BUS 384 Chapter 2

Equations and keys

2-2b

Which of the following is a financial performance measure at an operational level?

Budget variance

Statistical Analysis (Supplement A)

Collecting, organizing, analyzing, summarizing, interpreting, and presenting data. Visualizing data using charts to examine performance trends; comparing results relative to other business units, competitors, or best-in-class benchmarks; understanding relationships among different measures.

In the context of the triple bottom line (TBL or 3BL), which of the following is a social sustainability measure?

Consumer and workplace safety

The measures used by organizations to measure outputs and outcomes include

Defects per million opportunities

Simulation (Supplement G)

Developing and analyzing a logical model of a system and conducting computer-based experiments to describe, explain, and predict system behavior. Process design for manufacturing and service, inventory systems, complex waiting line analysis, and resource planning.

Which of the following is a productivity and operational efficiency measure at an organizational level?

Equipment utilization

Optimization (Supplements D and E)

Identifying the best decisions to maximize or minimize some objective while satisfying constraints and requirements. Product mix, process selection, production planning, scheduling, and transportation and supply chain management.

Break-Even Analysis (Supplement C)

Identifying the best economic choice between two options that vary with volume. Profitability analysis, outsourcing decisions, and technology choices.

Decision Analysis (Supplement B)

Identifying the best economic decision alternative with uncertain futures. Product selection, facility capacity expansion and location, inventory analysis, and technology and process analysis.

_____ refers to the ability to create new and unique goods and services that delight customers and create competitive advantage.

Innovation

Which of the following is a key measure of an organization's innovation and learning?

Intellectual asset growth

Which of the following is true of the value chain model of organizational performance?

It provides detailed frameworks for operation managers

Assurance, one of the key dimensions used by customers to assess service quality, is defined as the:

Knowledge and courtesy of service providers and their ability to inspire trust and confidence in customers

_____ refers to creating, acquiring, and transferring knowledge, and modifying the behavior of employees in response to internal and external change.

Learning

Interlinking.

The quantitative modeling of cause-and-effect relationships between external and internal performance criteria

Which of the following is the purpose of a balanced scorecard?

To translate strategy into measures that uniquely communicate an individual's vision to an organization

Queueing Models (Supplement F)

Understand behavior of waiting line systems with random arrivals of customers and service times using analytical models. Process design and analysis for manufacturing and service, resource utilization analysis, and bottleneck analysis.

In the context of the scope of business and operations performance measurement, which of the following performance measures is a customer-focused performance measure?

a. Warranty claims

Which of the following is an example of a productivity measure?

b. Hotel revenue per full-time employee

Which of the following perspectives in the balanced scorecard model is most meaningful to operations managers?

b. The internal perspective

Which of the following is true of actionable measures?

b. They reflect how an organization generates value to customers.

Actionable performance measures provide the basis for decisions at the:

b. level at which they are applied.

The triple bottom line (TBL or 3BL) refers to the measurement of _____ sustainability.

c. environmental, social, and economic

According to research, a key dimension that customers use to assess service quality is _____.

c. reliability

The value of a loyal customer (VLC) quantifies the:

c. total revenue or profit each target market customer generates over the buyer's life cycle.

One of the performance measures related to time is the _____ of a process.

c. variability

While computing the value of a loyal customer (VLC), the customer defection rate is used to determine the _____.

d. buyer's life cycle

In the context of performance measures, the ability to adapt quickly and effectively to changing requirements is called _____.

d. flexibility

value chain concept

dominant model Suppliers provide goods and services inputs to the value chain that are used in the creation and delivery of value chain outputs. Measuring supplier performance is critical to managing a value chain. Typical supplier performance measures include quality of the inputs provided, price, delivery reliability, and service measures such as rates of problem resolution.

balanced scorecard,

first developed at Analog Devices. Its purpose is "to translate strategy into measures that uniquely communicate your vision to the organization." Financial Perspective: Measures the ultimate value that the business provides to its shareholders. This includes profitability, revenue growth, stock price, cash flows, return on investment, economic value added (EVA), and shareholder value. Customer Perspective: Focuses on customer wants and needs and satisfaction as well as market share and growth in market share. This includes safety, service levels, satisfaction ratings, delivery reliability, number of cooperative customer-company design initiatives, value of a loyal customer, customer retention, percent of sale from new goods and services, and frequency of repeat business. Innovation and Learning Perspective: Directs attention to the basis of a future success—the organization's people and infrastructure. Key measures might include intellectual and research assets, time to develop new goods and services, number of improvement suggestions per employee, employee satisfaction, market innovation, training hours per employee, hiring process effectiveness, revenue per employee, and skills development. Internal Perspective: Focuses attention on the performance of the key internal processes that drive the business. This includes such measures as goods- and service-quality levels, productivity, flow time, design and demand flexibility, asset utilization, safety, environmental quality, rework, and cost.

The Service-Profit Chain (SPC)

first proposed in a 1994 Harvard Business Review article and is most applicable to service environments. The model is based on a set of cause-and-effect linkages between internal and external measures, and in this fashion, defines the key performance measurements on which service-based firms should focus. Because much of the value created in service processes is at the service-encounter level, the Service-Profit Chain focuses on employees or service providers.

Statistics

involves collecting, organizing, analyzing, interpreting, and presenting data. A statistic is a summary measure of data.

Actionable measures

provide the basis for decisions at the level at which they are applied

value of a loyal customer (VLC)

quantifies the total revenue or profit each target market customer generates over the buyer's life cycle

Descriptive statistics

refers to methods of describing and summarizing data using tabular, visual, and quantitative techniques.

A(n) _____ is a summary measure of data.

statistics

Malcolm Baldrige National Quality Award Program

was created to help stimulate American organizations to improve quality, productivity, and overall competitiveness, and to encourage the development of high-performance management practices through innovation, learning, and sharing of best practices. Leadership: This category addresses how senior leaders' personal actions guide and sustain the organization, the organization's governance system, and approaches for fulfilling ethical, legal, and societal responsibilities. Strategy: This category focuses on how an organization develops strategic objectives and action plans, implements them, and changes them if circumstances require, and measures progress. Customers: This category addresses how an organization engages its customers for long-term marketplace success, builds a customer-focused culture, listens to the voice of its customers, and uses this information to improve and identify opportunities for innovation. Measurement, Analysis, and Knowledge Management: This category focuses on how an organization selects, gathers, analyzes, manages, and improves its data, information, and knowledge assets; how it manages its information technology; and how it reviews data and uses the results to improve its performance. Workforce: This category addresses how an organization assesses workforce capability and capacity needs; builds a high-performance environment; and engages, manages, and develops its workforce to utilize its full potential in alignment with the organization's overall needs. Operations: This category addresses how an organization designs, manages, improves, and innovates its work systems and work processes to deliver customer value, and achieve organizational success. Results: This category examines an organization's performance and improvement in key business areas—product and process results, customer-focused results, workforce-focused results, leadership and governance results, and financial and market results.