Operation Supply Chain Management

What are phases in product design?

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

Tactics

method and actions taken to accomplish strategies

least squares line

minimize the sum of the squared vertical deviations around the line

Environmental scanning

monitoring of events and trends that present threats or opportunities for a company

weighted average

more recent values in a series are given more weight in computing a forecast

Research and Development

organized effort to increase scientific knowledge or product innovation

delayed differentiation

the process of producing, but not quite completing, a product or service until customer preferences are known

indifference point

the quantity that would make two alternatives equivalent

tracking signal

the ratio of cumulative forecast error to the corresponding value of MAD. used to forecast

product liability

the responsibility of a manufacturer for any injuries or damages caused by a faulty product

normal operating condition

the set condition under which an item's reliability is specified

Core competencies

the special attributes or abilities that give an organization a competitive edge

Lead time

the time between ordering goods or service and receiving it

computer aided manufacturing

the use of computers in process control

breakeven point

the volume of output at which total cost and total revenue are equal

time series

time-ordered sequence of observation taken at regular intervals

Lean system

uses minimal amounts of resources to produce high volume of high quality goods with some variety

focus forecasting

using the forecasting method that demonstrates the best recent success

Which of the following is not a characteristic of layout decisions in system design?

usually well received by operative personnel

predictor variables

variables that can be used to predict values of the variable of interest

trend adjusted exponential smoothing

variation of exponential smoothing used when a time series exhibits a linear trend

cycle

wakelike variations lasting more than one year

Production and distribution decisions focus on

what customers want, when they want it, and how much is needed.

NAFTA opened boarders of trade between who?

U.S., Canada and Mexico

Which of the following is not a basic question in capacity planning?

Who will pay for it?

Pareto phenomenon

a few factors account for a higher percentage of the occurrence of some events

naive forecast

a forecast for any period that equals the previous period actual value

modular design

a form of standardization in which component parts are grouped into modules that are easily replaced or interchanged

standard error of estimate

a measure of the scatter of points around a regression line

correlation

a measure of the strength and direction of relationship between two variables

service blueprint

a method used in service design to describe and analyze a proposed service

centered moving average

a moving average positioned at the center of the data that were used to compute it

uniform commercial code

a product must be suitable for its intended purpose

Supply chain

a sequence of activities and organizations involved in producing and delivering goods

mass customization

a strategy of producing basically standardized goods, but incorporating some degree of customization

computer integrated manufacturing

a system for linking a broad range of manufacturing activities through an integrating computer system

control chart

a visual tool for monitoring forecasts errors

exponential smoothing

a weighted averaging method based on previous forecast plus a percentage of the forecast error

The maximum allowable cycle time is computed as:

daily operating time desired by the desired output

what is an End of Life program?

deals with products that have reached the end of their useful lives. the purpose of this program is to reduce the dumping of products, especially electronics

Effective capacity

deign capacity minus allowances such as personal time, equipment maintenance, delays due to scheduling, problems and changing the mix products

The main issue in the design of process layouts for service operations concerns the relative positioning of:

departments

design for assembly

design so that used products can be easily taken apart

design for recycling

design that facilities for recovery of materials and components in used products for reuse

Robust design

design that results in products or services that can function over a broad range of conditions

design for manufacturing

designing of products that are compatible with an organization's capabilities

reverse engineering

dismantling and inspecting a competitor's product to discover product improvements

value analysis

examination of the function of parts and materials in an effort to reduce cost and/or improve product performance

capacity cushion

extra capacity used to offset demand uncertainty

Break even point formula

fixed cost divided by revenue per unit minus variable cost per unit

associative model

forecasting technique that uses explanatory variables to predict future demand

time-series forecasts

forecasts that project patterns identified in recent time-series observations

judgemental forecasting

forecasts that use subjective inputs such as opinions from consumer surveys, sales, staff, managers and experts

flexible manufacturing system

group of machines designed to handle intermittent processing requirements and produce a variety of similar products

Craft production

high skilled workers use simple, flexible tools to produce small quantities of customized goods

When the output is less than the optimal rate of output, the average unit cost will be:

higher

economies of scale

if the output rate is less than the optimal level, increasing the output rate results in decreasing average unit costs

diseconomies of scales

if the output rate is more than the optimal level, increasing the output rate results in increasing average unit costs

Two widely used metrics are?

Mean and standard deviation

What are some ways to improve productivity?

1. Develop productivity measures for all operations 2. Look at system as a whole when deciding which operations are most critical 3. Develop methods for achieving productivity improvements 4. Establish reasonable goals for improvement 5. Make it clear that management supports and encourages improvements 6. Measure improvements and publicize them

What are the key issues for today's business operation?

1. Economic conditions 2. Innovation 3. Quality problems 4. Risk management 5. Competing in a global economy

What are some key external factors?

1. Economic conditions 2. Political conditions 3. Legal environment 4. Technology 5. Competition 6. Markets

Managers use models in a variety of ways, what are some of the reasons?

1. Generally easy to use and less expensive 2. Require users to organize and sometimes quantify information 3. Increase understanding of the problem 4. Enable managers to analyze what if questions 5. Serve as a consistent tool for evaluation 6. Enable users to bring the power of mathematics to bear on a problem

What are some key internal factors?

1. Human resources 2. Facilities and equipment 3. Financial resources 4. Customers 5. Products and services 6. Technology 7. Suppliers 8. Other (patents, equipment, access to resources)

What are some ways that businesses compete?

1. Identifying consumer wants or needs 2. Price and quality 3. Advertising and promotion 4. Product and service design 5. Location 6. Cost 7. Quality 8. Quick response 9. Flexibility 10. Inventory management 11. Supply chain management 12. Service 13. Managers and workers

What are some of the different strategies companies can use?

1. Low cost 2. Scale based 3. Specialization 4. Newness 5. Flexible operations 6. High quality 7. Service 8. Sustainability

What are some of the reasons to manage the supply chain?

1. Need to improve operations 2. Increasing levels of outsourcing 3. Increased transportation costs 4. Competitive pressure 5. Increasing globalization 6. Increasing importance of e-business 7. The complexity of supply chains 8. The need to manage inventories

Why do some organizations fail?

1. Neglecting operations strategy 2. Failing to take advantage of strengths, opportunities. Failing to recognize threats and weaknesses 3. Putting too much emphasis on short term financial goals 4. Placing too much emphasis on product or service designs and not enough on process design 5. Neglecting investments in capital and human resources 6. Failing to establish good internal communications 7. Failing to consider customer wants and needs

What are some factors that affect productivity?

1. Standardizing 2. Use of the internet 3. Scrap rates (inefficient use of resources) 4. Computer viruses 5. Searching for lost or misplaced items 6. New workers 7. Safety 8. Shortage of tech savvy workers 9. Layoffs 10. Labor turnover 11. Incentive plans

What are the 3 categories of of business process?

1. Upper management process 2. Operational process 3. Supporting process

What are the five principles for thinking ethically?

1. Utilitarian principle (good done by action or inaction) 2. Rights principle (should respect and protect morale rights) 3. Fairness principle (equals should be held and evaluated at the same standards) 4. Common good (actions should contribute to the common good of community) 5. Virtue (honesty, compassion, tolerance and self control)

What are the key questions in capacity planning

1. What kind of capacity is needed? 2. How much is needed to match demand? 3. When is needed?

Operations managers make a number of key decisions that affect the entire organization by asking what questions?

1. What resources will be needed 2. When will each resource be needed 3. Where will the work be done 4. How will the product or service be designed 5. Who will do the work

What types of questions may need to be addressed after examining external and internal factors?

1. What role will the internet play 2. Will the organization have a global presence 3. What will the supply chain management strategy be 4. To what extent will new products be introduced 5. What rate of growth is desirable and sustainable 6. What emphasis should be placed on lean production 7. How will the organization differentiate its products from competition

characteristics of well designed service system

1. being consistent 2. being user friendly 3. being robust if variability is a factor 4. being easy to sustain 5. being cost effective

what are the steps to forecasting?

1. determine the purpose of the forecast 2. establish a time horizon 3. obtain, clean and analyze appropriate data 4. select a forecasting technique 5. make the forecast 6. monitor the forecast error

Factors that give rise to market opportunities and threats?

1. economic 2. social and demographic 3. political, liability, or legal 4. competitive 5. cost or availability 6. technological

major steps in service blueprinting?

1. establish boundaries for service 2. identify and determine the sequence of customer 3. develop time estimates 4. identify potential failure points develop a plan to prevent/minimize them

what is the basic objective of layout design?

1. facilitate attainment of product 2. to use workers and space efficiently 3. to avoid bottlenecks 4. to minimize material handling cost 5. to design for safety

What are the common features of forecasts?

1. forecasting techniques generally that the same underlying casual system 2.forecasts are not perfect 3. forecasts for groups of items tend to be more accurate than forecasts for individual items because forecasting errors may occur 4. forecast accuracy decreases as the time period covered by the forecast-the time horizon-

summarize the two major aspects of process management

1. managing a process to meet demand. Having the right capacity require having accurate forecasts of demand, the ability to translate forecasts into capacity requirements and a process in place capable of meeting expected demand 2. process variation: in addition to variation you have 4 basic sources of variation

What are the elements of a good forecast

1. timely 2. accurate 3. reliable 4. meaningful units 5. in writing 6. simple to understand and use

For fixed costs of $2,000, revenue per unit of $2, and variable cost per unit of $1.60, the break-even quantity is:

5000

Utilization is defined as the ratio of:

Actual output to design capacity

Efficiency is defined as the ratio of:

Actual output to effective capacity.

Which of the following is not a strategy to manage service capacity?

Backordering

explain the importance of learning about operations management

Because it affects every aspect of business, no matter if you're going into operations or another career. Through learning about operations supply chain management you will have a much better knowledge and understanding of the world we live in.

Capacity in excess of expected demand that is intended to offset uncertainty is a:

Capacity cushion

Product-focused, single-piece flow, pull production system would be called a:

Cellular layout

Which of the following is not an approach that companies use to achieve a smooth flow of production?

Companies use all of these

In the area of product and service design, the acronym CAD refers to:

Computer Aided Design

The process of comparing outputs to previously established standards to determine if corrective action is needed is called:

Controlling

Productivity growth formula?

Current productivity-previous productivity divided by previous productivity *100 (84-80/80*100)= 5%

What is it about repetitive processes that make them appropriate for products in the maturity phase of their life cycle?

Efficiency

The type of layout in which workers, materials, and equipment are moved to the product as needed is:

Fixed Position

Who was referred to as the father of scientific management?

Fredrick Winslow

When the output is less than the optimal rate of output, the average unit cost will be:

Higher

describe the operations function and the nature of the operations managers job.

May include but not limited to many interrelated activities such as forecasting, capacity planning, scheduling, managing inventories, assuring quality, motivating employees, and deciding where to locate facilities.

The first, and perhaps most important, step in constraint management is to _________ the most pressing constraint.

Identify

When buying component parts, risk does not include:

Interest rate fluctuations

The method of financial analysis which results in an equivalent interest rate is:

Internal Rate of Return

Supplying operations with parts and materials, performing work on products, and/or performing services are part of the firm's:

Internal Supply Chain

An advantage of a U-shaped production line is that:

It is more efficient than a traditional product layout

Which type of processing system tends to produce the most product variety?

Job Shop

Marketing depends on operations for information regarding:

Lead time

Daily capacity of a product layout is determined by

Operating time divided by cycle time

Productivity equals what?

Output divided by input

Productivity is expressed as:

Output divided by input

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

Outsourcing

The responsibilities of the operations manager are:

Planning, organizing, staffing, directing, and controlling

identify the similarities and differences between production and service operations

Production of goods results in a tangible output. Service however generally implies an act of some sort. Some of the service jobs are things like professional services, internet, utilities, and barbershops. Manufacturing and service are often done in different terms of what is done but quite similar on how it's done. Many service jobs involve a high degree of customer contact. Services often have a higher degree of labor content than manufacturing jobs do, although automated services are an exception Measurement of productivity can be more difficult for service jobs largely due to the variations of input

formal way to document customer requirements is:

Quality function deployment

Maximum capacity refers to the upper limit of:

Rate of output

Incorporating design for disassembly principles in product design helps firms with ________ design issues

Reuse

Short term considerations in determining capacity requirements include:

Seasonal demand variations

Product design and choice of location are examples of ________ decisions

Strategic

identify the three major functional areas of organizations and describe how they interrelate

The three major areas are operations, finance, and marketing/sales. Finance and operations management personnel cooperate by exchanging information and expertise in such activities like budgeting, investment proposals and provisions of funds. Marketing and production must work closely together to successfully implement design changes to develop and produce new products.

At the break-even point

Total cost equals total revenue

Quality function deployment

an approach that integrate the "voice of the customer" into both product and service developments

bottleneck operation

an operation in a sequence of operations whose capacity is lower than that of the other operations

Schematic models

are more abstract than their physical counterparts, they have less resemblance to their physical reality. Graphs and charts are examples

Mathematical models

are the most abstract

Theory y

assumed that workers enjoy the physical and mental aspects of work and become committed to work

Theory X

assumed workers do not like to work and have to be controlled

The substitution of machinery that has sensing and control devices for human labor is best described by the term:

automation

concurrent engineering

bringing engineering design and manufacturing personnel together early in the design phase

irregular variation

caused by unusual circumstances, not reflective of typical behavior

A product-focused, single-piece flow, pull production system would be called a:

cellular layout

Order winners

characteristics of an organization's goods or services that cause it to be perceived as better than the competition

Order qualifier

characteristics that customers perceive as minimum standards of accept ability to be considered as potential purchase

Theory Z

combined the Japanese approach with such features as lifetime employment, employee problem solving, and consensus building

Computer-integrated manufacturing integrates ______________ with manufacturing.

information from across the organization

Computer-integrated manufacturing integrates ______________ with manufacturing.marketing strateg

information from across the organization

Dephi method

iterative process in which managers and staff complete a series of questionnaires, each developed from the previous one, to achieve consensus forecast

The estimation of costs is generally most difficult when the ___________ process has been chosen.

job shop

fixed position layout

layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed

product layout

layout that uses standardization processing operations to achieve smooth, rapid, high volume flow

product or service profiling

linking key product or service requirements to process capabilities

trend

long term upward movement in data

Physical model

look like their real life counterparts

numerically controlled machines

machines that perform operations by following mathematical processing instructions

seasonal relative

percentage of average or trend

Strategy

plans for achieving company goals

Bias

president's tendency for forecasts to be greater or less than the actual values of a time series

Which of the following is not a primary concern for process selection?

pricing strategy

Six Sigma

process for reducing costs, improving quality, and increasing customer satisfaction

computer-aided designing

product design using computer graphics

Mission

reason for the company's existence

remanufacturing

refurbishing used by replacing worn-out or defective components

random variation

residual variations after all other behaviors are accounted for

seasonality

short term regular variations related to calendar or time of day

Forecast

statement about the future value of a variable of interest

moving average

technique that averages a number of recent actual values, updated as new values become available

cradle to grave assessment

the assessment of the environment impact of a product or service throughout its useful life

Mean Absolute Deviation (MAD)

the average absolute forecast error

Mean absolute percent error (MAPE)

the average absolute percent error

mean time between failures

the average length of time between failures of a product or component

Mean Squared Error (MSE)

the average of squared forecast errors

manufacturability

the capability of an organization to produce an item at an acceptable profit

serviceability

the capability of an organization to provide a service at an acceptable cost or profit

Value added

the difference between the cost of inputs and the value or price of outputs

service delivery system

the facilities, processes, and skills needed to provide a service

availability

the fraction of time piece of equipment is expected to be available for operation

group technology

the grouping into part families of items with similar designs or manufacturing characteristics

Operations Management

the management of systems or processes that create goods and provide services

Design capacity

the maximum designed service capacity or output rate

service package

the physical resources needed to perform the service, the accompanying goods, and the explicit and implicit services