SCM 3650 Exam 1

Project managers are responsible for...

(1) all necessary activities are finished in proper sequence and on time; (2) the project comes in within budget; (3) the project meets its quality goals; and (4) the people assigned to the project receive the motivation, direction, and information needed to do their jobs

PERT/CPM reports/programs produce a broad variety of reports including

(1) detailed cost breakdowns, (2) labor requirements, (3) cost and hour summaries, (4) raw material and expenditure forecasts, (5) variance reports, (6) time analysis reports, and (7) work status reports.

globalization has taken place because of the development of

(1) market economics; (2) better international communications; (3) more rapid, reliable travel and shipping; (4) ease of capital flow between countries; and (5) high differences in labor costs.

Project managers often deal with...

(1) offers of gifts from contractors, (2) pressure to alter status reports to mask the reality of delays, (3) false reports for charges of time and expenses, and (4) pressures to compromise quality to meet bonuses or avoid penalties related to schedules.

firms locate near their raw materials and suppliers because of

(1) perishability, (2) transportation costs, or (3) bulk

GIS is used to analyze factors that influence the location decisions by addressing five elements for each city...

(1) residential areas, (2) retail shops, (3) cultural and entertainment centers, (4) crime incidence, and (5) transportation options.

t=

(a+4m+b) / 6

Improved Labor

1) Basic education appropriate for an effective labor force 2) Diet of the labor force 3) Social overhead that makes labor available, such as transportation and sanitation

crashing a project involves four steps...

1) Compute the crash cost per week (or other time period) for each activity in the network. If crash costs are linear over time, the following formula can be used: (crash cost-normal cost)/(normal time-crash time) 2) Using the current activity times, find the critical path(s) in the project network. Identify critical activities. 3) If there is only one critical path, then select the activity on this critical path that (a) can still be crashed and (b) has the smallest crash cost per period. Crash this activity by one period. If there is more than one critical path, then select one activity from each critical path such that (a) each selected activity can still be crashed and (b) the total crash cost per period of all selected activities is the smallest. Crash each activity by one period. Note that the same activity may be common to more than one critical path. 4) Update all activity times. If the desired due date has been reached, stop. If not, return to Step 2.

10 strategic OM Decisions

1) Design of goods and services 2) Managing quality and statistical process control 3) Process and capacity strategies 4) Location strategies 5) Layout strategies 6) Human resources, job design and work measurement 7) Supply chain management 8) Inventory management 9) Scheduling 10) Maintenance

Seven Steps in the Forecasting System

1) Determine the use of the forecast: Disney uses park attendance forecasts to drive decisions about staffing, opening times, ride availability, and food supplies. 2) Select the items to be forecasted: For Disney World, there are six main parks. A forecast of daily attendance at each is the main number that determines labor, maintenance, and scheduling. 3) Determine the time horizon of the forecast: Is it short, medium, or long term? Disney develops daily, weekly, monthly, annual, and 5-year forecasts. 4) Select the forecasting model(s): Disney uses a variety of statistical models that we shall discuss, including moving averages, econometrics, and regression analysis. It also employs judgmental, or nonquantitative, models. 5) Gather the data needed to make the forecast: Disney's forecasting team employs 35 analysts and 70 field personnel to survey 1 million people/businesses every year. Disney also uses a firm called Global Insights for travel industry forecasts and gathers data on exchange rates, arrivals into the U.S., airline specials, Wall Street trends, and school vacation schedules. 6) Make the Forecast 7) Validate and implement the results: At Disney, forecasts are reviewed daily at the highest levels to make sure that the model, assumptions, and data are valid. Error measures are applied; then the forecasts are used to schedule personnel down to 15-minute intervals.

Three major types of forecasts:

1) Economic forecasts address the business cycle by predicting inflation rates, money supplies, housing starts, and other planning indicators. 2) Technological forecasts are concerned with rates of technological progress, which can result in the birth of exciting new products, requiring new plants and equipment. 3) Demand forecasts are projections of demand for a company's products or services. Forecasts drive decisions, so managers need immediate and accurate information about real demand. They need demand-driven forecasts, where the focus is on rapidly identifying and tracking customer desires. These forecasts may use recent point-of-sale (POS) data, retailer-generated reports of customer preferences, and any other information that will help to forecast with the most current data possible. Demand-driven forecasts drive a company's production, capacity, and scheduling systems and serve as inputs to financial, marketing, and personnel planning. In addition, the payoff in reduced inventory and obsolescence can be huge.

Challenges in OM

1) Globalization 2) Supply-chain partnering 3) Sustainability 4) Rapid product development 5) Mass customization 6) Lean operations

Why study Operations Management?

1) How people organize themselves for productive enterprise 2) how goods and services are produced 3) understand what operations managers do 4) it is such a costly part of an organization

Moving averages present three problems:

1) Increasing the size of n (the number of periods averaged) does smooth out fluctuations better, but it makes the method less sensitive to changes in the data. 2) Moving averages cannot pick up trends very well. Because they are averages, they will always stay within past levels and will not predict changes to either higher or lower levels. That is, they lag the actual values. 3) Moving averages require extensive records of past data.

Productivity variables

1) Labor 2) Capital 3) Management

Frederick W. Taylor's Managerial Responsibilities

1) Matching employees to the right job 2) Providing the proper training 3) Providing proper work methods and tools 4) Establishing legitimate incentives for work to be accomplished

Multifactor productivity measurement problems

1) Quality may change while the quantity of inputs and outputs remains constant 2) External elements may cause an increase or a decrease in productivity for which the system under study may not be directly responsible 3) Precise units of measure may be lacking

Future time horizon...

1) Short-range forecast: This forecast has a time span of up to 1 year but is generally less than 3 months. It is used for planning purchasing, job scheduling, workforce levels, job assignments, and production levels. 2) Medium-range forecast: A medium-range, or intermediate, forecast generally spans from 3 months to 3 years. It is useful in sales planning, production planning and budgeting, cash budgeting, and analysis of various operating plans. 3) Generally 3 years or more in time span, long-range forecasts are used in planning for new products, capital expenditures, facility location or expansion, and research and development.

A time series has four components:

1) Trend is the gradual upward or downward movement of the data over time. Changes in income, population, age distribution, or cultural views may account for movement in trend. 2) Seasonality is a data pattern that repeats itself after a period of days, weeks, months, or quarters. There are six common seasonality patterns: 3) Cycles are patterns in the data that occur every several years. They are usually tied into the business cycle and are of major importance in short-term business analysis and planning. Predicting business cycles is difficult because they may be affected by political events or by international turmoil. 4) Random variations are "blips" in the data caused by chance and unusual situations. They follow no discernible pattern, so they cannot be predicted.

Productivity of the service sector has proven difficult to improve because service sector work is:

1) Typically labor-intensive 2) Frequently focused on unique individual attributes or desires 3) Often an intellectual task performed by professionals 4) Often difficult to mechanize and automate 5) Often difficult to evaluate for quality

Location options include

1) expanding an existing facility instead of moving 2) maintaining current sites while adding another facility elsewhere 3) closing the existing facility and moving to another location

How to increase productivity?

1) reducing inputs while keeping output constant 2) increasing output while keeping inputs constant

PERT and CPM both follow six basic steps:

1)Define the project and prepare the work breakdown structure. 2)Develop the relationships among the activities. Decide which activities must precede and which must follow others. 3)Draw the network connecting all the activities. 4)Assign time and/or cost estimates to each activity. 5)Compute the longest time path through the network. This is called the critical path. 6)Use the network to help plan, schedule, monitor, and control the project.

Project organization is most helpful when

1)Work tasks can be defined with a specific goal and deadline. 2)The job is unique or somewhat unfamiliar to the existing organization. 3)The work contains complex interrelated tasks requiring specialized skills. 4)The project is temporary but critical to the organization. 5)The project cuts across organizational lines.

Six reasons domestic business operations decide to change to some form of international operation.

1. Improve the supply chain 2. Reduce costs and exchange rate risk 3. Improve operations 4. Understand markets 5. Improve products 6. Attract and retain global talent

Outsourcing is increasing in popularity because...

1. Increased technological expertise 2. more reliable and cheaper transportation 3. the rapid development and deployment of advancements in telecommunications and computers

Firms achieve missions in three conceptual ways...

1. differentiation 2. cost leadership 3. response

Risks of outsourcing

1. reduced employment levels 2. changes in facility requirements 3. potential adjustments to quality control systems and manufacturing processes 4. expanded logistics issues, including insurance, tariffs, customs, and timing

Shifting low-skilled jobs to another country has several potential advantages...

1. the firm may reduce costs 2. moving the lower skilled jobs to a lower cost location frees higher cost workers for valuable tasks 3. reducing wage costs allows the savings to be invested in improved products and facilities (and the retraining of existing workers if necessary) at the home location

Forecast error

=Actual demand-forecast value

Forecast including trend

=Exponentially smoothed forecast average + exponentially smoothed trend

coefficient of correlation

A measure of the strength of the relationship between two variables

Exponential smoothing

A weighted-moving-average forecasting technique in which data points are weighted by an exponential function. It involves very little record keeping of past data and is fairly easy to use.

clustering

Both manufacturing and service organizations also like to locate, somewhat surprisingly, near competitors

Naive approach

Demand in the next period is equal to demand in the most recent period

Steps to locational cost-volume analysis

Determine the fixed and variable cost for each location. Plot the costs for each location, with costs on the vertical axis of the graph and annual volume on the horizontal axis. Select the location that has the lowest total cost for the expected production volume.

Factor rating method...

Develop a list of relevant factors called key success factors (such as those in Figure 8.1). Assign a weight to each factor to reflect its relative importance in the company's objectives. Develop a scale for each factor (for example, 1 to 10 or 1 to 100 points). Have management score each location for each factor, using the scale in Step 3. Multiply the score by the weights for each factor and total the score for each location. Make a recommendation based on the maximum point score, considering the results of other quantitative approaches as well.

Earliest Finish=

ES + activity time

Economic and technological forecasting are...

Economic and technological forecasting are specialized techniques that may fall outside the role of the operations manager

Advantages of PERT

Especially useful when scheduling and controlling large projects. Straightforward concept and not mathematically complex. Graphical networks help highlight relationships among project activities. Critical path and slack time analyses help pinpoint activities that need to be closely watched. Project documentation and graphs point out who is responsible for various activities. Applicable to a wide variety of projects. Useful in monitoring not only schedules but costs as well.

Medium and long range forecasts are distinguished from short range forecasts by three features:

First, intermediate and long-range forecasts deal with more comprehensive issues supporting management decisions regarding planning and products, plants, and processes. Implementing some facility decisions, such as GM's decision to open a new Brazilian manufacturing plant, can take 5 to 8 years from inception to completion. Second, short-term forecasting usually employs different methodologies than longer-term forecasting. Mathematical techniques, such as moving averages, exponential smoothing, and trend extrapolation (all of which we shall examine shortly), are common to short-run projections. Broader, less quantitative methods are useful in predicting such issues as whether a new product, like the optical disk recorder, should be introduced into a company's product line. Finally, as you would expect, short-range forecasts tend to be more accurate than longer-range forecasts. Factors that influence demand change every day. Thus, as the time horizon lengthens, it is likely that forecast accuracy will diminish. It almost goes without saying, then, that sales forecasts must be updated regularly to maintain their value and integrity. After each sales period, forecasts should be reviewed and revised.

Forecasting time-series data implies...

Forecasting time-series data implies that future values are predicted only from past values and that other variables, no matter how potentially valuable, may be ignored.

Ft= new forecast Ft-1=previous periods forecast a=smoothing constant At-1=previous periods actual demand

Ft=Ft−1+α(At−1−Ft−1)

Controlling

Here the firm monitors resources, costs, quality, and budgets. It also revises or changes plans and shifts resources to meet time and cost demands.

How does forecasting impact Human Resources?

Hiring, training, and laying off workers all depend on anticipated demand. If the human resources department must hire additional workers without warning, the amount of training declines, and the quality of the workforce suffers. A large Louisiana chemical firm almost lost its biggest customer when a quick expansion to around-the-clock shifts led to a total breakdown in quality control on the second and third shifts.

Project scheduling serves these purposes:

It shows the relationship of each activity to others and to the whole project. It identifies the precedence relationships among activities. It encourages the setting of realistic time and cost estimates for each activity. It helps make better use of people, money, and material resources by identifying critical bottlenecks in the project.

Slack =

LS - ES or LF - EF

Latest Start=

Latest finish - activity time

Latest Finish=

Min {LS of all immediate following activities}

New forecast =

New forecast=Last period's forecast+ α (Last period's actual demand − Last period's forecast) a=smoothing constant

Multifactor productivity=

Output/Labor + Material + Energy + Capital + Miscellaneous

Regardless of the system that firms use, each company faces several realities...

Outside factors that we cannot predict or control often impact the forecast. Most forecasting techniques assume that there is some underlying stability in the system. Consequently, some firms automate their predictions using computerized forecasting software, then closely monitor only the product items whose demand is erratic. Both product family and aggregated forecasts are more accurate than individual product forecasts. Disney, for example, aggregates daily attendance forecasts by park. This approach helps balance the over- and underpredictions for each of the six attractions.

contract manufacturing

Outsourcing manufacturing is an extension of the long-standing practice of subcontracting production activities, which when done on a continuing basis is known as

The management of projects involves three phases

Planning, Scheduling, Controlling

Limitations of PERT

Project activities have to be clearly defined, independent, and stable in their relationships. Precedence relationships must be specified and networked together. Time estimates tend to be subjective and are subject to fudging by managers who fear the dangers of being overly optimistic or not pessimistic enough. There is the inherent danger of placing too much emphasis on the longest, or critical, path. Near-critical paths need to be monitored closely as well.

8 determinants of volume and revenue for the service firm

Purchasing power of the customer-drawing area Service and image compatibility with demographics of the customer-drawing area Competition in the area Quality of the competition Uniqueness of the firm's and competitors' locations Physical qualities of facilities and neighboring businesses Operating policies of the firm Quality of management

focus forecasting is based on two principles:

Sophisticated forecasting models are not always better than simple ones. There is no single technique that should be used for all products or services.

Weighted moving average =

Sum of ((Weight for period n)(Demand in period in)) / Sum of weights

Forecasting

The art and science of predicting future events. Forecasting may involve taking historical data (such as past sales) and projecting them into the future with a mathematical model. It may be a subjective or an intuitive prediction (e.g., "this is a great new product and will sell 20% more than the old one"). It may be based on demand-driven data, such as customer plans to purchase, and projecting them into the future. Or the forecast may involve a combination of these, that is, a mathematical model adjusted by a manager's good judgment.

Mean squared error

The average of the squared differences between the forecasted and observed values

The forecast is the only...

The forecast is the only estimate of demand until actual demand becomes known.

pessimistic time (b)

The length of time required under the worst conditions

collaborative planning, forecasting, and replenishment (CPFR)

They combine the intelligence of multiple supply-chain partners. The goal of CPFR is to create significantly more accurate information that can power the supply chain to greater sales and profits.

Mean Absolute Percent Error (MAPE)

This is computed as the average of the absolute difference between the forecasted and actual values, expressed as a percentage of the actual values. That is, if we have forecasted and actual values for n periods, the MAPE is calculated as:

Planning

This phase includes goal setting, defining the project, and team organization.

Scheduling

This phase relates people, money, and supplies to specific activities and relates activities to each other.

Knowledge societies

Those in which much of the labor force has migrated from manual work to technical and information-processing tasks requiring ongoing education

Overview of Quantitative Methods

Time-series models predict on the assumption that the future is a function of the past. In other words, they look at what has happened over a period of time and use a series of past data to make a forecast. If we are predicting sales of lawn mowers, we use the past sales for lawn mowers to make the forecasts. Associative models, such as linear regression, incorporate the variables or factors that might influence the quantity being forecast. For example, an associative model for lawn mower sales might use factors such as new housing starts, advertising budget, and competitors' prices.

1) Productivity=

Units produced/Input used

2) Single-factor productivity=

Units produced/Labor-hours used 4 units per labor house

unlike time series forecasting...

Unlike time-series forecasting, associative forecasting models usually consider several variables that are related to the quantity being predicted.

factor rating method

We assign points for each factor to each provider and then importance weights to each of the factors

when a detectable trend or pattern is present...

When a detectable trend or pattern is present, weights can be used to place more emphasis on recent values.

How does forecasting impact Capacity?

When capacity is inadequate, the resulting shortages can lead to loss of customers and market share. This is exactly what happened to Nabisco when it underestimated the huge demand for its Snackwell Devil's Food Cookies. Even with production lines working overtime, Nabisco could not keep up with demand, and it lost customers. Boeing faces this problem with its 737 MAX, where demand continues to exceed forecasts, and hence capacity. On the other hand, when excess capacity exists, costs can skyrocket.

PERT and CPM are important because they can help answer questions such as the following about projects with thousands of activities:

When will the entire project be completed? What are the critical activities or tasks in the project—that is, which activities will delay the entire project if they are late? Which are the noncritical activities—the ones that can run late without delaying the whole project's completion? What is the probability that the project will be completed by a specific date? At any particular date, is the project on schedule, behind schedule, or ahead of schedule? On any given date, is the money spent equal to, less than, or greater than the budgeted amount? Are there enough resources available to finish the project on time? If the project is to be finished in a shorter amount of time, what is the best way to accomplish this goal at the least cost?

Variance =

[(b-a/6]^2

multinational corporation (MNC)

a firm with extensive international business involvement

bias

a forecast that is consistently higher or consistently lower than actual values of a time series

SWOT analysis

a formal review of internal strengths and weaknesses and external opportunities and threats.

Supply chain

a global network of organizations and activities that supply a firm with goods and services

center-of-gravity method

a mathematical technique used for finding the location of a distribution center that will minimize distribution costs

Mean Absolute Deviation (MAD)

a measure of the overall forecast error for a model This value is computed by taking the sum of the absolute values of the individual forecast errors (deviations) and dividing by the number of periods of data (n):

tracking signal

a measurement of how well a forecast is predicting actual values

critical path analysis

a process that helps determine a project schedule

Forward pass

a process that identifies all the early times

Locational cost volume analysis

a technique for making an economic comparison of location alternatives. By identifying fixed and variable costs and graphing them for each location, we can determine which one provides the lowest cost.

Trend projection

a time-series forecasting method that fits a trend line to a series of historical data points and then projects the line into the future for forecasts

There are two approaches for drawing a project network...

activity on node (AON) and activity on arrow (AOA).

Backward pass

an activity that finds all the late start and late finish times

Adaptive smoothing

an approach to exponential smoothing forecasting in which the smoothing constant is automatically changed to keep errors to a minimum

multiple regression

an associative forecasting method with more than one independent variable

strategy

an organizations action plan to achieve the mission

Mission

an organizations purpose-what it will contribute to society

international business

any firm that engages in international trade or investment

Intangible costs

are less easily quantified. They include quality of education, public transportation facilities, community attitudes toward the industry and the company, and quality and attitude of prospective employees. They also include quality-of-life variables, such as climate and sports teams, that may influence personnel recruiting.

Gantt chart

are low-cost means of helping managers make sure that (1) activities are planned, (2) order of performance is documented, (3) activity time estimates are recorded, and (4) overall project time is developed.

Tangible costs

are those costs that are readily identifiable and precisely measured. They include utilities, labor, material, taxes, depreciation, and other costs that the accounting department and management can identify.

Under AOA...

arrows designate activities

agile style of management

collaboration and constant feedback to adjust to the many unknowns of the evolving technology and project specifications. In agile projects, the project manager creates a general plan, based on overall requirements and a broad perspective of the solution.

Production/operations

creates, produces, and delivers the product

Stakeholders

customers, distributors, suppliers, owners, lenders, employees, and community Stakeholders

work breakdown structure (WBS)

defines the project by dividing it into its major subcomponents (or tasks), which are then subdivided into more detailed components, and finally into a set of activities and their related costs

PERT and CPM

do have the ability to consider precedence relationships and interdependency of activities.

Earliest Finish (EF)

earliest time at which an activity can be finished

Earliest start (ES)

earliest time at which an activity can start, assuming all predecessors have been completed

Low-cost leadership

entails achieving maximum value as defined by your customer

transnational strategy

exploits the economies of scale and learning, as well as pressure for responsiveness, by recognizing that core competence does not reside in just the "home" country but can exist anywhere in the organization

response...

flexible, reliable, quick

focus forecasting

forecasting that tries a variety of computer models and selects the best one for a particular application

slack time

free time for an activity. Also referred to as free float or free slack

maquiladoras

free trade zones that allow manufacturers to cut their costs by paying only for the value added by Mexican workers. Tariff duties only charged on the work performed in Mexico

Marketing

generates the demand, takes the order for a product or service

differentiation

going beyond both physical characteristics and service attributes to encompass everything about the product or service that influences the value that the customers derive from it

global strategy

has a high degree of centralization, with headquarters coordinating the organization to seek out standardization and learning between plants, thus generating economies of scale

theory of comparative advantage

if an external provider, regardless of its geographic location, can perform activities more productively than the purchasing firm, then the external provider should do the work

five forces model

immediate rivals, potential entrants, customers, suppliers, and substitute products

Competitive advantage

implies the creation of a system that has a unique advantage over competitors

Dummy activities are common...

in AOA networks. They do not really exist in the project and take zero time.

work breakdown structure typically decreases

in size from top to bottom and is indented like this: Project Major tasks in the project Subtasks in major tasks Activities (or "work packages") to be completed

Services

including repair and maintenance, government, food and lodging, transportation, insurance, trade, financial, real estate, education, legal, medical, entertainment, and other professional occupations *constitute the largest economic sector in postindustrial societies

response

including the entire range of values related to timely product development and delivery, as well as reliable scheduling and flexible performance

Qualitative forecasts

incorporate such factors as the decision maker's intuition, emotions, personal experiences, and value system in reaching a forecast. Some firms use one approach and some use the other. In practice, a combination of the two is usually most effective.

operational hedging

intentionally building extra capacity in different countries and then shifting production from country to country as costs or exchange rates vary

Competition in the 21st century

is not between companies, it is between supply chains

Porter's Value-chain analysis

is used to identify activities that represent strengths, or potential strengths, and may be opportunities for developing competitive advantage

Latest start (LS)

latest time at which an activity can start so as to not delay the completion time of the entire project

Latest finish (LF)

latest time by which an activity has to be finished so as to not delay the completion time of the entire project

activity map

links competitive advantage, KSFs, and supporting activities

W. Edwards Deming

management must do more to improve the work environment and processes so that quality can be improved

service sector focus

maximizing revenue

Most likely time (m)

most realistic estimate of the time required to complete an activity

Under the AON convention...

nodes designate activities.

cycles

patterns in the data that occur every several years

Management process

planning, organizing, staffing, leading, controlling

Walter Shewhart

provided the foundations for statistical sampling and quality control

Financial hedging

purchasing currency options to protect against negative exchange rate changes

World Trade Organization (WTO)

reduced tariffs from 40% to 3%

Seasonal variations

regular upward or downward movements in a time series that tie to recurring events

The activities on the critical path...

represent tasks that will delay the entire project if they are not completed on time.

Overview of Qualitative Methods

ry of executive opinion: Under this method, the opinions of a group of high-level experts or managers, often in combination with statistical models, are pooled to arrive at a group estimate of demand. Bristol-Myers Squibb Company, for example, uses 220 well-known research scientists as its jury of executive opinion to get a grasp on future trends in the world of medical research. Delphi method: There are three different types of participants in the Delphi method: decision makers, staff personnel, and respondents. Decision makers usually consist of a group of 5 to 10 experts who will be making the actual forecast. Staff personnel assist decision makers by preparing, distributing, collecting, and summarizing a series of questionnaires and survey results. The respondents are a group of people, often located in different places, whose judgments are valued. This group provides inputs to the decision makers before the forecast is made. The state of Alaska, for example, has used the Delphi method to develop its long-range economic forecast. A large part of the state's budget is derived from the million-plus barrels of oil pumped daily through a pipeline at Prudhoe Bay. The large Delphi panel of experts had to represent all groups and opinions in the state and all geographic areas. Sales force composite: In this approach, each salesperson estimates what sales will be in his or her region. These forecasts are then reviewed to ensure that they are realistic. Then they are combined at the district and national levels to reach an overall forecast. A variation of this approach occurs at Lexus, where every quarter Lexus dealers have a "make meeting." At this meeting, they talk about what is selling, in what colors, and with what options, so the factory knows what to build. Market survey: This method solicits input from customers or potential customers regarding future purchasing plans. It can help not only in preparing a forecast but also in improving product design and planning for new products. The consumer market survey and sales force composite methods can, however, suffer from overly optimistic forecasts that arise from customer input.

North American Free Trade Agreement (NAFTA)

seeks to phase out all trade and tariff barriers among Canada, Mexico, and the US

crashing

shortening activity time in a network to reduce time on the critical path so total completion time is reduced

project variance deviation =

sqrt Project variation

Life cycle

stages a product goes through

Geographic information system (GIS)

stores, accesses, displays, and links demographic information to a geographical location. For instance, retailers, banks, food chains, gas stations, and print shop franchises can all use geographically coded files from a GIS to conduct demographic analyses. By combining population, age, income, traffic flow, and density figures with geography, a retailer can pinpoint the best location for a new store or restaurant.

Moving average =

sum of demand in previous n periods/n

The major difference between PERT and CPM is...

that PERT employs three time estimates for each activity. These time estimates are used to compute expected values and standard deviations for the activity. CPM makes the assumption that activity times are known with certainty and hence requires only one time factor for each activity.

The basic difference between AON and AOA...

that the nodes in an AON diagram represent activities. In an AOA network, the nodes represent the starting and finishing times of an activity and are also called events. So nodes in AOA consume neither time nor resources.

flexible respons

the ability to match changes in a marketplace where design innovations and volumes fluctuate substantially.

Production

the creation of goods and services

four major methods are used for solving location problems

the factor-rating method, locational cost-volume analysis, the center-of-gravity method, and the transportation model.

functional area

the major disciplines required by the firm (marketing,accounting,p/o)

*Production

the making of goods and services *high production does not equal high productivity (more people may be working/high employment levels)

Productivity

the ratio of outputs (goods and services) divided by the inputs (resources, such as labor and capital)

Operations management (OM)

the set of activities that creates value in the form of goods and services by transforming inputs into outputs

core competencies

the set of unique skills, talents, and capabilities that a firm does at a world class standard

Smoothing constant

the weighting factor used in an exponential smoothing forecast, a number greater than or equal to 0 and less than or equal to 1

resources view

thinking in terms of the financial, physical, human, and technological resources available and ensuring that the potential strategy is compatible with those resources.

Key success factors (KSFs)

those activities that are necessary for a firm to achieve its goals

optimistic time (a)

time an activity will take if everything goes as planned

transportation model

to determine the best pattern of shipments from several points of supply (sources) to several points of demand (destinations) so as to minimize total production and transportation costs.

objective of location strategy

to maximize the benefit of location to the firm

Finance/accounting

tracks how well the organization is doing, pays the bills, collects the money

outsourcing

transferring activities that have traditionally been internal to external suppliers. do this with non core competencies

reduction in bulk

trees to lumber

many of the project management software packages, including Microsoft Project...

use AON networks

Quantitative forecasts

use a variety of mathematical models that rely on historical data and/or associative variables to forecast demand.

Moving-Average

uses a number of historical actual data values to generate a forecast. Moving averages are useful if we can assume that market demands will stay fairly steady over time.

To find the critical path...

we calculate two distinct starting and ending times for each activity

Program evaluation and review technique (PERT) and the critical path method (CPM)

were both developed in the 1950s to help managers schedule, monitor, and control large and complex projects. CPM arrived first, as a tool developed to assist in the building and maintenance of chemical plants at DuPont. Independently, PERT was developed in 1958 for the U.S. Navy.

waterfall approach

where the project progresses smoothly, in a step-by-step manner, through each phase to completion.