OM Exam 2

Balancing low-cost storage with low-cost material handling is important in a(n)

warehouse layout

A(n) __________ is a special product-oriented arrangement of machines and personnel in what is ordinarily a process-oriented facility.

work cell

Which of the following is NOT one of the four approaches to capacity expansion?

lag demand with one-step expansion

Define fixed costs

Fixed costs are those that continue even if no units are produced

Describe the three forecasting time horizons and their use.

Forecasting time horizons are: short range—generally less than three months, used for purchasing, job scheduling, work force levels, production levels; medium range—usually from three months up to three years, used for sales planning, production planning and budgeting, cash budgeting, analyzing operating plans; long range—usually three years or more, used for new product development, capital expenditures, facility planning, and R&D.

Servicescape refers to the physical surrounding in which the service is delivered.

True

Mass Customization

___________ is a rapid, low-cost production process that caters to constantly changing unique customer desires.

Repetitive Focus

____________ is a process strategy that uses a product-oriented production process that uses modules.

A firm's process strategy is its approach to transforming resources into goods and services.

True

A(n) ______________ forecast uses an average of the most recent periods of data to forecast the next period.

moving average

Efficiency

____________ is actual output as a percent of effective capacity.

What is Mass Customization?

Mass customization is rapid, low-cost production of goods and services that fulfill increasingly unique customer desires. It brings us the variety of products traditionally provided by the process focus, with low costs associated with standardized high volume production (the product focus).

Process Strategy

An organization's approach to transforming resources into goods and services is called its

A forecast with a time horizon of about 3 months to 3 years is typically called a

b. medium-range forecast

Value Stream Mapping

A special form of time-function mapping, which goes beyond the organization into its supply chain, is _____________.

Value Stream Mapping

A variation on time-function mapping or process mapping. The most fundamental difference between them is that Value Stream Mapping is not confined to the organization itself. In particular, in its analysis of where value is added, it extends the analysis to the organization's supply chain.

Retail layout

A(n) ____________ addresses flow, allocates space, and responds to customer behavior.

Fixed-position layout:

Addresses the layout requirements of large, bulky projects such as ships and buildings

Explain what the purpose of assembly line balancing is. Describe briefly how it is done. Explain how assembly line balancing supports the needs of product layout.

Assembly line balancing attempts to put equal amounts of work into each of the workstations that assemble a product. The technique begins with a task list and precedence chart; to this is added demand data, from which cycle time can be computed. This is the speed at which the line must move. Then the theoretical number of stations is calculated. Each required task is then assigned into one workstation. This approach holds down the amount of idle time in a product layout, and leads to higher utilization of the plant, and to higher volume of output.

Distinguish between utilization and efficiency.

Both are ratios, not item counts. Both use actual output in the ratio numerator. Utilization is the ratio of actual output to design capacity, so it measures output as a fraction of ideal facility usage. Efficiency is the ratio of actual output to effective capacity, so it measures output as a fraction of the practical or current limits of the facility.

What is the fundamental distinction between design capacity and effective capacity? Provide a brief example.

Design capacity is the theoretical maximum output of a system in a given period under ideal conditions. Effective capacity, on the other hand, is the capacity that a firm expects to achieve given the current operating constraints. Effective capacity is often lower than design capacity because the facility may have been designed for an earlier version of the product or a different product mix than is currently being produced. As an example, a restaurant might have 100 seats, but it only opens up 60 every night because it cannot find enough qualified servers.

. __________ refers to the physical surroundings in which a service takes place, and how they affect customers and employees.

Servicescape

__________ forecasts employ one or more mathematical models that rely on historical data and/or causal variables to forecast demand.

Quantitative

What are the differences between quantitative and qualitative forecasting methods?

Quantitative methods use mathematical models to analyze historical data. Qualitative methods incorporate such factors as the decision maker's intuition, emotions, personal experiences, and value systems in determining the forecast.

What is a servicescape? How is it related to the retail layout problem? What are the three elements of servicescape for dealing with these human issues?

Servicescape describes the physical surroundings in which a service takes place. Rather than design a retail space strictly for profitability, managers must consider how the surroundings—the layout—have a humanistic effect on customers and employees. The three elements are ambient conditions, spatial layout/functionality, and signs, symbols, and artifacts.

Process Focus

The process strategy that is organized around processes to facilitate low-volume, high-variety processes is called a(n) ________________.

. Identify four components of a time series. Which one of these is rarely forecast? Why is this so?

Trend, seasonality, cycles, and random variation. Since random variations follow no discernible pattern, they cannot be predicted, and thus are not forecast.

Define variable costs

Variable costs are those that vary with the number of units produced, linearity, or proportionality.

Which of the statements below best describes office layout?

a. groups workers, their equipment, and spaces/offices to provide for movement of information

Which of the following statements regarding fixed costs is true?

While fixed costs are ordinarily constant with respect to volume, they can "step" upward if volume increases result in additional fixed costs.

Why do work cells increase the use of equipment and machinery?

Work cells increase the use of equipment and machinery because of better scheduling and faster material flow.

Flow Diagrams

_________ are drawings used to analyze movement of people or material.

Service blueprinting is

a process analysis technique that focuses on the customer and the provider's interaction with the customer

Which of the following is NOT one of the essential ingredients for mass customization?

a. high machine utilizations

When done correctly, mass customization

a. increases pressure on supply chain performance b. helps eliminate the guesswork that comes with sales forecasting c. drives down inventories d. increases pressure on scheduling e. all of the above answer: e (Four process strategies, moderate)

Value Stream Mapping

a. is a variation on time function mapping b. examines the supply chain to determine where value is added c. extends time function mapping back to the supplier d. starts with the customer and works backwards e. All of the above are true. answer: e (Process analysis and design, moderate)

Process redesign

a. is the fundamental rethinking of business processes b. can focus on any process c. tries to bring about dramatic improvements in performance d. focuses on activities that cross functional lines e. all of the above answer: e (Process reengineering, moderate)

Process redesign

a. is the fundamental rethinking of business processes b. can focus on any process c. tries to bring about dramatic improvements in performance d. focuses on activities that cross functional lines e. all of the above answer: e

Flow diagrams are used to analyze

a. movement of people and materials

The type of layout which features departments or other functional groupings in which similar activities are performed is

a. process-oriented

Which layout type assumes an adequate volume for high equipment utilization?

a. product-oriented layout

The two general approaches to forecasting are

a. qualitative and quantitative

Forecasts are usually classified by time horizon into three categories

a. short-range, medium-range, and long-range

In assembly line balancing, the minimum number of workstations is

a. the ratio of the sum of all task times to cycle time b. always (when a fraction) rounded upward to the next larger integer value c. not always possible to reach when tasks are actually assigned to stations d. all of the above answer: d

A disadvantage of product-oriented layout is that

a. there is a lack of flexibility in handling a variety of products or production rates b. high volume is required because of the large investment needed to set up the process c. work stoppage at any one point ties up the whole operation d. All of the above are disadvantages of product-oriented layouts. answer: d

.\An organization's process strategy

a. will have long-run impact on efficiency and flexibility of production b. is the same as its transformation strategy c. must meet various constraints, including cost d. is concerned with how resources are transformed into goods and services e. All of the above are true. answer: e (Introduction, moderate)

Effective capacity is the

b. capacity a firm expects to achieve given the current operating constraints

Which of the following is not an advantage of work cells?

b. decreased use of equipment and machinery

Which of the following is true for process layouts, but false for product-oriented layouts?

b. flexibility in equipment and labor assignments

. In assembly line balancing, cycle time (the ratio of available production time to scheduled production) is the

b. maximum time that a product is allowed at each workstation

A product-oriented layout would be most appropriate for which one of the following businesses?

b. steel-making

Product Focused processes

c. are processes that are specialized for relatively few products or customer groups

For which of the following operations would a fixed-position layout be most appropriate?

c. constructing a highway tunnel or bridge

Forecasts used for new product planning, capital expenditures, facility location or expansion, and R&D typically utilize a

c. long-range time horizon

Three types of processes are

c. process focus, repetitive focus, and product focus

The fixed-position layout would be most appropriate in which of the following settings?

d. a cruise ship assembly facility

Ambient conditions, spatial layout and functionality, and signs, symbols, and artifacts are all

d. elements of servicescapes

Service blueprinting

d. focuses on the provider's interaction with the customer

Which of the following phrases best describes product focus?

d. high fixed costs, low variable costs

Which of the following constitutes a major trend influencing office layouts?

d. off-site employees

Which of these layouts is most suitable for processing sugar from sugar beets or sugar cane?

d. product-oriented layout

One factor impacting the fixed-position layout strategy is

d. the movement of material to the limited storage areas around the site

"A special arrangement of machinery and equipment to focus on production of a single product or group of related products" describes what layout type?

d. work cell

One use of short-range forecasts is to determine

e. job assignments

The main advantage of a product-oriented layout is typically

e. low variable cost per unit

Formula for efficiency

efficiency= actual output/ effective capacity

The smoothing constant is a weighting factor used in ______________.

exponential smoothing

Utilization

is actual output as a percent of design capacity.

Design capacity

is the theoretical maximum output of a system in a given period under ideal conditions.

___________ layouts deal with low-volume, high-variety production with like machines and equipment grouped together.

process-oriented

Of the four approaches to capacity expansion, the approach that "straddles" demand

uses incremental expansion and at some times leads demand, and at other times lags

Formula for Utilization

utilization= actual output/ design capacity