MGMT Chapter 20

quality circle

A small group of workers who meet to discuss quality related problems in a particular project and to communicate their solutions to these problems to management directly at a formal presentation session.

control tool

A specific procedure or technique that presents pertinent organizational information

decision tree analysis

A statistical and graphical, multiphaseddecision-making technique that contains a series of steps showing the sequence and interdependence of decisions.

product layout

Designed to accommodate high production volumes, highly specialized equipment, and narrow employee skills. Appropriate for organizations that produce and service a limited number of different products.

Computer-Aided Manufacturing (CAM)

Employs computers to plan and program equipment used in the production and inspection of manufactured items

quality

How well a product does what it is intended to do - how closely it satisfies the specifications to which it was built

fixed-position layout

Layout in which the product is stationary while resources flow. Appropriate for organizations involves in a large number of different tasks that require low volumes, multipurpose equipment, and broad employee skills

Operations control

Making sure that operations activities are carried out as planned

managers should evaluate all ratios simultaneously, compare computed values for ratios in a specifc org with values of industry averages, and use of ratios should incorporate trend analysis

Managers should use ratio analysis in 3 ways to control an organization:

product, process (functional), fixed-position

The 3 basic types of layouts used for manufacturing facilities:

labor force planning

The primary focus of the operations human resource strategy. An operational plan for hiring the right employees for a job and training them to be productive, which is a lengthy and costly process

management by exception

a control technique that allows only significant deviations between planned and actual performance to be brought to a manager's attention

maintenance control

aimed at keeping an organization's facility and equipment functioning at predetermined work levels

BE = FC(fixed costs)/(P(price) - VC(variable cost))

algebraic break-even analysis equation

product strategy

an operational plan of action outlining which goods and services an organization will produce and market

Materials control

an operations control activity that determines the flow of materials from vendors through an operations system to customers

productivity

relationship between the total amount of goods or services being produced(output) and the organizational resources needed to produce them(input). outputs/inputs

production

the transformation of organizational resources into products

algebraic and graphic break even analysis

2 types of breakeven analysis:

continuous, repetitive, and job-shop process

3 different types of manufacturing processes

Computer-Aided Design (CAD)

A computerized technique for designing new products or modifying existing ones.

Budget

A control tool that outlines how funds in a given period will be spent, as well as how they will be obtained

value analysis

A cost control and cost reduction technique that helps managers control operations by focusing primarily on material costs

process (functional) layout

A layout pattern that groups together similar types of equipment. Appropriate for organizations involved in a large number of different tasks

Pure-breakdown (repair) policy

A maintenance control policy that decrees that machine adjustments, lubrication, cleaning, parts replacement, painting, and needed repairs and overhaul will be performed only after facilities or machines malfunction

Pure-preventive maintenance policy

A maintenance control policy that tries to ensure that machine adjustments, lubrication, cleaning, parts replacement, painting, and needed repairs and overhauls will be performed before facilities or machines malfunction

capacity strategy

A plan of action aimed at providing an organization with the right facilities to produce the needed output at the right time

process strategy

A plan of action outlining the means and methods that an organization will use to transform resources into goods and services

layout strategy

A plan of action that outlines the location and flow of all organizational resources around into and within production and service facilities

Zero-base budgeting

A planning and budgeting process that requires managers to justify their entire budget request in detail rather than simply refer to budget amounts established in previous years

repetitive process

A product oriented production process that uses modules to produce items in large lots. Characteristic of the auto and appliance industries

continuous process

A product oriented, high volume, low variety process used, in example, in producing chemicals, beer, and petroleum products

Just-in-time (JIT) inventory control

A technique for reducing inventories to a minimum by arranging for production components to be delivered to the production facility "just in time" for them to be used

process control

A technique that assists in monitoring production processes

job design

An operational plan that determines who will do a specific job and how, and where the job will be done

human resource strategy

An operational plan to use an organization's human resources effectively and efficiently while maintaining of improving the quality of work life

work methods analysis

An operational tool used to improve productivity and ensure the safety of workers. It can be performed for new or existing jobs

Quality assurance

An operations process involving a broad group of activities aimed at achieving an organization's quality objectives

Motion study techniques

Operational tools that are used to improve productivity

Effectiveness

The degree to which managers attain organizational objectives. "doing the right things"

efficiency

The degree to which organizational resources contribute to productivity. "doing things right"

layout

The overall arrangement of equipment, work areas, service areas, and storage areas within a facility that produces goods or provides services

Operations management

The performance of managerial activities that involve selecting, designing, operating, controlling, and updating production systems

ratio analysis

The process of generating information that summarizes the financial position of an organization through the calculation of ratios based on various financial measures that appear on the organization's balance sheet and income statements

Break-even analysis

The process of generating information that summarizes various levels of profit or loss associated with various levels of production

Statistical quality control

The process used to determine how many products should be inspected to calculate a probability that the total number of products will meet organization quality standards

profitability, liquidity, activity, leverage

The ratios available to managers for controlling organizations, can be divided into 4 categories:

automation

The replacement of human effort by electromechanical devices in operations such as welding, materials handling, design, drafting, and decision making

Robotics

The study of the development and use of robots

location strategy

a plan of action that provides an organization with a competitive location for its headquarters, manufacturing, services and distribution activities

fixed costs, total cost, total revenue, profit, loss, break-even point

break-even analysis typically involves reflection, discussion, reasoning, and decision making relative to the following seven major aspects of production:

graphic breakeven analysis

entails the construction of a graph showing all the critical elements in a break-even analysis

job-shop process

high variety, low-volume system; includes the production of one of a kind items as well as unit production. Spaceship and weapons systems production are examples

variable budget

outlines the levels of resources to be allocated for each organizational activity according to the level of production within the organization

establishing standard of planned cost amounts, measuring actual costs incurred, comparing planned costs to incurred costs, making changes to reduce actual costs to planned costs when necessary

the general cost control process has four stages:

management by objectives

the manager assigns a specific set of objectives and action plans to workers and then rewards those workers on the basis of how close they come to reaching their goals

cost control

wide ranging control aimed at keeping organizational costs at planned levels