isds
Five concerns of suppliers who enter a JIT partnership
(1) the ability to maintain a diverse customer base and still honor a partnership; (2) the purchaser's ability to maintain a smooth rate of demand; (3) changing lead times when new engineering or specification changes are introduced to the JIT system; (4) the ability to meet ongoing quality concerns with limited capital budges; (5) the focus on small lot sizes as a way to move buyers' holding costs onto suppliers
Three factors that contribute to variability
(1) unknown customer demand; (2) poor production processes that allow employees and suppliers to produce improper quantities; and (3) incomplete or inaccurate drawings, specifications, and bills of material
An insurance adjuster processes the claims of six policy holders in an eight hour work day. The adjuster uses $5 in gasoline and $3 in forms and office supplies to complete the work. What is her labor productivity?
.75 claims per hour The formula for single factor productivity is: Productivity = Units Produced / Labor Hours Used 6/8 = 0.75
An activity on a PERT network has these time estimates: optimistic = 1, most likely = 2, and pessimistic = 5. Its variance is:
0.4444 The variance is 0.444. Variance is calculated using the following formula: variance = [(b-a)/6]2, where a = optimistic time estimate (in this case 1) and b = pessimistic time estimate (in this case 5). Therefore; variance = [(5-1)/6]2 = 0.444
Dependent inventory models (like MRP) require managers to have the following five pieces of information:
(1) a master production schedule that outlines what products are to be made when; (2) specifications or bill of material that outlines the materials and parts necessary to make the product; (3) inventory availability; (4) purchase orders outstanding; and (5) lead times outlining how long it will take to get various component
3 things - Enterprise resource planning (ERP) is a software system that allows companies to:
(1) automate and integrate many (or most) of their business processes; (2) share a common database and business practices throughout the enterprise; and (3) produce information in real time
4 benefits of MRP systems
(1) better response to customer orders because of improved scheduling; (2) faster response to market changes; (3) improved utilization of facilities and labor; and (4) reduced inventory levels
When making a location decision at the region/community level, what eight factors would be considered
(1) corporate desires, (2) regional attractiveness, (3) labor availability, (4) environmental regulations, (5) government incentives, (6) proximity to raw materials, and (7) land/construction costs (8) cost and availability of utilities
5 things the economic order quantity (EOQ) model requires
(1) demand is known and constant, (2) lead time is known and constant, (3) the item has a constant ordering cost, (4) quantity discounts are not possible, and (5) inventory is received instantaneously
When making a location decision at the country level, what are the six factors to consider?
(1) political risks, (2) cultural and economic issues, (3) labor talent, attitudes, and productivity costs (4) availability of supplies, communication, and energy, and (5) exchange rates or currency risks (6) location of markets
Four common goals of lean partnerships include the
(1) removal of unnecessary activities (such as receiving and inspections); (2) removal of in-plant inventory (because delivery occurs in small batches more regularly); (3) removal of in-transit inventory (because suppliers are encouraged to locate near facilities); and (4) improved quality and reliability (because of long-term commitments)
Two car wash employees are paid $7.50 an hour each and are capable of washing 12 cars per hour, using $1 of water and $2 of soap and other cleaning supplies. What is the multifactor productivity of this operation?
0.667 cars per dollar Output / Total Inputs (e.g., labor costs + machine costs + material costs + overhead costs)
The smoothing constant that would make an exponential smoothing forecast equivalent to a naïve forecast is ______. This smoothing constant value suggests that the forecast for the next period is exactly the same as the forecast for this period's demand, which is the same as the naïve forecast model
1.0
A project's critical path is composed of activities A (variance .33), B (variance .67), C (variance .33), and D (variance .17). What is the standard deviation on the critical path?
1.22 To calculate the standard deviation you take the square root (√) of the sum of the critical path activity variances. In this case, Standard deviation = √.33+.67+.33+.17
A production line is to be designed to make 500 El-More dolls per day. Each doll requires 11 activities totaling 16 minutes of work. The factor operates 750 minutes per day. The required cycle time for this assembly line is __________
1.5 minutes he required cycle time for this assembly line is 1.5 minutes. Cycle time is defined as the maximum time that a product is allowed at each work station. Cycle time is calculated by dividing daily operating time (in this case 750 minutes a day) by the scheduled output (in this case 500 units per day). Thus, 750/500 = 1.5 minutes
How does the master production plan disaggregate the production plan?
By taking the production plan and then determining the specific quantities of parts and supplies needed to build the necessary number of products; the master production schedule informs operations managers and employees about what level of production is required to satisfy demand and meet the production plan.
________ diagrams typically focus on the four Ms—material, machinery, manpower, and methods; these factors serve as sources and possible inspection points for quality-improvement initiatives do not typically organize errors by identifying relative contribution (in percentage terms) to production problems
Cause-and-effect
Which of the following is true about the ISO 9000 certification? It deals with environmental management Certified organizations must be audited every three years One of the core-elements is a life-cycle assessment
Certified organizations must be audited every three years
__________________ is the technique where a manufacturer sends individual components (rather than assembled units) to a distributor
Channel assembly
_______ MRP systems are designed to provide feedback from the inventory control system
Closed-loop
The ____ model requires the assumption that demand is uniform and constant
EOQ
The objective of _____ systems is to integrate and coordinate a firm's entire business from supplier evaluation to employee tracking to customer feedback
ERP
______ forecasts utilize indicators like inflation rates, money supplies, and housing starts to understand business cycles
Economic
_______ is recognized for popularizing the use of interchangeable parts in the manufacturing process, which was possible due to his focus on standardization and quality control
Eli Whitney
A ____ ____ requirements plan is a schedule that combines a master production schedule and a time-phased schedule
Gross material
This type of plan clearly specifies when an item must be ordered from suppliers if there is no inventory on hand or when the production of an item must be started to satisfy demand for the finished product
Gross material requirements plan
Which one of the following is a concern expressed by suppliers who are in partnership with JIT organizations? Having limited ability to respond to changes in product and quality Large lot sizes Having too many customers
Having limited ability to respond to changes in product and quality
______'s work was focused on improvements in the assembly line manufacturing process
Henry Ford
__________ is a quality management approach that focuses on a series of environmental standards across five core elements
ISO 14000
What is the only internationally recognized quality standard
ISO 9000
________ is a set of quality standards developed by the International Organization for Standardization (ISO; focus on quality management procedures, documentation, and thorough leadership
ISO 9000
Porter's Five Forces Model is used to evaluate competition based on which 5 aspects?
Immediate rivals, potential entrants, customers, suppliers, and substitute products
The ______ is a term used to describe the phenomenon of where orders are communicated through multiple parties including retailers, distributors, wholesalers, and manufacturers. At each level, variations and fluctuations are introduced that can either elevate or decrease the reported demand; this ends up decreasing customer service and increasing costs
bullwhip effect
Which one of the following is an example of Lean being used for competitive advantage? Jones Company has decreased the number of job classifications to just a few Lafourche Metals increases the number of suppliers to be less dependent on just a few Houma Fabricators is proud to announce that incoming goods are inspected
Lafourche and Houma examples are focused on JIT partnerships
_______ is the term used to describe the latest time an activity can be completed and not delay the completion time of the entire project
Latest finish
______ strategic decisions pertain to sensible location of processes and materials in relation to each other
Layout design
______ are specifically characterized by continuous and forced problem solving through a focus on throughput and reduced inventory; this focus on the throughput process and continuous problem solving allows operations managers to fix problems at the source rather than continuing to produce defective parts through a long production run
Lean (pull) systems
In a ______, order size is one and single units are being pulled from one adjacent process to another, so fixed equipment is not a layout tactic
Lean environment
______ almost always: (1) utilize JIT techniques to reduce or eliminate inventory; and (2) educate suppliers to accept responsibility for satisfying customer needs
Lean operations
________ corporations have extensive involvement in the international locations often owning or controlling facilities in more than one country
Multinational
A firm producing a good is more likely to have which set of the following characteristics compared to a firm providing a service? Objective quality standards, tangible product, and located away from customers Subjective quality standards, intangible product, and located away from customers Objective quality standards, intangible product, and located near customers
Objective quality standards, tangible product, and located away from customers
_______ layout groups workers, their equipment, and spaces/offices to provide for movement of information; is one of the key drivers of long-run efficiency for operations does not focus on making decisions about how to implement manufacturing process improvements or manufacturing layout requirements
Office
_______ tasks involve any activity that relates to the creation of goods and services
Operations
Why must companies with P systems have higher safety stock?
P systems, or fixed-period inventory systems, require that inventory is counted at the end of a specific period of time (e.g., monthly, quarterly, etc.). Because inventory is only counted at one specific time, there is an increased likelihood of a stockout. To reduce this likelihood, companies should have higher safety stock
_____ is a continuous-improvement tool designed to help managers build continuous improvement into their actions plans
PDCA (plan, do, check, act)
________ analysis is a technique used to help project managers monitor and control large, complex projects
PERT (Program Evaluation and Review Technique)
In _______, each critical path activity has three estimates of duration - optimistic time, pessimistic time, and most likely time
PERT analysis
Two assumptions of PERT
PERT analysis assumes that no activity in the network must be repeated. PERT assumes that critical and non-critical path activities must be completed
________ are a problem-solving tool that help operations managers organize errors and defects to help identify appropriate solutions
Pareto charts
Which of the following is more likely to affect the location decision of a service firm rather than a manufacturing firm? Energy and utility costs Labor costs Parking and access
Parking and access Parking and access are most important to a service firm because of the direct relationship with the end consumer Energy costs and labor costs are important to all businesses, but given the reliance on a large workforce and extensive use of energy, production businesses tend to focus on these metrics more heavily than service firms
_______ speed product shipment by holding merchandise and delivery from the same distribution hub
Pass-through facilities
______ bills are used for components that exist only temporarily and are never included in inventories; coded to receive special treatment and lead times are set to zero (EX: computer fan that will be placed in a particular computer box during construction)
Phantom
Which one of the following is a characteristic of a Lean supplier partnership? Removal of incoming inspection Active pursuit of vertical integration Maximal product specifications imposed on supplier
Removal of incoming inspection; Businesses operating in Lean partnerships do not need to actively pursue vertical integration strategies because they view suppliers as extensions of their own organization and expect suppliers to be committed to continuous improvement
______ systems of inventory management involve forecasting inventory needs to meet customer demand; companies must predict what products a customer will purchase along with determining the quantity of products purchased
Push
Which of the following is not an attribute of lean operations? Eliminating almost all inventory through utilization of JIT Pushing responsibility to the highest level through centralized decision making Educating suppliers to accept responsibility for helping meet customer needs
Pushing responsibility to the highest level through centralized decision making Lean operations are focused on building employee empowerment through improved job design, training, teamwork, and allowing employees to participate in decision making
Which of the following is not a key benefit of MRP? Quality increases Improved response to customers Faster response to market changes
Quality increases
Quantitative methods of forecasting include Exponential smoothing Consumer market survey Sales force composite
Quantitative methods of forecasting include exponential smoothing. Consumer market surveys and sales force composites are both considered qualitative methods
With the growth of the JIT, which of the following distribution systems has been the biggest loser because JIT manufacturing techniques require the use of small, frequent deliveries? Airfreight Trucking Railroads
Railroads can't accommodate the small and frequent deliveries easily JIT has increased trucking and airfreight
_______ is a technique used to locate stock wherever there is open space
Random stocking
_______ layout is focused on making decisions about how to allocate shelf space and respond to customer behavior in an effort to increase customer exposure to products. The hope is that as customers see more product, purchases (and profit) will increase
Retail
The _________ process is a good way to evaluate a business strategy and determine core competencies
SWOT analysis
This practice is designed to allow firms to maximize opportunities and minimize threats in the environment by building off of a company's strengths and addressing internal weaknesses
SWOT analysis
Which of the following should be higher in P systems than Q systems? Demand Safety stock Order size
Safety stock
_______ represents inventory held at any point (raw materials, work-in-process, or finished goods) to prevent stockouts due to unpredictable spikes in demand, late shipments, long shipment times, or production breakdowns
Safety stock
_______ is focused on all of the activities associated with procuring materials and services, transforming those materials into intermediate goods, and delivering those goods to customers EX: credit and cash transfers and warehousing inventory levels
Supply-chain management
T/F - Employees, machines, and suppliers following production standards are not a reason for variability
T
T/F - Fixed-period systems do not necessarily involve higher ordering costs than fixed-quantity inventory systems
T - Fixed-period inventory systems do not create the need for additional inventory records or lower average inventory level. While this approach does increase the likelihood of a stockout, it is appropriate for perpetual inventory systems where counting inventory is routin
_____ employees are frequently cross-trained and the company uses very few job classifications
TPS
JIT, TPS, or Lean Operations: ______ systems emphasize employee learning and empowerment ______ systems tend to focus on problem solving and inventory reduction ______ tend to focus on understanding customer needs and reacting to customer demand
TPS, JIT, Lean Operations
_______ is an approach to quality management that focuses on the entire business process from suppliers to customers
TQM, or total quality management,
_______ concepts are a group of related concepts (quality robustness, quality loss functions, and target-oriented quality) that are all directed towards improving product and process quality
Taguchi
Costs of dissatisfaction, repair costs, and warranty costs are elements of cost in the __________
Taguchi Quality Loss Function
The ______ focuses on identifying costs associated with customer dissatisfaction, repair costs, and warranty cost
Taguchi Quality Loss Function
The ________ is one of three related Taguchi concepts that are all directed towards improving product and process quality
Taguchi Quality Loss Function The other two concepts are quality robustness and target-oriented quality
________ represent the production pace necessary to meet customer demands
Takt times
Among the following choices, an operations manager might evaluate political risk of a country most effectively by looking at which type of country ranking? Rankings based on size of government social programs Rankings based on cost of doing business Rankings based on corruption
Rankings based on corruption Corruption rankings measure things like willingness to engage in bribery and are useful proxies of political risk and instability in a country
Which of the following is not one of the factors complicating the techniques for addressing the fixed-position layout? Takt times at workstations are dynamic The volume of materials is dynamic There is limited space at virtually all sites
Takt times at workstations are dynamic Takt times are a factor considered in establishing work cells; takt times do not impact fixed-position layout decisions
__________ are readily identifiable costs that can be measured precisely; these costs include, among other things, labor rates, material costs, taxes, and depreciation of materials
Tangible costs
______ forecasts are concerned with rates of technological progress, which can result in the birth of new products and opportunities
Technological
_________ requires the supplier to open its books with the purchaser to determine an appropriate cost based on the suppliers material, labor, and equipment rates During this process, the supplier shares their accounting data with the purchaser
The cost-based price model
What is the primary reason why retailers tend to locate high-draw items around the periphery of the store?
This arrangement will help to maximize customer exposure to other items in the store
_______ (WBS) is a method used to break down projects into individual activities and costs. This is an important step in understanding and defining project timelines and deliverables
Work Breakdown Structure
_______ layout decisions focus more directly on balancing product flow from one workstation (or department) to another
Work-cell
Total quality management emphasizes __________
a commitment to quality that goes beyond internal company issues to suppliers and customers
A system that triggers ordering on a uniform time basis is called a _______
a fixed-period system
Traffic counts and purchasing power analysis of drawing areas are associated with __________ because they impact the customer-drawing area and the expendable income within the customer-drawing area
a retail or professional service location decision
ABC inventory analysis is based on the principle that ________; this approach to inventory management allows firms to focus on the few critical parts that drive dollar volume and not the many trivial ones
a small percentage of items typically consume a larger portion of dollar volume
Balancing low-cost storage with low-cost material handling is important to __________ a warehouse layout an office layout a product-oriented layout
a warehouse layout
ASRS stands for __________ automated storage and recovery system automated scan and retail system automated storage and retrieval system
automated storage and retrieval system
Enterprise Resource Planning __________
automates and integrates the majority of business processes
The ________ is a process that finds all the late start and finish times
backward pass
The last four weekly values of sales were 80, 100, 105, and 90 units. The last four forecasts were 60, 80, 95, and 75 units. These forecasts illustrate _____ which is a form of measurement error that occurs when forecasts are consistently greater or less than actual values
bias
A _________ is a list of the quantities of components and materials needed to manufacture a product
bill of material (EX: planning bills; phantom bills)
Having a ______ product line is least likely to be a cost leadership competitive advantage
broad Having a broad (or expansive) product line increases costs due to storage costs, stocking fees, etc
Most MRP systems load work into infinite time intervals called ________ without regard to any capacity issues
buckets
Demand for a certain product is forecast to be 800 units per month, averaged over all 12 months of the year. The product follows a seasonal pattern, for which the January monthly index is 1.25. What is the seasonally-adjusted sales forecast for January
1000 units To calculate a seasonally-adjusted sales forecast you take the product forecast (in this case 800) and multiply that by the monthly index (in this case 1.25). Thus, 800 * 1.25 = 1000
load reports are NOT used to
build additional capacity by enlarging a facility nor are they used to indicate that an aggregate plan needs to be revised
Given last periods forecast of 65, and last periods demand of 62, what is the simple exponential smoothing forecast with an alpha of .4 for the next period?
63.8 The simple exponential smoothing forecast model uses the following equation: Last periods forecast + α(Last periods demand - last periods forecast), where α = the smoothing constant. Therefore, in this case: Last periods forecast = 65 α = .4 Last periods demand = 62 65 + .4 (62 - 65) = 63.8
The service sector makes up approximately ____% of all jobs in the United States. Service sector jobs represent any type of job that produces an intangible product, such as education, health care, transportation, or food service
80
Each X requires 2 of component Y; each Y requires 4 of part Z. The lead time for assembly of X is 1 week. The lead time for the manufacturer of Y is 1 week. The lead time for procurement of Z is 6 weeks. The cumulative lead time for X is __________ weeks
8; 1 week (LT for part Y) + 6 weeks (LT for part Z) + 1 week (assembly time for product X) = 8 weeks cumulative lead time
A store wants to ensure a shelf full of marshmallow peeps as the holiday season approaches. Daily demand for peeps is normally distributed with a mean of 25 and a standard deviation of 5. Lead time is 3 days and the store intends a 98% service level. What is the appropriate reorder point?
93 z = 2.055 demand rate SD = 5 LT SD = sq root of 3 --> 1.732 ZσdLT = 2.055*(1.732*5) = 18 ROP = 25(3) + 18 = 93
______ distribution systems offer quickness and reliability when emergency supplies are needed overseas among the fastest and most reliable ways to ship supplies and freight and is frequently used to ship lightweight items nationally and internationally
Airfreight
_________ models, such as regression models, are considered more powerful than time-series models because they do not rely solely on historical values for forecasted variables
Associative
________ is an inspection point that focuses on classifying items as either good or defective. This approach does not define the degree of acceptability—a product is either good (it works) or it is defective (it does not perform)
Attribute inspection
_____ is the term used to describe the situation where a larger firm purchases a former supplier. EX: would occur if a car manufacturer purchased a controlling share in a tire company or glass manufacturer
Backward integration
Why do ERP systems tend to be expensive to implement?
Because of the broad scope (i.e., the focus on the entire organization) and the need to implement new software; however, these upfront costs can improve the efficiency of internal operations and effectiveness of a business
_______ is a process used to determine the expected standards of performance
Benchmarking
A ________ strategy has decentralized authority with substantial autonomy at each business. These businesses are typically franchises or joint ventures with substantial independence. The primary advantage of is local responsiveness
multidomestic
The international operations strategy that involves a focus on cost reductions and high local responsiveness is a _____ strategy
multidomestic
The quantitative method known as the _________ method makes the assumption that future demand will be the same as past demand
naïve
In a PERT network, non-critical activities that have little slack need to be monitored closely because ___________
near-critical paths could become critical paths with small delays in these activities
The third stage of vendor selection is _____ which is focused on quality, delivery, payment, and costs
negotiations
Type of plan to use when there is inventory on hand; takes into account assemblies, subassemblies, and individual parts in the production order and planning state
net requirements plan
Most firms have recognized that it is ___________ to respond to minor scheduling or quantity changes in an MRP system even if they are aware of them because it will create system nervousness
not effective
Organizations that produce goods typically have many ______ quality standards (e.g., amount of waste product, number of units produced), they usually have ______ products (e.g., car, toaster oven, clothing item) and may need to locate _____ to/from raw materials and labor force rather than customers
objective; tangible; closer
Once individual missions are developed, a functional area can create ______ strategies to achieve the functional area mission and corporate mission
operational
A/an ______ task performed at Hard Rock Café is preparing employee schedules
operations preparing employee schedules ensures that staff are working to provide adequate service for customers
The transfer of some of what are traditional internal activities and resources of a firm to outside vendors is __________ the term used to describe the decision to move any aspect of a firm's operation to an outside vendor. This is frequently done by businesses that want to focus on areas of the business directly tied to their central operation and competitive advantage can be done with any task that falls outside of central operations
outsourcing
3 ways to smooth a load report
overlapping production, operations splitting, and order or lot splitting
A production manager at a pottery factory has noticed that about 70 percent of defects result from impurities in raw materials, 15 percent result from human error, 10 percent from machine malfunctions, and 5 percent from a variety of other causes. This manager is most likely using a __________
pareto chart
Operations managers can use _______ as a problem-solving tool to organize errors and identify solutions; managers should focus on the issues as they strive for continuous improvement
pareto charts
An international business is a firm that __________
participates in international trade or investment
In an MRP system, ________ is used to trace upward in the bill of materials from the component to the parent item;
pegging
In regard to MRP systems, _________ allows the production planner to determine the need for a part and make informed decisions about adjusting production schedules
pegging
Linking a part requirement with a parent component that caused the requirement is referred to as
pegging
2 ways to deal with MRP dynamics and system nervousness
pegging and time fences
The mismatch between infinite buckets and finite capacity in MRP systems creates ________
planning problems
The management process consists of _____
planning, organizing, staffing, leading, and controlling NOT: inspecting Planning involves determining organizational goals and a means to achieve them, organizing is deciding where decisions will be made and who will be responsible for certain tasks, staffing is focused on determining who to hire and where to place each employee, leading involves inspiring and motivating workers, and controlling is monitoring progress towards goal achievement
Governmental attitudes toward issues such as private property, intellectual property, zoning, pollution, and employment stability may change over time. The term associated with this phenomenon is __________
political risk
Keeping a product generic as long as possible before customizing is known as __________ This process is very useful when making somewhat generic products (like computers, printers, televisions, etc.)
postponement
Using ABC analysis allows companies to _________
prioritize their inventory by the annual dollar volume. Class A items will get the most attention including supplier development, records verification, and forecasting. Class B will receive less attention Class C items will receive the least amount of time and attention
Because ______ models rely on estimates, organizations must develop inventory policies that rely on an increased safety stock to buffer against inaccurate estimates
probablistic
ISO 9000 seeks standardization in terms of __________
procedures to manage quality
The type of layout which features departments or other functional groupings in which similar activities are performed is __________
process-oriented
An approach to defining production quality is known as a _______-based definition of quality, which assumes that there are absolute ways to measure quality that focus on specific, expected product attributes (such as the degree of stain resistance in car upholstery)
product
6 areas where a business can use value-chain analysis to add value for a customer
product research, design, human resources, supply-chain management, process innovation, or quality management NOT: financial management
Both the _____ model and _____ model try to balance inventory costs with stockout risks
production order quantity model and the EOQ
a kanban system moves parts through production via a PULL/PUSH from a signal
pull
Which of the following is generally found in most JIT environments? Pull systems Push systems
pull systems
In _____ systems workflow is initiated by the "pull" of the customer's order. Thus, rather than ______ products based on forecasting models, JIT systems give the customer what they want when they want without waste or excessive holding inventory
pull; pushing
A ______ is an activity that produces an intangible product, such as attending a concert or receiving counseling An intangible product is experienced (e.g., attend a concert) rather than consumed like a good (e.g., purchase a tube of toothpaste)
pure service
The tracking signal is the__________; it is a measure of how well a forecast is predicting actual demand values
ratio of cumulative error/MAD
Four main categories of inventory
raw material inventory, work-in-process inventory, maintenance/repair/operating inventory and finished goods inventory NOT safety stock
Distortion in MRP systems can be minimized when safety stock is held at the __________
raw material level; best to hold safety stock at the raw material level or the finished goods level because it removes questions about subassembly availability
The _____ represents when the business needs to place orders to allow for delivery and setup time without running out of an item
reorder point
All of the following are advantages of enterprise resource planning except it __________ requires additional training increases communication and collaboration between business units worldwide can provide a strategic advantage over competitors
requires additional training; full implementation of ERP systems require employees to receive training to understand the company level changes and the impact on existing processes
A _______ strategy requires that organizations distinguish their products or services by being able to customize products or offer a variety of products to meet customer demand
responsive
Given the global nature of business operations, efficient supply chains, and web-based business models, ______ are rarely impacted by the location of central operations
sales
Time-series patterns that repeat themselves after a period of days or weeks are called __________
seasonality
The "S" focused on ______ is targeted on decreasing variations in the production process by developing consistent operating procedures and checklists
standardization
SWOT analysis refers to __________
strengths, weaknesses, opportunities, and threats
The four stages of supplier selection, in order, are __________
supplier evaluation, supplier development, negotiations, and contracting
specific behaviors and strategies that lead to achieving the identified success factors
support activities
Characteristics of JIT partnerships with respect to suppliers include: supporting suppliers so they become or remain price competitive frequent competitive bidding pursuit of vertical integration to reduce number of suppliers
supporting suppliers so they become or remain price competitive do not engage in competitive bidding - instead engage in open discussions about costs, business operations, and profits with desire to make both businesses successful JIT partnerships do not need to actively pursue vertical integration strategies because they view suppliers as extensions of their own organization and expect suppliers to be committed to continuous improvement
There are two types of costs typically considered in location analysis—_______ (or readily identifiable costs such as labor and utility rates) and _____ costs (or costs that are difficult to quantify such as quality of life and government regulations)
tangible; intangible
Difference between MRP and MRP II
the broadened focus on resource variables other than inventory
A restaurant runs a special promotion on lobster and plans to sell twice as many lobsters as usual. When this large order is sent to the distributer, the distributer assumes the large size is a trend, not a one-time event. The distributer, therefore, places an even larger order with the lobsterman. This is the result of __________
the bullwhip effect
The activity that takes place most immediately once the organization's mission has been developed is that _____
the functional areas develop their supporting missions Once the corporate mission is determined, each functional area (e.g., marketing, finance/accounting, and production/operations) develops its supporting mission
A disadvantage of the "few suppliers" strategy is __________
the high cost of changing partners The long-term relationship that is common in a few partners model creates dependence between the firms that can sometime backfire when one partner can no longer meet their expectations
Productivity measurement is complicated by __________
the lack of precise units of measurement because many jobs are knowledge based (vs. manufacturing), it is difficult to identify precise input and output measures
The difference between a multinational corporation (MNC) and an international business is that __________
the multinational firm owns or operates facilities in a variety of countries
The number of kanbans should be equal to the ratio of _______; this ratio provides the authorized level of inventory
the ratio of (demand during lead time + safety stock) to container size
The service sector has lower productivity improvements than the manufacturing sector because __________
the service sector is usually more labor intensive than the manufacturing sector
Increases in productivity are difficult to achieve if __________ because they make it difficult to improve productivity because the amount of inputs (effort, materials, etc.) required to produce a single output are variable
the task is more personal
Businesses that adopt a ________ strategy recognize that core competence can exist anywhere in the company—not just in the home country of the business
transnational
The international operations strategy that allows a firm to pursue all three operations strategies is ________ strategy
transnational
The term _______ describes the condition where raw materials, people, and ideas cross national boundaries to create economies of scale that allow the company to pursue all three operation strategies—differentiation, low cost, and response
transnational
Businesses that are focused on identifying market/destination or supplier locations should use the ______ method of location analysis
transportation
The _________ method is a location analysis method used to determine the best pattern of shipments from points of supply (or sources of materials and goods) to sources of demand (or destinations); it is targeted at minimizing production and shipping costs
transportation
The ___________ method is a location analysis method used to determine the best pattern of shipments from points of supply (or sources of materials and goods) to sources of demand (or destinations); targeted at minimizing production and shipping costs
transportation
According to JIT and lean operations, waste can be due to several factors including
unnecessary movement, over processing work, building up inventory, creating queues with long lead times need good supplier networks
The center-of-gravity method does not take into consideration the __________ value of goods shipped volume of goods shipped to the markets location of markets
value of goods shipped The center-of-gravity method does take into consideration both volume of goods shipped and the location of markets
Inspection points that focus on the scale, or degree, of performance are called ____ inspection points
variable
The second stage of vendor selection is _____, which focuses on integrating a supplier into the supply chain; involves outlining product specifications, developing quality control systems, creating a payment system, and developing procurement policies
vendor development
The ______ stage involves identifying vendors and determining if they would be reliable suppliers
vendor evaluation first stage
The three major variations of online catalogs are grouped by __________
vendors, intermediaries, and buyer exchange systems
The primary purpose of ________ layout is to appropriately handle the trade-off between handling costs (e.g., transport, storage costs, etc.) and costs associated with warehouse space (e.g., equipment, people, insurance, depreciation, etc.)
warehouse
Cargo shipped by _____ is typically low value and bulky; an important method of shipping if shipping costs are more important than speed since it's cost efficient, but very slow
waterways
The two most important inventory-based questions answered by the typical inventory model are ______
when to place an order and how many of an item to order
Holding safety stock at this level increases distortion because it is more difficult to calculate lead times in the planning process regarding delivery times for the remaining parts and assembly times for the final product
work-in-process
The Beta distribution is used in project management to _______ by weighting three time estimates including the optimistic time of an activity, the pessimistic time of an activity, and the most likely time for an activity
calculate expected activity times
Material requirements planning (MRP) does not consider __________
capacity
A customer service manager at a retail clothing store has collected numerous customer complaints from the forms they fill out on merchandise returns. To analyze trends of patterns in these returns, she has organized these complaints into a small number of sources or factors. This is most closely related to the __________ tool of TQM
cause-and-effect diagram
A successful TQM program incorporates all of the following except __________ centralized decision-making authority benchmarking continuous improvement
centralized decision-making authority
The appropriate level of safety stock is typically determined by _________
choosing the level of safety stock that assures a given service level
(MRP) During the ____ process, operations managers will utilize feedback from load reports and attempt to smooth work load and minimize the impact of changed workloads through methods such as operation splitting or lot splitting
closed-loop
Geographic Information Systems can assist the location decision by __________
combining geography with demographic analysis
A _______ strategy requires that organizations distinguish their product or services in a way that customers perceive as adding value (e.g., BMW is marketed as the Ultimate Driving Machine)
differentiation
Organizations can achieve a competitive advantage through one of three primary strategies
differentiation, low cost, or response NOT: setting equipment utilization goals
The center-of-gravity method is used primarily to determine ________ locations
distribution center
Cycle time is calculated by
dividing daily operating time by the scheduled output for a production day
______ businesses may actually hire non-U.S. citizens or use or purchase raw materials necessary for their business from outside the country
domestic
A furniture maker has delivered a dining set to the end consumer rather than to the furniture store. The furniture maker is practicing __________
drop shipping
The EF of an activity is the _______;
earliest an activity can be completed and is determined by identifying the early start time (ES) and adding in the amount of time it will take to complete the activity (Activity Time) ES + Activity Time
Standardization and repetition boost productivity because they create _____
efficiency
Ambient conditions, spatial layout and functionality, and signs, symbols, and artifacts are all __________
elements of successful servicescapes
Building high-morale organizations and building communication networks that include employees are both elements of __________
employee empowerment
________ is focused on increasing employee involvement in the production and/or service delivery process; it is critical because most errors are the result of faulty production methods and/or deficient practices This can happen through various mechanisms, but one of the most common is enlarging jobs such that decision making authority is moved into lower levels of the company
employee empowerment
The five core elements of ISO 14000
environmental management, auditing, performance evaluation, labeling, and life cycle assessment
The ability of an organization to produce services that, by utilizing the consumers' five senses, have some uniqueness in their characteristics so that they become immersed in the product is __________ EX: Disney theme parks
experience differentiation While the physical mechanics of the rides are similar to other theme parks, the experience is "magical" because it is associated with Disney characters and movies
The ______ approach is a complicated forecasting approach that uses statistical weights for individual data points
exponential smoothing
The ______ method of location analysis requires managers to identify weights for key success factors affecting location decisions (such as labor rates or energy costs)
factor-rating
Evaluating location alternatives by comparing their composite (weighted-average) scores involves __________
factor-rating analysis
The ________ method best considers intangible costs related to a location decision; it is a useful tool for location analysis because it focuses on the relevant key success factors at the country, region, and site level
factor-rating method
The _______ supply-chain strategy is focused on developing long-term relationships with a few dedicated suppliers; long-term suppliers have a vested interest in the procuring firm and the end customer and function much more like a partnership
few suppliers
MRP does not recognize ______ and/or ______
finite labor and/or equipment capacity
Using a _______ inventory system increases the likelihood of a stockout because there is no routine count of inventory during a specific review period. Instead of basing inventory orders on the amount of stock on hand (or predetermined reorder points), inventory orders are made at the end of a specified time interval
fixed-period
In a ________ layout, the project remains in one place and workers and equipment come to that one work area
fixed-position
In a ________ layout, the project remains in one place and workers and equipment come to that one work area. EX: the construction of a high-rise building
fixed-position
The early start and finish times are determined during the _________, which is a process used to determine all of the early start times and finish times for activities in a project
forward pass
System nervousness in an MRP system is evidenced by
frequent changes to MRP systems including production schedule and order changes
A _______ stores and displays information that can be linked to a particular geographic location; can use it to combine information such as population, age, income, and traffic flow to pinpoint the most effective location for a new store
geographic information system (GIS)
A ______ strategy is a strategy in which operating decisions are centralized and headquarters coordinates the standardization and learning process
global
10 strategic decisions that influence the OM process are
goods and services design, quality, process and capacity design, location selection, layout design, human resources and job design, supply-chain management, inventory, scheduling, and maintenance NOT: marketing
The list of the 5Ss supports lean production by __________
identifying non-value items and removing them, in the "sort/segregate" item. Getting rid of non-value items makes additional space and improves work flow
The trucking industry is establishing technologies, which let shippers and truckers find each other in order to ________ by using some of the industry's idle capacity
improve logistics efficiency
In the probabilistic model, increasing the service level will __________
increase the cost of the inventory policy
3 Benefits of managing quality
increased productivity (up to 5 times more units produced per labor hour when compared to companies with less quality focus), increased sales, and reduced costs. All three of these factors boost profit
The capital investment each year in the United States usually __________ at a rate of 1.5% after allowing for depreciation
increases
_____ is a supply-chain complication best described as optimizing one's local area without full knowledge of the organizational need; does not describe production efficiency or focus on the compatibility of corporate cultures
local optimization
Availability of public transportation and quality and attitude of prospective employees are factors that are frequently considered during __________
location analysis
The reason retail stores are often found in close proximity to each other is __________; happens when a major resource can be found in a single geographic location. The resource could be raw materials, human talent, or information resources
location clustering
_______ forecasts are used in planning for new products, capital expenditures, and facility planning
long-range longer than 3 years
The critical path of a network is the__________. Identifying and understanding the critical path is one of the most challenging aspects of managing and controlling a project
longest time path through the network
The ___________ is a production plan that is focused on producing the exact amount to meet forecasted demand; does not deal with system nervousness
lot-for-lot approach
The main advantage of a product-oriented layout is typically __________
low variable cost per unit because of the focus on high-volume, standardized products The high-volume production process increases the capital/investment costs because this type of production requires specialized machinery
A _______ strategy requires that organizations distinguish their products or services in a way that emphasizes low costs and maximum value for customers
low-cost
The best example of competing on _______ leadership is a firm that produces its product with less raw material waste than its competitor
low-cost
Achieving competitive advantage by competing on _________ requires that a business achieve maximum value for customers by driving down costs while still providing quality goods and services to customers. One way to drive down costs is to improve efficiency by creating less material waste or scrap during the production process
low-cost leadership
The lower the service level, the _____ the requirement of safety stock
lower
Among the ethical and social challenges facing operations managers are __________ involves creating ecologically sustainable work processes that use fewer resources/inputs (raw materials, supplies, etc.) to create green products and services
maintaining a sustainable environment An added benefit of focusing on sustainability is the reduced cost associated with inputs
In MRP, system nervousness is caused by __________
management's attempt to continually respond to minor changes in production requirements
"Making it right the first time" is a ______-based definition of quality This approach to quality focuses on quality outcomes like conforming to production standards
manufacturing
Inventory management policies based on ABC analysis might include investing _______ more in supplier development for A items the most time verifying the accuracy of records for B items extra care in forecasting for C items
more in supplier development for A items
The _______ is calculated by summing the relevant monthly demand reports and dividing by the months included in the model
moving average
Dummy activities__________
are used when two AOA network activities have identical starting and ending events
A seasonal index for a monthly series is about to be calculated on the basis of three years' accumulation of data. The three previous July values were 110, 150, and 130. The average over all months is 190. The approximate seasonal index for July is
0.684 Step 1 - Calculate average historical demand. To do this, we must first obtain the actual demand during July (in this case 110, 150, 130) and divide by the number of months on record (in this case 3). Thus, average July demand is calculated as 110 + 150 + 130 = 390/3 = 130 Step 2 - Calculate seasonal index by taking monthly average (130) and dividing by average demand over all months (190). Seasonal index for July is 130/190 = 0.684
The seven common inspection points include:
1) The supplier's plant while the supplier is producing 2) The receiver's facility upon receipt of goods from the supplier 3) Before costly or irreversible processes 4) At each step of the production process 5) When the production or service process is complete 6) Before delivery or shipment to the customer 7) At the point of customer contact NOT: after a costly process
Three advantages of work cells
1) increased equipment and machinery utilization is considered a benefit of work cell utilization; possible because of better scheduling and faster material flow between employees 2) reduced raw material and finished goods inventory (less work-in-process allows more rapid movement of a product within a work cell) 3) reduced direct labor costs (because of improved communication within the work cell)
Three factors complicating fixed-position layouts
1) there is limited space at virtually all sites. 2) different materials are required at different stages of the product. 3) the volume of materials needed is dynamic
An inventory decision rule states "when the inventory level goes down to 14 gearboxes, 100 gearboxes will be ordered." Which of the following statements is true? 100 is the reorder point, and 14 is the order quantity 14 is the safety stock, and 100 is the reorder point 14 is the reorder point, and 100 is the order quantity
14 is the reorder point, and 100 is the order quantity reorder point represents the appropriate level to place orders to allow for delivery and setup time without running out of an item order quantity represents the total number of items that need to be ordered at each purchase interval
An activity has an optimistic time of 15 days, a most likely time of 18 days, and a pessimistic time of 27 days. What is the expected time?
19 days Expected time (t) is calculated using the following formula: t = (a + 4m + b)/6, where a = optimistic time estimate (in this case 15); m = most likely time estimate (in this case 18); and b = pessimistic time estimate (in this case 27). Therefore; t = (15 + 4*18 + 27)/6 t = 114/6 t = 19
The productivity of the United States has increased, on average, at ____% a year over the last century
2.5
An item's annual holding cost is $75. Each setup costs $100. Lead time is 2 weeks. Annual demand is 15,000. The EOQ lot size quantity would be ___________
200 use basic EOQ formula
A Six Sigma program has how many defects per million?
3.4 defects per million units produced. Six Sigma is a total quality management approach that focuses on building a process, product, or service with an accuracy rate of 99.9997% accuracy. This accuracy rate achieves a very high quality threshold and results in only 3.4 defects per million units produced
The last four months of sales were 8, 10, 15, and 9 units. The last four forecasts were 5, 6, 11, and 12 units. The Mean Absolute Deviation (MAD) is
3.5 The last four months sales were 8, 10, 15, and 9 units. The forecasts for these same months were 5, 6, 11, and 12 units. Forecast errors are calculated using the equation demand - forecast. In this case, that would be 8 - 5 = 3; 10 - 6 = 4; 15 - 11 = 4; 9 - 12 = -3. Therefore: 3+4+4+3 = 14 14/4 = 3.5
An activity has an optimistic time of 11 days, a most likely time of 15 days, and a pessimistic time of 23 days. What is its variance?
4 Variance (v) is calculated by using the following formula: v = [(b-a) / 6]2, where b = pessimistic time estimate (in this case 23) and a = optimistic time estimate (in this case 11)
A time-series trend equation is 25.3 + 2.1X. What is your forecast for period 7?
40 This is determined by solving the equation 25.3 + 2.1X, where X = time period. In this case we are interested in period 7. Therefore: 25.3 + 2.1(7) =40 25.3 + 14.7 = 40
A production facility is trying to determine the best batch size for an item that is produced intermittently. This item has an annual demand of 1,000 units, an annual carrying cost of $10 per unit, and a setup cost of $400. They operate 50 weeks per year, and can produce 40 units per week. What is the best batch size for this item?
400; use the production order quantity equation for annual demand and production rates
A specific product has expected demand during lead time of 100 units, with a standard deviation during lead time of 25 units. What safety stock (approximately) provides a 95% service level?
41 1.65*25 = 41.25
Given the following data about monthly demand, what is the approximate forecast for May using a four month moving average? November = 39 December = 36 January = 40 February = 42 March = 48 April = 46
44 40+42+48+46 = 176 176/4 = 44 Moving Average = 44
Companies with the highest levels of quality are about __ times more productive than their competitors with the lowest quality levels
5
Four hundred and eighty minutes of production time are available per day. The schedule calls for the production of 80 units per day. Each unit of the product requires 30 minutes of work. What is the theoretical minimum number of workstations?
5 The theoretical minimum number of workstations is 5. The minimum number of workstations is determined by calculating the sum of all the task times divided by the cycle time. Thus, in this case, our first step is to calculate the cycle time. Cycle time is calculated by dividing daily operating time (in this case 480 minutes a day) by the scheduled output (in this case 80 units per day). Thus, 480/80 = 6 minutes. Our second step is to calculate the number of workstations. The minimum number of workstations is determined by calculating the sum of all task times (in this case 30) divided by the cycle time (in this case 6). Thus, 30/6 = 5
The fixed-position layout would be most appropriate in which of the following settings? A cruise ship assembly facility A doctor's office A casual dining restaurant
A cruise ship assembly facility In a fixed-position layout, the project remains in one place and workers and equipment come to that one work area. This would make sense during a cruise-ship assembly process because the size of the ship would make it difficult to move A doctor's office and a casual dining restaurant require employees (either doctors or waiters) to move between stations (rooms or tables) to provide their service. Thus, the project moves location constantly
________ is a method of inventory management that involves forecasting inventory needs to meet customer demand; under these systems companies must predict what products a customer will purchase along with determining the quantity of products purchased
A push system
Which of the following best describes a gross material requirements plan? A schedule showing which products are to be manufactured and in what quantities An intermediate-range plan for the scheduling of families of products A schedule that shows total demand for an item, when it must be ordered from a supplier, or when production must start
A schedule that shows total demand for an item, when it must be ordered from a supplier, or when production must start
_________ is an inventory management process that improves record accuracy by dividing on-hand inventory into three classes generally based upon annual dollar volume
ABC analysis
Dummy activities are frequently used in _____ networks, but not in ______ networks. Dummy activities are not considered critical activities because they consume no resources or time
AOA; AON
_______ systems are a useful tool as warehouse managers try to reduce the costs associated with finding and moving material within a warehouse as well as the resulting damage and product deterioration associated with moving supplies
ASRS
Capacity planning in closed-loop MRP does not do which of the following? Adds in additional capacity Utilize feedback about workload Smooth work center loads
Adds in additional capacity; this would be an operations decision that falls outside the closed-loop MRP system
For which of the following operations would a fixed-position layout be most appropriate? Constructing a highway tunnel or bridge Producing TV sets Assembling automobiles
Constructing a highway tunnel or bridge In a fixed-position layout, the project remains in one place and workers and equipment come to that one work area. This would make sense during the construction of a highway tunnel or bridge because both are immovable structures Producing TV sets and moving automobiles through an assembly line requires employees to stay at their workstation and a product moves to them. Thus, the employee stays relatively stationary and the product moves to them
Two strategies of supply chain management
Continued negotiation with many suppliers and vertical integration are both supply-chain strategies that are commonly used Effective supply-chain strategy is focused on obtaining goods and services from sources outside the firm
________ under TPS means building an organizational culture and instilling in its people a value system stressing that processes can be improved, that improvement is an integral part of every employee's job
Continuous improvement
_______ are built so that data can be compared across time so that new data can be easily compared with past performance data
Control charts
________ are graphic presentations of data over time that show target values, upper limit, and lower limit for the process being controlled. These values are used to monitor and evaluate quality The upper and lower limits are chosen so that the majority of the data points will fall within the parameters of these two limits - simply because a value falls above the upper limit does not necessarily imply the product is exceeding expectations
Control charts
Effective use of MRP and other dependent demand models does not require which of the following? Cost of individual components Bill of materials Lead times
Cost of individual components
_______ shortens the project duration by assigning more resources to one or more of the critical tasks in a project
Crashing
__________ activities are those activities that will delay the entire project if they are not completed on time
Critical path
________ requires an information system that provides inbound product identification, its destination, and routing of the product to the designed outbound vehicle designed to avoid placing materials or supplies in storage by processing them as they are received implemented in an effort to avoid stocking by immediately routing the inbound product to a location where it will be processed and used EX: in a distribution center a shipment would arrive at the shipment dock labeled and presorted for immediate re-routing and delivery
Cross-docking
_________ are used in process configurations to determine the appropriate volume of production
Crossover charts
_______ is focused on adding value to the production process by modifying a product. It does not directly focus on product identification or product routing through a business
Customizing
________ is a process by which inventory records are verified for accuracy; requires continuous audits and is used to count inventory and audit records based on the ABC model of inventory management; companies are counting their most valuable inventory (Class A items) frequently and their least valuable inventory (Class B and Class C items) infrequently
Cycle counting
_____ are patterns in data that occur over longer time horizons such as multiple years
Cycles
The ______ method uses three types of participants: decision makers, staff personnel, and respondents
Delphi
A forecast that projects a company's sales is a(n)
Demand forecast
________ (also called sales forecasts) are projections of demand for a company's products or services; impact a company's production, capacity, and scheduling systems
Demand forecasts
Many of the management quality points outlined by _____ highlight the importance of training and development initiatives designed to improve knowledge, provide education, and lead to self-improvement
Deming
______ focused on building skills through training, building capacity through leadership, and creating a consistency of purpose
Deming
_____ is a supply-chain management technique where a product is shipped directly from the supplier to the end consumer. This practice saves time and additional shipping costs
Drop shipping
_________ occurs when one firm tries to model their performance off of other successful firms. For example, many companies have tried to use Google's famous employment practices in an effort to boost the productive output of their employees EX: one of Britain's largest children's hospitals working with Ferrari Racing
External benchmarking
________ are those costs that occur after delivery of defective parts or services and include the costs of returned goods, product liability claims, decreased customer satisfaction, etc
External failure costs
Which of the four major categories of quality costs is particularly hard to quantify and why?
External failure costs are difficult to quantify because the costs occur after the production cycle (and external to the business) and some outcomes such as lost goodwill and final costs to society are difficult to pinpoint precisely
T/F: tangible goods are generally produced and consumed simultaneously; services are not
False services are generally intangible, produced and consumed simultaneously, unique for each customer, have a high degree of customer interaction, and are typically knowledge based
T/F - MRP II is accurately described as an enhanced MRP that includes all elements of the supply chain
False - given the dependent demand assumptions of MRP systems it would be almost impossible to include all elements of a supply chain
________ is focused on understanding how organizations are performing, paying bills and collecting money
Finance and accounting
If a casual-dining restaurant is attempting to practice JIT and lean operations, which of the following would NOT be present? Close relationship with the restaurant's suppliers of food, utensils, and equipment A kitchen set up to minimize unnecessary movement Food preparation in large batches
Food preparation in large batches Producing more than the customer orders or producing early is waste. In these systems inventory of any kind is considered waste
_______ represent how the activity schedules flow on the project network and are used to determine the overall project schedule
Forward and backward passes
________ is the term used to describe the situation where a maker of parts begins to produce final products EX: American Apparel clothing company who makes clothes and then sells them in their own branded store rather than through a traditional retail department store
Forward integration
________'s research impacted multiple areas of management including human resource management, planning, motion study, and ergonomics the father if scientific management
Frederick Taylor
_______ are visual devices that show the duration of activities in a project; graphically specify all of the tasks involved in a project and how much time should be spent doing each activity
Gantt charts
If the goals of JIT partnerships are met, which of the following is a result? For incoming goods, receiving activities are outsourced In-plant inventory replaces in-transit inventory In-transit inventory falls as suppliers are located closer to facilities
In-transit inventory falls as suppliers are located closer to facilities unnecessary activities like incoming inspection, receiving activities, and paperwork related to bidding, invoicing, and payment can largely be eliminated because of the trust based relationship between partner firms
_______ is focused on adopting practices between business units inside one firm. For example, the research and development division could learn budget best practices from the accounting department and the accounting department might be able to learn team-building skills from the research and development division
Internal benchmarking
_________ represent costs that result from production of defective parts or services before delivery to customers; can be reasonably estimated EX: Costs associated with scrap and rework
Internal failure costs
______ businesses simply engage in cross-border transactions; they do not own or control facilities in more than one country
International
______ allows organizations to take advantage of quantity discounts that provide a buffer against future price increases and inflation
Inventory
________ management involves planning, coordinating, and controlling the acquisition, storage, handling, movement, and sale of different types of inventory
Inventory does NOT directly deal with the production process
Which of the following statements regarding the gross material requirements plan is false? It includes inventory on hand It shows when an item must be ordered or when production must be started It combines a master production schedule with the time-phased schedule
It includes inventory on hand; gross material requirements plans assume there is no inventory on hand
Which of the following is false concerning enterprise resource planning? It is inexpensive to implement. It shares common data and practices across the enterprise. It provides and accesses information in a real-time environment
It is inexpensive to implement
________ layout tactics focus on building work cells for families of products, minimizing the distance between work cells, increasing flexibility to react to changes in volume and new designs, cross training employees, and reducing the amount of space utilized for inventory and work processes
JIT
______ represents an inventory management concept, but does not deal with a specific number of items held in stock
Just-in-time inventory
_______ are often necessary, but not sufficient for competitive advantage
KSFs
those activities or factors that are considered instrumental to achieving competitive advantage
KSFs
Focus on continuous improvement is described by _____________
Kaizen
The _____ supply-chain strategy is focused around building a coalition of supplier businesses that partner with the end manufacturer. In some cases, the manufacturing firms even become financial supporters of the suppliers supply-chain strategy that focuses on integrating the two strategies of building relationships with a few suppliers and vertical integration
Keiretsu
______ are those activities that are necessary for a firm to achieve its goals and mission. Key success factors can be so significant that a firm must get them right to survive in the marketplace
Key success factors
The LS of an activity is the
LF - Activity time It is the latest an activity can be started and is determined by identifying the late finish time (LF) and subtracting from it the amount of time it will take to complete the activity (Activity Time)
Which of the following statements concerning the operations management decision is relevant to services? There are many objective quality standards Labor standards vary depending on customer requirements The customer is not involved in most of the process
Labor standards vary depending on customer requirements
________ analysis is a location-analysis technique typically employed by a service organization
Purchasing power
__________ is a production management process where operations managers set a level production schedule in an effort to build inventories that will meet fluctuations in demand
Leveling
_______ is designed to minimize the imbalance (or delay) that is created when employees are waiting on output from a different part of the production line; cycle time is an important component because it allows operations managers to forecast the maximum amount of time a product should be allowed at each workstation
Line balancingLine balancing
________ analyses typically focus on identifying locations for manufacturing facilities rather than service firms
Location break-even
__________ analysis is a break-even economic comparison of different production locations; focuses on fixed and variable costs for both locations rather than the purchasing power of a given area
Locational cost-volume
Which of the following supply-chain strategies creates value by allowing suppliers to have economies of scale? Long-term partnering with a few suppliers Vertical integration Negotiating with many suppliers
Long-term partnering with a few suppliers Economies of scale are realized because production costs can be spread across a longer period of time and a larger batch order
Which of the following lot-sizing techniques results in the lowest holding costs and why? Lot-for-lot Part period balancing Economic order quantity
Lot-for-lot because it is a production plan focused on producing the exact amount to meet forecasted demand; there are no holding costs associated with this technique if the number of products generated meets the planned demand
A _______ system will tell you that a certain set of jobs needs to be completed in a given week to meet demand, but it does not consider facility capacity or labor utilization
MRP
MRP II is accurately described as
MRP augmented by other resource variables
Which of the following is not a concern of the supply chain? Maintenance scheduling Warehousing and inventory levels Credit and cash transfers
Maintenance scheduling
__________ are focused on helping a business understand whether it is more advantageous to buy a particular part or product from an outside vendor or to produce the part themselves
Make-or-buy decisions
______ provides the best opportunity for increases in productivity; responsible for ensuring that labor and capital are used effectively to increase productivity; contributes approximately 52% of the annual increase in productivity
Management
What could reduce system nervousness and how?
Management's attempt to evaluate alternative plans before taking action would actually reduce system nervousness because it would lead to more measured responses to changes in schedule and/or quantity orders
______ typically focuses on producing goods (tangible products that you can touch and feel)
Manufacturing
________ is the time that an order is in the shop; represents the time between when a business receives raw materials and shipping a finished product
Manufacturing cycle time
______ is designed to generate demand and take orders for products and services
Marketing
Standardization is an appropriate strategy in which stage of the product life cycle?
Maturity
The primary purpose of the mean absolute deviation (MAD) in forecasting is to
Measure forecast accuracy
________bills are used to create an artificial grouping of materials into a single bill of material; helpful for small items (washers, nuts) that are frequently grouped with other parts (bolts, screws)
Planning
The three phases involved in the management of large projects are:
Planning, scheduling, and controlling
__________ is a Japanese phrase that is used to describe a foolproof device or technique that ensures that a product (or service) is created (or delivered) in a precise, error-free way EX: Check sheets, production diagrams, and scales to weigh products
Poka-yoke
Which of the following is an aspect of environmental risk in supply-chain management? Political issues Secure financial transactions Raw material availability
Political issues The environmental risks that an operations manager must consider include political issues, custom duties, tariffs, security screening, and risk of terror attacks
__________ represent the costs associated with attempting to reduce the costs of defective parts or services; can include training costs or quality improvement program costs; can be reasonably estimated
Prevention costs
_________ are applicable when product demand (or other variables) are not known, but can be estimated by using probability distributions
Probabilistic models
________ are best suited for low-volume, high-variety projects and tend to utilize general purpose (rather than specialty) machines. As a result, this strategy requires flexibility in equipment and labor assignments ;require the ability to move people and adjust equipment to meet the needs of a specific project
Process layouts
_______ differentiation is a type of differentiation that relies on distinguishing the offerings of an organization in a way that customers perceive as adding value by being unique
Product
________ layouts are organized around products or families of similar high-volume, low-variety products (such as potato chips)
Product-oriented
_________ layout assumes an adequate volume for high equipment utilization, that product demand will be stable enough to justify the capital expense associated with specialized equipment, that the product is standardized, and that raw material supplies will be adequate
Product-oriented
_________ layouts are best suited for high-volume, low-variety production line that produce a lot of the same thing and then package it differently (e.g., potato chips, crayons, etc.
Product-oriented
________ is focused on the process organizations use to turn raw materials into a final product or service
Production and operations
Two effective ways to drive down costs
Proper inventory management and mass production
_______ represents the amount of expendable income of a particular customer-drawing area. This helps determine whether or not a particular service firm (hair salon or investment bank) will be able to draw customers with access to funds to purchase the service
Purchasing power
______ diagrams are used to graphically represent the relationship (or correlation) between two variables. For instance, the relationship between customer satisfaction and knowledgeable employees or the relationship between absenteeism and employee productivity
Scatter
What can MRP be applied to?
Service organizations such as restaurants, hospitals, and hotels (service firms with dependent demand)
______ are specifically designed to meet the expectations of the customer and, therefore, labor standards will vary depending on customer expectations and prior experiences. Furthermore, they typically have a high level of customer interaction and tend to have many more subjective measures (rather than objective measures) of quality
Services
Which of the following statements regarding MRP in services is true Services such as restaurant meals illustrate dependent demand, and require product structure trees, bills-of-material, and scheduling. MRP does not work well in services because there is little (or no) dependent demand. MRP can be used in services, but only for those that offer little customization
Services such as restaurant meals illustrate dependent demand, and require product structure trees, bills-of-material, and scheduling
Which of the following is not an advantage of the "few suppliers" concept? Sharing trade secrets between firms Suppliers' willingness to provide technological expertise Suppliers' willingness to participate in JIT systems
Sharing trade secrets between firms Trade secrets are part of what gives a firm a competitive advantage, and it is unlikely that such information would ever be shared with an outside firm trade secrets are one motivation to pursue vertical integration where a company develops the skills, capacity, and equipment to internalize the production of goods and services
Forecasts are usually classified into three categories including
Short-range, medium-range, and long-range
Why would short-term relationships with few suppliers not be a supply chain strategy?
Short-term relationships with a few suppliers would not be a viable supply-chain strategy because it does not allow a firm to develop a trusting relationship within the supplier network
__________ are fees manufacturers pay to have their goods placed on shelves in a retail store or supermarket. The fees are not used to promote a product. Given the early expense (some retailers charge up to $25,000), many small firms or new entrants are not able to pay for it. Thus, these fees can reduce the ability of a small business to introduce new products
Slotting fees
During the maturity stage of a product life cycle, businesses need to defend market position and focus on competitive costs. _______ helps maintain market position and it also provides an opportunity to reduce manufacturing costs. These savings can be passed on to the consumer in an attempt to maintain or build market share
Standardization
_______ represents how an organization expects to achieve its mission and goals and is an activity that starts at the corporate level rather than the department level
Strategy
Two common advantages of few suppliers supply-chain strategy
Suppliers' willingness to participate in JIT systems and provide technological expertise
_______ management decisions are focused on what is to be made and what is to be purchased and primarily focuses on the relationship between the buyer (company) and supplier
Supply-chain
Which of the following statements is true about the kanban system? The customer workstation signals to the supplier workstation when production is needed The supplier workstation signals the customer workstation as soon as a batch is completed It is useful to smooth operations when numerous large and small lot sizes exist
The customer workstation signals to the supplier workstation when production is needed PULL --> customer signals production process push --> supplier workstation pushes inventory through to the next workstation as soon as a batch is completed even when personnel are not ready Kanban is JIT technique so focused on small lot production
Which of these conditions is not necessary for the economic order quantity model to be valid? The item has a constant lead time. The item has a constant order cost. The item has a constant purchase price
The item has a constant purchase price
________ uses public, auction, or index prices to determine appropriate cost structures
The market-based price model
Four hundred and eighty minutes of production time are available per day. Scheduled production is 120 units per day. What is the required cycle time?
The required cycle time is 4 minutes. Cycle time is defined as the maximum time that a product is allowed at each work station. Cycle time is calculated by dividing daily operating time (in this case 480 minutes a day) by the scheduled output (in this case 120 units per day). Thus, 480/120 = 4 minutes
PERT analysis computes the variance of the total project completion time as
The sum of the variances of all activities on the critical path
The term used to describe the outsourcing of logistics is
Third-Party Logistics Third-party, or specialized logistics firms, represent a potential way for operations managers to drive down inventory costs and improve delivery speed and reliability EX: Dell has a partnership with FedEx as a third-party logistics firm to help handle the packing and shipment of their products
What is the rate required to push orders through the production process?
Throughput time
Which of the following best describes vertical integration? To develop the ability to produce products which complement the original product To build long-term partnerships with a few suppliers To produce goods or services previously purchased
To produce goods or services previously purchased Vertical integration can help provide a strategic advantage for firms that have the capital and talent to handle the additional scope of responsibility. Specifically, vertical integration can help reduce costs, increase quality, and ensure timely delivery
____________ is an entire approach to managing a business that focuses on implementing policies and practices that lead to continuous improvement in every aspect of the business from product development to service delivery
Total quality management
_________ represents the amount of time shared among non-critical path tasks on the same non-critical path
Total slack
_________ is specifically characterized by a focus on continuous improvement, respect for people, and standard work practices;
Toyota Production System (TPS)
Which of the following is a location-analysis technique typically employed by a manufacturing organization? Transportation method Demographic analysis Queuing theory
Transportation method Demographic analysis is more appropriate for service firms. Queuing theory is focused on understanding wait times in service firms
_____ is a gradual upward or downward movement of the data over time
Trend
_____ projections fit a trend line to a series of historical data points and then projects the line into the future to help forecast future demand
Trend
_______-based definitions of quality focus on outcomes like better performance, higher quality, and nicer product features and are typically associated with marketing initiatives and end consumers. These definitions of quality recognize that quality standards often "lie in the eyes of the beholder"
User
______ is a step towards integrating MRP and finite capacity because it links time segments to equipment capacity
Using smaller (time) buckets
______ analysis is used to identify activities that represent existing (or potential) strengths for a business that may be used to develop a competitive advantage
Value-chain
_______ is the term used to describe any deviation from the optimum process, i.e., one designed to produce a perfect product delivered on time, every time; in the production process, it leads to wasted resources
Variability
______ is a system where the vendor/supplier actually keeps inventory on stock and delivers directly to the department that will use the product This approach works well for inventory stock that can have multiple uses. EX: the same type of fabric could be used for sheets, pillow-cases, and curtains
Vender-managed inventory
The person who is most noted for his contributions to quality control in operations management was __________
W. Edwards Deming
A/an ______ links competitive advantage, key success factors, and supporting activities (the critical components of an operations strategy Creating one allows firms to create a graphic illustration of the key behaviors that build a firm's strategy
activity map
Any activity can be crashed if the duration of time can be reduced by ________; if the amount of time won't be reduced there is no need to crash a project. Crashing projects can occur with single (or multiple) critical paths
adding resources (additional labor, materials, etc.)
If demand is not uniform and constant, the stockout risks can be controlled by __________ because it represents the buffer a company holds to reduce the risk of running out of inventory
adding safety stock
analysis of ______, ______, ______ determines lot size in a lean environment
analysis of the process, transportation time, and physical attributes such as size of containers used for transport are considered when determining lot size such analysis typically results in a small lot size, but a lot size larger than one. Once a lot size has been determined, the EOQ production order quantity model can be modified to determine the desired setup time
The ability of an organization to produce goods or services that have some uniqueness in their characteristics is __________
competing on differentiation
The five force model is a useful framework to examine _______ because it helps operation managers to fully consider the range of external factors that could impact the success of the business
competition
The __________ is most appropriate when suppliers are not willing to discuss costs or when good data does not exist to provide a market-based cost structure
competitive bidding process
PDCA is most often applied to which aspect of TQM?
continuous improvement PDCA (plan, do, check, act) is a circular model designed to help managers build continuous improvement into their actions plans
The fourth stage of vendor selection is ______, spelling out the terms of the relationship, designed to share risk, benefits, and create incentive structures to encourage SC members to adopt policies that are optimal for the entire chain
contracting
The _____ phase of management involves monitoring the use of resources and adjusting goals and timelines to meet time and cost specifications
controlling
Once the ______ strategy is determined (e.g., differentiation, cost focused, or response), each _______ area develops its mission and strategy to help support the it
corporate; functional
The degree or strength of a relationship between two variables is shown by the__________
correlation coefficient
A location decision for an appliance manufacturer would tend to have a _________
cost focus Appliance manufacturers, and any other manufacturing business, have to consider a wide range of cost-based factors including energy and water rates, labor rates, infrastructure costs, and facility upgrade/building costs when evaluating location decisions
Inventory models do not help answer questions related to the __________
cost of the order; set-up, ordering, and holding costs are included in typical inventory models and, therefore, do not answer questions related to cost
The three classic types of negotiation strategies are __________
cost-based price model, market-based price model, and competitive bidding
long-range location decisions will more heavily rely on ______
costs not environmental issues/education level of the labor force
The determinant of service quality that involves having the customer's best interests at heart is _______
credibility
Project variance represents the sum of the ______ activity variances only
critical path
MRP can be used in services where there is a huge degree of __________ such as ___________
customization; surgery in a hospital; most surgeries require known materials, but there are many unknown variables (size/health of client, prior medical history, etc.) --> need customization
The fundamental purpose of an organization's mission statement is to __________
define the purpose of the organization The mission statement outlines the primary reason for existing and clearly defines the purpose of a business. While mission statements help focus a business, it does not specify operational issues like organizational structure, functional areas, or reporting relationships
The phrase "demand related to the demand for other products" describes __________
dependent demand; EX: Ford F-150 production manager knows every single component, wire, and bolt that will be needed to complete the build, so when ordered to make another F-150, the manager knows specifically what parts to order because the components have dependent demand with the truck
The objective of layout strategy is to __________ develop a system that maximizes flexibility develop an effective and efficient system that meets competitive requirements develop a system that minimizes material handling costs
develop an effective and efficient system that meets competitive requirements Layout strategy requires operations managers to link the overall corporate strategy (e.g., product differentiation, low-cost competition, etc.) to the layout of the physical space for the business
Inventory record accuracy would be decreased by __________ using ABC analysis increasing stockroom accessibility increasing reorder points
increasing stockroom accessibility Stockroom accessibility deals with the number of individuals who can enter, deliver, and remove inventory items. As the number of people with access increases, the accuracy of inventory records will decrease for a number of reasons including inconsistent record keeping, inventory shrinkage, failure to log items appropriately, and failing to store items in the appropriate location.
Productivity increases when __________ or ________
inputs decrease while outputs remain the same; increasing output using fewer inputs
Deming argued against relying on ________ at the end of the production process. Instead, he believed that quality should be built into the product and that managers should not rely on these to find problems
inspections
The bullwhip effect is a problem associated with a supply chain that is not _____
integrated
The concept of customizing in a warehouse layout __________ is possible, but causes serious loss of oversight of the quality of function is a new trend in value-added activities in warehouses cannot work in today's high efficiency factories
is a new trend in value-added activities in warehouses Warehouse customization is a useful way to generate competitive advantage in markets where there is a lot of competition
For a given product demand, the time-series trend equation is 53 - 4X. The negative sign on the slope of the equation
is an indication that product demand is declining
The production order quantity model _______ is appropriate when units are produced and sold simultaneously results in larger average inventory than an equivalent EOQ model assumes instantaneous delivery
is appropriate when units are produced and sold simultaneously; the production order quantity model requires the assumption of a known, constant demand and a known, constant lead time; EOQ requires instantaneous delivery
With respect to PERT and CPM, slack__________
is the amount of time a task may be delayed without changing the overall project completion time
Lean (pull system) makes quality less expensive because __________
it prevents long runs of defects
A ______ occurs when members of a work cell group or team meet to develop innovative ways to immediately implement improvements in the work area or process; making a multitude of small or incremental changes as one seeks elusive perfection
kaizen event
_______ for Southwest Airlines include short haul flights, standardized equipment, and limited passenger service. While many other airlines (Spirit, JetBlue, etc.) have tried to copy these, they were not able to achieve a competitive advantage because they were missing the full number of support services (supplier relationships, ability to utilize secondary or smaller airports, etc.) Southwest Airlines has built into their business model
key success factors
CPM assumes that activity times are ______
known with certainty
Three critical productivity variables are __________
labor, capital, and management
The equation Min{LS of all immediate following activities} is used to determine the _____ of an activity
latest finish (LF)
_______ decisions focus on understanding material flows and inventory requirements so that the delivery of inputs aligns with the manufacturing or transformation process so that outputs are created without waste
layout design
A company that needs a large _____ indicates the inability to create quality products quickly and, therefore, this could be an indicator that the firm is not operating at the caliber of a world class firm
lead time
A _____ partnership exists when a supplier and purchaser work together to remove waste and drive down costs
lean
The technique known as _________ processes many small batches rather than one large batch
level schedules
Managers who utilize ______ try to ensure that each day's production meets the demand for that day (rather than week)
level schedules While level schedules are focused on producing small batches, as with other JIT production approaches, this approach still views variance in production as something to be avoided
production planners can use _______ to understand how to move work between time periods to smooth the load or bring it within capacity
load reports
Maximizing local profit or minimizing cost in a supply chain is best described as __________
local optimization
The approach that holds the suppliers responsible for maintaining the necessary technology, expertise, and forecasting ability plus cost, quality, and delivery competencies is __________ few suppliers many suppliers Keiretsu
many suppliers; With a many-suppliers strategy, a firm submits a request for bids out to suppliers. Suppliers then respond to the demands and specifications for the request. This approach holds the supplier responsible for meeting the needs of the request. This includes making sure that the supplier has the necessary technology and expertise to deliver quality products and services
The three major business functions necessary to all organizations are __________
marketing, finance/accounting and production/operations
A document calls for the production of 50 small garden tractors in week 1; 50 small garden tractors and 100 riding mowers in week 2; 100 riding mowers and 200 garden utility carts in week 3; and 100 riding mowers in week 4. This document is most likely a __________
master production schedule
The __________ is the MRP input detailing which end items are to be produced, when they are needed, and in what quantities
master production schedule
A gross material requirements plan is a schedule that combines a ________ schedule and a _______ schedule
master production schedule; time-phased schedule this combination clearly specifics when an item must be ordered from suppliers if there is no inventory on hand or when the production of an item must be started to satisfy demand for the finished product
The "four Ms" of cause-and-effect diagrams are __________
material, machinery, manpower, and methods Operations managers use these four Ms as a starting point to identify possible locations of quality problems
Retail layouts thrive on the notion that __________ maximizing customer exposure rate maximizes sales and profit average customer visit time should be maximized storage costs should be minimized
maximizing customer exposure rate maximizes sales and profit
The main goal of retail layout is __________
maximizing profitability per square foot of floor space
In assembly line-balancing, cycle time (the ratio of available production time to scheduled production) is the __________
maximum time that a product is allowed at each workstation
The ________ is designed to provide a measure of overall forecast error for the model. It does this by taking the sum of the absolute values of the individual forecast errors and dividing by the number of data periods
mean absolute deviation
This type of forecast is used to plan production cycles, determine budgets, and make operation level decisions
medium-range 3 months to 3 years
Industrial location analysis typically attempts to __________
minimize costs
The major problem addressed by the process-oriented layout strategy is __________
minimizing difficulties caused by material flow variability for each product While this flexibility helps a business meet the unique demands of a particular customer or client, it also presents a disadvantage because each piece of equipment is a general purpose machine rely on highly trained employees to accomplish
A paint company mixes ten different base colors into 3,000 different color options. If the MPS is organized around the ten different base colors, their bills of material are classified as
modular
Firms making many different final products use __________ to facilitate production scheduling
modular bills
When bills of material are organized around product modules (EX: paint colors) rather than final products, they are referred to as ______ bills
modular; used in MPS
Productivity in the _____ sector is difficult to improve because the work is labor intensive, typically unique to each customer's demands, often includes an intellectual task completed by professionals, often difficult to mechanize and automate, and often difficult to evaluate overall quality
service
The ________ describes the physical surroundings where service is delivered. In retail layout design, conditions such as spatial layout, symbols, and artifacts have all been shown to positively impact customer perceptions of service quality
servicescape
This type of forecast is used to schedule jobs, determine workforce levels, and plan purchases
short-range forecast up to one year but are generally less than 3 months
An effective management technique where the responsibility for monitoring and managing inventory is assigned to one member of the supply chain; removes the distortions and multiple forecasts that create the bullwhip effect
single-stage control of replenishment
Lean (pull) systems focus on ______ lot sizes and production runs; it does not support the buildup of inventory
small
Modular bills are particularly useful because they are organized around a _____ number of final modules rather than a ____ number of independent parts
small; very large
A ________ is a weighting factor applied in an exponential smoothing forecast to improve accuracy; it can range from 0 to 1, but most frequently the forecaster chooses a value between .1 and .5
smoothing constant
Inspection points that focus on the source of production are called _____ inspection points
source
One disadvantage of process-oriented layouts arises from __________
the use of general purpose machines and equipment The use of general purpose machinery allows process-oriented layouts to meet the needs of diverse clients and product lines. This flexibility is considered a disadvantage because general purpose equipment requires high labor skills, takes more time to move a product through the production process, and increases the in-process materials needed to create a final product
Two strategies that can be used to integrate a supply chain
the utilization of pass-through facilities and/or vendor-managed inventory
If a load report (resource requirements profile) shows a work center scheduled beyond capacity, then __________
the work center's load may be smoothed
________ allow a segment of the master schedule to be labeled as "not to be rescheduled" in MRP systems
time fences
________ forecasts are based on the assumption that the analysis of past demand helps predict future demand; include trends, seasonality, cycles, and random variation so forecasts can increase, decrease, or stay the same as past demand
time-series
Typical inventory models focus on determining _______ and ________
timing (when to place an order); quantity (how much to order)
The primary purpose of the basic economic order quantity model is ________
to minimize the sum of setup cost and holding cost; while organizations are interested in determining the appropriate reorder point and the most effective service level, these issues are not directly related to the economic order quantity model
Most inventory models attempt to minimize __________
total inventory based costs (which include holding costs, ordering costs, and set-up costs)
Standard _________ practices include decentralized decision making, empowering employees to make decisions, training employees, and benchmarking
total quality management
Goods and services design deals with the _______ process
transformation
