Operations Management Exam 1-Definitions – Flashcards
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an international organization that promotes world trade by lowering barriers to the free flow of goods across borders
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World Trade Organization
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a free trade agreement between US, Mexico, and Canada
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NAFTA
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the purpose or rationale for an organization's existence
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Mission
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how an organization expects to achieve its missions and goals
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Strategy
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the creation of a unique advantage over competitors
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Competitive Advantage
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distinguishing the offerings of an organization in a way that the customer perceives as adding value
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Differentiation
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engaging a customer with a product through imaginative use of the five senses, so the customer experiences the product
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Experience Differentiation
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achieving maximum value, as perceived by the customer
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Low-cost Leadership
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a set of values related to rapid, flexible, and reliable performance
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Response
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a method managers use to evaluate the resources at their disposal and manage or alter them to achieve competitive advantage
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Resources View
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a way to identify those elements in the product/service chain that uniquely add value
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Value-Chain Analysis
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a method of analyzing the five forces in the competitive environment
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Five Forces Model
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a method of determining internal strengths and weaknesses and external opportunities and threats
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SWOT Analysis
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activities or factors that are key to achieving competitive advantage
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Key Success Factors
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a set of skills, talents, and capabilities in which a firm is particularly strong
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Core Competencies
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a graphical link of competitive advantages, KSFs, and supporting activities
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Activity Map
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transferring a firm's activities that have traditionally been internal to external suppliers
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Outsourcing
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a firm that engages in cross border transactions
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International Business
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a firm that has extensive involvement in international business, owning or controlling facilities in more than one country
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Multinational Corporations
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a strategy in which global markets are penetrated using exports and licenses
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International Strategy
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a strategy in which operating decisions are decentralized to each country to enhance local responsiveness
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Multi domestic Strategy
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a strategy in which operating decisions are centralized and headquarters coordinates the standardization and learning between facilities
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Global Strategy
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a strategy that combines the benefits of global-scale efficiencies with the benefits of local responsiveness
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Transnational Strategy
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this phase includes goal setting, defining the project, and team organization
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Planning
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this phase relates people, money, and supplies to specific activities and relates activities to each other
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Scheduling
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here the firm monitors resources, costs, quality, and budgets
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Controlling
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an organization formed to ensure that programs receive the proper management and attention
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Project Organization
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a hierarchical description of a project into more and more detailed components
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Work breakdown Structure
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planning charts used to schedule resources and allocate time
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Gantt Charts
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a project management technique that employs three time estimates for each activity
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PERT
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a project management technique that uses only one time factor per activity
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CPM
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the computed longest time path through a network the activities on the critical path represent tasks that will delay the entire project if they are not completed on time
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Critical Path
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a network diagram in which nodes designate activities
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Activity-on-node AON
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a network diagram in which arrows designate activities
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Activity-on-arrow AOA
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a process that helps determine a project schedule
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Critical Path Analysis
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earliest time at which an activity can start, assuming all predecessors have been completed
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Earliest Start
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earliest time at which an activity can be finished
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Earliest Finish
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latest time at which an activity can start so as to not delay the completion time of the entire project
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Latest Start
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latest time by which an activity has to finish so as to not delay the completion time of the entire project
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Latest Finish
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a process that identifies all the early times
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Forward Pass
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an activity that finds all the late start and late finish times
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Backward Pass
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free time for an activity length of time an activity can be delayed without delaying the entire project
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Slack Time
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the best activity completion time that could be obtained in a PERT network
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Optimistic Time
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the worst activity time that could be expected in a PERT network
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Pessimistic Time
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the most probable time to complete an activity in a PERT network
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Most likely time
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shortening activity time in a network to reduce time on the critical path so total completion time is reduced
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Crashing
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the art and science of predicting future events
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Forecasting
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this forecast has a time span of up to one year but is generally less than 3 months
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Short-range forecast
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spans from 3 months to 3 years
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Medium-range forecast
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generally 3 years or more in time span
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Long-range forecast
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planning indicators that are valuable in helping organizations prepare medium to long-range forecast
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Economic Forecast
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long-term forecasts concerned with the rates of technological progress
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Technological Forecasts
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projections of a company's sales for each time period in the planning horizon
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Demand Forecast
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forecasts that employ mathematical modeling to forecast demand
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Quantitative Forecast
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forecasts that incorporate such factors as the decision maker's intuition, emotions, personal experiences, and value system
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Qualitative Forecasts
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a forecasting technique that uses the opinion of a small group of high-level managers to form a group estimate of demand
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Jury of Executive Opinion
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a forecasting technique using a group process that allows experts to make forecasts decision makers, staff personnel, and respondents
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Delphi Method
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a forecasting technique based on salespersons' estimates of expected sales
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Sales Force Composite
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a forecasting method that solicits input from customers or potential customers regarding future purchasing plans
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Market Survey
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a forecasting technique that uses a series of past data points to make a forecast
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Time Series
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the gradual upward or downward movement of the data over time
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Trend
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a data pattern that repeats itself after a period of days, weeks, months, or quarters
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Seasonality
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patterns in the data that occur every several years
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Cycles
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blips in the data caused by chance and unusual situations
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Random Variations
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a forecasting technique which assumes that demand in the next period is equal to demand in the most recent period
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Naive Approach
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a forecasting method that uses an average of the n most recent periods of data to forecast the next period
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Moving Averages
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a weighted-moving-average forecasting technique in which data points are weighted by an exponential function
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Exponential Smoothing
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the weighting factor used in an exponential smoothing forecast, a number greater than or equal to 0 and less than or equal to 1
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Smoothing Constant
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a measure of the overall forecast error for a model
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Mean Absolute Deviation
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the average of the squared differences between the forecasted and observed values
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Mean Squared Error
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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
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Trend Projection
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regular upward or downward movements in a time series that tie to recurring events
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Seasonal Variations
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a straight-line mathematical model to describe the functional relationships between independent and dependent variables
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Linear-regression Analysis
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a measure of the strength of the relationship between two variables
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Coefficient Correlation
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an associative forecasting method with more than one independent variable
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Multiple Regression
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a measurement of how well a forecast is predicting actual values
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Tracking Signal
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a forecast that is constantly higher or consistently lower than actual values of a time series
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Bias
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an approach to exponential smoothing forecasting in which the smoothing constant is automatically changed to keep errors to a minimum
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Adaptive Smoothing
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forecasting that tries a variety of computer models and selects the best one for a particular application
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Focus forecasting
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the ability of a product or service to meet customer needs
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Quality
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quality lies in the eyes of the beholder
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User Based
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believe that quality means conforming to standards and making it right the first time
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Manufacturing Based
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views quality as a precise and measurable variable
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Product Based
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an organization can expect its reputation for quality to follow it
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Company Reputation
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the courts hold organizations that design, produce, or distribute faulty products or services liable for damages or injuries resulting from their use
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Product Liability
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for both a company and a country to compete effectively in the global economy, products must meet global quality, design, and price expectations
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Global Implications
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the cost of doing things wrong, that is the price of nonconformance
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Cost of quality
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costs associated with reducing the potential for defective parts or services
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Prevention Costs
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costs related to evaluating products, processes, parts and services
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Appraisal Costs
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costs that result from production of defective parts or services before delivery to customers
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Internal Failure Costs
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costs that occur after delivery of defective parts or services
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External Failure Costs
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management of an entire organization so that it excels in all aspects of products and services that are important to the customer
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Total Quality Management
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a never-ending process of continuous improvement that covers people, equipment, suppliers, materials, and procedures
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Continuous Improvement
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a continuous improvement model of plan, do, check, act
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PDCA
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a program to save time, improve quality, and lower costs
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Six Sigma
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defines, measures, analyzes, improves, and controls
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DMAIC
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enlarging employee jos so that the added responsibility and authority is moved to the lowest level possible in the organization
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Employee Empowerment
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a group of employees meeting regularly with a facilitator to solve work-related problems in their work area
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Quality Circle
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selecting a demonstrated standard of performance that represents the very best performance for a process or an activity
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Benchmarking
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designed to produce or deliver goods just as they are needed
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Just in Time JIT
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products that are consistently built to meet customer needs in spite of adverse conditions in the production process
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Quality Robust
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identifies all costs connected with poor quality and shows how these costs increase as the product moves away from being exactly what the customer wants
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Quality loss function
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a philosophy of continuous improvement to bring a product exactly on target
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Targeted-oriented Quality
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any kind of form that is designed for recording data
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Check Sheets
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show the relationship between two measurements
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Scatter Diagrams
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a schematic technique used to discover possible locations of quality problems
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Cause-and-effect diagram
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a graphic way of classifying problems by their level of importance, often ruled as the 80/20 rule
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Pareto Charts
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block diagrams that graphically describe a process or system
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Flowcharts
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a process used to monitor standards, make measurements, and take corrective action as a product or service is being produced
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Statistical Process Control
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graphic presentations of process data over time, with predetermined control limits
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Control Charts
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a means of ensuring that an operation is producing at the quality level expected
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Inspection
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controlling or monitoring at the point of production or purchase at the source
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Source Inspection
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it has come to mean a device or technique that ensures the production of a good unit every time
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Poka-yoke
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a type of poke-yoke that lists the steps needed to ensure consistency and completeness in a task
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Checklist
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an inspection that classifies items as being either good or defective
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Attribute Inspection
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classifications of inspected items as falling in a continuum scale, such as dimension or strength
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Variable Inspection
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training and empowering frontline workers to solve a problem immediately
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Service Recovery
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variability that affects every production process to some degree and is to be expected; also known as common cause
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Natural Variations
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variation in a production process that can be traced to specific causes
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Assignable Variation
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a quality control chart for variables that indicates when changes occur in the central tendency of a production process
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x bar chart
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a control chart that tracks the range within a sample; it indicates that a gain or loss in uniformity has occurred in dispersion of a production process
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R chart
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a quality control chart that is used to control attributes
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P chart
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a quality control chart used to control the number of defects per unit of output
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C chart
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a test used to examine the points in a control chart to see if nonrandom variation is present
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Run Test
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the ability to meet design specifications
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Process Capability
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a method of measuring random samples of lots or batches of products against predetermined standards
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Acceptance Sampling
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the mistake of having a producer's good lot rejected through sampling
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Producer's Risk
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the mistake of a customer's acceptance of a bad lot overlooked through sampling
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Consumer's Risk
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the quality level of a lot considered good
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Acceptable Quality Level
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statistically, the probability of rejecting a good lot
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Type I Error
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statistically, the probability of accepting a bad lot
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Type II Error
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the percentage of defective in an average lot of goods inspected through acceptance sampling
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Average Outgoing Quality
