SCM chapter 3

Identify the true statements about Juran's law, which is a key premise of process thinking. (Check all that apply.)

- 85% of operational problems are due to systematic process errors. -To improve operations, the focus should be on processes first. -15% of operational problems are the result of human errors.

Identify the basic principles at the heart of the Theory of Constraints.

- Every process must continually improve. - Every process has a constraint. - Every process contains variance that consumes capacity.

Identify the true statements about inputs, outputs, and flows. (Check all that apply.)

- Inputs are items that come from outside the process and are acted upon or consumed by the process. - Most processes involve information flow and material flow. - Binary code, written words, pictures, and currency are examples of information flows.

Identify the parameters by which a particular process can be defined. (Check all that apply.)

- activites - inputs/outputs / flows - process structure - management policies

Identify the various components that usually fall under activities of a process. (Check all that apply.)

- delay - transportation - inspection - storage

equipment, space- short term low-skilled labor- short term physical plant long term

- rental or leasing -hiring part time or overtime - new building outsourcing

Identify the three general strategies involved while determining when to change capacity relative to demand. (Check all that apply.)

-Adding or removing capacity -Capacity lag strategy -Capacity lead strategy

transportation delay storage

-An activity that moves an input from one place to another without transforming its other characteristics -An unintentional stoppage of work -An activity where items are inventoried under formal control

Why is the awareness of bottlenecks critical? (Check all that apply.)

-An hour of lost output at a bottleneck equates to an hour of lost output for the entire process. -Bottlenecks affect investment strategies. -To improve the overall output of a process

Strategies for managing bottlenecks include: (check all that apply)

-Closely monitoring and maintaining the bottleneck. -Ensuring that investments improve the capacities of bottleneck processes rather than non-bottleneck processes. -Keeping inventory in front of bottlenecks so that so that they never "starve"

Identify the methods by which a manager of a firm can respond to variability. (Check all that apply.)

-Cross-training labor and investing in flexible technology - Finding the sources of variance in the process and try to eliminate them -Make use of safety stock in for highly variable activities to reduce the effect of variability

Identify the internal reasons due to which processes are often not able to achieve the desired levels of capacity utilization. (Check all that apply.)

-Lack of resource availability -Quality problems

Identify the outcomes when a manager views supply chain operations as a collection of processes rather than a collection of departments or functions.

-Managers and workers can view operational activities from a customer's perspective. -Operation managers can better ensure that the operational capabilities they create are consistent with the firm's strategy.

Identify the statements that are true of maximum capacity. (Check all that apply.)

-Maximum capacity is also known as design capacity. -An assumption of maximum capacity is that all equipment and workers are fully operational for the maximum amount of available time. -Design capacity is an engineering assessment of maximum output, assuming continuous operation except for maintenance and repair time

Identify the true statements about process capacity. (Check all that apply.)

-The capacity of a process is determined by the limits of its resources. -Process capacity is usually specified with respect to some unit of time. -Capacity can also denote size or storage limits.

Identify the true statements about utilization. (Check all that apply.)

-Utilization is sometimes calculated as the percentage of available resource time that is used. -Utilization can be calculated as the ratio of the actual output rate to the capacity.

Identify the true statements about variance. (Check all that apply.)

-Variance consumes capacity in a process. -Variance increases flow time of a process. -Variance causes an increase in process congestion.

An operation can produce 100 units per hour for any product and is available just 8 hours a day. Assume that this capacity is both the maximum and the effective capacity for this operation. Each product requires a setup time of one hour. How many units could be produced if five different products have to be produced on the same day?

300

unintended output

A car manufacturing firm uses a special type of alloy to manufacture its car chassis. As a result of the process, environmental waste is produced. In this scenario, environmental waste is an example of

Identify the example that best illustrates a tactical capacity change decision.

A firm wants to find an additional distributor who can cater to a diverse customer base

Define process thinking.

A way of viewing activities in an organization as processes rather than as departments or functions

activities outputs inputs

Every process has variance. The sources or root causes of the variances are because of variability in _____. (Check all that apply.)

Identify the inputs of supply management as a business process.

Raw materials, customer orders, demand forecasts, and dealer capabilities

structure

_____ deals with how inputs, activities, and outputs of a process are organized.

As the production volume doubles, the labor hours required decrease by a constant proportion. This is known as _____.

learning curve

Management policies include how managers , , and customer requirements.

specified, measured evaluated

maximum

capacity is the highest level of output that a process can achieve under ideal conditions in the short term.

True or false: All processes have variance.

true

True or false: In a capacity decision, if the limiting resource is low-skilled labor, a short-term capacity decision could be scheduling overtime, hiring temporary labor, or laying off people.

true

True or false: In some industries such as consumer electronics, operations managers install enough production capacity in a single manufacturing plant to meet the global demand so that they can achieve economies of scale.

true

True or false: Capacity requirements are determined by dividing the sum of the total time needed to make the products and the total time needed for setup by the operating time that is available.

true

True or false: Processes are the means by which customers' needs are satisfied.

true

An effective operations mangers has to maintain the balance between maintaining his capacity utilization while avoiding unsustainable .

overutilization

Identify the true statements about the Theory of Constraints. (Check all that apply.)

- It serves to simplify process management by focusing managers' attentions on the important constraints that limit the performance of a process. - The principles offered by the Theory of Constraints is applicable universally.

Identify the statements that are true of capacity planning. (Check all that apply.)

-Capacity decisions are important as demand, products, technology, and the competitive environment shift over time. -Too much capacity in a supply chain means that resources are underutilized. -Typically, cross-functional teams make decisions about how much capacity is needed and when it should be added or removed.

Identify the four primary reasons for economies of scale in operations. (Check all that apply.)

-Learning curves or practice improves output volume as employees gain skill -Allocation of fixed costs -Lower cost of purchases -Equipment and construction costs

Identify the methods by which process managers define a process's structure. (Check all that apply.)

-Positioning process activities -Sequencing process activities -Linking process activities

output-product variety process quality variance process - resource availibilty varance input variance in delivery

-Process changeover is required and that requires time which could be otherwise used to create output. - Productive resources are consumed by quality control and rework activities. - Broken-down machines hold up production. - Process activities are to be halted because they are missing needed components.

management policies

A manager of a firm finds that the productivity of a worker is declining at a steady rate. To increase his productivity, the manager decides to pay the worker for the rate of output instead of paying him by the hour. This scenario is an example of _____.

economies of scale

As the production volumes increase with addition of capacity, the unit costs to produce a product decreases to an optimal level. This is known as the _____.

Supplied inputs Insufficient demand

Identify the external reasons due to which processes are often not able to achieve the desired levels of capacity utilization.

storage

Identify the process activity that has floor space, racks, bins, stockrooms, and stockroom clerks as its associated resources that limit capacity.

cross training

One strategy for managers to increase capacity by creating flexibility involves the - of labor.

strategic capacity change

The manager of a manufacturing unit decides to outsource a certain part of the firms production as it is economical to do so. In this scenario, the manager's decision to outsource is an example of a(n) _____.

An inspection _____

checks or verifies the results of another activity

Identify the outcomes when an operations manager chooses to utilize overproduction by making actual production greater than effective capacity for longer periods of time. (Check all that apply.)

- Workers become fatigued. - Machines will break down if they are not properly maintained. -Errors and accidents become more frequent. - Safety issues emerge.

Identify the characteristics of a strategic capacity change. (Check all that apply.)

-It takes long time to implement. -It includes large increases or decreases in capacity. -It requires changes to labor, equipment, and space.

-Operations -Transportation -Inspection -Delay

-Tools, labor, machine capacity, supplier capacity -Pallets, carts, fork-lift trucks, trucks, trains, airplanes -Inspectors, inspection stations, gauges, robots, or machine-vision equipment -Space on the shop floor, bins, carts, racks

Process (blank) refers to the limit on the amount of output per period of time that a process can generate or store given a level of inputs and resources.

capacity

The constraining activity in a process that limits the overall output is called a

bottleneck

Little's Law

is an empirically proven relationship that exists between flow time, inventory, and throughput.

utilization

is defined as the percentage of process capacity that is actually used.

Effective capacity

is the level of capacity or output that a process can be expected to produce under normal conditions

Theory of Constraints

is the overall management system that strives to improve system performance by identifying, focusing, and managing

yield rate

is the percentage of units successfully produced as a percentage of inputs.

flow time

is the time it takes one unit to get through a process.

Identify the business process that has competitor data, market assessments, internal capability assessments, and economic forecasts as its input.

strategic planning

parallel

structure is a process where there are two or more resources doing the same task simultaneously

A diseconomy of scale can occur when _____.

the size of an operation increases beyond some point, and the cost per unit increases

The principles that every process must be managed as a system and that performance measures are crucial to a process's success are the basic principles of the _____.

theory of constraints

wait

time is the amount of time that an item spends waiting.

cycle

time is the time a unit spends being processed at a given operation in the overall process.