Operations Management Exam 2 Study Guide

The point in the supply chain where inventory is positioned to allow the preceding processes to operate independently is the a) forecast level b) customer order independence point c) manufacturing independence point d) customer order decoupling point

d) customer order decoupling point

Firms that service customers from finished good inventory are known as which of the following a) assemble-to-order b)make-to-order c)engineer-to-order d) make-to-stock

d) make-to-stock

In a project layout, a high degree of ________ is common.

task ordering

Days-of-supply

(average inventory/cost of goods sold) x 365 OR multiply the inverse of inventory turn by 365

Ranked from high uniqueness to low, and low product volume to high, here is the product-process matrix.

1) Project 2) Work Center 3) Manufacturing cell 4) Assembly Line 5) Continuous Process

Product-Process Matrix

A framework depicting when the different production process types are typically used depending on product volume and how standardized the product is.

What is not true about a workcenter layout?

A workcenter layout is commonly used for systems with high production volumes.

Arranges processes according to the sequence of steps by which the product is manufactured.

Assembly line

Inventory Turn

COGS/Total average value of inventory

What process is the best for manufacturing liquids?

Continuous

Manufacturing Cell Layout

Dedicated area where products that are similar in processing requirements are produced. Cells are designed to perform a specific set of processes, and dedicated to a limited range or products. Can have several different cells in a production area.

Little's Law Formula

Inventory = Throughput rate x flow time (Throughput is the long-term average rate that items are flowing through the process.) (Flow time is the time that it takes a unit to flow through the process from beginning to end.)

Little's Law

Mathematically relates inventory, throughput, and flow time.

Assembly Line Layout

Processes are arranged according to the progressive steps by which the product is made. Steps are defined so that a specific production rate can be achieved. (ex. toys, appliances, automobiles)

Workcenter Layout (Job Shop)

Similar equipment or functions are grouped together. (aka all the drilling machines are grouped together) A part being worked on travels, according to teh established sequence of operations, from workcenter to workcenter.

Continuous Process Layout

Similar to an assembly line in that production follows a predetermined sequence of steps, but the flow is continuous such as with liquids, rather than discrete.

Project Layout Structure

The product remains in a fixed location. Manufacturing equipment is moved to the product rather than vice versa. (examples construction sites, houses, bridges, movie shooting lots.)

Workcenter

a process with great flexibility to produce a variety of products, typically at lower volume levels.

Which of the following statements about inventory measures is TRUE? a) inventory turn compares cost of goods sold to average inventory b) inventory turn and days-of-supply are unrelated measures c) total average inventory is the best measure of inventory d) days-of-supply measures how long(on average) a firm's inventory can support sales

a) inventory turn compares cost of good sold to average inventory b) days-of-supply measures how long (on average) a firm's inventory can support sales

Which statement is true regarding differences between service and manufacturing organizations? a) manufacturing organizations must plan and hold inventory b) service organizations produce tangible goods c) service organizations have higher inventory costs

a) manufacturing organizations must plan and hold inventory.

Which of the following is one of the dimensions depicted on a product-process matrix? a) volume b) time c) service d) cost

a) volume

Firms invest in lean manufacturing programs in order to

achieve high customer service with minimum levels of inventory investment.

Which of the following is not a step required to make a good? a) sourcing b) decoupling c) making d) delivering

b) decoupling

Which type of firm invests in lean manufacturing programs in order to improve customer service levels for a given inventory investment?

make-to-stock

A map showing the flow of materials through a manufacturing system is known as

make-to-stock process map

A _____ _____ layout uses dedicated areas for production of similar products.

manufacturing cell

When a company groups dissimilar machines to work on products that have similar processing requirements, it's using a(n) _______ layout.

manufacturing cell

If inventory turn is known, days-of-supply is calculated by

multiplying the inverse of inventory turn by 365 days.

In an assemble-to-order system, the total number of unique combinations possible is calculated by

multiplying the number of options for each other together.

Workcenters are often structured to _____ the movement of material.

optimize

Process Selection

refers to the strategic decision of selecting which kind of production processes to use to produce a product or provide a service.

Total average value of inventory

the total investment in inventory at the firm, which includes raw material, work-in-process, and finished goods.

A production process map is built by

tracking the flow of material through the system

What are the dimensions of a product-process matrix?

volume and standardization