C720 - Operations and Supply Chain Management (7-9)

The sales for the 12 months of 2014 for the store are as follows: 1200, 1000, 900, 1300, 1400, 1500, 1200, 900, 1100, 1300, 1600, 1800. What is the 12-month moving average and the final quarter moving average?

1267.67, 1566.67 (1200+1000+900+1300+1400+1500+1200+900+1100+1300+1600+1800)/12 = 1267.67 (1300+1600+1800)/3 = 1566.67

What is the typical length of time considered in long-range operations planning?

5 years

Which of the following A values would be most appropriate if Sally knows her last month's sales figures were dismal due to remodeling?

A = .3 An A-value closer to 0 will mean that the prior month's revenue will not affect the smoothing as much.

Which type of operation would most likely benefit by using a regional facility strategy?

A Subway franchise restaurant.

Which type of operation would most likely benefit by using a product facility strategy?

A computer chip manufacturer.

________ involves combining individual end items into groups or families of parts for planning purposes.

Aggregate planning

Many constraints affect the forecast that companies make for the upcoming season. Constraints are evaluated during which of the five stages of forecast development.

Apply the model (Constraints are evaluated during the model application stage.)

Why might the location of competitors be an important factor in making a location decision for service operations?

Because having competitors in the immediate area might negatively impact sales

What is the primary focus of the theory of constraints (TOC)?

Bottlenecks (The theory of constraints (TOC) is a 5-step process that helps a firm achieve optimal throughput by identifying the bottleneck and coordinating the system around the bottleneck's capacity.)

If the manager asks each insurance agent to estimate their sales for the month and one salesperson predicts 200% increase in sales over the last month, which qualitative method should the manager use?

Buildup

HIstorically, different manufacturing systems have been employed to improve productivity. How can companies attain economies of scope?

By diversifying their product line using the same equipment.

________ is a measure used to determine how much capacity is actually used on an average basis.

Capacity utilization

"Fill in the blank" question: select the correct answer. As Jennifer reviews her location analysis, she is concerned with the qualitative costs of different sites. ---------- are a qualitative concern when Jennifer is analyzing where to locate the gas station.

Climate conditions

The type of process a company uses depends on the product being manufactured. Match the product being produced to the type of process used to make it. Continuous Flow Process Batch Processing

Continuous Flow Process - Check processing at a bank Bach Processing - Manufacturing of pain medication

Executives at ZTX Industries want the firm to become a low-cost leader. Executives are aware that the firm may have high fixed costs due to investing in special equipment. However, they want a process that offers high-volume, mass-production operations to manufacture a highly standardized product. Which process would best fit the business strategy of ZTX Industries?

Continuous flow

What quantitative factors might influence service location decisions?

Costs associated with facility construction, productions, overhead, transportation to and from the facility, and state and local government incentives might influence service location decisions.

In the forecasting process, what is the first step a manager must take?

Determining forecasting objectives.

---------- is the first stage of the forecasting process.

Determining objectives

During what stage of forecast development would the owner need historical sales information?

Develop and test the model.

The following considerations are important when integrating qualitative factors to evaluate location alternatives.

Factoring relevance and weight with respect to each potential site (It is important to decide which factors are relevant and weigh each of the factors because some may be more important than others. Finally, an evaluation of each site is needed so rational comparisons can be made.)

True or false? When operations managers use forecasting models, they should consider the forecast to be factual and complete.

False (A forecast should not be taken as fact. A forecast is one scenario that managers must ground in reality. A forecast is not a complete answer, but rather one more piece of information.)

True or false? Concord Enterprises has implemented a product facility strategy, which means that each of its manufacturing plants has a specified marketing area and manufactures a complete line of products for that area.

False (Concord has implemented a regional facility strategy not a product facility strategy. A regional facility strategy requires that each production facility has a defined marketing area and each facility produces a complete line of products for that area.)

True or false? Economy of scale requires flexibility within the organization and suggests building volume to cover fixed costs by producing a variety of products on the same equipment.

False (Economy of scope requires flexibility within the organization to produce a variety of products.)

True or False The evaluation of quantitative factors is always more important than of qualitative factors when making service location decisions.

False (Even though qualitative factors do not usually have measurable, direct effects, they do need to be carefully considered and integrated with quantitative factors when making service location decisions.)

Jacqui Vozzotti is an up-and-coming fashion designer from Kenya. Her designs received rave reviews at fashion shows across Europe and Asia, and she and her work have been featured in many articles in the fashion press. Her management team advises her that the time is right to open an exclusive retail boutique to highlight her designs. But, her investor-partner balks when she insists on locating the facility on "Fashion Row" in Rome, a multi-square block area where premiere designers present their wares to well-heeled shoppers. He insists that rent is far too expensive, as much as 10 times as high as a suburban storefront. Jacqui stands firm, maintaining that, to be successful, she must be located alongside her competitors. True or false. Jacqui's partner is right. Competitors' locations should not be an important consideration when choosing a location.

False (Much like auto dealers or fast food restaurants, fashion boutiques can expect the location of their competitors to influence their own service location decisions because they can have a positive or negative impact on sales.)

True or False Qualitative factors, including potential costs and revenues, must be organized for each site in a way that allows them to be easily compared when making service location decisions.

False (Potential costs and revenues are considered quantitative costs. Potential costs and revenues, however, must be organized for each site in a way that allows them to be easily compared when making service location decisions.)

True or False Qualitative factors do not usually have measurable, direct effects, so they do not need to be compared when evaluating location alternatives.

False (Qualitative factors do not usually have measurable direct effects, but they are important to integrate with quantitative factors when making location decisions.)

True or false? When evaluating location alternatives, a service firm considers qualitative factors, such as labor and transportation costs, and quantitative factors, such as quality of life and cultural activities.

False (Quantitative factors like labor and transportation costs can be measured, while qualitative factors like culture and quality of life are important but less easy to measure.)

Which planning approach involves evaluating past experiences to gain insights about the future?

Forecasting

Which of the following is a quantitative factor that influences location decisions for manufacturing firms? Government incentives Quality of life Labor climate Customer proximity

Government incentives

Which of the following processes would produce the lowest volume of similar products?

Job shop

Which qualitative factors are considered when making manufacturing location decisions?

Labor climate, quality of life, proximity to customers and markets, proximity to suppliers and resources.

Which quantitative factors are considered when making manufacturing location decisions?

Labor costs, materials costs, transportation, utilities, taxes, real estate and construction costs and government incentives.

Which quantitative factors usually impact manufacturing and service operations equally as they make location decisions

Labors costs, taxes, real estate costs, construction costs, and government incentives.

As a forecaster for a television studio's new season of programming, which constraint would most likely affect a show?

Lack of corporate sponsorship

What is a key requirement for gaining economies of scope?

Organizational flexibility

________ involves determining the most appropriate method of completing a task based on technical issues and scale issues.

Process selection

Which of the following involves a firm having one manufacturing location to produce one product and shipping the product around the country or world?

Product facility strategy

The owners of Freedom Footwear, a retail shoe store chain, are evaluating potential locations for a new store. Although the firm has a website, the majority of its sales take place in its physical outlets. Which of the following is a qualitative factor that would be most important for the firm? Proximity to customers Local utility costs Quality of life Government incentives

Proximity to customers

When forecasting, Coffman Enterprises uses only the most recent time period to project the next time period. With this method, each time period has the same weight. Which forecasting method is the firm using?

Simple moving average

Managers at Concord Manufacturing are in the process of evaluating locations for the firm's next manufacturing facility. Which of the following is a qualitative factor that the managers should consider? Supplier proximity Transportation costs Government incentives Local real estate prices

Supplier proximity

Executives of Yummy Yogurt want to forecast sales behavior in San Antonio, a city that executives believe would be profitable for the company. For one month, Yummy Yogurt sells its products from a temporary kiosk in a local mall to determine product demand. Which qualitative forecasting approach is Yummy Yogurt using?

Test market

Many research firms exist to measure viewer preference for television shows. If you were called and asked questions about a current TV show, which step in the forecast development model do you think is being addressed?

Test the model

Toyota has developed a new manufacturing process to assist in its sustainability goals as it moves forward. What is the name of Toyota's new production process?

Toyota New Global Architecture

Toyota has had many financial firsts since it was formed. In 2008, Toyota experienced a first in its operating history. What occurred?

Toyota experienced its first loss in 70 years.

True or false? Although qualitative factors lack measurable, direct effects, they can be included in service location decisions if managers focus on the most relevant factors and give each factor a weight.

True

True or false? Both continuous flow and assembly line processes use dedicated facilities to produce large volumes of goods with few, if any, product differences.

True

True or false? Dependent demand refers to demand for a product that is generated by a firm's production processes.

True

True or false? Design capacity is the maximum achievable output of a system under ideal conditions for a short period of time.

True

True or false? For a firm that wants to develop a competitive advantage as a low-cost leader, flow-oriented processes are appropriate.

True

True or false? For an automotive manufacturer, an aggregated plan would state the firm's planned monthly output by product group.

True

True or false? Regression analysis can be used to predict both cross-sectional data and time-series data.

True

A large regional bank is considering two locations for its new call center. One, a mid-sized city, features inexpensive real estate and low taxes but rates low in national "quality of life" surveys. The other, a large metropolitan area, features a highly educated, sophisticated workforce and easy access to a large airport but its cost of living rates are in the top 5%, nationally. True or false? A responsible site selection process will focus on cost factors but may ignore less tangible issues like quality of life and access to transportation.

True (Both quantitative (such as cost) and qualitative (such as access to transportation) factors should be analyzed because, when integrated, they can influence service location decisions.)

Girardi's, a happy hour wine bar, has outgrown its current location in a busy pedestrian mall in a bustling Northeastern city. Girardi's has built its reputation around its large patio seating area, where young professionals who work in the hip startups that surround the location, often gather with friends to blow off steam after work. As it reviews options in anticipation of a move, it finds that locations in suburban malls are much less expensive per square foot than locations that match its current ambiance and accessibility to its clientele. True or false? In choosing its next location, Girardi's should consider the value its current customers place on its location and accessibility, versus the savings it would incur in a much less expensive location.

True (Girardi's is used in person. Proximity to its customer and market is very important when a service facility is used in person.)

Toyota has recognized that it must improve its manufacturing operations if it is to be competitive in the future. Which company has inspired Toyota to create its new improvement plan?

Volkswagen

When might a product facility strategy be appropriate for an organization?

When the production process is complex and hard to control or when a firm does not want to duplicate expensive equipment so they produce in one facility.

Assembly line operations are best used in certain production situations. Which of the following types of businesses is best suited to an assembly line operation? a surgical center a fast-food restaurant a sculptor's studio a movie production

a fast-food restaurant

Automobile manufacturers have been producing vehicles in a specific manufacturing process. Historically, auto manufacturers produced vehicles using a(n) -----------

assembly line

For a firm that wants to develop a competitive advantage as a low-cost leader by producing large volumes of similar products, a(n) ---------- process would be best.

assembly line

It is true that many service providers tend to cluster together. Jennifer is studying types of businesses that cluster together due to competition. Which of the following is an example of that type of business?

auto dealerships (Auto dealerships feel that being close to each other will improve their sales and make it easy for customers to comparison shop.)

The type of store or business will often dictate its optimal location. Jennifer has determined that the gas station is considered a convenience business similar to _____________.

banks (Banks need to locate where customers can visit easily.)

Toyota has been experiencing excess production capacity, automobile part recalls and bad press for several years. It has decided that a new manufacturing process can return the company to previous levels of respect and sales. Jason wonders if Toyota can turn its manufacturing system into a ------------ operation.

batch processing

Toyota engineers follow a procedure called ___________to study competitor's processes for possible implementation.

benchmarking

Economies of scale deal with utilizing the fixed costs of production. Companies must -----------

build sales volume

Which qualitative forecasting method starts at the bottom of the organization?

buildup

The qualitative forecasting method of starting at the bottom of an organization and making an overall estimate by adding together estimates from each element is known as the ________.

buildup method

Batch processing is often used to produce different models of the same fundamental product. Although it adds efficiency, batch processing still requires ----------

changeover time.

For an operations manager to improve the accuracy of a forecast, the manager must ________.

compare the forecast with actual results

The control process for accurate forecasting involves ----------

constant evaluation

Which of the following is a qualitative technique that can assist companies in their forecasting?

consumer surveys

Economies of scale occur when fixed costs are better utilized. High volume operations best optimize economies of scale using -----------

continuous flow

Jason has studied Toyota's historical production system. Jason has learned that Toyota's production systems have been known for ----------

continuous improvement

As Jennifer studies the many factors involved in the gas station location project, she would like to use hard facts. A quantitative measure of location analysis would be labor ----------

costs

If a business has customers that use a service facility in person, being close to customers is a very important factor because ----------

customers often place a high value on their time, therefore, convenience is essential

Manufacturing companies must recognize which items are worked on in their process before other items. Raw material availability for these stages of production may vary. Inventory management is more critical for the ---------- demand items.

dependent

Jason has studied Toyota's arch rival, Volkswagen, and analyzed its new manufacturing process. Volkwagen can produce _________________.

different brands and models on the same production line. (batch flow)

Many factors should be considered when Jennifer summarizes her findings and recommends a location for a new Speedyway gas station. When Speedyway is deciding about important aspects of its new service station, which of the following factors will be the most important?

ease of access (When locating a gas station, ease of access is the most important factor as convenience is essential.)

Flexible manufacturing systems help a company achieve -----------

economies of scope

---------- requires flexibility within the organization and suggests building volume to cover fixed costs by producing a variety of products on the same equipment

economy of scope

Process selection involves completing tasks efficiently. The decision regarding which type of support material to use in a building is a(n) -----------

engineering issue

Jennifer would like to review the fixed and variable costs of locating the gas station as she prepares her report. The cost of the land where the gas station will be located is a ---------- cost.

fixed

Apple, Inc. designs and produces consumer electronics. An aggregate plan for Apple would most likely be based on -----------. Apple's aggregate plan is an example of ---------- planning. Apple is unlikely to use its aggregated plan to decide whether to ----------.

iPods (Aggregate plans are based on product families, such as "iPods." Companies aggregate at a level that will allow rough estimates of how much capacity and other resources will be needed to meet the demand.) medium-term (Aggregate plans are an example of medium-term, or medium-range, planning. Medium-range planning typically has a 6- to 18-month horizon, depending on the industry. Decisions based on medium-range planning are often called "tactical" decisions.) build a new distribution center (The decision to build a new distribution center is more likely to be based on long-term planning. It will require significant resources, years of planning and construction, and should be based on a long-term understanding of Apple's expected product demand.)

Productivity is dependent on the efficient use of resources. Leverage can best be described as ----------

increasing the output from the employees

A regional facility strategy would be used when each product facility produces for a defined marketing area and ships----------.

locally

Flexible manufacturing systems are a process option. Flexible manufacturing systems produce ------------

low cost products

The ---------- is the best person in the organization to choose which value to use in the upcoming forecast.

manager

The differences between the actual value of a variable and the forecasted value are squared, added together, and divided by the number of observations. The result is called the ________.

mean squared error

Project planning involves unique requirements for each new project. One noticeable characteristic of projects is the ----------

need to be flexible

The Acme Manufacturing Company is operating at a maximum rate of production and meeting the demand of its customer base. Acme is ----------

operating at capacity

Forecasts are an essential part of ----------. In order to deal with forecasting error, companies can ----------.

planning create contingency plans

Forecasting is best defined as an effort to ________.

predict and plan for the future

Economies of scale and scope are dependent on sales volume. According to your module text, which of the following has a direct impact on a company's sales volume: -----------

producing higher quality products

One type of capacity approach is appropriate when the production process is complex and hard to control. If Jennifer was trying to locate a facility to produce specialized parts for the aerospace industry, she would choose the ---------- facility capacity planning.

product

----------means that one facility is responsible for producing one product, or product line, and shipping that product throughout the country and the world.

product facility strategy

According to the ________, a firm has one manufacturing location that produces a single product that is shipped throughout the world.

product facility strategy

Carbon Computers has a manufacturing plant in Tennessee that is solely responsible for producing the firm's line of tablets, which are shipped internationally. The firm has a second manufacturing plant in Kansas that is solely responsible for producing the firm's line of laptops, which are also shipped around the world. Carbon Computers has implemented a ________.

product facility strategy

A ---------- layout is characterized by high consumer demand for similar goods that have few variations.

product-oriented

Dependent demand is based on a company's ---------- whereas independent demand involves -----------.

production process finished goods

Transportation costs, government incentives, and local wage rates are ---------- factors that influence manufacturing location decisions.

quantitative

When Jennifer is analyzing the factors that will determine where to locate, she will take into account large amounts of data. Jennifer will be able to obtain ---------- data more easily.

quantitative

The experts convey their opinions through ----------.

questionnaire

Effective capacity is based upon what a manufacturer can produce in ---------- conditions.

realistic

The government offers incentives to businesses in several ways. Jennifer hears there are government incentives to locate the gas station near one particular city. What is an example of a government incentive?

reduced state and local taxes

A _________________ facility strategy requires that each production facility has a defined marketing area and each facility produces a complete line of products for that area.

regional

Dixon Manufacturing has plants in Texas, Ohio, Georgia, and Minnesota. Each manufacturing facility has a defined marketing area, and each facility produces a complete line of products for that area. Dixon has implemented a ________ strategy.

regional facility

When a firm implements a ---------- strategy, each of its manufacturing plants has a specified marketing area and manufactures a complete line of products for that area.

regional facility

----------is used when customer convenience and access are important, or when outbound transportation costs are very high.

regional facility strategy

The ---------- phase involves human judgement.

revising and evaluating

Jennifer wants to review the several locations for the new gas station logically. Jennifer should prepare a _____________ analysis.

side-by-side cost

here are many costs associated with building and operating a new gas station. The costs of phone and internet service is considered a ---------- cost to the company.

variable (Phone and internet service costs vary with usage and are considered variable costs.)