operations management midterm

external customers
those who purchase the goods and services
internal customers
those who receive the output of other within a firm, they are part of the transformation process
service and product design
what are we going to offer, how should we design these products
quality management
how do we define quality, who is responsible for quality
process and capacity design
what process an what capacity will these products require, what equipment and technology is necessary for these processes
where should we put the facility, on what criteria should we base the location decision
layout design
how should we arrange the facility and material flow, how large must the facility be to meet our plan
human resources and job design
how do we provide a reasonable work environment, how much can we expect our employees to produce
supply chain management
should we make or buy this component, who are our suppliers and who can integrate into our e commerce program
inventory, material requirements planning and JIT
how much inventory of each item should we have, when do we re-order
intermediate and short term scheduling
are we better off keeping people on the payroll during slowdowns, which jobs do we perform next
who is responsible for maintenance, when do we do maintenance
Mission statement
tells an organization where it is going
tells the organization how to get there
jury of executive opinion
pool opinions of high level executive
delphi method
panel of experts, queried iteratively
sales force composite
estimates from individual salespersons are reviewed for reasonableness then aggregated
consumer market survey
ask the customers
Moving average method
Σ demand in previous n periods/n
Weighted Moving Average
Σ (weight for period n)
x (demand in period n)/
Σ weights
Mean Absolute Deviation (MAD)
Σ |actual – forecast|/
Mean Squared Error (MSE)
Σ (forecast errors)^2/
Mean Absolute Percent Error (MAPE)
100 Σ |actuali – forecasti|/actuali/
robust design
product is designed so that small variation in production or assembly do not adversely affect the product
modular design
product designed in easily segmented components
assembly chart
identifies the point of production where components flow into sub assemblies and ultimately into the final product
route sheet
lists the operations and times required to produce a component
work order
instruction to produce a given quantity of a particular item, usually to a schedule
the totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs
japanese character that symbolizes a broader dimension that quality, a deeper process than education, and a more perfect method than persistence
prevention costs
reducing the potential for defects
appraisal costs
evaluating products, parts, and services
internal failure
producing defective parts or service before delivery
external costs
defects discovered after delivery
ISO 9000
common quality standards for products sold in europe
ISO 14000
environmental standards
encompasses entire organization from supplier to customer
seven concepts of TQM
continuous improvement, six sigma, employee empowerment, benchmarking, just in time, taguchi concepts, knowledge of TQM tools
continuous improvement
represents continual improvement of all processes
six sigma
an extremely high measure of process capability- uses DMAIC
define critical outputs and identify gaps for improvement, measure the work and collect process data, analyze the data, improve the process, control the new process to make sure new performance is maintained
quality circle
group of employees who meet regularly to solve problems
selecting best practices to use as a standard for performance
taguchi concepts
experimental design methods to improve product and process design
check sheet
an organized method of recording data
scatter diagram
a graph of the value of one variable vs another
cause and effect diagram
a tool that identifies process elements that might effect an outcome
pareto charts
a graph to identify and plot problems of defects in descending order of frequency
flow charts
a chart that describe the steps in a process
statistical process control
uses statistics and control charts to tell when to take corrective action
process focus
low volume but may vary, has high flexibility
repetitive focus
facilities often organized as assembly lines, less flexibility, higher volume
product focus
organized by product, high volume but low variety of products
mass customization
rapid low cost production that is flexible and high volume
time function mapping
shows time it takes for each function in order
automatic identification systems
data acquisition system, like bar coding
automated storage and retrieval systems
automated placement and withdrawal of parts and products
automated guided vehicle
electronically guided and controlled carts
flexible manufacturing systems
computer controls both workstation and material handling equipment
computer integrated manufacturing
extension of flexible manufacturing systems
design capacity
maximum theoretical output of a system
effective capacity
is the capacity a firm expects to achieve given current operating constraints
percent of design capacity achieved
actual output/design capacity
is the percent of effective capacity achieved
actual output/effective capacity
break even point=
Fixed costs/ price per unit-variable costs
total revenue-total cost
break even point multiple products=
Σ 1 – (v1/p1)x (Wi) (F=fixed costs, P=price per unit, V=variable cost per unit, W=percentage each product is total dollar series, i=each product)