Principles of Management, Ch.18 Production and Control

Robotics

Is the study of the development and use of robots.

Variable Cost

An expense that fluctuates with the number of products produced.

Management By Exception

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

Value Analysis

Is a cost control and cost reduction technique that helps managers control operations by focusing primarily on material costs. The goal of this analysis is to reduce costs by using cheaper components and materials in such a way that product quality or appeal is not affected.

Process (Functional) Layout

Is a layout pattern that groups together similar types of equipment.

Loss

Is the amount of the total costs of producing a product that exceeds the total revenue gained from selling the product.

Effectiveness

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

Efficiency

Is the degree to which organizational resources contribute to productivity: "doing things right."

Layout

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

Operations Management

Is the performance of managerial activities that involve selecting, designing, operating, controlling, and updating production systems.

Labor Force Planning

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

Ratio Analysis

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

Break-Even Analysis

Is the process of generating information that summarizes various levels of profit or loss associated with various levels of production.

Statistical Quality Control

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

Productivity

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

Production

Is the transformation of organizational resources into products.

Variable Budget

Also known as a (flexible budget), outlines the levels of resources to be allocated for each organizational activity according to the level of production within the organization.

Motion-Study Techniques

Are another set of operational tools used to improve productivity.

Work Measurement Methods

Are operational tools used to establish labor standards. These standards are useful for planning, control, productivity improvements, costing and pricing, bidding, compensation, motivation, and financial incentives.

Computer-Aided Design (CAD)

Are systems that include several automated design technologies. CAD also includes technologies used in process design. CAD functions to ensure the quality of a product by guaranteeing not only the quality of parts in the product but also the appropriateness of the product's design.

Quality

Can be defined as how well a product does what it is intended to do-how closely it satisfies the specifications to which it was built.

Capacity Strategy

Is a plan of action at providing an organization with the right facilities to produce the needed output at the right time.

Process Strategy

Is a plan of action outlining the means and methods an organization will use to transform resources into goods and services.

Layout Strategy

Is a plan of action that outlines the location and flow of all organizational resources around, into, and within production and service facilities.

Location Strategy

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

Control Tool

Is a specific procedure or technique that presents pertinent organizational information in a way that helps managers and workers develop and implement an appropriate control strategy.

Decision Tree Analysis

Is a statistical and graphical, multiphased decision-making technique that contains a series of steps showing the sequence and interdependence of decisions.

Just-In-Time (JIT) Inventory Control

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

Process Control

Is a technique that assists in monitoring production processes.

Total Revenue

Is all sales dollars accumulated from selling manufactured products or services.

Fixed Cost

Is an expense incurred by the organization regardless of the number of products produced.

Product Strategy

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

Automation

Is defined as the replacement of human effort by electromechanical devices in such operations as welding, materials handling, design, drafting, and decision making. It includes robots-mechanical devices built to perform repetitive tasks efficiently.

Product Layout

Is designed to accommodate high production volumes, high specialized equipment, and narrow employee skills.

Fixed-Position Layout

Is one in which the product is stationary while resources flow.

Zero-Base Budgeting

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

Human Resources Strategy

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

Work Methods Analysis

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

Materials Control

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

Quality Assurance

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

Budget

Is an organization's financial plan outlining how funds in a given period will be obtained and spent.

Pure-Breakdown (Repair) Policy

Is at the other end of the maintenance control continuum in which decrees that facilities and equipment be fixed only after they malfunction.

Operations Control

Is defined as making sure that operations activities are carried out as planned. The major components are just-in-time inventory control, maintenance control, cost control, budgetary control, ratio analysis, and materials control.

Computer-Aided Manufacturing (CAM)

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

Total Cost

Is simply the sum of the fixed and the variable costs associated with production.

Pure-Preventive Maintenance Policy

Is the first strategy which includes machine adjustments, lubrication, cleaning, parts replacement, painting, and needed repairs and overhauls are done regularly, before facilities or machines malfunction.

Quality Circle

Is a small group of workers that meets to discuss quality-related problems in a particular project and to communicate their solutions to these problems to management directly at a formal presentation session.

Profit

Is defined as the amount of total revenue that exceeds the total costs of producing the products sold.

Break-Even Point

Is the level of production at which the total revenue of an organization equals its total costs-that is, the point at which the organization is generating only enough revenue to cover its costs. The company is neither gaining a profit nor incurring a loss.

Job Design

Is an operational plan that determines who will do a specific job and how and where the job will be done. The goal is to facilitate productivity.