Name: Production Operations Management – Flashcards
Rating: 4.2 (852 reviews)

question

10 Strategic OM Decisions

answer

1. Design of goods and services 2. Managing quality 3. Process and capacity design 4. Location strategy 5. Layout strategy 6. Human resources and job design 7. Supply chain management 8. Inventory management 9. Scheduling 10. Maintenance

question

Services

answer

economic activities that typically produce an intangible product (such as education, entertainment, lodging, government, financial, and health services)

question

Service Sector

answer

the segment of the economy that includes trade, financial, lodging, education, legal, medical, and other professional occupations

question

Productivity

answer

the ratio of outputs (goods and services) divided by one or more inputs (such as labor, capital, or management)

question

Single-factor Productivity

answer

indicates the ratio of one resource (input) to the goods and services produced (outputs)

question

Multi-factor Productivity

answer

indicates the ratio of many or all resources (inputs) to the goods and services produced (outputs)

question

Productivity Variables

answer

the three factors critical to productivity improvement- labor, capital, and the art and science of management

question

Knowledge Society

answer

a society in which most of the labor force has migrated from manual work to work based on knowledge

question

Stakeholders

answer

those with a vested interest in an organization- including customers, distributors, suppliers, owners, lenders, employees, and community members

question

Organize to Produce Goods and Services

answer

Three functions performed by every organization to produce goods and services: 1. Marketing- which generates demand 2. Production/Operations- which creates the product 3. Finance/Accounting- which tracks how well the organization is doing, pays the bills, and collects the money

question

The Supply Chain

answer

Firms rely on a variety of suppliers who provide everything from raw materials to accounting services, and when taken together, they can be thought of as a supply chain

question

Why OM?

answer

Operation Management is studied for 4 reasons: 1. We want to know how people organize themselves for productive enterprise 2. We want to know how goods and services are produced 3. We want to understand what operations managers do 4. It is such a costly part of an organization

question

What Operations Managers Do

answer

Planning Organizing Staffing Leading Controlling

question

Heritage of OM

answer

Eli Whitney is credited for the early popularization of interchangeable parts Fredrick W. Taylor is known as the father of scientific management Taylor and his colleagues, Henry L. Gantt and Frank and Lillian Gilbreth, were among the first to systematically seek the best way to produce

question

Productivity Challenge

answer

The creation of goods and services requires changing resources into goods and services The more efficiently we make this change, the more productive we are and the more value is added to the good or service provided The improvement of productivity can be made in two ways: 1. Reducing inputs while keeping outputs constant 2. Increasing output while keeping input constant High production may imply only that more people are working and that employment levels are high (low unemployment), but it does not imply high productivity Only through increasing productivity can the standard of living improve Only through increases in productivity can labor, capital, and management receive additional payments If returns to labor, capital, and management are increased without increase in productivity, prices rise Downward pressure is placed on prices when productivity increases because more is being produced with the same resources

question

Measurement Problems of Multifactor Productivity

answer

Quality may change while the quantity of inputs and outputs remain constant External elements may cause an increase or decrease in productivity for which the system under study may not be directly responsible Precise units of measure may be lacking

question

Productivity increases are dependent on three productivity variables

answer

1. Labor 2. Capital 3. Management

question

Differentiation

answer

distinguishing the offerings of an organization in a way that the customer perceived as adding value

question

Experience Differentiation

answer

engaging a customer with a product through imaginative use of the five senses, so the customer "experiences" the product

question

Low Cost Leadership

answer

achieving maximum value, as perceived by the customer

question

Response

answer

a set of values related to rapid, flexible, and reliable performance

question

Resources View

answer

a method managers use to evaluate the resources at their disposal and manage or alter them to achieve competitive advantage

question

Value Chain Analysis

answer

a way to identify those elements in the product/service change that uniquely add value

question

5 Forces Model

answer

the method of analyzing the five forces in the competitive environment: 1. immediate rivals 2. potential entrants 3. customers 4. suppliers 5. substitute products

question

Activity Map

answer

a graphical link of competitive advantage, KSFs, and supporting activities

question

Theory of Comparative Advantage

answer

a theory which states that countries benefit from specializing in (and exporting) goods and services in which they have relative advantage, and they benefit from importing goods and services in which they have a relative disadvantage

question

Multinational Corporation

answer

a firm that has extensive involvement in international business, owning or controlling facilities in more than one country

question

International Strategy

answer

a strategy in which global markets are penetrated using exports and licenses

question

Multidomestic Strategy

answer

a strategy in which operating decisions are decentralized to each country to enhance local responsiveness

question

Global Strategy

answer

a strategy in which operating decisions are centralized and headquarters coordinates the standardization and learning between facilities

question

Transnational Strategy

answer

a strategy that combines the benefits of global-scale efficiencies with the benefits of local responsiveness

question

A Global View of Operations and Supply Chains

answer

Reasons why domestic business operations decide to change to some form of international organization: Improve supply chain Reduce costs improve operations Understand markets Improve products Attract and retain global talent

question

Developing Missions and Strategies

answer

Mission statements provide boundaries and focus for organizations and the concept around which a firm can rally The missions states the rationale for the organization's existence Each functional area has a strategy for achieving its mission and for helping the organization reach the overall mission Firms achieve missions in three ways: Differentiation Cost leadership Response This means that operation managers are called on to deliver goods and services that are: Better (or at least different) Cheaper More responsive Operations managers translate these strategic concepts into tangible tasks to be accomplished

question

Achieving Competitive Advantage through Operations

answer

For each of the three strategies provides opportunity for operations managers to achieve competitive advantage

question

Competing on Differentiation

answer

Concerned with providing uniqueness Opportunities for creating uniqueness are not located within a particular function or activity but can arise in virtually in everything the firm does Differentiation should be considered going above and beyond both physical characteristics and service attributes to encompass everything about the product or service that influences the value that consumers derive from it Disney does this with the magic kingdom- they don't just go on a ride they are surrounded by dynamic visual and sound experiences that complement the physical ride Similar to a theme restaurant like Hard Rock Cafe

question

Competing on Cost

answer

One driver of a low cost strategy is a facility that is effectively utilized Identifying the optimum size allows firms to spread overhead cost, providing the cost advantage Cost cutting Effectively match capacity to demand and utilize this capacity Example: A belgian discount food retailer is an aggressive cost cutter that utilizes converted factory warehouses, movie theaters, and garages as outlets

question

Competing on Response

answer

Often thought of as a flexible response but also refers to reliable and quick response Flexible: the ability to match changes in a marketplace where design innovations and volumes fluctuate substantially Reliability of scheduling: meaningful schedules and perform to them and they are communicated to the customer Quickness of a response: speed in product development, production, and delivery

question

Issues in Operation Strategy

answer

Issues are dealt with via a combination of three methods: Five forces model Value chain analysis Resources view

question

Critical path method (CPM)

answer

a project management technique that uses only one time factor per activity

question

Critical path

answer

the computed longest time paths through a network

question

Dummy Activity

answer

an activity having no time that is inserted into a network to maintain the logic of the the network→ aka the start node

question

Forward Pass

answer

a process that identifies all the early start and early finish times

question

Backward Pass

answer

an activity that finds all the late start and late finish times

question

Slack Time

answer

free time for an activity, also known as free float or free slack

question

Optimistic Time

answer

the "best" activity completion time that could be obtained in a PERT network

question

Pessimistic Time

answer

the "worst" activity time that could be expected in a PERT network

question

Crashing

answer

shortening activity time in a network to reduce time on the critical path so total completion time is reduced

question

Management of Projects (3 Phases)

answer

Planning: This phase includes goal setting, defining the project, and team organization Scheduling: This phase relates people, money, and supplies to specific activities and relates activities to each other Controlling: Here the firm monitors resources, costs, quality, and budgets. It also revises or changes plans and shifts resources to meet time and cost demands

question

Project Planning

answer

Project organization might be most helpful when: Work task can be defined with a specific goal and deadline The job is unique or somewhat unfamiliar to the existing organization The work contains complex interrelated tasks requiring specialized skills The project is temporary but critical to the organization The project cuts across organizational lines

question

Project Scheduling

answer

Involves sequencing and allotting time to all project activities One popular scheduling approach is the Gannt chart Gannt charts are low cost means of helping managers make sure that: Activities are planned Order of performance is documented Activity time estimates are recorded Overall project time is developed Project scheduling serves many purposes: Shows the relationship of each activity to others and to the whole project It identifies the precedence relationships among activities It encourages the setting of realistic time and cost estimates for each activity It helps make better use of people, money, and material resources by identity critical bottleneck in the project

question

Project Controlling

answer

The control of projects involves close monitoring of resources, costs, quality, and budgets Control also means using a feedback loop to revise the project plan and having the ability to shift resources to where they are needed most. PERT/CPM- these programs produce a broad variety of reports including: Detailed cost breakdowns for each task Total program label curves Cost distribution tables Function costs and hour summaries Raw material and expenditure forecast Variance reports Time analysis reports Work status reports

question

Framework of PERT and CPM

answer

Six basic steps: Define the project and prepare the work breakdown structure Develop the relationships among the activities, decide which activities must precede and follow others Draw the network connecting all the activities Assign time and or cost estimates to each activity Compute the longest time path through the network (the critical path) Use the network the help plan, schedule, and monitor and control the project The activities on the critical path represent tasks that will delay the entire project

question

Network Diagrams and Approaches

answer

The first step in a PERT or CPM network is to divide the entire project into significant activities in accordance with the work breakdown structure Two approaches for drawing a project network: Activity On Node (AON) Activity on Arrow (AOA) Activities consume time and resources The basic difference between AON and AOA is that the nodes in an AON diagram represent activities In an AOA network, the nodes represent the starting and finish times of an activity and are also called events (consume neither time nor resources) Many offices only use AON**

question

Determining the Project Schedule

answer

To find the critical path, we calculate two distinct starting and ending times for each activity: Earliest start (ES): earliest time at which an activity can start assuming all predecessors have been completed Earliest finish (EF) earliest time at which an activity can be finished Latest start (LS): latest time an activity can start so as to not delay the completion time of the entire project Latest finish (LF): latest time an activity has to finish so as to not delay the completion time of the entire project We use a two pass project consisting of a forward pass and a backwards pass to determine the time schedules for each activity The early start and early finish times are determined by the forward pass The late start and late finish times are determined by the backwards pass Early= forward Backward= late

question

AON Steps

answer

Start node: all zeros Enter activity time for all nodes ES is the MAX EF from immediate predecessors Forward pass: ES + Activity Time = EF Finish node: ES = LS; EF = LF LF is the MIN LS from immediate predecessors Backward pass: LF - Activity Time = LS Slack= (ES - LS) or (EF - LF) Critical path= longest time path Total project time = sum of all activity times on the critical path

question

Earliest start time rule

answer

before an activity can start ALL of its immediate predecessors must be finished If an activity has only a single immediate predecessor, its ES equals the EF of the predecessor If an activity has multiple immediate predecessors, its ES is the maximum of all EF values of its predecessors (ES= max of all immediate predecessors

question

Earliest finish time rule

answer

the earliest finish time, EF, of an activity is the sum of its easiest start time, ES, and its activity time EF= ES + activity time

question

Latest finish time rule

answer

this rule is again based on the fact that before an activity can start, all its immediate predecessors must be finished If an activity is an immediate predecessor for just a single activity, its LF equals the LS of the activity that immediately follows If an activity is an immediate predecessor to more than one activity, its LF is the minimum of all LS values of all activities that immediately follow it LF = minimum(LS of all immediate follow activities)

question

Latest start time rule

answer

the latest start time, LS, of an activity, is the difference of its latest finish life, LF, and its activity time LS = LF - activity time Calculating Slack time (the length of time an activity can be delayed without delaying the entire project) Slack = LS - ES or Slack = LF - EF

question

Economic Forecasts

answer

planning indicators that are valuable in helping organizations prepare in medium to long range forecasts

question

Technological Forecasts

answer

long term forecasts concerned with the rates of technological progress

question

Demand Forecasts

answer

projections of a company's sales for each time period in the planning horizon

question

Quantitative Forecasts

answer

forecasts that employ mathematical modeling for forecast demand

question

Qualitative Forecasts

answer

forecasts that incorporate such factors as the decision maker's intuition, emotions, personal experiences, and value system

question

Jury of Executive Opinion

answer

a forecasting technique that uses the opinions of a small group of high level managers to form a group estimate of demand

question

Delphi Method

answer

a forecasting technique using a group process that allows experts to make forecasts

question

Sales Force Composite

answer

a forecasting technique based on salespersons estimates of expected sales

question

Market Survey

answer

a forecasting technique that solicits input from customers or potential regarding future purchasing plans

question

Time Series

answer

a forecasting technique that uses a series of past data points to make a forecast predict on the assumption that the future is a function of the past. they look at what has happened over a period of time and use a series of past data to make a forecast

question

Naive Approach

answer

a forecasting demand that assumes which demand in the next period is equal to the demand in the most recent period

question

Moving Averages

answer

a forecasting method that uses an average of the n most recent periods of data to forecast the next period

question

Exponential Smoothing

answer

a weighted moving average forecasting technique in which data points are weighted by an exponential function

question

Smoothing Constant

answer

the weighting factor used in exponential smoothing forecast, a number greater than or equal to 0 and less than or equal to 1

question

Trend Projection

answer

a time series projection method that fits a trend line to a series of historical data points and then projects the line into the future of forecasts

question

Seasonal Variations

answer

regular upward or downward movements in a time series that tie to recurring events

question

What is Forecasting?

answer

Forecasting may involve taking historical data, such as past sales, and projecting them into the future with a mathematical model

question

Time Horizons

answer

usually classified by the future time horizon that it covers time horizons fall under 3 categories: short range forecast- time span of up to one year, but is generally less than 3 months. it is used for planning purchasing, job scheduling, work force levels, job assignments, and production levels medium range forecast- intermediate forecast generally spans from 3 months to 3 years. it is used in sales planning, production planning, and budgeting, cash budgeting, and analysis of various operating plans long range forecasting- generally 3 years or more in time span. used in planning for new products, capital expenditures, facility location or expansion, and research and development the forecast is the only estimate of demand until the actual demand becomes known

Production Operations Management – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards