Chapter 10: Operations Management

inventory control(problems)?

Businesses that provide both goods and services, such as retail stores and auto-repair shops have similar control problems as manufacturers do

production planning?

How a good will be produced? Where? What is the process layout?

(Capacity planning) Like manufacturers, service providers must consider many variables when estimating demand and capacity which are?

How many customers will I have? When will they want my services (which days of the week, which times of the day)? How long will it take to serve each customer? How will external factors, such as weather or holidays, affect the demand for my services?

quality control?

Insuring quality products are manufactured and specs are met.

(Manufacturing vs Service) Intangibility?

Manufacturers produce tangible products—things that can be touched or handled, such as automobiles and appliances. Service companies provide intangible products, such as banking, entertainment, or education

(Manufacturing vs Service) Customization?

Most manufactured goods are standardized. Services, by contrast, are often customized to satisfy the specific needs of a customer. For example, haircut

Employment involvement?

Must have employee commitment to quality from top to bottom of the organization

production control?

Scheduling & monitoring production activities? Handling purchases and inventories.

An example of a statistical process control method is?

Six Sigma

operations manager?

The upper-level manager who directs this transformation process

(Facilities Decisions)In Site Selection, managers must consider several factors which are?

To minimize shipping costs, managers often want to locate plants close to suppliers, customers, or both. Availability of skilled labor. Desirable place to live. Low resource costs (taxes, supplies, land, labor, etc.). Favorable business climate (Tax incentives/Enterprise Zones)

Operations planning?

When starting or expanding operations, businesses in the service sector must make a number of decisions quite similar to those made by manufacturers: What services (and perhaps what goods) should they offer? Where will they locate their business, and what will their facilities look like? How will they forecast demand for their services?

Total quality management (TQM)?

also known as quality assurance, includes all the steps that a company takes to ensure that its goods or services are of sufficiently high quality to meet customers' needs

On a business trip, Diana's flight is overbooked and she loses her seat. The attendant tells her that the flight is almost always overbooked. The airline has done a poor job in ___________. a. Scheduling b. Capacity planning c. Outsourcing d. Materials requirements planning

b. Capacity planning

Each item Diana's company makes is designed specifically to the requirements of a unique customer. What production method does her company employ? a. Quality control b. Make-to-order c. Mass customization d. Mass production

b. Make-to-order

Diana's company is about to launch a new product. She is tasked with deciding which factory will make the product and how the production lines will be organized. She works in what aspect of operations management? a. Product transformation b. Production planning c. Quality control d. Production control

b. Production planning

mass customization?

combines the advantages of customized products with those of mass production. Targeted to customers wanting customization at reasonable price. Examples: Nike shoes, Levi jeans, M&M's Challenge: customers don't want to pay more.

e-procurement?

companies use the Internet to interact with suppliers, purchasing through electronic connections between buyers and sellers - usually online

The first step in production planning is?

deciding which type of production process is best for making the goods that your company intends to manufacture

balanced scorecard?

finding a balance between profitability, customer satisfaction and associate satisfaction

Transformation processes represent?

goods and services

PERT charts?

is designed to diagram the activities required to produce a good, specify the time required to perform each activity in the process, and organize activities in the most efficient sequence. It also identifies a critical path. For more complex

Inputs represent?

labor, materials, money, and information

Mass production?

make-to-stock strategy, the practice of producing high volumes of identical goods at a cost low enough to price them for large numbers of customers. Goods are made in anticipation of future demand (based on forecasts) and kept in inventory for later sale. Low cost, high volume, faster production cycle. examples: appliances

Customer satisfaction?

making profits via satisfied customers. Let customers define the exact products they want and then use surveys to monitor customer satisfaction.

(Manufacturing vs Service) Customer contact?

manufacturing wise you could never see a customer vs services you always interact with customers daily

Service capacity planning is very different than?

manufacturing. You can't inventory it for later use(easier for established companies)

A Gantt chart is?

named after the designer, Henry Gantt, is an easy-to-use graphical tool that helps operations managers determine the status of projects, Very useful when the process is simple and the steps are not interrelated

A Six-Sigma process is?

one in which 99.99966 percent of all opportunities to perform an operation are free of defects. This percentage equates to only 3.4 defects per million opportunities

operations managers are involved in?

planning and controlling the systems that produce goods and services. Managing the process that transforms inputs into outputs. continuing to make these activities as efficient as possible. It's a transformation process.

operations managers 3 key responsibilities?

production planning, production control, and quality control

Make to Order?

products were customized to meet the needs of the buyers who ordered them. Examples include: : custom signs/custom tailored clothing. Low volume, high variety & longer production & delivery cycles.

Operations managers engage in the daily activities of materials management, which encompasses the activities of?

purchasing, inventory control, and work scheduling

computer-aided design (CAD) is a

software package to design not only the engine but also the board itself and many of its components (computer aided design where we can use the computer to design our product)

computer-aided manufacturing (CAM)?

software system determines the steps needed to produce the component and instructs the machines that do the work(taking that computerized design and integrating it into the manufacturing process)

computer-integrated manufacturing (CIM)?

takes us beyond CAD/CAM and includes order entry, inventory control, warehousing and shipping

quality circles?

teams of employees who perform similar jobs to identify quality, efficiency, and other work-related problems, to propose solutions, and to work with management in implementing their recommendations.

statistical process control (SPC)?

technique monitors production quality by testing a sample of output to see whether goods in process are being made according to predetermined specifications

quality?

the characteristics of a product or service that bear on its ability to satisfy stated or implied needs

continuous improvement?

the commitment to making constant improvements in the design, production, and delivery of goods and services

just-in-time (JIT) production?

the manufacturer arranges for materials to arrive at production facilities just in time to enter the manufacturing process, materials don't sit unused for long periods, and costs of "holding" inventory are significantly cut, requires considerable communication and cooperation between the manufacturer and the supplier

To control the timing of all operations, managers set up schedules?

they select jobs to be performed during the production process, assign tasks to work groups, set timetables for the completion of tasks, and make sure that resources will be available when and where they're needed

Operations process?

two choices made to order(BK/Most fast food) or made to stock(dunkin donuts), and improve operational efficiency

(Facilities Decisions)Capacity planning?

)Forecasting demand; understanding your industry, Calculate capacity requirements, Calculate equipment and labor investment needed, Failing to balance demand and capacity can be detrimental - lose customers or consume excess resources.(this is about managerial efficiency)

material requirements planning (MRP)?

A software tool that relies on sales forecasts and ordering lead times for materials to calculate the quantity of each component part needed for production and then determine when they should be ordered or made

In deciding which type of production process should be used, you should answer such questions as?

Am I making a one-of-a-kind good based solely on customer specifications, or am I producing high-volume standardized goods to be sold later? Do I offer customers the option of "customizing" an otherwise standardized good to meet their specific needs?

inventory control?

Balancing supplies with demand

Operations managers must consider questions such as? and this process is called?

Can the vendor supply the needed quantity of materials at a reasonable price? Is the quality good? Is the vendor reliable (will materials be delivered on time)? Does the vendor have a favorable reputation? Is the company easy to work with? supplier selection

a company adheres to TQM principles by focusing on three tasks which are?

Customer satisfaction, Employee involvement, and Continuous improvement

two of the most common scheduling techniques are?

Gantt and PERT charts

supplier selection?

Getting the answers to the operation managers questions during the purchasing and supplier selection and making the right choices

PERT stands for?

Program Evaluation and Review Technique

purchasing (or procurement)?

The process of acquiring the materials and services to be used in production

Scheduling?

Very Critical Task, Staffing for fluctuating demand, How do I cover the peaks and valleys?, and Staff wrong: irritated customers or higher labor costs

(Facilities Decisions)Site Selection?

choosing a location for the business

operations management (OM)?

consists of all the activities involved in transforming a product idea into a finished product

one big disadvantage to mass production?

customers, as one old advertising slogan put it, can't "have it their way." They have to accept standardized products as they come off assembly lines

outsourcing?

having outside vendors manufacture the engines, fiberglass hulls, and associated parts

The three basic types of processes or methods(production process methods) are?

make-to-order, mass production, and mass customization

Outputs represent?

products services

a critical path is?

the sequence of activities that will entail the greatest amount of time

After selecting the best production process, operations managers must then decide?

where the goods will be manufactured, how large the manufacturing facilities will be, and how those facilities will be laid out