Operations management exam 1 Study guide

Operations
The part of a business organization that is responsible for producing goods or services
Goods
physical items that include raw materials, parts, subassemblies, and final products. (e.g. tables, chair, TV, laptop, etc.)
Services
intangible activities that provide some combination of time, location, form or psychological value. (e.g. social networking, air travel, education etc.)
Operations Management
The management of systems or processes that create goods and/or provide services
Model
an abstraction of reality; a simplification of something
supply chain
a sequence of activities and organizations involved in producing and delivering a good or service
competitiveness
How effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services
Mission
The reason of an organization’s existance
Goals
can be viewed as organizational destinations. Help provide detail and scope of the organization’s mission.
Strategy
A plan for acheiving organizational goals
Tactics
The “how to” part of the process
Strategy formulation
Requires taking into account core competencies and environmental scanning
SWOT Analysis
Part of environmental scanning that examnines strengths, weaknesses, opportunities, and threats.
Order qualifiers
Characteristics that customers perceive as minimum standards of acceptability for a product or service to be considered as a potential for purchase
Order winners
Characteristics of an organization’s goods or services that cause it to be perceived as better than the competition
Balanced scorecards
a top-down management system that organizations can use to clarify their vision and strategy and transform them into action
Productivity
A measure of the effective use of resources, usually expressed as the ratio of output to input
Productivity
output/input (output divided by input)
Multifactor Productivity
Output/ Labor+Materials+Overhead
Productivity Growth
(Current Productivity-Previous Productivity)/ Previous productivity X 100
Decision Theory
A general approach to decision making that is suitable to a wide range of operations management decisions
Bounded Rationality
The limitations on decision making caused by costs, human abilities, time, technology, and availability of information
Suboptimization
The results of different departments each attempting to reach a solution that is optimum for that department
Certainty
Environment in which relevant parameters have known values
Risk
Environment in which certain future events have probabilistic outcomes
Uncertainty
Environment in which it is impossible to assess the likelihood of various possible future events
Maximin
Choose the alternative with the best of the worst possible payoffs
Maximax
Choose the alternative with the best possible payoff
Laplace
Choose the alternative with the best average payoff
Minimax Regret
Choose the alternative that has the least of the worst regrets
EMV
Determine the expected payoff of each alternative, and choose the alternative that has the best expected payoff
Decision Tree
A schematic representation of the available alternatives and their possible consequences. Useful for analyzing sequential decisions.
Forecast
a statement about the future value of a variable of interest
Expected level of demand
The level of demand may be a function of some structural variation such as trend or seasonal variation
Accuracy
Related to the potential size of the forecast error
Error
Actual – Forecast
time-series
a time-ordered sequence of observations taken at regular time intervals