Management Test 2

Arrival Rate

(λ) - Mean number of arrivals per unit time (usually per hour or day).

Service Rate

(μ) - Mean number of customers that can be served at 100% utilization by each individual server per unit time (usually per hour or day). At the individual workstation level, the service rate will equal capacity

What characteristics of a waiting line situation determine the difference between the basic model, the multichannel model, the constant service time model and limited-population model of queuing?

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Why does waiting occur? What can be done to reduce waiting?

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Fixed Cost

A cost that will not change with an increase or decrease in the amount of goods or services produced

Balk

A customer/person refuses to enter the queue because of a previous bad experience. In operations management, balking is a flaw in a company's operations

Queue

A line of people who are waiting for something

Redundancy

Added in the form of backup components or parallel paths. Provided to ensure that if one component or path fails, the system has recourse to another

What can a manager do if capacity exceeds demand in the short term? In the long term?

Capacity exceeds Demand : in the short term managers can stimulate demand with price reductions or aggressive marketing, or may accommodate the market through product changes. In the long term they can have layoffs and plant closings to bring capacity in line with demand.

What is capacity and how is it computed?

Capacity is the "throughput," or number of units a facility can hold, receive, store, or produce in a period of time.

Total Productive Maintenance (TPM)

Combines total quality management with a strategic view of maintenance from process and equipment design to preventative maintenance.

Variable Cost

Costs that vary depending on a company's production volume; they rise as production increases and fall as production decreases

What can a manager do if demand exceeds capacity in the short term? In the long term?

Demand exceeds Capacity : in the short term managers can curtail demand by raising prices, scheduling long lead times, and discouraging marginally profitable business.In the long term they can increase capacity.

What are some of the reasons for the difference between design and effective capacity?

Design capacity is the theoretical maximum output of a system in a given period under ideal conditions. While effective capacity is the capacity a firm can expect to achieve, given its product mix, methods of scheduling, maintenance and standards of quality.

What are important considerations for a good capacity decision?

Determining facility size,with an objective of achieving high levels of utilization and high return on investment, is critical. One must also consider time horizon. Must consider long-run, intermediate-range and short-range planing.

Why is there such a thing as economies of scale?Why is there such a thing as diseconomies of scale?

Economies of scale are advantages that arise for a firm because of its larger size, or scale of operation. These advantages translate into lower unit costs (or improved productive efficiency), although some economies of scale are not so easy to quantify. An economic concept referring to a situation in which economies of scale no longer function for a firm. Rather than experiencing continued decreasing costs per increase in output, firms see an increase in marginal cost when output is increased.

Long-range planning

Focused on adding facilities and long lead time equipment.

Short-range planning (scheduling)

Focused on scheduling jobs, scheduling personnel and allocating machinery properly.

Intermediate-range planning (aggregate planning)

Focused on subcontracts, adding equipment, adding shifts. Building or using inventory.

Preventative Maintenance

Involves performing routine inspections and servicing and keeping facilities in good repair

Design Capacity

Maximum output possible in a given time period under ideal conditions

Breakdown Maintenance

Occurs when equipment fails and must be repaired on an emergency or priority basis

Effective Capacity

Output that can be expected in a given time period given product mix, scheduling impacts, downtime qualtity, etc

What can be done to reduce the psychological impact of waiting?

Technology use. For telephone waits playing music to try and distract the customer. One can also set a time expectations which helps.

Reliability

The Probability that a machine part or product will function properly for a specified time under stated conditions

What are the relevant costs when studying waiting lines?

The relevant costs relating to studying waiting lines is the idea of cost-benefit analysis, will this lead to losing customers, are we overstaffed in order to ensure no waiting lines.

What does it mean to exploit the bottleneck or constraint?

To obtain as much capability as possible from a constraining component, without undergoing expensive changes or upgrades. An example is to reduce or eliminate the downtime of bottleneck operations.

Why does pooling servers reduce waiting?

Waiting goes down due to improved access in the available capacity. When pooling servers, you will never have waiting when one server is idle.

What is the exploding queue property and why does it lead to the 85% rule?

Waiting is usually reasonable at 80-85% or less, and after that waiting is substantial. If you cannot control variation, then avoid going over 85% in your utilization or you will have unreasonable wait times. Give yourself a capacity cushion of 15%

renege

When a person who enters a line, decides to leave it without being served.

What is a bottleneck? Why are bottlenecks important?

a bottleneck is the limiting factor or constraint in a system. A bottleneck has the lowest effective capacity of any operation in the system and thus limits the entire system.

Negative exponential probability distribution

a continuous probability distribution often used to describe the service time in a queue.

Poisson distribution

a discrete probability distribution that often describes the arrival rate in queuing theory.

Single-server queuing system

a service system with one line and one server

Multiple-server queuing system

a service system with one waiting line but with several servers.

Single-phase system

a system in which the customer receives service from only one station and then exits the system

Multiphase system

a system in which the customer receives services from several stations before exiting the system.

Utilization

actual output/design capacity. A measure of how busy the system is.

Efficiency

actual output/effective capacity