually

sampling plan

a plan for acceptance sampling that precisely specifies the parameters of the sampling process and the acceptance/rejection criteria.

hybrid aggregate plan

a planning approach that uses a combination of level and chase approaches while developing the aggregate plan

chase aggregate plan

a planning approach that varies production to meet demand each period

factor rating

a procedure that can be used to evaluate multiple alternative locations based on a number of selected factors

internal resource constraint

a regular bottleneck

capacity planning using overall planning factors (CPOPF)

a rough-cut capacity planning technique. MPS items are multiplied by historically determined planning factors for key resources

ISO 14000

a set of international standards and a certification focusing on a company's environmental responsibility

feasible solution

a specific combination of values of the decision variables such that all of the constraints are satisfied

infeasible solution

a specific combination of values of the decision variables such that at least one of the constraints is violated

mission

a statement defining what business an organization is in, who its customers are, and how its core beliefs shape its business

quality circle

a team of volunteer production employees and their supervisors who meet regularly to solve quality problems

global marketplace

a trend in business focusing on customers, suppliers, and competitors from a global perspective

sustainability

a trend in business to consciously reduce waste, recycle, and reuse products and parts

continuous process

a type of process that operates continually to produce a high volume of a fully standardized product

batch process

a type of process used to produce a small quantity of products in groups or batches based on customer orders or specifications

capacity cushion

additional capacity added to regular capacity requirements to provide greater flexibility

A company's __________ plan is a statement of the resources available to the operations group during the next 6 to 18 months.

aggregate

the _______ identifies the resources needed by operations to support the marketing plan.

aggregate plan

Percentage of orders shipped on schedule is a good measure of finished goods customer service if:

all orders and customers have similar value.

the Deming Prize

an annual award given to firms that demonstrate outstanding quality

scientific management

an approach to management that focused on improving output by redesigning jobs and determining acceptable levels of worker output

electronic request for quote (eRFQs)

an electronic request for a quote on goods and services

All product designs begin with ____________________________.

an idea

Industrial Revolution

an industry movement that changed production by substituting machine power for labor power

total quality management (TQM)

an integrated effort designed to improve quality performance at every level of the organization

time-based competition

an organizational strategy focusing on efforts to develop new products and deliver them to customers faster than competitors

waste

anything that does not add value

Common causes of variation

are random causes that we cannot identify.

master production schedule

assembly schedule which is a statement of which products and quantities will be made in specific time periods.

A control chart for ______________ is used to monitor characteristics that have discrete values and can be counted.

attributes

When companies try to level the workload they can use all but which of the following tools: under time, overtime, back orders, hiring, sub-contracting

back orders

According to the textbook, the available space of a facility is best seen by using a

block plan

alternative workplace

brings work to the worker rather than the worker to the workplace

defining beliefs of JIT

broad view of operations, simplicity, continuous improvement, visibility, and flexibility

business-to-business e-commerce

businesses selling to and buying from other businesses

step 3 to develop an aggregate plan

calculate size of workforce

step 2 to develop an aggregate plan

calculate the aggregate production rate

external setup

can be performed while the machine is still running

competitive priorities

capabilities that the operations function can develop in order to give a company a competitive advantage in its market

multifunction workers

capable of performing more than one job

What helps an organization identify and plan the actions necessary to meet current and future customer demands?

capacity planning

Companies use ____________ to check that enough work is scheduled for operations and that the amount of work scheduled is feasible.

capacity requirements planning

control charts

charts used to evaluate whether a process is operating within set expectations

What type of aggregate plan sets labor and equipment capacity to satisfy demand each period?

chase

_______________ MRP is an MRP system that includes production planning, master production scheduling, and capacity requirements planning.

closed-loop

Two causes of variation in the quality of a product or process:

common causes and assignable causes.

order qualifiers

competitive priorities that must be met for a company to qualify as a competitor in the marketplace

order winners

competitive priorities that win orders in the marketplace

ALDEP and CRAFT

computer software packages for designing process layouts

CRAFT

computerized relative allocation of facilities technique

nonnegativity constraints

constraints of the form x ₁ ≥ 0, which are nearly universal in linear programming problems. They are used to represent the fact that negative quantities of products cannot be made, shipped, etc.

Evaluating an aggregate plan in terms of inventory levels is using what perspective?

cost

Quality failure costs

cost consequences of poor quality

external failure costs

costs associated with quality problems that occur at the customer site

appraisal costs

costs incurred in the process of uncovering defects

Quality controls costs

costs necessary for achieving high quality

setup cost

costs such as scrap costs, calibration costs, and downtime costs associated with preparing the equipment for the next product being produced

The _______ is the longest sequential path of interrelated activities in the network and shows the minimum completion time for the project.

critical path

Quality is defined by the

customer

If capacity is excessive, a company may have to ______________________.

decide how to use a partially empty facility

Location analysis is:

deciding on the best location for a facility.

tactical decisions

decisions that are specific and short-term in nature and are bound by strategic decisions

strategic decisions

decisions that set the direction for the entire company; they are broad in scope and long-term in nature

behavioral feasibility

degree to which the job is intrinsically satisfying to the employee

dependent demand

demand for component parts is based on the number of end items being produced

What refers to the use of common and interchangeable parts?

design standardization

SCM software

designed to improve decision making in the supply chain

work measurement

determines how long it should take to do a job

capacity requirements planning (CRP)

determines the labor and machine resources needed to fill the open and planned orders generated by the MRP

We use _______ estimates when we have done similar activities in the past and can make a reliable time estimate.

deterministic time

Sales and operations planning enables:

disciplined and formalized communications.

The load-distance model and center of gravity approach evaluate the location decision based on ________.

distance

Finished goods in transit to the customer are called what?

distribution inventory

business-to-business (B2B)

electronic commerce between businesses

customer-to-customer (C2C)

electronic commerce between customers

The central belief of the JIT philosophy is

elimination of waste

project

endeavor with a specific objective, multiple activities, and defined precedence relationships, to be completed in a specified time period

elemental time data

establish standards based on previously completed time studies, stored in an organization's database

precedence relationships

establishes the sequencing of activities to ensure that all necessary activities are completed before a subsequent activity is begun

step 5 to develop an aggregate plan

evaluate plan in terms of cost, customer service, operations, and human resources

JIT requires compact layouts and increased visibility so

everyone can see what everyone else is doing

A supply chain structure has:

external suppliers, internal functions of the firm, and external distributors

A difficulty with back orders, even when the customer waits, can be ________________.

extra administrative costs

distribution inventory

finished goods in the distribution system

Independent demand is the demand for ________________________________.

finished products

Bridge construction is an example of which layout type?

fixed position

Being able to keep costs low while changing the volume of production is an example of

flexibility

Long-term capacity requirements are identified on the basis of _____________________.

forecasts of future demand

Which term means to schedule a job that starts immediately, regardless of the due date?

forward scheduling

just-in-time (JIT) philosophy

getting the right quantity of goods at the right place at the right time

scatter diagrams

graphs that show how two variables are related to each other

special-purpose teams

highly focused, short-term teams addressing issues important to management and labor

frequency of occurrence

how often the work element must be done each cycle

conformance to specifications

how well a product or service meets the targets and tolerances determined by its designers

Capacity requirements planning enables the company to evaluate ____________________.

how well it is using its critical work centers

engineering plan

identifies new products or modifications to existing products that are needed to support the marketing plan

marketing plan

identifies the markets to be served, desired levels of customer service, product competitive advantage, profit margins, and the market share needed to achieve the objectives of the strategic business plan

financial plan

identifies the sources and uses of funds; projects cash flows, profits, return on investment; and provides budgets in support of the strategic business plan

steps used to develop a factor rating

identify dominant factors, assign weights to factors, select scale by which to evaluate each location relative to each factor, evaluate each alt relative to each factor using scale, score each alt based on rated/weighted factors, select alt with highest score

step 1 to develop an aggregate plan

identify type of aggregate plan: level, chase, or hybrid

bullwhip effect

inaccurate or distorted demand information created in the supply chain

ISO 14000: Operations standards

include the measurement of consumption of natural resources and energy.

One outcome of a U-shaped cell manufacturing layouts is

increased worker satisfaction

Project Life Cycle

initial concept, feasibility study, planning of project, execution of plan, termination of project

What type of operations focus on products in the early stage of the life cycle?

intermittent

Which type of operation is used to produce many different products with varying process requirements in lower volumes?

intermittent

costs that the company hopes to prevent

internal and external failure costs

extranets

intranets that are linked to the Internet so that suppliers and customers can be included in the system

According to JIT, __________ is carried to cover up a wide variety of problems, such as poor quality, demand uncertainty, and slow delivery.

inventory

anticipation inventory

inventory built in anticipation of future demand

transportation inventory

inventory in movement between locations

work-in-process (WIP)

items in process throughout the plant

Which design work system minimizes repetitiveness in tasks by assigning employees the role of planning and scheduling?

job enrichment

Which work system acknowledges the benefits of employee proficiency?

labor specialization

enterprise resource planning (ERP)

large, sophisticated software systems used for identifying and planning the enterprise-wide resources needed to coordinate all activities involved in producing and delivering products

The broad view of JIT is now often termed __________________________.

lean production

Which concept takes a total system approach to creating an efficient operation and combines concepts such as just-in-time (JIT), total quality management (TQM), and continuous improvement?

lean systems

What type of aggregate plan maintains a constant workforce and produces the same amount of product in each time period?

level

constraints

limitations or requirements that must be satisfied

What type of process is designed to produce a large volume of a standardized product for mass production, such as automobiles?

line process

bill of material (BOM)

lists all the subassemblies, component parts, and raw materials that go into an end item and shows the usage quantity of each required

JIT believes in developing __________ relationships with suppliers.

long-term

hiring and firing

long-term option for increasing or decreasing capacity

If setup costs are essentially zero (negligible when compared to carrying costs), which approach should be used for lot sizing?

lot for lot

The quantity of the replenishment order is based on the __________________________.

lot sizing rule used

A ______ throughput time means that more products can move through the system.

lower

supply chain management (SCM)

management of the flow of materials from suppliers to customers in order to reduce overall cost and increase responsiveness to customers

The ease with which the product can be made is its

manufacturability

process layouts are designed to produce:

many different items, often to customer specifications.

The next level down in the planning process after development of the aggregate plan is the _____________.

master production schedule

types of waste

material, energy, time, and space

The center of gravity approach may identify a location that

may not be feasible to locate to

ISO 14000: Management systems standards

measure systems development and integration of environmental responsibility into the overall business.

Skewness

measures the symmetry of the distribution

decision tree

modeling tool used to evaluate independent decisions that must be made in sequence

environmental scanning

monitoring the external environment for changes and trends to determine business opportunities and threats

The Production Plan is usually updated and reevaluated:

monthly

activity-on-node

network diagramming notation that places activities in the nodes and arrows to signify precedence relationships

critical path method (CPM)

network planning technique, with deterministic times, used to determine a project's planned completion date and identify the project's critical path

intranets

networks that are internal to an organization

Percentage of Line Items Shipped on Schedule recognizes that:

not all orders are equal but fails to take into account the dollar value of orders.

Which of the following is not typically indicated as part of the resources authorized in an aggregate plan?

number of machines to be used

What type of machine is controlled by a computer and can do a variety of tasks, such as drilling, boring, or turning parts of different sizes and shapes?

numerically controlled

business-to-consumer e-commerce (B2C)

on-line businesses sell to individual consumers

electronic storefronts

on-line catalogs of products made available to the general public by a single supplier

For capacity requirements planning, loads for critical work centers are calculated based on ___________.

open shop orders and planned shop orders

structure

operations decisions related to the design of the production process, such as facilities, technology, and flow of goods and services through the facility

infrastructure

operations decisions related to the planning and control systems of the operation, such as organization of operations, skills and pay of workers, and quality measures

For every scheduled receipt in an MRP table, there is also in the organization an __________________.

order that has been placed but not yet been received

manufacturing organizations

organizations that primarily produce a tangible product and typically have low customer contact

service organizations

organizations that primarily produce an intangible product, such as ideas, assistance, or information, and typically have high customer contact

What are the two primary objectives of aggregate planning?

output rate and workforce size

control charts for attributes include:

p-charts and c-charts

Decision alternatives.

part of a decision tree -- Buying a large facility and buying a small facility are two decision alternatives. They are represented by "branches" or arrows leaving a decision point.

Outcomes.

part of a decision tree -- For each possible alternative an outcome is listed. In our example, that may be expected profit for each alternative (expand now or later) given each chance event (high demand or low demand).

Chance events.

part of a decision tree -- These are events that could affect the value of a decision. Each chance event has a probability or likelihood of occurring. the sum of the probabilities of all chances must add up to 100 percent. Chance events are "branches" or arrows leaving circular nodes.

components

parts or subassemblies used in the final product

output-based (incentive) systems

pay based on the number of units completed

JIT considers ______ to be the organization's most important resource.

people

capacity utilization

percentage measure of how well available capacity is being used

efficiency

performing activities at the lowest possible cost -- the ratio of actual output to standard output

cell manufacturing

placement of dissimilar machines and equipment together to produce a family of products with similar processing requirements

cycle counting

prespecified items are counted daily

costs that are incurred to prevent poor quality

prevention and appraisal costs

Two types of quality control costs

prevention costs and appraisal costs

Demand patterns can be smoothed through:

pricing incentives, reduced prices for out-of-season purchases, or nonprime service times.

A demand-based option in which the marketing tries to shift demand patterns to minimize demand fluctuations is called

proactive

visibility

problems must be visible to be identified and solved

A hospital is an example of which layout type?

process

A university is an example of which layout type?

process

Product design considerations must include the ____

process

hospitals, universities, metalworking shop, wal-mart -- these are examples of a _________ layout

process

A hybrid layout combines

process and product

Which of the following is a tool for evaluating an operation in terms of the sequence of steps from inputs to outputs with the goal of improving its design?

process flow analysis

a tool for evaluating an operation in terms of the sequence of steps from inputs to outputs with the goal of improving its design

process flow analysis

type of layout is seen in companies with intermittent processing systems

process layouts

four basic layout types

process, product, hybrid, and fixed position

A car wash is an example of which layout type?

product

assembly lines, cafeterias, car washes -- these are examples of a _______ layout

product

Product design and process selection affect

product quality, product cost, and customer satisfaction.

A visual depiction of the subassemblies and components that are needed to produce a finished product is called a(n) ____________________________________.

product structure tree

total productivity

productivity computed as a ratio of output to all organizational inputs

partial productivity

productivity computed as a ratio of output to only one input (e.g., labor, materials, machines)

multifactor productivity

productivity computed as a ratio of output to several, but not all, inputs

finished goods inventory

products available for shipment to the customer

finished goods

products sold to customers

Which type of process would be least likely to produce goods for inventory rather than for a specific customer request?

project

Building a bridge over the Mississippi River for a new highway uses a

project process

demonstrated capacity

proven capacity calculated from actual performance data

double sampling

provides an opportunity to sample the lot a second time if the results of the first sample are inconclusive. We first sample a lot of goods according to preset criteria for definite acceptance or rejection. However, if the results fall in the middle range, they are considered inconclusive and a second sample is taken.

Key factors in location analysis include:

proximity to customers, transportation, source of labor, community attitude, and proximity to supplies.

predetermined time data

published database of elemental time data used for establishing standard times

raw materials

purchased items or extracted materials transformed into components or products

Highly labor intensive services are called

pure services

Factor rating is a tool that helps managers evaluate _________ factors.

qualitative

Two categories of quality costs

quality controls costs, quality failure costs

decision variables

quantities under the control of the decision maker

common causes of variation

random causes that cannot be identified

utilization

ratio of time a resource is used to time it is available for use

MRP maintains priorities by _________ and making the necessary adjustments.

recognizing changes in the operations environment

reengineering

redesigning a company's processes to make them more efficient

open shop orders

released manufacturing orders

Vertical integration decisions is a better strategic decision for

repetitive operations

traffic management

responsible for arranging the method of shipment for both incoming and outgoing products or materials

distribution management

responsible for movement of material from the manufacturer to the customer

According to JIT, workers should perform

routine preventive maintenance activities

block plan

schematic showing the placement of resources in a facility

a process flowchart is useful for:

seeing the totality of the operation and for identifying potential problem areas

The first step in developing the production plan is:

selection of the aggregate plan that matches your company's objectives.

subcontracting

sending production work outside to another manufacturer or service provider

JIT manufacturing cannot succeed if __________costs are too high.

set-up

application service provider (ASP)

sets up and runs ERP systems

What is the term used for the adjustment of a machine after making one product type so that production can begin for another product type?

setup

Single setup means

setup times are in single digits of minutes

A proactive marketing approach in aggregate planning involves _________________________________.

shifting the demand patterns to level demand fluctuations

In evaluating your new production plan, cost comparisons are

simple if you are comparing similar ending positions

Capacity planning and location analysis decisions are often made __________

simultaneously

Concurrent engineering is

simultaneously design the product and the process

In facility location zoning restrictions, soil conditions, and access roads for trucks are ________________.

site considerations

For the general warehouse layout problem, which department should be located furthest from the dock?

smallest ratio of trips needed to area needed

customer relationship management (CRM)

software solutions that enable the firm to collect customer-specific data

job design

specifies the contents of the job

Which inventory function provides a hedge against inflation?

speculative inventory

ISO 14000: Environmental systems standards

standards measure emissions, effluents, and other waste systems.

backward scheduling

starts with the due date for an order and works backward to determine the start date for each activity

OM uses tools to help make the right quality decisions. These tools come from the field of ________

statistics

Planning begins with the development of the_________

strategic business plan

benchmarking

studying the business practices of other companies for purposes of comparison

JIT was based on the need for

survival

broad view of the organization

tasks and procedures are important only if they meet the company's overall goals

break-even analysis

technique used to compute the amount of goods that must be sold just to cover costs

location analysis

techniques for determining location decisions

companies' motivations for implementing ERP systems:

technological and operational.

step 4 to develop an aggregate plan

test plan and calculate costs

JIT is a philosophy that was developed by

the Toyota Motor Company in the mid-1970s

mass customization

the ability of a firm to highly customize its goods and services at high volumes

small-lot production

the ability to produce small quantities of products

customer service

the ability to satisfy customer requirements

c-charts monitor:

the actual number of defects in a sample

slack

the amount of time an activity can be delayed without affecting the project's planned completion time

allowance factor

the amount of time the analyst allows for personal time, fatigue, and unavoidable delays

quality at the source

the belief that it is best to uncover the source of quality problems and eliminate it — uncovering the root cause of a quality problem

specialization

the breadth of the job design

operations management (OM)

the business function responsible for planning, coordinating, and controlling the resources needed to produce a company's goods and services

cross-functional decision making

the coordinated interaction and decision making that occur among the different functions of the organization

The transportation method is an excellent tool for evaluating:

the cost impact of adding sites to the network of current facilities.

economic feasibility

the cost of the job should be less than the value it adds

Process Selection

the development of the process necessary to produce the designed product.

manufacturability

the ease with which a product can be made

duration of the change

the expected length of time the different capacity level is needed

optimal solution

the feasible solution with the largest (for a maximization problem) or smallest (for a minimization) objective value

technical feasibility

the job must be physically and mentally doable

The cumulative lead time is

the longest route in terms of time from the low level items to the end item in the product structure tree

critical path

the longest sequential path through the network diagram

Capacity planning is deciding on

the maximum output rate of a facility.

capacity

the maximum output rate that can be achieved by a facility

design capacity

the maximum output rate that can be achieved by a facility under ideal conditions

effective capacity

the maximum output rate that can be sustained under normal conditions

normal time

the mean observed time multiplied by the performance rating factor by the frequency of occurrence

x-bar charts monitor:

the mean or average value of a product characteristic

customer-defined quality

the meaning of quality as defined by the customer

trade-off

the need to focus more on one competitive priority than on others

value added

the net increase created during the transformation of inputs into final outputs

most likely time estimate

the normal time that the activity is expected to take

master scheduler

the person responsible for managing, developing, reviewing, and maintaining the master schedule

rough-cut capacity planning (RCCP)

the process of converting the master production schedule into requirements for key resources such as direct labor and machine time

capacity planning

the process of establishing the output rate that can be achieved by a facility

globalization

the process of locating facilities around the world

p-charts monitor:

the proportion of defects in a sample

objective

the quantity to be maximized or minimized

r-charts monitor:

the range or dispersion of the values of a product characteristic

the process capability index (Cp) is computed as:

the ratio of the specification width to the width of the process variability

rectilinear distance

the shortest distance between two points measured by using only north-south and east-west movements

Hawthorne studies

the studies responsible for creating the human relations movement, which focused on giving more consideration to workers' needs

gross requirements

the total-period demand for an item

core competencies

the unique strengths of a business

lot tolerance percent defective (LTPD)

the upper limit of the percentage of defective items consumers are willing to tolerate.

LHS value

the value of the constraint expression to the left of the ≤, ≥, or = sign

RHS value

the value of the constraint expression to the right of the ≤, ≥, or = sign

best operating level

the volume of output that results in the lowest average unit cost

Marketing plays a large role in JIT because

they pass on the customer-driven quality requirements

Assignable causes of variation are

those that can be identified and eliminated.

One goal of process improvement is to reduce ________.

throughput time

due date

time when the job is supposed to be finished

The ______ schedule shows the production planner when in the production process parts and materials must be available.

time-phased

MRP develops a ____________ that shows future demand, supply and inventories by time period.

time-phased schedule

Part of the MRP system is developing a _________ that shows future demand, supply, and inventories by time period.

time-phased schedule

objectives of an MRP system are _________ and ________

to determine the quantity and timing of material requirements, to keep priorities updated and valid.

role of operations management

to transform organizational inputs into outputs

beta probability distribution

typically represents project activities

Infinite loading identifies:

uneven workloads and bottlenecks.

back orders

unfilled customer orders

speculative inventory

used to protect against some future event

e-commerce

using the Internet and Web to transact business

The ratio of actual output rate to capacity is ____________________________.

utilization

What is the measure of how much supply chain is owned or operated by the manufacturer?

vertical integration

Companies that use back orders are asking their customers to ___________________.

wait for delivery of the product

The master production schedule is reviewed:

weekly

symmetric distribution

when the number of observations below the mean is the same as the number of observations above the mean

overtime

work beyond normal established operation hours that usually requires a premium be paid to the workers

JIT flexibility refers to

workers being able to perform many different tasks

Control charts for variables include

x-bar charts and r-charts

The standard deviation of the distribution of sample means is computed by

σ/√n