BA 360 - Exam #1 Showghi

percent change =

((new - old) x 100)/old

Crash cost per time period

(crash cost - normal cost) / (normal time - crash time)

z =

(due date - expected date)/variance

slack =

(late finish - early finish) or (late start - early start)

due date (x) =

(variance)(z) + expected date

associated role

- core team member - subject matter - suppliers rep

Heritage of OM

- division of labor (Adam Smith) - standardized parts (Whitney) - scientific management (Taylor) - coordinated assembly line (Ford) - Gantt charts (Gantt) - motion study (Frank and Lillian Gilbreth) - quality control (Deming)

factors affecting mission

- environment, customers, benefit to society, public image, profitability and growth, philosophy and values

1. project planning

- establishing goals/objectives - defining project - creating work breakdown structure - determining needed resources - selecting and forming a team

competing on response

- flexibility: matching market changes in design innovation and volumes - reliability: in meeting schedules - timeliness: quickness in design, production, and delivery

role of a project manager (high visible)

- focal point of the project - leads the planning, executing, and closing of a project - ensures the project team receives motivation, direction, and information - schedule, budget, results

key characteristics of services

- intangible product, often unique, high customer interaction, produced and consumed at the same time, often knowledge based

how strategy is shaped

- integral strengths, mission, internal weaknesses, strategy, external opportunities, external threats

Companies Need to Consider

- national illiteracy rate - rate of innovation - rate of technology change - number of skilled workers - political stability - product liability laws - export restrictions - variations in language - work ethic - tax rates - inflation - availability of raw materials - invest rates - population - number of miles of highway - telecomm infrastructure

project's risk areas

- people/team - scope/deliveries - technology - financials - organization strategy - external factors

managerial roles

- project manager - functional manager - senior customer rep

productivity measurement problems

- quality: may change while quantity of inputs and outputs remain constant - extreme elements: may cause an increase or decrease on productivity - precise units: measurement may be lacking

project's stakeholders

- steering committee - sponsor - project manager - project team managers - subject matter expert - financial managers - customers - suppliers

executive roles

- steering team - chief project officer - sponsor

key characteristics of goods

- tangle, inventoried, low customer interaction, production usually separate from consumption

10. Maintenance

-Consider facility capacity, production demands, and personnel -Maintain a reliable and stable process

Steps in project crashing

1. Compute the crash coast per time period 2. Find critical path 3. If there is only one critical path, then select the activity on this critical path that can still be crushed and has the smallest crash cost 3a. if there is more than one critical path, then select one activity from each critical path such that each selected activity can still be crushed and the total cost of all slept activities is the smallest 4. Update all activity times

6 steps of PERT and CPM

1. Define the project and prepare the work breakdown structure 2. Develop relationships among the activities - decide which activities must precede and what follows) 3. Draw the network connecting all of the activities 4. Assign time and cost estimate to each activity 5. Compute the longest time path through network (CRITICAL PATH) 6. Use the network to help plan, schedule, monitor, and control the project

how to determine the critical path

1. Perform forward pass to find ES and EF 2. Perform a backward pass to find LS and LF 3. activities within the same ES and LS and the same LS and LF are on the CRITICAL PATH 4. all others have slack

key variables for improved labor productivity

1. basic education: appropriate for the labor force 2. diet: for the labor force 3. social overhead: that makes labor available (ex: transportation)

Strategies for Competitive Advantage

1. differentiation 2. cost leadership 3. response

2. Project Scheduling

1. ensure that all activities are planned for 2. their order of performance is accounted for 3. the activity time estimates are reported 4. The overall project time is developed

reasons to globalize

1. improve the supply chain (human expertise) 2. reduce costs 3. improve operations 4. understand markets (new opportunity) 5. improve products 6. attract and retain global talent

project phases and activities

1. initiation 2. planning/scheduling 3. execution 4. control 5. closure

Key productivity variables

1. labor: contributes about 10% of the annual increase 2. capital: contributes about 38% of the annual increase 3. management: contributes about 52% of the annual increase

efficiency principles

1. matching employees to the right job 2. providing the proper training 3. providing proper work methods and tools 4. establishing legitimate incentives for work to be accomplished

PERT makes 2 more assumptions

1. total project completion times follow a normal probability distribution 2. activity times are statistically independent (not related)

Medium range forecast

3 months to a year sales and production planning

o^2 = project variance

= sum of (variances of critical path activities)

9. Scheduling

Determine and implement intermediate- and short-term schedules Utilize personnel and facilities while meeting customer demands

EF =

ES + activity time

Earliest finish (EF)

Earliest time at which an activity can be finished

Earliest start (ES)

Earliest time at which an activity can start, assuming all predecessors have been completed

Qualitative models

Executive judgment, Delphi method, market research, survey of salesforce

Scheduling Techniques

Gantt chart, critical math patter (CMP), program evaluation and review technique (PERT)

7. Supply Chain Management

Integrate supply chain into the firm's strategy. Determine what is to be purchased, from whom, and under what conditions.

8. Inventory Management

Inventory ordering and holding decisions Optimize considering customer satisfaction, supplier capability, and production schedules and cost

LS =

LF - activity time

LF =

LS + activity time

Project management software

MacProject, Mindview, Microsoft Project, HP Project, Fast Track

LF =

Min(LS of all immediate following activity)

4. Location Strategy

Nearness to customers, suppliers, and talent. Considering costs, infrastructure, logistics, and government.

productivity and change

OM's objective is to improve productivity

Long range forecast

Over two years New product or operations planning Qualitative methods

Forecasting

Process of predicting a future event; underlying basis of all business decisions

6. Human Resources and Job Design

Recruit, motivate, and retain personnel with the required talent and skills; Integral and expensive part of the total system design

standard deviation

SD = (b-a)/6

Perform a critical path analysis

The critical path is the longest path through the network The critical path is the shortest time in which the project can be completed And delay in the critical path activities delays the project No slack time

project variance

The sum of variances of project's critical path activity

variability in activity times assumption

Time estimate follows beta distribution

Variance of times

V = ((b - a)/6)^2

it is not uncommon to face

being behind schedule on a project or the completion time has moved forward

US has global competition with everyone

but biggest competition is China

value

created when we buy things, add something, and then sell it

production/operations

creates product/service

W. Edwards Demming

credited with reaching Japan quality control methods post WWII; used statistics to analyze process workers involved in decisions

multi domestic strategy

customizing product and marketing for differing national conditions (ex: PizzaHut, now being called Escargot Pizza)

2. Managing Quality

determine customer's quality expectations and establish policies and procedures to identify/achieve quality

5. Layout Strategy

determine the efficient flow of materials, people, and info; integrate capacity needs, personnel levels, tech, and inventory

Frank and Lillian Gilbreth

developed work measurement methods applied efficiency methods at home

work units

devisor of work packages

work packages

division of tasks

CPM assumes a fixed time estimate for

each activity with no variability in times

management

ensures labor and capital are effectively used to increase production use of knowledge, application of technologies, knowledge of management

Frederick W. Taylor

father of scientific management began first motion and time series after studying how tasks were done created efficiency principles

Henry Ford

first moving assembly line for Model T unfinished product moved by conveyor belt

marketing

generates demand

project imagers should be

good coaches, organize activities from a variety of disciplines, good communicators

work breakdown structure (WBS)

hierarchical decomposition of the project into pages, deliverables, and work packages tree structure, which shows a subdivision of effort required to achieve an object

3. Process and Capacity design

how is a good or service produced; commits management to specific technology, quality resources, investments

theory of comparative advantage

if an external provider can perform an activity more productively than the purchasing firm, then the external provider should do the work

the operations managers' job

implement OM strategy to provide competitive advantage and increase productivity

international strategy

import/export of license (existing product, such as Harley Davidson)

accelerating due to

increased technological expertise, more reliable and cheaper transportation, rapid development and ubiquity of global telecommunication network

application of productivity measures

individual level, group, department, corporate, national, global

the economic system

inputs (labor, capital, management) -> transformation (economy) -> outputs (goods and services)

rating outsourcing providers

insufficient analysis is most common reason for failure (factor rating method and points and weights assigned for each factor)

product life cycle

introduction (increase market share), growth (establish price), maturity (compete on costs), decline (cost control critical)

Examples of forecasting

inventory, personnel, production, facilities

productivity increases when

investment increases

Latest start (LS)

latest time at which an activity can start so as to not delay the competition time of the entire project

Latest finish (LF)

latest time by which an activity has to be finished so as to not delay the competition time of the entire project

global operations strategy options

make cost reduction a priority; make differentiation and response a priority

operations of goods and services

manufacturers produce tangible products services are often intangible but have a tangible component pur services = counseling

ES =

max(EF of all predecessors)

strategy development process

mission and strategies cascade, superordinates, through the organization strategic unity and alignment is imperative

3. project controlling

monitoring of resources, costs, quality and budgets feedback enables plan revisions and shifting resources

m

most likely time

multiple resources input =

multi-factor productivity

project management

one of the most useful tools for managers

a

optimistic time (if everything goes accordingly to plan)

total factor productivity =

output / (labor + material + energy + capital + miscellaneous)

multifactor prodcutivty

output/total cost

productivity =

outputs (goods and services ) / inputs (labor and capital)

b

pessimistic time, assuming unfavorable conditions

1. Design of Goods and Services

product design determines functionality, sustainability and what is required of operations

Transnational Strategy

production and marketing at low cost locations based on differing national conditions (ex: coca cola)

global strategy

production at low cost locations (standardized product and use economies of scale, such as Caterpillar)

competing on cost

provide the maximize value as perceived by the customer (does not imply low quality!) (ex: SouthWest Airlines: no frills service, efficient equipment usage)

productivity investment

result of managing and intervening in transformation of work processes

task

set of activities that comprise a project

project crashing

shortening the duration of a project

Eli Whitney

showed that machine tools could make standardized parts to "exact situations"; standardized parts could be used in many things

one resource input =

single factor calc

expected time

t = (a + 4m + b)/6

mission statements

tell an organization where it is going

strategy

tells the organization how to get there; action plan on how to achieve mission; tactical approaches to achieve superior market position

PERT uses a probability distribution for activity times

to allow for variability

finance/accounting

tracks how well the organization is doing, collects the money, and pays bills

outsourcing

transferring activities that traditionally been internal to external suppliers

projects

unique and non-routine activities problem with a known solution scheduled for completion

competing of differentiation

uniqueness can go beyond the physical characteristics and service attributes to encompass everything that impacts a customers perception of value (ex: Apple products, Disney Magic Kingdom)

labor productivity =

units produced / labor-hours used

mutli-domestic operations

uses decentralized authority with substantial autonomy at each business

Short range forecast

usually less than 3 months, Job scheduling worker assignments quantitative//detail use