Operations Management Smartbook Study Guide

As processing time increases the batch size that yields the target capacity ________.

Increases

Companies employ individuals to manage acquiring ____ needed to serve customers

Inputs or resources

True or false: A process manager participates in a process.

False

True or false: A process that is demand constrained can have utilization of 100%.

False

True or false: If Little's Law predicts that inventory for sweaters in a warehouse will be 10 units then there will ALWAYS be 10 sweaters in the warehouse.

False

True or false: Inventory can be calculated by dividing the total number of customers that arrived during a period of time by the length of that period of time.

False

True or false: Some processes do not require inputs.

False

True or false: The bottleneck is the resource with the fewest number of employees.

False

True or false: You should measure the inputs to a restaurant process in customers and the outputs in dollars.

False

How far you have to drive to the store to buy an item impacts the consumption utility you associate with it

False - consumption utility is irrespective of convenience

Subway and mcdonalds have the same capabilities

False -subway charges more to provide custom sandwiches, whereas Mcdonald's sells essentially remade food

True or false: A process can only have one scope.

False -the scope of a process is often determined by the perspective of the person managing it. if there are different managers, or individuals at different levels of management then there may be multiple scopes

True or false: In terms of a process, inventory can only refer to physical things.

False -when doing process analysis, inventory refers to whatever flow unit you are interested in tracking

Inventory is the number of ________ units within the process.

Flow

If a restaurateur wanted to know how many dollars his/her restaurant made per day, which process metric would he/she need?

Flow rate

If a university president wanted to know how many students graduated from their university each year, which process metric would he/she need?

Flow rate

If a plant manager can reduce the time it takes to manufacture a part (i.e. the Flow Time) and the Flow Rate stays the same, what does Little's Law predict will happen to Inventory?

Go down

If a supply chain manager can reduce Inventory while keeping the Flow Rate constant, what does Little's Law predict will happen to Flow Time?

Go down

Price includes the _______ of owning the product or receiving the service

Total Cost

Economists often refer to the inconvenience component as _____ costs

Transaction

A pizza delivery chain offering 30 minutes or less guarantee on their pizza orders impacts the inconvenience component of utility

True

An online retailer offering same-day shipping impacts the inconvenience component

True

The higher the utility associated with an item the more likely you are to choose it

True

True or false: To calculate total idle time, one must know the amount of idle time per flow unit.

True

True or false: In the case of an interventional radiology unit, there is only one flow unit for the process.

True -The patient is provided with care in the interventional radiology unit

The longer the average flow time, the _______ the average inventory level.

True -a process metric is something that can be measured

When 25 customers arrive between 8 am and 9 am and 10 arrive between 9 am and 10 am we are experiencing _______ in demand.

Variability

When a computer manufacturer makes 250 personal computers on Monday and 10 on Tuesday, it is experiencing a _____ in supply

Variability

three sources of inefficiency

Waste Variability Flexibility

Process Flow Diagram

a graphical way to describe a process

Inventory

The number of flow units within a process

Bottleneck

The resource with the lowest capacity

Scope

The set of activities included in the process

Variability

corresponds to changes in either demand or supply over time -customer arrivals -customer requests -customer behavior

Costs of direct labor measure the labor cost associated with serving one _________

customer

A production _______ is a repeating sequence of produced units.

cycle

An organization that wants to fulfill customer orders more quickly should make the cycle time of their fulfillment process __________.

decrease

If takt time is 30 seconds and cycle time is 40 seconds then all demand ____ satisfied.

is not

Tme spent doing a setup _____ classified as idle time.

is not

The larger the average flow rate, the ______ the average inventory level.

larger

The capacity of a step with a setup is ______ than its output rate when producing.

less

Flow rate can be __________ process capacity.

less than or equal to

The more a resource is idle the ____ its utilization.

lower

Average labor utilization

measure of efficiency- we have to pay employees whether they're working or not, so an unutilized worker creates an unnecessary expense -you want avg labor utilization as high as possible

consumption utility

measures how much you like a product or service, ignoring the effects of price and inconvenience

Cycle time

measures the time between completing a process -ex: ringing up two consecutive customers

The flow unit is the basic unit that ________ a process.

moves through

We refer to the improvement strategy of moving work away from the bottleneck step as _____.

off-loading the bottleneck

Flow Unit

people dollars, kilograms in a process

A process metric is something that we can measure that informs us about the ______ and capability of a process.

performance

A rigorous framework for understanding the detailed operations of a business is known as _____.

process analysis

At a step with a setup, inventory accumulates when that step is in _______.

production

Specialization ______ the need for equipment replication.

reduces

An accurate measure of labor content is ______.

seconds per customer

Which could be an appropriate unit for a processing time?

seconds/ customer minutes / burger

A small batch size at a step with a setup leads to low capacity because the step spends much of its time in what mode?

setup

At a step with a setup, inventory falls when that step is in _______.

setup

A small batch size at a step with a setup will lead to a ______ amount of inventory.

small

The target capacity for a resource is the ______ capacity that does not reduce the flow rate of the process.

smallest

Process Metric

something that we can measure that informs us about the performances and capability if a process

As process capacity increases, takt time ______.

stays the same

takt time

the cycle time needed to match customer demand for final product

Variability

the inhibitor that corresponds to changes in either supply or demand

Demand rate

the number of flow units that customers want per unit of time # of customers * (Units/hour)

True or false: The bottleneck step in a process can change depending upon the batch size set at a step with a setup.

true

The price of an item impacts the consumption utility you associate with it

False

Suppose the flow rate is 100 customers per hour, the average price is $10, the variable cost is $8, and the fixed cost is $50 per hour. What is the profit?

$150 per hour

Demand Drivers

-Consumption utility -Price -Inconvenience for customers

Which of the following contribute to labor content?

-The time a worker works on the flow unit -The time a worker spends inspecting a flow unit

An appropriate unit for takt time is: (Select all that apply.)

-hours/customers -seconds/burger

To increase profit a firm can do the following:

-increase flow rate -increase avg. price -decrease avg. cost

In the context of baking cupcakes for sale later, which activity is a setup (assume you only have one bowl)?

-preheating oven -the baking of a batch of cupcakes

Suppose a faucet adds water at a rate of 1 gallon per minute. For which drain flushing rate will inventory accumulate the fastest?

.6 gallon per minute -the fastest

Consider a two-step process where the first step produces at a rate of 2 units per minute for the first 30 minutes of an hour and then goes into setup for the second 30 minutes of an hour. The second step produces at a rate of 1 unit per minute for the entire hour. Assuming the beginning inventory in a buffer before step 2 is zero, after one hour the inventory in that buffer will be _______.

0 units

Which of the following could represent inventory in a restaurant process?

30 eggs

Consider a two-step process where the first step produces at a rate of 2 units per minute and the second step produces at a rate of 1 unit per minute. Assuming the beginning inventory in a buffer before step 2 is equal to zero, the inventory in that buffer after 30 minutes will be _______.

30 units

Consider a two-step process where the first step produces at a rate of 2 units per minute for the first 30 minutes of an hour and then goes into setup for the second 30 minutes of an hour. The second step produces at a rate of 1 unit per minute for the entire hour. Assuming the beginning inventory in a buffer before step 2 is zero, the highest level of inventory in that buffer during the hour will be _______.

30 units

If the demand rate for a process is 80 units per hour and the rate of the bottleneck in a process is 90 units per hour then the target capacity is _____ units per hour.

80

Process scope defines the set of ________ included in the process.

Activities

In a process flow diagram what shape is used to represent a resource?

Box

What shape is used to represent resources in a process flow diagram?

Box

Flow units waiting in the process without being worked on are often referred to as __________ inventory.

Buffer

For a process that is _________ constrained the bottleneck resource will have 100% utilization.

Capacity

the "just right" batch size makes a smart trade-off between _____ and inventory

Capacity

Firm's capabilities are defined as the dimensions of the _____ utility function it is able to satisfy

Customer's

Firm's capabilities are defined as the dimensions of the ______ utility function it is able to satisfy.

Customer's

For a step with a setup, as the processing time increases, the capacity _______.

Decreases

The time to complete setup activities ______ depend on the number of units subsequently produced.

Does not

The price of an item impacts the consumption utility you associate it with

False

Stock on hand is sometimes defined as the amount of goods a company has at a particular time. It is a synonym for which process metric?

Inventory

Consider a process with two resources where the first has capacity of 2 customers/minute and the second has capacity of 1.5 customers/minute. If the processing time at the first resource goes down, lower than the second, then what will happen to the capacity of the process?

It will decrease

If inventory goes up but flow time stays constant what will happen to cycle time?

It will go down

The larger the average flow rate, the ______ the average inventory level

Larger

The longer the average flow time, the _______ the average inventory level.

Larger

The earlier the patient arrives for the same departure time the ______ the flow time.

Longer

Determining customers wants and preferences is the primary function of ____

Marketing

Flexibility

Operations ability to react to variability

A firm is ______ dominated when its competitors perform equally or better on all attributes of the customer's utility function.

Pareto

Recharge Answer Mode Fill in the Blank QuestionYour Answer correct A firm on the efficient frontier cannot be _______ dominated.

Pareto

A new restaurant, John's Burgers, offers better tasting food that is custom-made, take less time to prepare, and cost less than what mcdonalds offers. John's Burgers _____ ______ McDonalds

Pareto Dominates

____________ identifies and analyzes all the activities involved in serving one unit of demand or, put differently, in providing one unit of supply.

Process Analysis

a ________ is a graphical way to describe a process

Process flow diagram

A production cycle is a _______ sequence of produced flow units.

Repetitive

Efficiency Frontier

Set of firms in the industry that have no firms in the industry to their upper rights (are better on all dimensions

The calculation of labor content requires ______ all of the processing times for serving one flow unit.

adding

Waste

all the consumption inputs that don't add value to the customer

A process flow diagram indicates

both where a flow unit is processed and where it is held in inventory.

If we know the flow rate and capacity of each labor resource that work in a process, we ______ compute the average labor utilization across employees.

can

If the cycle time for a process goes down then the time to finish X units starting with empty inventory buffers will _________.

decrease

When flow rate goes up but wages per unit of time stay the same, costs of direct labor _________.

decrease

When the takt time increases, the demand rate must have ___.

decreased

As processing time increases, the output rate when producing ________.

decreases

For a step with a setup, as the setup time increase, the capacity _______.

decreases

If the cycle time increases--and everything else remains constant--average labor utilization ______.

decreases

When takt time goes up, target manpower ________.

decreases

You can off-load the bottleneck by ______ the processing time it spends per flow unit.

decreasing

If process capacity is 100 units per hour and customers desire 80 units per hour then the process is ______ constrained

demand

Takt time depends on ________.

demand

When the flow rate is less than the capacity the process is referred to as _______ constrained.

demand

Capacity-Constrained

demand exceeds supply and the flow rate is equal to process capacity

A process flow diagram is a graphical way to _______ the process.

describe

Average labor utilization equals labor content ______ (cycle time multiplied by number of employees).

divided by

A process can have capacity that is _________ the capacity of a bottleneck.

equal to

True or false: Average labor utilization can be greater than 100%.

false

True or false: Setup activities can be deferred until after production is done for the day.

false

Specialization usually leads to __________ set-ups.

fewer

The target capacity for a resource is the smallest capacity that does not reduce the ______ of the process.

flow rate

When calculating the utilization of a step with a setup the denominator to use is ________.

flow rate when producing

A hospital administrator wants to know how long patients spend in the emergency room. What process metric is he/she interested in?

flow time

If a plant manager can reduce the time it takes to manufacture a part (i.e. the Flow Time) and the Flow Rate stays the same, what does Little's Law predict will happen to Inventory?

go down

If a supply chain manager can reduce Inventory while keeping the Flow Rate constant, what does Little's Law predict will happen to Flow Time?

go down

The longer the processing time at a resource, the ______ the target manpower for a desired capacity.

greater

Inventory accumulates in a process when the inflow rate is ______ the outflow rate.

greater than

Processing time

how long the resource takes to complete its work on one flow unit

The time when a process is doing nothing is known as _ time.

idle

Demand-constrained

if the process capacity exceeds demand, the flow rate will be equal to the demand rate

Being able to line balance without having to observe a fixed sequence should ________ average labor utilization.

increase

If flow rate goes up then profit will _________.

increase

If the cycle time increases, but no new resources are added to the process, then the time needed to serve 100 customers will ______.

increase

When takt time is less than cycle time target, manpower should ________.

increase

To increase the capacity of a process, one should __________.

increase the capacity of the bottleneck resource regardless of where it is located in the process

As target capacity increases the batch size that yields that target capacity ________.

increases

At a resource with a setup, increasing the batch size ______ the capacity of the resource.

increases

Resources help the flow units to move from being a unit of _______ to a unit of ________.

input, output

Flow units waiting in the process without being worked on are often referred to as buffer ________

inventory

If a hospital administrator wanted to know how many patient beds an emergency room would usually need what process metric would he/she need?

inventory

The "just right" batch size makes a smart trade-off between capacity and

inventory

Labor utilization ______ a measure of efficiency.

is