Exam 1: ch 1, 2, 3, 4, 7

What are characteristics of service operations? -which is NOT a characteristic of service operations?

*output is intangible *customer contact is high *labor content is high *uniformity of input is low *measure of productivity is difficult *opportunity to correct problems before delivery is low *inventory is little *wages are wide range *patentable is not usually (characteristics of goods is the opposite)

Line vs. Support (Staff) functions in an organization. (value chain is a derivative of line vs staff) -fill in the blank question

-Line functions: operations and sales -Support functions: accounting, financing, marketing, IT, etc. ex: in a university, Faculty is Line, TC/security/cleaning are all Support

What is supply chain management? -what makes it more important?

-SCM is the coordination of the activities involved in producing and delivering goods/services -increased globalization, the need to improve operations, increased outsourcing, increased transportation costs, competitive pressures, increased e-business, the need to manage inventories

What is a naïve forecast?

-a forecast for any period that equals the previous period's actual value (ex: if product demand last week was 20 cases, the forecast for this week is 20 cases) -it is quick, easy, and cheap to do

Excitement characteristics are categories in the _________ model.

Kano

Putting forecast errors into perspective is best done using

MAPE

In addition to operations, which of the following is considered a "line" function?

Sales

Which of the following would tend to increase the importance of supply chain management?

increased globalization

Which of the following corresponds to the predictor variable in simple linear regression?

independent variable

Time-based approaches of business organizations focus on reducing the time to accomplish certain necessary activities. Time reductions seldom apply to:

internal audits

Which of the following is not an advantage of work sampling compared to stopwatch time study?

it is better suited for short, repetitive tasks

In work sampling, how will increasing the permissible maximum error affect sample size?

it will decrease the number of observations needed

One reason for using the Delphi method in forecasting is to:

reduce the risk that one individual's opinion will prevail

If the average amount of time a product goes without failing decreased by some amount, that product's availability could nevertheless be maintained at previous levels by __________ its __________.

reducing; time required for repair

Incorporating design for disassembly principles in product design helps firms with ___________ design issues.

reuse

Some companies attempt to maximize the revenue they receive from fixed operating capacity by influencing demands through price manipulation. This is an example of:

revenue management

Core competencies in organizations generally do not relate to:

sales price

The chart used to focus on busy and idle portions of a work cycle is a:

worker-machine chart

chapter seven - work design (quiz)

quiz

chapter three - forecasting (quiz)

quiz

chapter two - productivity (quiz)

quiz

What is systems approach and what is the main theme of this approach? -what does it allow managers to do?

-a set of interrelated parts that must work together (each department is a subsystem) -main theme: *the whole is greater than the sum of its individual parts* -whenever something is being changed, it allows managers to plan for the impact on all parts of the system

What is exponential smoothing? -what is the formula? -what does the computation mean?

-a weighted averaging method based on previous forecast plus a percentage of the forecast error (A-F) -smoothing constant (a) is how much you weight the error, it represents a percentage of the forecast error; closer it is to zero the slower the forecast will be to adjust to errors (greater smoothing), while the closer it is to 1.00 the greater the responsiveness (less smoothing) -the result is what you forecast the current period's demand to be

Which term most closely relates to associative forecasting techniques?

-associative forecasting uses explanatory variables to predict future demand -Least Squares Line: minimizes the sum of the squared vertical deviations around the line *Yc = a + bx *Yc = predicted (dependent variable) *x = predictor (independent) variable *b = slope of the line (see pic) *a = value of Yc when x=0 (y-intercept) (see pic) *the predicted value is equal to some constant plus the slope of a line times an independent variable

What is the relationship between service quality and profitability? (T/F)

-business rated highly by their customers for service quality tend to be more profitable, and grow faster, than business with low service quality (higher service quality, higher profits)

How can supply chain forecasts be improved?

-by striving to develop the best possible forecasts -collaboratively plan and forecast with major supply chain partners -information sharing among partners -rapid communication about poor forecasts and disruptions/changes

What are postponement tactics and why are they used?

-delayed differentiation (the process of producing, but not quite completing, a product/service until customer preferences are known) is a type of postponement tactic -if it doesn't cost managers to wait on making decisions, they may learn new things tomorrow that they don't know today to help them in their decisions

What is Robust design?

-design that results in products or services that can function over a broad range of conditions -if your product lacks robust design, it can only perform a narrow range of things -more robust a product, stronger capabilities and less likely to fail

What is work measurement? -what are the different types and their processes?

-determining how long it should take to do a job -stopwatch time study: based on observations of one worker taken over a number of cycles (define the task to be studied, determine the number of cycles, time the job and rate the performance, compute the standard time) -standard elemental times: derived from a firm's historical time data (analyze the job to identify the standard elements, check the file for historical times, modify the file times if necessary, sum the elemental times to obtain the normal time and factor in allowances to obtain the standard time) -predetermined time standards: published data on standard elemental times (advantages: they are based on large numbers of workers under controlled conditions, not required to rate performance, no disruption of the operation, standards can be established before a job is done) -work sampling: estimates the proportion of time that a worker/machine spends on activities and the idle time (identify the workers/machines to be studied, notify them of the purpose of the study, compute an estimated sample size, develop a random observation schedule, begin taking observations, determine the time spent on the activity)

What do you need in order to achieve a time-based strategy?

-focuses on reducing the time required to accomplish various activities (reducing time reduces cost and increases productivity) -Agile operations

How do global teams affect operations/organizations? -what are the benefits of this diversity of working across countries?

-global teams can engage the best human resources from around the world, also operating on a 24-hour basis which decreases the time-to-market -global teams lead to diverse views and ideas to enrich the design process

What is simple linear regression? -what are the assumptions?

-it is a linear relationship between two variables; the object is to obtain an equation of a straight line that minimizes the sum of squared vertical deviation of data points from the line Assumptions: -variations around the line are random (no patterns/trends should be apparent) -deviations around the average value should be normally distributed (should have a concentration of values close to the line with only a few larger deviations) -predictions are being made only within the range of observed values

What is the difference between customization and low-cost strategies?

-low cost: focuses on low price, Walmart. ex: outsource operations to third-world countries that have low labor costs -customization: focuses on narrow product lines or limited service to achieve higher quality

What are the factors that affect competitiveness? -how does customization/variety vs standardization affect competitiveness?

-marketing (identify customer wants/needs, price, quality, advertising, promotions) -operations (product/service design and differentiation, cost, location, flexibility, inventory, SCM) -you can be more competitive if your products are customized to your customers wants/needs

What is the House of Quality?

-matrix of Quality Function Deployment (QFD) that integrates the "voice of the customer" into product/service development -the approach involves a sequence of "houses" going from design characteristics, specific components, production processes, and quality plan

What are reasons why companies have poor performance in the marketplace? -which is NOT a reason of poor performance?

-neglecting operations strategy -failing to take advantage of SWOT -putting too much emphasis on short-term financial performance at the expense of R&D -putting too much emphasis on product/service design and not enough on process design/improvement -neglecting investments in capital and human resources -failing to establish good internal communications among functional areas -failing to consider customer wants and needs

What are the steps of the Research & Development process? -what can you do with the information?

-organized efforts directed toward increasing scientific knowledge and product innovation -basic research: no near-term expectation of commercial application -applied research: objective of achieving commercial application -development: converts results from applied research into commercial applications

What are seasonal relatives? (T/F) -what is the formula? -what does the computation mean?

-percentage of average or trend in the multiplicative model (demand = trend x seasonality) -if the seasonal relative for sales in May is 1.20, this means sales for that month are 20% above the monthly average. -if the seasonal relative for sales in July are .70, this means sales for that month are 70% of the monthly average *de-seasonalize the data for better forecasting using seasonal relatives*

What are the factors that affect productivity? -which does NOT affect productivity?

-productivity = output/input -higher productivity means lower costs and more competitive -factors that affect productivity: methods, capital, quality, technology, management

How are salesforce composites used to forecast what the demand of a product/service will be in the future?

-qualitative forecasting technique that uses the opinions of salesforce staff -drawbacks include conflicts of interest (due to sales quotas) and distinguishing between what the customer would like to do and what they actually do

What is Remanufacturing (reuse)? -why is it used?

-refurbishing used products by replacing worn-out or defective components -cuts down on waste, negative environmental impact, and cost; can also use mostly unskilled labor

What is reliability? -how is it increased? -how is it decreased?

-reliability is the ability of a product to perform its intended function under a prescribed set of conditions -failure occurs when an item does not perform as intended -reliabilities are specified with respect to normal operating conditions

What is an environmental analysis?

-studying industries and competitors and monitoring the events/trends that present threats or opportunities for the organization. -these include competitors' activities, changing consumer needs, legal, economic, political, environmental issues, new markets, technology

What is lean production systems? -how does it work? -what are the advantages?

-system that uses minimal amounts of resources to produce a high volume of high-quality goods with some variety (flattens the organizational structure) -they use highly skilled workforce and flexible equipment, leading to higher quality than mass production -advantages: lower inventory, higher quality, flexibility, time reduction, teamwork

What is standardization? -what are the advantages/disadvantages? -what is commonality of components

-the extent to which a product, service, or process lacks variety -they are made in large quantities of identical items (calculators, milk)(automatic car wash is an ex of service) -component commonality is when a part/component can be used in multiple products (cars)

How is the percentage change in productivity growth calculated? -what does the computation mean?

-the increase in productivity from one period to the next relative to the productivity in the preceding period (if new is higher than old, it's a positive change) -if productivity increases, it adds value to the country while keeping inflation in check -it can also be used to track performance over time -it shows how effectively companies use their resources

How do managers use forcasts?

-they use them to anticipate the future (and demand) so they can plan accordingly and make decisions regarding accounting, finance, HR, marketing, MIS, operations, and product/service design -they use them to plan the system and to plan the use of the system

What is the Learning Effect theory?

-time required to perform a task decreases with increasing repetitions (negative relationship, downward sloping curve) -if the task is short and routine, only a modest amount of improvement is likely to occur during the first few repetitions -if the task is long and complex, improvements will occur over a longer interval and a larger number of repetitions -learning curve theory is used in manpower planning and scheduling, negotiated purchasing, pricing new products, budgeting, and capacity planning

What is a transformation process? -what is NOT a transformation process?

-transforming inputs (labor, capital) into outputs (goods, services) -cutting, storing, entertaining, analyzing

What is the service design process?

1. conceptualize -idea generation -assessment of customer wants/needs -assessment of demand potential 2. identify service package components needed 3. determine performance specifications 4. translate performance specifications into design specifications 5. translate design specifications into delivery specifications

What is the product design process?

1. feasibility analysis 2. product specifications 3. process specifications 4. prototype development 5. design review 6. market test 7. product introduction 8. follow-up evaluation

What are the assumptions and characteristics of forecasting? -What is NOT a feature?

Assumptions: -the same underlying causal system that existed in the past will continue to exist in the future -forecasts are not perfect; actual results usually differ from predicted values, so allowances should be made for errors -forecasts for groups of items are more accurate than for individual items because errors among items in a group usually have a cancelling effect -forecast accuracy decreases as the time horizon increases (short-range forecasts have fewer uncertainties so they are more accurate) Characteristics of good forecasts: -timely -accurate -reliable -meaningful units -in writing -simple to understand and use -cost-effective

A moving average forecast tends to be more responsive to changes in the data series when more data points are included in the average.

FALSE

As long as we match a competitor on quality and price we will gain market share.

FALSE

If a system depends on two subsystems functioning when activated, the reliability of that system is equal to that of the less reliable subsystem.

FALSE

Quality function deployment is a structured approach that guarantees that the highest-quality product or service will be designed.

FALSE

The naive forecast is limited in its application to series that reflect no trend or seasonality.

FALSE

Productivity is defined as the ratio of input to output.

FALSE (ratio of outputs to inputs)

A mission statement should provide a guide for the formulation of strategies for the organization.

TRUE

A service blueprint is quite similar to an architectural drawing.

TRUE

Applied research is the major R&D effort of business organizations because of their desire for commercial applications.

TRUE

Bias exists when forecasts tend to be greater or less than the actual values of time series.

TRUE

Bias is measured by the ratio of the cumulative sum of forecast errors to the mean absolute deviation (MAD).

TRUE

Concurrent engineering brings people concerned with manufacturing into the design phase earlier than in the "over-the-wall" approach.

TRUE

Correlation measures the strength and direction of a relationship between variables.

TRUE

Environmental scanning is a search for events or trends that present either threats or opportunities to the organization.

TRUE

One way to increase overall reliability of a system is to add parts that increase redundancy in the system. (backup components)

TRUE

Product reliability involves both short-term and long-term perspectives.

TRUE

Reliability can be improved by the use of backup components.

TRUE

Reliability refers to the ability of a product to perform its intended function under normal conditions.

TRUE

Remanufacturing refers to replacing worn-out components of old products to extend the products' useful life.

TRUE

The use of a control chart assumes that random errors are normally distributed about a mean of zero.

TRUE

Which of the following statements about variation is false?

any variation makes a production process less productive

Unique attributes of firms that give them a competitive edge are called:

core competencies

Which of the following would be least important in the pursuit of a time-based strategy?

cost minimization

Which of the following is a type of transformation process used by operations to convert inputs into outputs?

cutting storing entertaining analyzing

Which of the following is not a step in the forecasting process?

eliminate all assumptions

Which is not an area of significant difference between manufacturing and service operations?

forecasting demand

Which of the following is not a potential benefit of the use of self-directed teams?

greater satisfaction for middle managers

One way to increase reliability is to:

improve preventive maintenance procedures

Marketing depends on operations for information regarding:

lead time

A simo chart includes:

left/right hand movements.

From the worker's perspective, an output-based pay system has the advantage of:

linking pay more directly to effort

Two widely used metrics of variation are the __________ and the _________.

mean; standard deviation

Managing the supply chain has become more important as a result of firms increasing their levels of:

outsourcing

Which of the following is least likely to affect the cost an organization incurs in producing its products or services?

price

The ratio of good output to quantity of raw material input is called

process yield

The two general approaches to forecasting are:

qualitative and quantitative

chapter four - product and service design (quiz)

quiz

chapter one - overview (quiz)

quiz

Moving average forecasting techniques do the following:

smooth variations in the data

The more novel a new product or service design is, the more forecasters have to rely on:

subjective estimates

Which of the following is not a benefit of using models in decision making?

they force the decision maker to take into account qualitative issues such as personalities and emotions

Which of the following is not a type of judgmental forecasting?

time series analysis