operations management

operations

the part of a business/organization that is responsible for producing goods and/or services--planning, coordinating, controlling assets to create goods and services

value-added

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

primary supply chain

those who actually touch the good or service

secondary supply chain

not directly interacting with the product, supporting the primary chains (ex. HR, Finance)

Transformation process

inputs -> transformation adds value -> outputs (goods/services)

Inputs

Land, labor, capital, technology, energy

Operations impacts...

all financial statements

competitiveness

how effectively an organizations meets the wants and needs of customers relative to other that offer similar goods

mission

the reason for the existence of an organization

goals

provide detail and scope of the mission, foundation of the development for strategies

strategies

plans for achieving organizational goals

tactics

the methods and actions taken to accomplish strategies

core competencies

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

order qualifiers

characteristics that customers perceive as minimum standards of acceptability to be considered as a potential for purchase

order winners

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

external factors

economic conditions, political conditions, legal environment, technology, competition, markets

internal factors

HR, facilities and equipment, financial resources, customers, products and services, technology, suppliers, etc.

the Balanced Scorecard

used to clarify vision, link departmental objectives to strategy and transform to action
-financial
-customer
-internal business processes
-learning and growth focus

productivity

a measure of effective use of resources
ratio of output to input
output/input

productivity growth

current productivity - previous productivity/previous productivity

distinctive competency

better competencies than anyone else in the industry

forecast

an estimate about the future value of a variable such as demand
better estimates = better informed decisions
1. expected level of demand
2. accuracy

steps in forecast process

1. determine the purpose
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 errors
7. additional action

error =

actual - forecast

forecast accuracy tools

MAD, MSE, MAPE

MAD

mean absolute deviation;
average absolute forecast error
weights all errors evenly, easiest, least useful

MSE

mean squared error;
weights errors according to squared values
squares will magnify the errors and make a positive value

MAPE

mean absolute percent error;
weights according to relative error, puts errors in perspective and allows for comparison

qualitative

consist mainly of subjective inputs (soft data)

quantitative

involve project of historical data or the development of associative models that attempt to utilize causal variables to make a forecast

judgmental forecasts

use subjective inputs such as opinions from consumer surveys, sales staff, managers, etc. provides insights.

time-series forecasts

project patterns identified in recent time-series observations, use historical data of trend, seasonality, cycles, irregular variations, random variations

Naive method

forecast for any period that equals the previous periods actual value, the last data point becomes the forecast for the next period

moving average

uses a number of recent, actual values, updated as new values become available

weighted moving average

typically assigns more weight to the most recent values in a time series, more reflective of the most recent occurrences

exponential smoothing

each new forecast is based on a previous forecast + a % of the difference between that forecast and the actual value of the series at that point
next forecast = previous + (% of error)(actual - previous)

The function that is part of every business organization that produces products and/or delivers services is the ___ function

operations

Which of the following is a key difference between the production of goods and the delivery of services?

the feasibility of using inventory

operations and sales are ___ functions; all other functions are ___ functions

line; support

one thing that must be managed in all processes is

variability

viewing decisions in the context of the big picture is a key element of this approach

systems approach

measurements taken at various point in the transformation process for control purposes are called

feedback

a key difference between the production of goods and the performance of services is

service workers require less training than manufacturing workers

operations management includes all of these activities except:

assessing consumer wants and needs

which type of variation is the result of a deliberate choice of a business?

variety

the fact that improvements in a few key factors will have a major impact on operations is associated with this name:

Pareto

The 'father of scientific management' was

Taylor

Which one of these is not one of the ethical principles?

utilization

which of the following is not true about the systems approach?

focuses on achieving efficiency within subsystems

the needs for supply chain management is increasing for all of the following reasons except

labor laws

a key reason that companies resort to outsourcing is to

reduce costs

a mission statement should answer the question

what business are we in?

two factors that tend to have almost universal strategic operations importance are:

time and quality

productivity measures output relative to

inputs

The _____ helps managers focus their attention on strategic issues and strategy implementation

Balanced Scorecard

Balanced Scorecard componets

Financial, customers, internal business processes, learning and growth

an order winner is:

a superior factor

order qualifier

minimal standards

what are an organization's goals based on

its mission

special attributes or abilities that give organizations a competitive edge are

core competencies

which is a useful contributor to a strategy of mass customization?

modular design and delayed differentiation

one of the disadvantages of standardization is

early freezing of product designs

robust design

Taguchi

which of these specifies that a product must be suitable for its intended use?

the Uniform Commercial Code

voice of the customer

quality function deployment

the term associated with incorporating customer ideas in product design is

quality function deployment

modular design creases product variety

false, it reduces it

what term closely relates to remanufacturing?

recycling

the process of dismantling and examining a competitor's product to get design ideas

reverse engineering

service design often differs from product design how?

customer interface and interaction

the ability of a product, part or service to perform its intended function under an appropriate set of conditions is

reliability

production design and manufacturing personnel being brought together early in the design process is

concurrent engineering

describing and analyzing a proposed service is often done by using a

service blueprint

exponential smoothing

accounts for error
next forecast = previous forecast + (smoothing constant percentage)(actual - previous)
quickness of forecast adjustment to error is determined by the smoothing constant. the closer its value is to zero, the slower the forecast will be t

Delphi method

managers and staff complete a series of questionnaires for forecasting, qualitative forecasting technique

tracking signal

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

If an analyst wants to make a moving average more responsive to change, the analyst should

decrease the number of data points in the average

MAD

mean absolute deviation, sum of all absolute errors/number of data points(or periods)

MSE

mean squared error
sum of all errors squared/number of data points(or periods) - 1

MAPE

(sum of all absolute errors/actual data) X 100/number of periods

which term is most closely associated with a tracking signal?

MAD

what is a good reason to use a sales force composite forecast?

they are often aware of customers future plans

one feature common to good forecasting is that a good forecast's ____ outweigh its ____.

benefits; costs

which is not typically accounted for in time-series forecasting?

random variation

in monitoring forecasts, bias is commonly assessed with ____ while nonrandomness is commonly assessed with ____.

tracking signals; control charts

The first step in location planning and analysis is:

determine the criteria upon which the decision will be made

which statement about location decisions is not true?

the goal is to find the optimal location

multiple plant manufacturing strategies include all of these except:

core plant

which reason would not generally be cited for locating in a third world country?

nearness to markets

which one is not usually listed as a regional factor in location decisions?

taxes

the tool that provides demographic information for location analysis is the:

geographic information system

location planning for a secondary school would most likely focus on factors of a:

site

which of the following considerations would not typically enter into location decisions regarding services?

proximity to raw materials

locating manufacturing plans such that they serve particular geographic segments is a ______ plant strategy

market area

effective capacity cannot be:

in excess of design capacity

the max output rate or service rate that is possible is called the ___ capacity

design

the ratio or actual output to effective capaity is called the

efficiency ratio

the actual output to design capacity is called the

utilization ratio

the capacity cushion is the difference between ___ and ___.

capacity and expected demand

when an economy of scale is in play, if the _____ is less than ideal, increasing it will result in lower ____.

output; avg unit costs

which is not a determinant of effective capacity?

product life cycle

which does not enhance developing capacity alternatives?

staying focused on quantitative factors

which is the primary input in capacity planning?

demand forecasts

which is not necessarily a special factor in planning service capacity?

demand volatility

which is not a reason for diseconomies of scale?

fixed costs are spread over more units

deciding to pay another organization to produce a good or provide a service is an example of:

outsourcing

which processing system would be least likely to have special-purpose equipment?

job shop

2 key factors in service layout design are :

customer contact; customization

a malfunctioning cable tv converter would most likely be repaired in what type of layout?

process

wich system has the least flexibility?

continuous

which type of operation would be most closely associated with division of labor?

assembly

the type of layout that would be used to build a submarine is:

fixed-position

which processing system would be the least efficient choice for producing a standrd pair of shoes?

job shop

which type of processing system would most likely be used to produce smart phones?

assembly

product or service profiling links key product or service requirements to:

process capabilities

which of these does not relate to design process layouts?

equalizing times of workstations

in a Muther closeness grid, which symbol is used for a location if closeness is not important?

U

In a Muther closeness grid, which symbold reflects the greatest importance for closeness?

A

which one of the following involves a group of machines that involve supervisory computer control and automatic material handling?

flexible manufacturing system

group technology is often related to:

cellular manufacturing

in a statistical process control, attributes are characteristics that can be

counted

narrowing control limits from 3 to 2s will increase the probability of making a ____ error

Type II error

a point which is outside of the lower control limit on a c-chart

should be investigated because an assignable cause of variation might be present

the ____ the sample size, the ____ the sampling distibution

larger, less variable

which type of control chart would be appropriate if the variable being monitored is the number of students absent from section 1 of a statistics class?

P-chart

We are monitoring a process that has an outcome that is normally distributed with a mean of 100 and a standard deviation of 10. we would use ____ to evalute whether this process's average is remaining in control

x-bar charts

We are monitoring a process that has an outcome that is normally distributed with a mean of 100 and a standard deviation of 10. We would use ___ to evaluate whether this process's variability is remaining in control

R-charts

we are monitoring a process that has an outcome that falls into one of two categories. We would use a __ to evaluate whether this process is remaingin in control

p-charts

If a process that falls out of statistical control continues to produce a very large proportion of output that is acceptable, that process must be highlly

capablle

the ratio of a centered process's specification width to its process width is called the

capability index

if a process is not centered within its specification interval, use of the basic capability index, Cp, will lead to an assessment of capability that is:

inflated

aggregate planning typically covers a time interval of

eighteen months

in aggregate planning, planners avoid focusing on individual products or services because

focusing on a group of similar products or services tends to be more accurate

which of the following is not a "supply option" for aggregate planning?

adjusting pricing

keeping producting at essentially a constant rate is known as a

level plan

which of the following is true about a chase strategy?

labor utilization costs tend to be higher

which of the following is an advantage of a level approach?

less hiring

which of the following would make a chase approach more attractive than a level one?

an increase in back order costs

the feasibility of the proposed master schedule is assessed using the

rough-cut capacity plan

disaggregating the aggregate plan relates to

master scheduling

which of these is not considered to be a capacity option?

use of backorders

which of these is not a disadvantage of a level approach as compared to a chase approach?

varying workforce levels

the terms frozen, slushy, and liquid are most closely associated with

time fences

the term available-to-promise is most closely associated with

master production scheduling

which one of these is not related to the master scheduling process?

yield management