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"A" in PDSA cycle
"Act" - act on the basis of the results by communicating results to other members of the company and implementing the new procedure if it has been successful.
"D" in PDSA cycle
"Do" - implementing the plan, documenting all changes made and collecting data for evaluation.
"P" in PDSA cycle
"Plan" - evaluate current process and make plans based on any problems found. document current procedures, collect data, identify problems.
"S" in PDSA cycle
"Study" - study data collected in "do" phase and evaluate whether plan is achieving goal.
Why is the marketing plan essential to the creation of the aggregate plan?
"The marketing plan provides insight into operations goals and activities for the year."
Differences between Intermittent & Repetitive Ops:
(1) the amount of product volume produced, and (2) the degree of product standardization.
Which formula would indicate that a fast-food restaurant was performing at, above, or below its benchmark?
(Actual output) / (standard output)
Which formula would compute process velocity?
(Throughput time) / (Value Added Time)
three steps in designing process layouts:
1. Gather information 2. Develop a block plan or schematic of the layout 3. Develop a detailed layout
Which total quality management (TQM) process was developed to stress management's responsibility for quality?
14 points for quality improvement
When developing a detailed layout, what tools would be used?
3-D models and CAD software
process width is typically used when computing the process capability index Cp
6σ
"The annual cost of goods sold for a company is $8,400,000 and the average inventory is $1,200,000. What is the number of weeks of supply?"
7 (COGS / AvgInventory)
kaizen
A Japanese term that describes the notion of a company continually striving to be better through learning and problem solving.
subscription revenue model
A Web site that charges a subscription fee for access to its contents and services.
An employee who will not help a customer because "it is not my job" violates the JIT belief of
A broad view of operations
kanban card
A card that specifies the exact quantity of product that needs to be produced.
process flowchart
A chart showing the sequence of steps in producing the product or service.
histogram
A chart that shows the frequency distribution of observed values of a variable.
progress chart
A chart that visually shows the planned schedule compared to actual performance.
load chart
A chart that visually shows the workload relative to the capacity at a resource.
"Which type of aggregate plan is preferable when a company produces custom or special purpose equipment, one-of-a-kind items, or highly perishable products?"
A chase aggregate plan
flexibility
A company can quickly adapt to the changing needs of its customers.
range (R) chart
A control chart that monitors changes in the dispersion or variability of a process.
p-chart
A control chart that monitors the proportion of defects in a sample.
x-bar chart
A control chart used to monitor changes in the mean value of a process.
c-chart
A control chart used to monitor the number of defects per unit.
percentage of dollar volume shipped on schedule
A customer service measure appropriate when customer orders vary in value.
Fitness for Use
A definition of quality that evaluates how well the product performs for its intended use.
fitness for use
A definition of quality that evaluates how well the product performs for its intended use.
robust design
A design that results in a product that can perform over a wide range of conditions.
plan-do-study-act (PDSA) cycle
A diagram that describes the activities that need to be performed to incorporate continuous improvement into the operation.
bottleneck
A facility, department, or resource whose capacity is less than the demand placed on it.
operating characteristic (OC) curve
A graph that shows the probability or chance of accepting a lot given various proportions of defects in the lot.
control chart
A graph that shows whether a sample of data falls within the common or normal range of variation.
service package
A grouping of physical, sensual, and psychological benefits that are purchased together as part of the service.
Six Sigma quality
A high level of quality associated with approximately 3.4 defective parts per million.
job enlargement
A horizontal expansion of the job through increasing the scope of the work assigned.
production card
A kanban card that authorizes production of material.
fixed-position layout
A layout in which the product cannot be moved due to its size and all the resources have to come to the production site.
purchase order
A legal document committing the company to buy the goods and providing details of the purchase.
mixed-model line
A line designed to produce many versions of a product.
single-model line
A line designed to produce only one version of a product.
numerically controlled (NC) machine
A machine controlled by a computer that can perform a variety of tasks.
theory of constraints (TOC)
A management philosophy that extends the concepts of optimized production technology (OPT).
shifting demand
A marketing strategy that attempts to shift demand from peak periods to nonpeak periods to smooth out the demand pattern.
exchanges
A marketplace that focuses on spot requirements of large firms in a single industry.
sales revenue model
A means of selling goods, information, or services directly to customers.
vertical integration
A measure of how much of the supply chain is actually owned or operated by the manufacturing company.
manufacturing resource planning (MRP II)
A method for the effective planning and integration of all internal resources.
automated order entry system
A method using telephone models to send digital orders to suppliers.
supply chain
A network of all the activities involved in delivering a finished product or service to the customer.
sourcing strategy
A plan indicating suppliers to be used when making purchases.
level aggregate plan
A planning approach that produces the same quantity each time period. Inventory and back orders are used to absorb demand fluctuations.
virtual private network (VPN)
A private Internetbased communications environment that is used by the company, its suppliers, and its customers for day-to-day activities.
load-distance model
A procedure for evaluating location alternatives based on distance. Model used to compare the relative effectiveness of different layouts.
partnering
A process of developing a long-term relationship with a supplier based on mutual trust, shared vision, shared information, and shared risks.
variable
A product characteristic that can be measured and has a continuum of values (e.g., height, weight, or volume).
attribute
A product characteristic that has a discrete value and can be counted.
end item
A product sold as a completed item or repair part.
single sampling
A random sample is drawn from every lot. Each item in the sample is examined and is labeled as either "good" or "bad."
Lot-size inventory
A result of the quantity ordered or produced.
flowchart
A schematic of the sequence of steps involved in an operation or process.
design for manufacture (DFM)
A series of guidelines to follow in order to produce a product easily and profitably.
product life cycle
A series of stages that products pass through in their lifetime, characterized by changing product demands over time.
ISO 9000
A set of international quality standards and a certification demonstrating that companies have met all the standards specified.
operation sequencing
A short-term plan of actual jobs to be run in each work center based on available capacity and priorities.
strategic business plan
A statement of long-range strategy and revenue, cost, and profit objectives.
standard deviation
A statistic that measures the amount of data dispersion around the mean.
mean (average)
A statistic that measures the central tendency of a set of data.
postponement
A strategy that shifts production differentiation closer to the consumer by postponing final configuration.
performance rating factor
A subjective estimate of a worker's pace relative to a normal work pace.
paced line
A system in which the product being worked on is physically attached to the line and automatically moved to the next station when the cycle time has elapsed.
computer-aided design (CAD)
A system that uses computer graphics to design new products.
material requirements planning (MRP)
A system that uses the MRP, inventory record data, and BOM to calculate material requirements.
immediate predecessor
A task that must be performed immediately before another task.
A quality circle is:
A team of volunteer production employees and their supervisors who meet regularly to solve quality problems
time study
A technique for developing a standard time based on actual observations of the operator.
work sampling
A technique for estimating the proportion of time a worker spends on a particular activity.
Johnson's rule
A technique for minimizing makespan in a two-stage, unidirectional process.
input/output control
A technique for monitoring the flow of jobs between work centers.
process flow analysis
A technique used for evaluating a process in terms of the sequence of steps from inputs to outputs with the goal of improving its design.
Pareto analysis
A technique used to identify quality problems based on their degree of importance.
optimized production technology (OPT)
A technique used to schedule bottleneck systems.
computer-integrated manufacturing (CIM)
A term used to describe the integration of product design, process planning, and manufacturing using an integrated computer system.
quality function deployment (QFD)
A tool used to translate the preferences of the customer into specific technical requirements.
flexible manufacturing system (FMS)
A type of automated system that combines the flexibility of intermittent operations with the efficiency of continuous operations.
project process
A type of process used to make a one-at-a-time product exactly to customer specifications.
line process
A type of process used to produce a large volume of a standardized product.
global positioning systems (GPS)
A type of wireless technology that uses satellite transmission to communicate exact locations.
job enrichment
A vertical expansion of the job through increased worker responsibility.
precedence diagram
A visual representation of the precedence relationships between tasks.
psychological criteria
A way of defining quality that focuses on judgmental evaluations of what constitutes product or service excellence.
expected value (EV)
A weighted average of chance events, where each chance event is given a probability of occurrence.
radio frequency identification (RFID)
A wireless technology that uses memory chips equipped with radio antennas attached to objects used to transmit streams of data.
nonbottleneck
A work center with more capacity than demand.
logistics
Activities involved in obtaining, producing, and distributing materials and products in the proper place and in proper quantities.
What is one advantage of a periodic review system?
All items are reviewed during the same time interval.
yield management
Allocates scarce resources to maximize yield.
closed-loop MRP
An MRP system that includes production planning, master production scheduling, and capacity requirements planning
concurrent engineering
An approach that brings together multifunction teams in the early phase of product design in order to simultaneously design the product and the process.
Malcolm Baldrige National Quality Award
An award given annually to companies that demonstrate quality excellence and establish best practice standards in industry.
respect for people
An element of JIT that considers human resources as an essential part of the JIT philosophy.
kaizen blitz
An improvement tool that utilizes cross-functional teams to plan and deliver improvements to specific processes during two- or three-day marathon sessions
process capability index
An index used to measure process capability.
parent item
An item produced from one or more children (components).
scheduled receipt
An open order that has an assigned due date.
deterministic time estimate
Assumption that the activity duration is known with certainty.
jidoka
Authority given to workers to stop the production line if a quality problem is detected.
ALDEP
Automated layout design program
value chain management (VCM)
Automation of a firm's purchasing or selling processes.
Which statement is true about capacity requirements planning (CRP)?
Available capacity is compared to calculated workloads of relevant items.
throughput time
Average amount of time it takes a product to move through the system.
It the goal is to reduce the amount of inventory in the system, the number of Kanban cards should
Be decreased
Which instrument would use an allocation process for space requirements in an industry scenario?
Block plan
capacity-constrained resource
Bottleneck caused by inefficient usage.
group technology (GT)
Brings the efficiencies of a product layout to a process layout.
fluctuation inventory
Buffer stock/reserve stock — Provides a cushion against unexpected demand.
How do just-in-time (JIT) and lean systems add value?
By reducing waste
______ uses deterministic time estimates.
CPM
explosion process
Calculates the demand for the children of a parent by multiplying the parent requirements by the children's usage as specified in the BOM.
assignable causes of variation
Causes that can be identified and eliminated such as poor quality in raw materials, an employee who needs more training, or a machine in need of repair
A company manufactures shoes using a quality management system. The company needs to put a process in place to measure any defects. The company would like to measure the number of defects and observe the number of occurrences to isolate the particular defect. Which quality tool should the company use to focus on correcting this particular issue?
Checklist
Philip B. Crosby
Coined phrase "quality is free" and introduced concept of zero defects
How does a just-in-time (JIT) system influence all functional areas within a company?
Companies are able to reduce waste. Companies develop new ways to generate revenue.
affiliate revenue model
Companies receive a referral fee for directing business to an affiliate.
e-purchasing
Companies that connect on-line MRO suppliers to businesses that pay fees to join the market, usually for long-term contractual purchasing.
"A company decides and makes plans to enter into a new market. Which project life cycle phase does this strategy directly relate to?"
Conception
Which project life cycle phase includes identifying the need for a project?
Conception
bottom-round management
Consensus management by committees or teams.
transportation crossdocking
Consolidation of LTL shipments to gain economies of scale.
Walter A. Shewhart
Contributed to understanding of process variability and developed concept of statistical control charts
Which quality control tool should be used to monitor the current status or end result of a process?
Control Chart
supply chain management
Coordinates and manages all the activities of the supply chain.
fixed costs
Costs a company incurs regardless of how much it produces.
prevention costs
Costs incurred in the process of preventing poor quality from occurring. Costs of preparing and implementing a quality plan.
Taguchi loss function
Costs of quality increase as a quadratic function as conformance values move away from the target.
internal failure costs
Costs of scrap, rework, and material losses. associated with discovering poor product quality before the product reaches the customer site.
variable costs
Costs that vary directly with the amount of units produced.
concepts of TQM
Customer focus, continuous improvement, employee empowerment, use of quality tools, product design, process management, managing supplier quality.
Five-step plan of six sigma
DMAIC: Define, Measure, Analyze, Improve, Control
layout planning
Deciding on the best physical arrangement of all resources that consume space within a facility.
How can the EPQ model be economically reconciled with just-in-time (JIT) production?
Decrease ordering cost (S).
Joseph M. Juran
Defined quality as "fitness for use" and developed concept fo cost of quality
priority rule
Determines the priority of jobs at a work center.
Kaoru Ishikawa
Developed cause-and-effect diagrams and identified concept of "internal customer"
tier two supplier
Directly supplies materials or services to a tier one supplier in the supply chain.
tier three supplier
Directly supplies materials or services to a tier two supplier in the supply chain.
An ________ provides a single interface for managing all routine activities performed in manufacturing
ERP system
crossdocking
Eliminates the storage and order-picking functions of a distribution warehouse.
supply chain intelligence (SCI)
Enables strategic decision making along the supply chain.
Which group of keywords or phrases describes the critical role that marketing plays in the total quality management (TQM) process?
Enhance competition; understand consumer preferences; maintain communication with operations
What are two ways management can assist employees' focus in a just-in-time (JIT) processing environment?
Ensure that workers receive multi-functional training. Develop an incentive system to reward workers for their efforts.
time-phased
Expressing future demand, supply, and inventories by time period.
Which role do third-party logistics providers play in the supply chain?
External distributors
Two types of quality failure costs
External failure costs and internal failure costs
The three types of lot size rules are
FOQ, L4L, POQ
focused factories
Facilities that are small, specialized, and focused on a narrow set of objectives.
planning factors
Factors include the lot size rule, replenishment lead times, and safety stock requirements.
"A manufacturing firm uses warehouses and shippers in their supply chain. At which stage of the firm's inventory management system would the statement "percentage of line items shipped on schedule" be used?"
Finished goods
Which definition used for quality evaluates how well a product performs its intended function?
Fitness for use
What was the first US company to receive the Deming Prize?
Florida Power & Light
critical chain approach
Focus on the final due date that is based on the theory of constraints.
Genichi Taguchi
Focused on product design quality and developed taguchi loss function
green supply chain management
Focuses on the role of the supply chain with regard to its impact on the environment.
What would be an organization's next step afer it has revised or implemented new operations?
Follow up to make sure the new operation resolves quality problems
poka-yoke
Foolproof devices or mechanisms that prevent defects from occurring.
Who developed a formula for determining the cost of poor quality?
Genichi Taguchi
Which continuous improvement method does Cpk measure?
How close one is to a target and how consistent one is with the average performance
group technology (GT) or cell layouts
Hybrid layouts that create groups of products based on similar processing requirements.
Which total quality management (TQM) process consists of 13 published standards and guidelines?
ISO 9000
The three-step procedure for making capacity planning decisions
Identify Capacity Requirements, Develop Capacity Alternatives, Evaluate Capacity Alternatives
aggregate plan
Includes the budgeted levels of finished products, inventory, backlogs, workforce size, and aggregate production rate needed to support the marketing plan.
What are two strategic objectives for every member of the supply chain?
Increasing cost effectiveness Becoming more efficient
_____________ is the demand for finished products; it does not depend on the demand for other products.
Independent demand
e-distributors
Independently owned net marketplaces having catalogs representing thousands of suppliers and designed for spot purchases.
industry consortia
Industry-owned markets that enable buyers to purchase direct inputs from a limited set of invited suppliers.
ERP _____ benefits refer to the improved visibility of corporate data, improved customer responsiveness, better integration between systems, standardization of computing platforms, improved flexibility, global sharing of information, and better visibility into the supply chain management process.
Intangible
self-directed teams
Integrated teams empowered to control portions of their process.
Armand V. Feigenbaum
Introduced concept of total quality control. 40 steps. Company-wide quality control.
early supplier involvement (ESI)
Involving suppliers in the early stages of product design.
"Why might a company avoid using demand-based options such as inventory and backorders over a long period of time?
It is more risky
How does the status of overall customer satisfaction support supply chain objectives?
It measures efficiency.
Why is capacity requirements planning (CRP) important?
It provides the ability to compare available production capabilities to the planned workload
Why is kanban significant to the "pull" system?
It specifies the exact quantity of a product that needs to be produced.
"What are two common drawbacks of implementing an enterprise resource planning (ERP) solution?"
It takes a long time to implement and to see any benefits, It requires extensive, often complex, training.
Which function does marketing play in a just-in-time (JIT) organization?
JIT marketing focuses on customer-driven quality.
The philosophy of JIT originated in:
Japan
common causes for TQM failure
Lack of a genuine quality culture, Lack of top management support and commitment, Over- and underreliance on statistical process control (SPC) methods
product layouts
Layouts that arrange resources in sequence to allow for an efficient buildup of the product.
hybrid layouts
Layouts that combine characteristics of process and product layouts.
process layouts
Layouts that group resources based on similar processes or functions.
flexible layouts
Layouts that remain desirable many years into the future or can be easily modified to meet changing demand.
Hand tools, lubricants, and cleaning supplies are usually examples of what?
MRO inventory
"A company is experiencing an unusual amount of deliveries that are either late or an incorrect quantity. Which type of system is used to identify and manage this type of problem?"
MRP (material requirements planning)
global priority rule
Makes a priority decision based on information that includes the remaining work centers a job must pass through.
local priority rule
Makes a priority decision based on jobs currently at that work center.
MRP II
Manufacturing Resource Planning
"How does inventory management differ for manufacturing organizations compared to service organizations?"
Manufacturing organizations must maintain tangible inventory.
________ develops a plan that enables the company to satisfy the goals of the strategic business plan.
Marketing
MRP
Material Requirements Planning
_____ is an information system that uses the concept of backward scheduling.
Material requirements planning (MRP)
Which concept of variation measures the central tendency of a set of data?
Mean
job flow time
Measurement of the time a job spends in the shop before it is finished.
process performance metrics
Measurements of different process characteristics that tell how a process is performing.
job tardiness
Measures how long after the due date the job is completed.
job lateness
Measures whether the job is done ahead of, on, or behind schedule.
average number of jobs in the system
Measures work-in-process inventory.
program evaluation and review technique (PERT)
Network planning technique used to determine a project's planned completion date and identify the project's critical path.
______ motivation is related to improving inadequate business performance, reducing high-cost structures, improving customer responsiveness, simplifying complex processes, supporting global expansion, and standardizing best practices throughout the enterprise.
Operational
What do assignable causes of variation indicate?
Out-of-control signals were found in the process.
action notices
Output from an MRP system that identifies the need for an action to be taken.
What are two reasons a company might be hesitant to provide overtime as a capacity-based option
Overtime is not a long-term solution, overtime is typically a 50% wage premium
backward integration
Owning or controlling sources of raw materials and components.
forward integration
Owning or controlling the channels of distribution.
_____ uses probabilistic time estimates.
PERT
Decision points.
Part of a decision tree -- These are the points in time when decisions, such as whether or not to expand, are made. They are represented by squares, called "nodes."
time-based compensation systems
Pay based on the number of hours worked.
Gantt chart
Planning and control chart designed to graphically show workloads or to monitor job progress.
product specifications
Preset ranges of acceptable quality characteristics.
In which organizational layout would one expect to see items arranged by type?
Process
_____ layouts provide much flexibility and allow for the production of many products with differing characteristics
Process
methods analysis
Process concerned with the detailed process for doing a particular job.
probabilistic time estimate
Process that uses optimistic, most likely, and pessimistic time estimates.
flow operations
Processes designed to handle high-volume, standard products.
outsource
Processes or activities that are completed by suppliers.
insource
Processes or activities that are completed in-house.
intermittent operations
Processes used to produce a variety of products with different processing requirements in lower volumes.
repetitive operations
Processes used to produce one or a few standardized products in high volume.
make-to-order strategy
Produces products to customer specifications after an order has been received.
assemble-to-order strategy
Produces standard components that can be combined to customer specifications.
make-to-stock strategy
Produces standard products and services for immediate sale or delivery.
____ layouts provide great efficiency when producing one type of product.
Product
ISO 9004:2000, Quality Management Systems—Guidelines for Performance:
Provides guidelines for establishing a quality management system. It focuses not only on meeting customer requirements but also on improving performance.
routing
Provides information about the operations to be performed, their sequence, the work centers, and the time standards.
ISO 9000:2000, Quality Management Systems—Fundamentals and Standards:
Provides the terminology and definitions used in the standards. It is the starting point for understanding the system of standards.
advertising revenue model
Provides users with information on services and products and provides an opportunity for suppliers to advertise.
which two factors affect a service location decision?
Proximity to customer, Quality-of-life issues
What is a key factor of a location analysis for a service company?
Proximity to customers
What is a major factor in the decision to locate a business near its primary market territory?
Proximity to customers
Which two capacity measurement concepts should a firm consider when conducting a location analysis?
Proximity to sources of supply, site considerations
The system of Kanbans used to coordinate delivery of goods by suppliers does not include
Purchase approvals by the production manager
What are two product system differences between the push and pull processes?
Push moves the product forward in anticipation for demand. Pull eliminates excessive inventory.
quality trilogy
Quality Planning Quality Control Quality Improvement
One common name for TQM based team work is:
Quality circle
value for price paid
Quality defined in terms of product or service usefulness for the price paid.
support services
Quality defined in terms of the support provided after the product or service is purchased.
For Juran's quality trilogy, which part stresses that processes should be set up to ensure that the quality standards can be met?
Quality planning
process velocity
Ratio of throughput time to value-added time. measures how much wasted time exists in a process
requisition request
Request indicating the need for an item.
internal setup
Requires the machine to be stopped in order to be performed.
What is the third basic element in the just-in-time (JIT) system if the first element is total quality management (TQM) and the second is JIT manufacturing?
Respect for people
What is the name of the model that has been created to examine the four different supply chain perspectives of reliability, flexibility, expenses, and assets/utilization
SCOR (Supply Chain Operations Reference)
project buffer
Safety time placed at the end of the critical path.
forward scheduling
Schedule that determines the earliest possible completion date for a job.
infinite loading
Scheduling that calculates the capacity needed at work centers in the time period needed without regard to the capacity available to do the work.
finite loading
Scheduling that loads work centers up to a predetermined amount of capacity.
Which strategy is used by some emergency rooms to overcome customer frustrations about long waiting times?
Screen patients and fast-track those with minor ailments
indented bill of material
Shows the highest-level "parents" closest to the left margin and the "children" indented toward the right. Subsequent levels are indented farther to the right.
Multiple-sampling plans
Similar to double-sampling plans except that criteria are set for more than two samples.
problem-solving teams
Small groups of employees and supervisors trained in problem-solving techniques who meet to identify, analyze, and propose solutions to workplace problems.
retail crossdocking
Sorting product from multiple vendors onto outbound trucks headed for specific stores.
project activities
Specific tasks that must be completed and that require resources.
Which factor determines how long it takes a qualified operator to perform a duty of the job requirements under the assumption that the operator is working at a sustainable pace with the proper tools for the process?
Standard Time
descriptive statistics
Statistics used to describe quality characteristics and relationships.
W. Edwards Deming
Stressed management's responsibility for quality and developed "14 points" to guide companies in quality improvement. often referred to as the "father of quality control."
planned orders
Suggested order quantities, release dates, and due dates created by an MRP system.
net marketplaces
Suppliers and buyers conduct trade in a single Internet-based environment.
single-source suppliers
Suppliers that supply an entire family of parts for one manufacturer.
tier one supplier
Supplies materials or services directly to the processing facility.
______ is the capability of collecting business intelligence along the supply chain.
Supply chain intelligence (SCI)
______ is designed to improve decision making in the supply chain.
Supply chain management (SCM) software
repetitive processing systems
Systems used to produce high volumes of a few standardized products.
intermittent processing systems
Systems used to produce low volumes of many different products.
from-to matrix
Table that gives the number of trips or units of product moved between any pair of departments.
REL chart
Table that reflects opinions of managers with regard to the importance of having any two departments close together.
ERP ______ benefits refer to reductions in inventory and staffing, increased productivity, improved order management, quicker closing of financial cycles, reduced IT and purchasing costs, improved cash flow management, increased revenue and profits, reduced transportation and logistics costs, and improved on-time delivery performance.
Tangible
two important aspects of Six Sigma
Technical tools, People involvement
______ motivation relates to the replacement of disparate systems; improved quality and visibility of information; integration of business processes and systems; replacement of older, obsolete systems; and the acquisition of systems that can support future business growth.
Technological
information technology (IT)
Technology that enables storage, processing, and communication of information within and between firms.
process capability
The ability of a production process to meet or exceed preset specifications.
balance delay
The amount by which the line efficiency falls short of 100 percent.
makespan
The amount of time it takes to finish a batch of jobs.
master production schedule (MPS)
The anticipated production schedule (build schedule) for the company expressed in specific configurations, quantities, and dates.
mean observed time
The average of the observation times for each of the work elements.
consumer's risk
The chance of accepting a lot that contains a greater number of defects than the LTPD limit.
producer's risk
The chance that a lot containing an acceptable quality level will be rejected.
remanufacturing
The concept of using components of old products in the production of new ones.
policy constraint
The condition that results when a specific policy dictates the rate of production.
market constraint
The condition that results when market demand is less than production capacity.
price and availability
The current price of the item and whether the quantity is available when needed.
action bucket
The current time period.
independent demand
The demand for an item is unrelated to the demand for other items.
range
The difference between the largest and smallest observations in a set of data.
just-in-time manufacturing
The element of JIT that focuses on the production system to achieve value-added manufacturing.
average outgoing quality (AOQ)
The expected proportion of defective items that will be passed to the customer under the sampling plan.
statistical quality control (SQC)
The general category of statistical tools used to evaluate organizational quality.
projected available
The inventory balance projected into the future.
standard time
The length of time it should take a qualified worker using appropriate process and tools to complete a specific job, allowing time for personal fatigue and unavoidable delays.
What is meant by "duration of the change"?
The length of time one expects to need the different level of capacity
pessimistic time estimate
The longest time period in which the activity will be completed.
cycle time
The maximum amount of time each workstation has to complete its assigned tasks.
In JIT a Kanban card is used to signal
The need for more parts
Your firm starts the week with 5 employees and each employee can ship 10 computers a day. At the end of the week you need to ship 300 computers. Daily demand fluctuates and you are using a chase aggregate plan. What is the impact on your employees?
The number of employees will vary over the week.
output rate
The number of units we wish to produce over a specific period of time.
theoretical minimum number of stations
The number of workstations needed on a line to achieve 100 percent efficiency.
point of departure
The percentage of normal capacity the company is currently using.
reliability
The probability that a product, service, or part will perform as intended.
line balancing
The process of assigning tasks to workstations in a product layout in order to achieve a desired output and balance the workload among stations.
product design
The process of defining all of the product's characteristics.
reverse engineering
The process of disassembling a product to analyze its design features.
service design
The process of establishing all the characteristics of the service, including physical, sensual, and psychological benefits.
acceptance sampling
The process of randomly inspecting a sample of goods and deciding whether to accept the entire lot based on the results.
sales and operations planning
The process that brings together all the functional business plans (marketing, operations, engineering, and finance) into one integrated plan.
throughput
The quantity of finished goods that can be sold.
transfer batch
The quantity of items moved at the same time from one resource to the next.
process batch
The quantity produced at a resource before the resource is switched over to produce another product.
distributor crossdocking
The receiving and consolidating of inbound products from different vendors into a multi-SKU pallet.
manufacturing crossdocking
The receiving and consolidating of inbound supplies and materials to support just-in-time manufacturing.
magnitude of the change
The relative size of the change needed.
optimistic time estimate
The shortest time period in which the activity can be completed.
simplicity
The simpler a solution, the better it is.
out of control
The situation in which a plot of data falls outside preset control limits.
acceptable quality level (AQL)
The small percentage of defects that consumers are willing to accept.
lead time
The span of time needed to perform an activity or series of activities.
supply chain velocity
The speed at which product moves through a pipeline from the manufacturer to the customer.
vendor-managed inventory (VMI)
The supplier maintains an inventory at the customer's facility.
JIT system
The three elements are just-in-time manufacturing, total quality management, and respect for people.
product structure tree
The visual representation of the BOM, clearly defining the parent-child
Which two areas should managers consider in order to adapt to the business dynamics affecting their company?
Their control over internal operations & Their influence and leverage over supplies
ISO 9001:2000, Quality Management Systems—Requirements:
This is the standard for the certification of a firm's quality management system. It is used to demonstrate the conformity of quality management systems to meet customer requirements.
Managers become more of a supportive function in the JIT environment. Aside from being a coach, motivator, assisting with teamwork and problem solving, what is the most important thing managers can give to employees to help facilitate implementing JIT?
Time
The important thing in Quality Function Deployment competitive evaluation is
To identify customer requirements that should be pursued and how we fare relative to our competitors
"What is the primary purpose in using the master production schedule (MPS) in the marketing department of an organization?"
To manage the demand for promised deliveries
expedite
To rush orders that are needed in less than the normal lead time.
What is the common theme in total quality management (TQM) across all functions in an organization?
To satisfy customer needs
An alpha (α) risk is also called:
Type I error
crashing
Typically represents project activities.
general warehouse
Used for long-term storage.
distribution warehouse
Used for short-term storage, consolidation, and product mixing
automation
Using machinery to perform work without human operators.
the only definition that combines economics with consumer criteria
Value for price paid
A control chart for ______________ is used to monitor characteristics that can be measured.
Variables
incoming inspection
Verifies the quality of incoming goods.
queue
Waiting line.
Who developed quality control charts?
Walter Shewhart
When is capacity measurement at the best operating level?
When the average unit cost is minimized
job rotation
Workers shift to different jobs to increase understanding of the total process.
Deming Prize
a Japanese award given to companies to recognize efforts in quality improvement
cause-and-effect diagram
a chart that identifies potential causes of particular quality problems
transaction fee model
a company receives a fee for executing a transaction
cost
a competitive priority focusing on low cost
quality
a competitive priority focusing on the quality of goods and services
lean systems
a concept that takes a total system approach to creating efficient operations
economies of scale
a condition in which the average cost of a unit produced is reduced as the amount of output is increased
diseconomies of scale
a condition in which the cost of each additional unit made increases
undertime
a condition occurring when there are more people on the payroll than are needed to produce the planned output
uniform plant loading
a constant production plan for a facility with a given planning horizon
linear program (LP)
a constrained optimization problem in which all the functions involving decision variables are linear
less-than-or-equal-to constraint
a constraint such as 3x ₁ + 5x ₂ ≤ 22, often used to model a limitation on the amount of a resource that can be used
greater-than-or-equal-to constraint
a constraint such as 4x ₁ + 7x ₂ ≥ 50, often used to model a requirement that must be satisfied
equality constraint
a constraint such as 6x ₁ + 3x ₂ = 30, used to specify that a requirement must be met exactly
percentage of orders shipped on schedule
a customer service measure appropriate for use when orders have similar value
percentage of line items shipped on schedule
a customer service measure appropriate when customer orders vary in number of line items ordered
Black Belts
a designation received by individuals highly trained in quality improvement principles and techniques and who's job is to identify and solve quality problems
management science
a field of study that focuses on the development of quantitative techniques to solve operations problems
electronic data interchange (EDI)
a form of computer-to-computer communications that enables sharing business documents
formulation
a formal, algebraic statement of a constrained optimization problem
capacity-based options
a group of options that allow the firm to change its current operating capacity
demand-based options
a group of options that respond to demand fluctuations through the use of inventory or back orders, or by shifting the demand pattern
withdrawal card
a kanban card that authorizes withdrawal of material
checklist
a list of common defects and the number of observed occurrences of these defects
business strategy
a long-range plan for a business
operations strategy
a long-range plan for the operations function that specifies the design and use of resources to support the business strategy
Simplex Method
a mathematical algorithm developed by George Dantzig that, when implemented in software, can solve LPs very quickly
constrained optimization problem
a mathematical model in which one is trying to maximize or minimize some quantity, while satisfying a set of constraints
productivity
a measure of how efficiently an organization converts inputs into outputs — Ratio of outputs over inputs.
inventory turnover
a measure of inventory policy effectiveness
weeks of supply
a measure of inventory policy effectiveness
human relations movement
a philosophy based on the recognition that factors other than money can contribute to worker productivity
just-in-time (JIT)
a philosophy designed to achieve high-volume production through elimination of waste and continuous improvement
continuous improvement (kaizen)
a philosophy of never-ending improvement
broad view of JIT
a philosophy that encompasses the entire organization
periodic counting
a physical inventory is taken periodically, usually annually
sampling plan
a plan for acceptance sampling that precisely specifies the parameters of the sampling process and the acceptance/rejection criteria.
hybrid aggregate plan
a planning approach that uses a combination of level and chase approaches while developing the aggregate plan
chase aggregate plan
a planning approach that varies production to meet demand each period
factor rating
a procedure that can be used to evaluate multiple alternative locations based on a number of selected factors
internal resource constraint
a regular bottleneck
capacity planning using overall planning factors (CPOPF)
a rough-cut capacity planning technique. MPS items are multiplied by historically determined planning factors for key resources
ISO 14000
a set of international standards and a certification focusing on a company's environmental responsibility
feasible solution
a specific combination of values of the decision variables such that all of the constraints are satisfied
infeasible solution
a specific combination of values of the decision variables such that at least one of the constraints is violated
mission
a statement defining what business an organization is in, who its customers are, and how its core beliefs shape its business
quality circle
a team of volunteer production employees and their supervisors who meet regularly to solve quality problems
global marketplace
a trend in business focusing on customers, suppliers, and competitors from a global perspective
sustainability
a trend in business to consciously reduce waste, recycle, and reuse products and parts
continuous process
a type of process that operates continually to produce a high volume of a fully standardized product
batch process
a type of process used to produce a small quantity of products in groups or batches based on customer orders or specifications
capacity cushion
additional capacity added to regular capacity requirements to provide greater flexibility
A company's __________ plan is a statement of the resources available to the operations group during the next 6 to 18 months.
aggregate
the _______ identifies the resources needed by operations to support the marketing plan.
aggregate plan
Percentage of orders shipped on schedule is a good measure of finished goods customer service if:
all orders and customers have similar value.
the Deming Prize
an annual award given to firms that demonstrate outstanding quality
scientific management
an approach to management that focused on improving output by redesigning jobs and determining acceptable levels of worker output
electronic request for quote (eRFQs)
an electronic request for a quote on goods and services
All product designs begin with ____________________________.
an idea
Industrial Revolution
an industry movement that changed production by substituting machine power for labor power
total quality management (TQM)
an integrated effort designed to improve quality performance at every level of the organization
time-based competition
an organizational strategy focusing on efforts to develop new products and deliver them to customers faster than competitors
waste
anything that does not add value
Common causes of variation
are random causes that we cannot identify.
master production schedule
assembly schedule which is a statement of which products and quantities will be made in specific time periods.
A control chart for ______________ is used to monitor characteristics that have discrete values and can be counted.
attributes
When companies try to level the workload they can use all but which of the following tools: under time, overtime, back orders, hiring, sub-contracting
back orders
According to the textbook, the available space of a facility is best seen by using a
block plan
alternative workplace
brings work to the worker rather than the worker to the workplace
defining beliefs of JIT
broad view of operations, simplicity, continuous improvement, visibility, and flexibility
business-to-business e-commerce
businesses selling to and buying from other businesses
step 3 to develop an aggregate plan
calculate size of workforce
step 2 to develop an aggregate plan
calculate the aggregate production rate
external setup
can be performed while the machine is still running
competitive priorities
capabilities that the operations function can develop in order to give a company a competitive advantage in its market
multifunction workers
capable of performing more than one job
What helps an organization identify and plan the actions necessary to meet current and future customer demands?
capacity planning
Companies use ____________ to check that enough work is scheduled for operations and that the amount of work scheduled is feasible.
capacity requirements planning
control charts
charts used to evaluate whether a process is operating within set expectations
What type of aggregate plan sets labor and equipment capacity to satisfy demand each period?
chase
_______________ MRP is an MRP system that includes production planning, master production scheduling, and capacity requirements planning.
closed-loop
Two causes of variation in the quality of a product or process:
common causes and assignable causes.
order qualifiers
competitive priorities that must be met for a company to qualify as a competitor in the marketplace
order winners
competitive priorities that win orders in the marketplace
ALDEP and CRAFT
computer software packages for designing process layouts
CRAFT
computerized relative allocation of facilities technique
nonnegativity constraints
constraints of the form x ₁ ≥ 0, which are nearly universal in linear programming problems. They are used to represent the fact that negative quantities of products cannot be made, shipped, etc.
Evaluating an aggregate plan in terms of inventory levels is using what perspective?
cost
Quality failure costs
cost consequences of poor quality
external failure costs
costs associated with quality problems that occur at the customer site
appraisal costs
costs incurred in the process of uncovering defects
Quality controls costs
costs necessary for achieving high quality
setup cost
costs such as scrap costs, calibration costs, and downtime costs associated with preparing the equipment for the next product being produced
The _______ is the longest sequential path of interrelated activities in the network and shows the minimum completion time for the project.
critical path
Quality is defined by the
customer
If capacity is excessive, a company may have to ______________________.
decide how to use a partially empty facility
Location analysis is:
deciding on the best location for a facility.
tactical decisions
decisions that are specific and short-term in nature and are bound by strategic decisions
strategic decisions
decisions that set the direction for the entire company; they are broad in scope and long-term in nature
behavioral feasibility
degree to which the job is intrinsically satisfying to the employee
dependent demand
demand for component parts is based on the number of end items being produced
What refers to the use of common and interchangeable parts?
design standardization
SCM software
designed to improve decision making in the supply chain
work measurement
determines how long it should take to do a job
capacity requirements planning (CRP)
determines the labor and machine resources needed to fill the open and planned orders generated by the MRP
We use _______ estimates when we have done similar activities in the past and can make a reliable time estimate.
deterministic time
Sales and operations planning enables:
disciplined and formalized communications.
The load-distance model and center of gravity approach evaluate the location decision based on ________.
distance
Finished goods in transit to the customer are called what?
distribution inventory
business-to-business (B2B)
electronic commerce between businesses
customer-to-customer (C2C)
electronic commerce between customers
The central belief of the JIT philosophy is
elimination of waste
project
endeavor with a specific objective, multiple activities, and defined precedence relationships, to be completed in a specified time period
elemental time data
establish standards based on previously completed time studies, stored in an organization's database
precedence relationships
establishes the sequencing of activities to ensure that all necessary activities are completed before a subsequent activity is begun
step 5 to develop an aggregate plan
evaluate plan in terms of cost, customer service, operations, and human resources
JIT requires compact layouts and increased visibility so
everyone can see what everyone else is doing
A supply chain structure has:
external suppliers, internal functions of the firm, and external distributors
A difficulty with back orders, even when the customer waits, can be ________________.
extra administrative costs
distribution inventory
finished goods in the distribution system
Independent demand is the demand for ________________________________.
finished products
Bridge construction is an example of which layout type?
fixed position
Being able to keep costs low while changing the volume of production is an example of
flexibility
Long-term capacity requirements are identified on the basis of _____________________.
forecasts of future demand
Which term means to schedule a job that starts immediately, regardless of the due date?
forward scheduling
just-in-time (JIT) philosophy
getting the right quantity of goods at the right place at the right time
scatter diagrams
graphs that show how two variables are related to each other
special-purpose teams
highly focused, short-term teams addressing issues important to management and labor
frequency of occurrence
how often the work element must be done each cycle
conformance to specifications
how well a product or service meets the targets and tolerances determined by its designers
Capacity requirements planning enables the company to evaluate ____________________.
how well it is using its critical work centers
engineering plan
identifies new products or modifications to existing products that are needed to support the marketing plan
marketing plan
identifies the markets to be served, desired levels of customer service, product competitive advantage, profit margins, and the market share needed to achieve the objectives of the strategic business plan
financial plan
identifies the sources and uses of funds; projects cash flows, profits, return on investment; and provides budgets in support of the strategic business plan
steps used to develop a factor rating
identify dominant factors, assign weights to factors, select scale by which to evaluate each location relative to each factor, evaluate each alt relative to each factor using scale, score each alt based on rated/weighted factors, select alt with highest score
step 1 to develop an aggregate plan
identify type of aggregate plan: level, chase, or hybrid
bullwhip effect
inaccurate or distorted demand information created in the supply chain
ISO 14000: Operations standards
include the measurement of consumption of natural resources and energy.
One outcome of a U-shaped cell manufacturing layouts is
increased worker satisfaction
Project Life Cycle
initial concept, feasibility study, planning of project, execution of plan, termination of project
What type of operations focus on products in the early stage of the life cycle?
intermittent
Which type of operation is used to produce many different products with varying process requirements in lower volumes?
intermittent
costs that the company hopes to prevent
internal and external failure costs
extranets
intranets that are linked to the Internet so that suppliers and customers can be included in the system
According to JIT, __________ is carried to cover up a wide variety of problems, such as poor quality, demand uncertainty, and slow delivery.
inventory
anticipation inventory
inventory built in anticipation of future demand
transportation inventory
inventory in movement between locations
work-in-process (WIP)
items in process throughout the plant
Which design work system minimizes repetitiveness in tasks by assigning employees the role of planning and scheduling?
job enrichment
Which work system acknowledges the benefits of employee proficiency?
labor specialization
enterprise resource planning (ERP)
large, sophisticated software systems used for identifying and planning the enterprise-wide resources needed to coordinate all activities involved in producing and delivering products
The broad view of JIT is now often termed __________________________.
lean production
Which concept takes a total system approach to creating an efficient operation and combines concepts such as just-in-time (JIT), total quality management (TQM), and continuous improvement?
lean systems
What type of aggregate plan maintains a constant workforce and produces the same amount of product in each time period?
level
constraints
limitations or requirements that must be satisfied
What type of process is designed to produce a large volume of a standardized product for mass production, such as automobiles?
line process
bill of material (BOM)
lists all the subassemblies, component parts, and raw materials that go into an end item and shows the usage quantity of each required
JIT believes in developing __________ relationships with suppliers.
long-term
hiring and firing
long-term option for increasing or decreasing capacity
If setup costs are essentially zero (negligible when compared to carrying costs), which approach should be used for lot sizing?
lot for lot
The quantity of the replenishment order is based on the __________________________.
lot sizing rule used
A ______ throughput time means that more products can move through the system.
lower
supply chain management (SCM)
management of the flow of materials from suppliers to customers in order to reduce overall cost and increase responsiveness to customers
The ease with which the product can be made is its
manufacturability
process layouts are designed to produce:
many different items, often to customer specifications.
The next level down in the planning process after development of the aggregate plan is the _____________.
master production schedule
types of waste
material, energy, time, and space
The center of gravity approach may identify a location that
may not be feasible to locate to
ISO 14000: Management systems standards
measure systems development and integration of environmental responsibility into the overall business.
Skewness
measures the symmetry of the distribution
decision tree
modeling tool used to evaluate independent decisions that must be made in sequence
environmental scanning
monitoring the external environment for changes and trends to determine business opportunities and threats
The Production Plan is usually updated and reevaluated:
monthly
activity-on-node
network diagramming notation that places activities in the nodes and arrows to signify precedence relationships
critical path method (CPM)
network planning technique, with deterministic times, used to determine a project's planned completion date and identify the project's critical path
intranets
networks that are internal to an organization
Percentage of Line Items Shipped on Schedule recognizes that:
not all orders are equal but fails to take into account the dollar value of orders.
Which of the following is not typically indicated as part of the resources authorized in an aggregate plan?
number of machines to be used
What type of machine is controlled by a computer and can do a variety of tasks, such as drilling, boring, or turning parts of different sizes and shapes?
numerically controlled
business-to-consumer e-commerce (B2C)
on-line businesses sell to individual consumers
electronic storefronts
on-line catalogs of products made available to the general public by a single supplier
For capacity requirements planning, loads for critical work centers are calculated based on ___________.
open shop orders and planned shop orders
structure
operations decisions related to the design of the production process, such as facilities, technology, and flow of goods and services through the facility
infrastructure
operations decisions related to the planning and control systems of the operation, such as organization of operations, skills and pay of workers, and quality measures
For every scheduled receipt in an MRP table, there is also in the organization an __________________.
order that has been placed but not yet been received
manufacturing organizations
organizations that primarily produce a tangible product and typically have low customer contact
service organizations
organizations that primarily produce an intangible product, such as ideas, assistance, or information, and typically have high customer contact
What are the two primary objectives of aggregate planning?
output rate and workforce size
control charts for attributes include:
p-charts and c-charts
Decision alternatives.
part of a decision tree -- Buying a large facility and buying a small facility are two decision alternatives. They are represented by "branches" or arrows leaving a decision point.
Outcomes.
part of a decision tree -- For each possible alternative an outcome is listed. In our example, that may be expected profit for each alternative (expand now or later) given each chance event (high demand or low demand).
Chance events.
part of a decision tree -- These are events that could affect the value of a decision. Each chance event has a probability or likelihood of occurring. the sum of the probabilities of all chances must add up to 100 percent. Chance events are "branches" or arrows leaving circular nodes.
components
parts or subassemblies used in the final product
output-based (incentive) systems
pay based on the number of units completed
JIT considers ______ to be the organization's most important resource.
people
capacity utilization
percentage measure of how well available capacity is being used
efficiency
performing activities at the lowest possible cost -- the ratio of actual output to standard output
cell manufacturing
placement of dissimilar machines and equipment together to produce a family of products with similar processing requirements
cycle counting
prespecified items are counted daily
costs that are incurred to prevent poor quality
prevention and appraisal costs
Two types of quality control costs
prevention costs and appraisal costs
Demand patterns can be smoothed through:
pricing incentives, reduced prices for out-of-season purchases, or nonprime service times.
A demand-based option in which the marketing tries to shift demand patterns to minimize demand fluctuations is called
proactive
visibility
problems must be visible to be identified and solved
A hospital is an example of which layout type?
process
A university is an example of which layout type?
process
Product design considerations must include the ____
process
hospitals, universities, metalworking shop, wal-mart -- these are examples of a _________ layout
process
A hybrid layout combines
process and product
Which of the following is a tool for evaluating an operation in terms of the sequence of steps from inputs to outputs with the goal of improving its design?
process flow analysis
a tool for evaluating an operation in terms of the sequence of steps from inputs to outputs with the goal of improving its design
process flow analysis
type of layout is seen in companies with intermittent processing systems
process layouts
four basic layout types
process, product, hybrid, and fixed position
A car wash is an example of which layout type?
product
assembly lines, cafeterias, car washes -- these are examples of a _______ layout
product
Product design and process selection affect
product quality, product cost, and customer satisfaction.
A visual depiction of the subassemblies and components that are needed to produce a finished product is called a(n) ____________________________________.
product structure tree
total productivity
productivity computed as a ratio of output to all organizational inputs
partial productivity
productivity computed as a ratio of output to only one input (e.g., labor, materials, machines)
multifactor productivity
productivity computed as a ratio of output to several, but not all, inputs
finished goods inventory
products available for shipment to the customer
finished goods
products sold to customers
Which type of process would be least likely to produce goods for inventory rather than for a specific customer request?
project
Building a bridge over the Mississippi River for a new highway uses a
project process
demonstrated capacity
proven capacity calculated from actual performance data
double sampling
provides an opportunity to sample the lot a second time if the results of the first sample are inconclusive. We first sample a lot of goods according to preset criteria for definite acceptance or rejection. However, if the results fall in the middle range, they are considered inconclusive and a second sample is taken.
Key factors in location analysis include:
proximity to customers, transportation, source of labor, community attitude, and proximity to supplies.
predetermined time data
published database of elemental time data used for establishing standard times
raw materials
purchased items or extracted materials transformed into components or products
Highly labor intensive services are called
pure services
Factor rating is a tool that helps managers evaluate _________ factors.
qualitative
Two categories of quality costs
quality controls costs, quality failure costs
decision variables
quantities under the control of the decision maker
common causes of variation
random causes that cannot be identified
utilization
ratio of time a resource is used to time it is available for use
MRP maintains priorities by _________ and making the necessary adjustments.
recognizing changes in the operations environment
reengineering
redesigning a company's processes to make them more efficient
open shop orders
released manufacturing orders
Vertical integration decisions is a better strategic decision for
repetitive operations
traffic management
responsible for arranging the method of shipment for both incoming and outgoing products or materials
distribution management
responsible for movement of material from the manufacturer to the customer
According to JIT, workers should perform
routine preventive maintenance activities
block plan
schematic showing the placement of resources in a facility
a process flowchart is useful for:
seeing the totality of the operation and for identifying potential problem areas
The first step in developing the production plan is:
selection of the aggregate plan that matches your company's objectives.
subcontracting
sending production work outside to another manufacturer or service provider
JIT manufacturing cannot succeed if __________costs are too high.
set-up
application service provider (ASP)
sets up and runs ERP systems
What is the term used for the adjustment of a machine after making one product type so that production can begin for another product type?
setup
Single setup means
setup times are in single digits of minutes
A proactive marketing approach in aggregate planning involves _________________________________.
shifting the demand patterns to level demand fluctuations
In evaluating your new production plan, cost comparisons are
simple if you are comparing similar ending positions
Capacity planning and location analysis decisions are often made __________
simultaneously
Concurrent engineering is
simultaneously design the product and the process
In facility location zoning restrictions, soil conditions, and access roads for trucks are ________________.
site considerations
For the general warehouse layout problem, which department should be located furthest from the dock?
smallest ratio of trips needed to area needed
customer relationship management (CRM)
software solutions that enable the firm to collect customer-specific data
job design
specifies the contents of the job
Which inventory function provides a hedge against inflation?
speculative inventory
ISO 14000: Environmental systems standards
standards measure emissions, effluents, and other waste systems.
backward scheduling
starts with the due date for an order and works backward to determine the start date for each activity
OM uses tools to help make the right quality decisions. These tools come from the field of ________
statistics
Planning begins with the development of the_________
strategic business plan
benchmarking
studying the business practices of other companies for purposes of comparison
JIT was based on the need for
survival
broad view of the organization
tasks and procedures are important only if they meet the company's overall goals
break-even analysis
technique used to compute the amount of goods that must be sold just to cover costs
location analysis
techniques for determining location decisions
companies' motivations for implementing ERP systems:
technological and operational.
step 4 to develop an aggregate plan
test plan and calculate costs
JIT is a philosophy that was developed by
the Toyota Motor Company in the mid-1970s
mass customization
the ability of a firm to highly customize its goods and services at high volumes
small-lot production
the ability to produce small quantities of products
customer service
the ability to satisfy customer requirements
c-charts monitor:
the actual number of defects in a sample
slack
the amount of time an activity can be delayed without affecting the project's planned completion time
allowance factor
the amount of time the analyst allows for personal time, fatigue, and unavoidable delays
quality at the source
the belief that it is best to uncover the source of quality problems and eliminate it — uncovering the root cause of a quality problem
specialization
the breadth of the job design
operations management (OM)
the business function responsible for planning, coordinating, and controlling the resources needed to produce a company's goods and services
cross-functional decision making
the coordinated interaction and decision making that occur among the different functions of the organization
The transportation method is an excellent tool for evaluating:
the cost impact of adding sites to the network of current facilities.
economic feasibility
the cost of the job should be less than the value it adds
Process Selection
the development of the process necessary to produce the designed product.
manufacturability
the ease with which a product can be made
duration of the change
the expected length of time the different capacity level is needed
optimal solution
the feasible solution with the largest (for a maximization problem) or smallest (for a minimization) objective value
technical feasibility
the job must be physically and mentally doable
The cumulative lead time is
the longest route in terms of time from the low level items to the end item in the product structure tree
critical path
the longest sequential path through the network diagram
Capacity planning is deciding on
the maximum output rate of a facility.
capacity
the maximum output rate that can be achieved by a facility
design capacity
the maximum output rate that can be achieved by a facility under ideal conditions
effective capacity
the maximum output rate that can be sustained under normal conditions
normal time
the mean observed time multiplied by the performance rating factor by the frequency of occurrence
x-bar charts monitor:
the mean or average value of a product characteristic
customer-defined quality
the meaning of quality as defined by the customer
trade-off
the need to focus more on one competitive priority than on others
value added
the net increase created during the transformation of inputs into final outputs
most likely time estimate
the normal time that the activity is expected to take
master scheduler
the person responsible for managing, developing, reviewing, and maintaining the master schedule
rough-cut capacity planning (RCCP)
the process of converting the master production schedule into requirements for key resources such as direct labor and machine time
capacity planning
the process of establishing the output rate that can be achieved by a facility
globalization
the process of locating facilities around the world
p-charts monitor:
the proportion of defects in a sample
objective
the quantity to be maximized or minimized
r-charts monitor:
the range or dispersion of the values of a product characteristic
the process capability index (Cp) is computed as:
the ratio of the specification width to the width of the process variability
rectilinear distance
the shortest distance between two points measured by using only north-south and east-west movements
Hawthorne studies
the studies responsible for creating the human relations movement, which focused on giving more consideration to workers' needs
gross requirements
the total-period demand for an item
core competencies
the unique strengths of a business
lot tolerance percent defective (LTPD)
the upper limit of the percentage of defective items consumers are willing to tolerate.
LHS value
the value of the constraint expression to the left of the ≤, ≥, or = sign
RHS value
the value of the constraint expression to the right of the ≤, ≥, or = sign
best operating level
the volume of output that results in the lowest average unit cost
Marketing plays a large role in JIT because
they pass on the customer-driven quality requirements
Assignable causes of variation are
those that can be identified and eliminated.
One goal of process improvement is to reduce ________.
throughput time
due date
time when the job is supposed to be finished
The ______ schedule shows the production planner when in the production process parts and materials must be available.
time-phased
MRP develops a ____________ that shows future demand, supply and inventories by time period.
time-phased schedule
Part of the MRP system is developing a _________ that shows future demand, supply, and inventories by time period.
time-phased schedule
objectives of an MRP system are _________ and ________
to determine the quantity and timing of material requirements, to keep priorities updated and valid.
role of operations management
to transform organizational inputs into outputs
beta probability distribution
typically represents project activities
Infinite loading identifies:
uneven workloads and bottlenecks.
back orders
unfilled customer orders
speculative inventory
used to protect against some future event
e-commerce
using the Internet and Web to transact business
The ratio of actual output rate to capacity is ____________________________.
utilization
What is the measure of how much supply chain is owned or operated by the manufacturer?
vertical integration
Companies that use back orders are asking their customers to ___________________.
wait for delivery of the product
The master production schedule is reviewed:
weekly
symmetric distribution
when the number of observations below the mean is the same as the number of observations above the mean
overtime
work beyond normal established operation hours that usually requires a premium be paid to the workers
JIT flexibility refers to
workers being able to perform many different tasks
Control charts for variables include
x-bar charts and r-charts
The standard deviation of the distribution of sample means is computed by
σ/√n