Final Exam Review Busi 411 Ch. 1-4

Prepare an exponential smoothing forecast

-A weighted averaging method based on previous forecast plus a percentage of the forecast error -Next forecast=Previous forecast + sum(Actual-Previous forecast) -Each new forecast is equal to the previous forecast plus a percentage of the previous error

List the characteristics of well-designed service systems

-Being consistent with the orgnanization's mission -Being user friendly -Being robust if variability is a factor -Being easy to sustain -Being cost effective -Having value that is obvious to customers -Having effective linkages between "back of the house" operations (no contact with the customer) and "front of the house" operations (direct contact with customers) -Having a single, unifying theme, such as convenience or speed -Having design features and checks that will ensure service that is reliable and of high quality

Explain why forecasts are generally wrong

-Changes occur due to time horizons, non grouping of items, and no room for randomness is included

Construct control charts and use them to monitor forecast errors

-Control Chart - visual tool for monitoring forecast errors. Used to detect nonrandomness in errors -In order for forecast errors to be judged "in control", two things are necessary: all errors are within the upper and lower control limits, no patterns are present

Explain the purpose and goal of life cycle assessment

-Cradle to grave assessment- also known as life cycle analysis. Assessment of the environmental impact of a product or service throughout its useful life, focusing on such factors as global warming, smog formation, oxygen depletion, and solid waste generation -Goal is to choose products and services that have the least environmental impact while taking into account economic considerations -This assessment is part of the ISO 14000 environmental management standards

List some guidelines for successful service design

-Define the service package in detail -Focus on the operation from the customer's perspective -Consider the image that the service package will present both to customers and to prospective customers -Recognize that designer's familiarity with the system may give them a quite different perspective than that of the customer, and take steps to overcome this

Discuss several key issues in product design

-Degree of Standardization - extent to which a product, service, or process lacks variety -Designing for Mass Customization - a strategy of producing basically standardized goods, but incorporating some degree of customization. Delayed differentiation - process of producing but not fully completing a product until specifications are known. Modular Design - a form of standardization in which component parts are grouped into modules that are easily replaced or interchanged -Reliability - ability of a product, part, or system to perform its intended function under a prescribed set of conditions -Robust Design - design that results in products or services that can function over a broad range of conditions. Taguchi approach . -Degree of Newness - low level of newness can mean a fairly quick and easy transition to produce a new product, high level of newness would likely mean a slower and more difficult and costly transition -Quality function deployment - approach that integrates the "voice of the customer" into both product and service development -The Kano Model -3 definitions of quality: basic, performance, excitement. Backpack example: must have pockets/straps (basic), performance determines satisfaction/dissatisfaction, and excitement is something customer did not expect

Discuss the two key issues in service design

-Degree of variation in service requirements -Degree of customer contact and customer involvement in the delivery system -The lower the degree of customer contact and service requirement variability, the more standardized the service can be

Briefly describe the phases in product design and development

-Demand typically varies with each phase -Introduction Phase - curiosity item -Growth Phase - ensure that capacity increases coincide with increasing demand -Maturity Phase - demand levels off, few design changes needed, cost are low and productivity high, (examples: baking soda, duct tape, vinegar) -Decline Phase - decisions made whether to discontinue item or replace it with new ones or abandon the market. Tend to find new uses or users for the product. Cost tend to be low.

Steps in Forecasting Process

-Determine the purpose of the forecast, establish a time horizon, obtain and clean/analyze appropriate data, select a forecasting technique, make the forecast, monitor the forecast errors

Describe four qualitative forecasting techniques

-Executive Opinions = small group of upper level managers may meet and collectively develop a forecast -Salesforce Opinions = sales staff have direct contact with customers to best dictate forecast, however, the sales staff may be unable to discern what customers would like to do and what they actually will do -Consumer Surveys = consumer ultimately determine demand. Best to do online surveys to get the most responses -Other Approaches = Delphi Method - iterative process in which managers and staff complete a series of questionnaires, each developed from the previous one, to achieve consensus forecast

Use a Naive method to make a forecast

-Forecast for any period that equals the previous period's actual value -Example: forecast for turkeys this Thanksgiving season is equal to demand for turkeys last Thanksgiving

Describe the operations function and the nature of the operation managers job

-Forecasting, capacity planning, locating facilities, facilities layout, scheduling, managing inventories, assuring quality, motivating and training employees. -The operations manager is the key figure in the system, he or she has the ultimate responsibility for the provision of goods or services

Name the key questions of product and service design

-Is there demand for it? -Can we do it? -What level of quality is appropriate? -Does it make sense from an economic standpoint?

Describe Several Factors that Affect Productivity

-Main Factors: Methods, Capital, Quality, Technology, and Management -Other Factors: Standardizing, Quality Differences, Use of the Internet, Computer Viruses, Searching for lost or misplaced items, scrap rates, new workers, safety, a shortage of technology savvy workers, layoffs, labor turnover, design of the work space, incentive plans that reward productivity increases

Prepare a weighted-average forecast

-More recent values in a series are given more weight in computing a forecast -Example: Most recent assigned a weight of .40, next .30, next .20, next .10. Multiply the value by the assigned weight and add the values together to get the weighted average

Discuss the importance of legal, ethical, and sustainability considerations in product and service design

-Often businesses have standards that they must meet with federal or state governmental agencies -Produce designs that are consistent with the goals of the organization -Give customers the value they expect -Make health and safety a primary concern

3 Major functional areas of organizations and describe how they interrelate

-Operations, Finance, and Marketing/Sales -Budgeting, economic analysis of investment proposals, and provision of funds

Summarize 2 major aspects of process management

-Process to meet demand = having the right capacity requires having accurate forecasts of demand, the ability to translate forecasts into capacity requirements, and a process in place capable of meeting expected demand -Process of Variation = the variety of goods or services being offered, structural variation in demand, random variation, assignable variation

Identify some reasons for design or redesign

-Product and service design has typically had strategic implications for the success and prosperity of an organization -Economic reasons, social and demographic reasons, political/liability/legal, competitive, cost or availability, technological

Define the term productivity and explain why it is important to companies and countries

-Productivity = measure of effective use of resources, usually expressed as the ratio of output to input -Productivity=Output/Input -Very important for Ops because the higher the productivity, the lower the cost of the output

Explain the phrase "the 3Rs"

-Reduce - examination of the function of parts and materials in an effort to reduce cost and/or improve product performance -Reuse - refurbishing used products by replacing worm out or defective components -Recycle - recovering materials for future use

Compute and Use regression and correlation coefficients

-Regression - technique for fitting a line to a set of points -Examples on page 101-105

Compute and Use seasonal relatives

-Seasonal relative - percentage of average or trend -Used in 2 ways: to deseasonalize data, incorporate seasonality in a forecast -Examples on Page 97-100

Prepare a moving average forecast

-Technique that averages a number of recent actual values, updated as new values become available -Take the last ____ year amounts and add them together and divide by the number of years for the moving average. -Example: Find the 5 year moving average. Add up the previous 5 year results and divide by 5. -Page 86 and 87

Historical Evolution of Operations Management

-The Industrial Revolution - Scientific Management -The Human Relations Movement - Decision Models and Management Science -The Influence of Japanese Manufacturers. Table 1.5

Prepare a Liner trend forecast

-This is basically the same thing as a slope intercept line (Ft=a+bt)

Describe and give examples of time-based strategies

-Time based strategies = strategy that focuses on reduction of time needed to accomplish tasks -Planning Time - time needed to react to a competitive threat, to develop strategies and select tactics, to approve proposed change to facilities, to adopt new technologies, and so on. -Product/Service Design Time = time needed to develop and market new or redesigned products or services -Processing Time = time needed to produce goods or provide services. Scheduling, repairing equipment, methods used, inventories, quality, training -Changover Time = time needed to change from producing one type of product or service to another. New equipment settings and attachments, different methods, equipment, schedules, or materials. -Delivery Time = time needed to fill orders -Response Time for Complaints = these might be customer complaints about quality, timing of deliveries, and incorrect shipments, may also be complaints from employees

Elements of a good forecast

-Timely, Accurate, Reliable, Meaningful Units, In Writing, Simple to Understand and Use, Cost-Effective

Describe key factors and trade-offs to consider when choosing a forecasting technique

-Two most important factors when choosing forecasting techniques are: Cost and Accuracy -Generally higher the cost, higher the accuracy -Other factors to consider - availability of historical data, availability of computer software, and the time needed to gather and analyze date to create forecast -Tables 3.4 and 3.5 page 111

Prepare a Trend Adjusted Exponential Smoothing Forecast

-Variation of exponential smoothing used when a time series exhibits a liner trend -Page 95

Features common to all forecasts

-forecasting techniques generally assume that the same underlying casual system that existed in the past will continue to exist in the future -forecasts are not perfect, actual results usually differ from predicted values, the presence of randomness precludes a perfect forecast. Allowances should be made for forecasting errors -Forecasts for groups of items tend to be more accurate than forecasts for individual items because forecasting errors among items in a group tend to usually have a cancelling effect -Forecast accuracy decreases as the time period covered by the forecast (time horizon) increases

Current Issues in Business that impact operations management

Economic Conditions, Innovating, Quality problems, risk management, competing in global economy

Importance of Ops Managment

Involved in all aspects of business

Summarize forecast errors and use summaries to make decisions

Mean Absolute Deviation (MAD) Mean Squared Error (MSE) Mean Absolute Percent Error (MAPE) -All are on page 81

Define Mission and Strategy and why they are important

Mission - reason for its existence Strategy - plans for achieving organizations goals -They are important because it guides the organization

Define Operations Management and Supply Chain

Ops = management of systems or processes that create good and provide services Supply Chain = sequence of organizations involved in producing and delivering a good or service

Discuss and compare organization strategy and operations strategy and explain why it is important to link the two

Organization Strategy - provides the overall direction for the organization Operations Strategy - narrower in scope, dealing primarily with the operations aspect of the organization - The operations strategy must be consistent with the organization strategy in order to be effective

Explain the need to manage the supply chain

The need to improve operations, increasing the levels of outsourcing, increasing the transportation costs, competitive pressure, increasing globalization, increasing importance of e-business, the complexity of supply chains, need to manage inventories

Key aspects of operations management decision making

What, When, Where, How, and Who

List several ways that business organizations compete

identifying consumer wants and/or needs, price and quality, advertising and promotion, product and service design, cost, location, quality, quick response, flexibility, inventory management, supply chain management, service, managers and workers

Several reasons that business organizations fail

neglecting operations strategy, failing to take advantage of strengths and opportunities, and/or failing to recognize competitive threats, putting too much emphasis on short term performance, placing too much emphasis on product and service design and not enough on design and improvement, neglecting investments in capital and human resources, failing to establish good internal communications and cooperation among different functional areas, failing to consider customer wants and needs

Similarities and Differences between production and service operations

similarities = forecasting and capacity planning to match supply and demand, process management, managing variations, monitoring and controlling costs and productivity, location planning, inventory management, quality control, and scheduling differences = customer contact, labor content, uniformity of input, measurement of productivity, etc.