Chapter 18

Product Layout

A layout designed to accommodate a limited number of different products that require high volumes, highly specialized equipment and narrow employee skills.

Process (Functional Layout)

A layout pattern based primarily on grouping together similar types of equipment.

Fixed-Positon Layout

A layout plan in which the product is stationary while resources flow. It is appropriate for organizations involved in a large numbered different tasks that require low volumes, multipurpose equipment and broad employee skills.

Pure-Preventive Maintenance Policy

A maintenance control policy that decrees that machine adjustments, lubrication, cleaning, parts replacement, painting, and needed repairs and overhaul will be performed before facilities or machines malfunction.

Decision Tree Analysis

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

Just-In-Time (JIT Inventory Control)

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

A technique that assets in monitoring production processes.

Computer-Aided Manufacturing (CAM)

A technique that employs computers to plan and program equipment used in the production and inspection of manufactured items.

Capacity Strategy

AN operational plan of action aimed at providing an organization with the right facilities to produce the needed output at the right time.

Total Revenue

All sales dollars accumulated from selling manufactured products or services.

Break-Even Point

That level of production where the total revenue of an organization equals its total costs.

Break-Even Analysis

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

Operations Control

Making sure that operations activities are carried out as planned.

Automation

The replacement of human effort by electromechanical devices.

Layout Strategy

AN operational plan that determines the location and flow of organizational resources around, into and within production and service facilities.

Fixed Cost

An expense incurred by the organization regardless of the number of products produced.

Variable Cost

An expense that fluctuates with the number of products produced.

Materials Control

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

Labor Force Planning

An operational plan for hiring the right employees for a job and training them to be productive.

Human Resources Strategy

Information about the characteristics of organization members; the focus is on past performance and future potential, and the objective is to keep management up to date about the possibilities for filling a position from within.

Operations Management

Performance of managerial activities entailed in selecting, designing, operating, controlling and updating production systems.

Total Cost

The sum of fixed costs and variable costs.

Budget

A control tool that outlines how funds in a given period will be spent, as well as how they will be obtained.

Variable Budget (Flexible Budget)

One that outlines the levels of resources to be allocated for each organizational activity according to the level of production within the organization.

Work Measurement Methods

Operational tools that are used to establish labor standards.

Motion-Study Techniques

Operational tools that are used to improve productivity.

Loss

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

Effectiveness

The degree to which managers attain organizational objectives; it is "doing the right things."

Robotics

The study of the development and use of robots.

Management By Exception

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

Ratio Analysis

A control tool that summarizes the financial position of an organization by calculating ratios based on various financial measures that appear on the organization's balance sheet and income statements.

Value Analysis

A cost control and cost reduction technique that examines all the parts, materials, and functions of an operation to help managers control operations.

Pure-Breakdown (Repair Policy)

A maintenance control policy that decrees that machine adjustments, lubrication, cleaning, parts replacement, painting, and needed repairs and overhaul will be performed only after facilities or machines malfunction.

Quality Circle

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 at a formal presentation session.

Control Tool

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

Process Strategy

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

Product Strategy

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

Location Strategy

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

Job Design

An operational plan that determines who will do a specific job and how and where the job will be done.

Work Methods Analysis

An operational tool used to improve productivity and ensure the safety of workers.

Quality Assurance

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

Zero-Base Budgeting

Requires managers to justify their entire budget request in detail rather than simply refer to budget amounts established in pervious years.

Quality

The extent to which a product reliably does what it is intended to do.

Layout

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

Statistical Quality Control

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

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

Computer-Aided Design (CAD)

A computerized technique for designing new products or modifying existing ones.

Profit

The amount of total revenue that exceeds the total costs of producing the products sold.

Efficiency

The degree to which organizational resources contribute to production; it is "doing things right."

Production

The transformation of organizational resources into products.