Business Exam 3: Chapters 17, 15, 8, 9, 16

Vocabulary flashcards covering core operations management concepts, facility layout types, project scheduling, quality management frameworks, and production technologies from Chapter 17.

Operations Management

The management of activities that produce goods and services and distribute them to customers, directly impacting a firm's revenues, costs, and overall profitability.

Efficiency

Producing output or achieving a goal at the lowest cost.

Effectiveness

Using resources to create value by providing customers with better goods and services.

Mass Customization

The production of customized goods and services to precisely meet the needs of specific customers.

Process

A set of related activities that transforms inputs into outputs.

Product Layout

A facility arrangement where the product moves from one station to the next; typically used for high-standardization and high-volume production.

Process Layout

A facility layout where equipment is arranged by the specific task performed; typically used for high-customization and low-volume production.

Cellular Layout

A facility layout that groups different types of equipment together into a cell, within which a product is completely finished.

Fixed-Position Layout

A facility layout in which the product remains stationary in one location while equipment, materials, and workers are brought to it.

Inventories

Stocks of goods held by an organization.

Critical Path Method (CPM)

A project scheduling tool that illustrates relationships among activities and identifies the longest sequence of activities needed for completion.

Immediate Predecessors

Activities that must be completed before another activity in a project sequence can begin.

Value Chain

A network of relationships that channels the flow of inputs, information, and financial resources through all processes directly or indirectly involved in producing and distributing goods and services.

Vertical Integration

The performance of processes internally that were previously performed externally by other firms.

Outsourcing

The performance of processes externally by outside entities that were previously performed internally.

Offshoring

Moving the performance of business processes to foreign countries.

Enterprise Resource Planning (ERP)

A software-based approach designed to integrate an organization's information flows across all of its activities and operations.

Goods

Tangible products that have a physical form, can be handled, shipped, stored in inventory, and produced independently of the consumer.

Services

Intangible products that are experienced rather than touched, must be consumed when and where they are produced, and often require direct customer involvement.

Servicescape

The physical and ambient environment in which a customer and a service provider interact, encompassing ambience, functionality, and signs, symbols, and artifacts.

Automation

The practice of replacing the human operation of machinery and equipment with some form of programmed control.

Robot

A reprogrammable machine capable of manipulating materials, tools, parts, and specialized devices to perform a variety of tasks.

Computer-Aided Design (CAD)

Drawing and drafting software used to create, modify, and edit blueprints and product drawings.

Computer-Aided Manufacturing (CAM)

Software that takes an electronic product design and translates it into programmed instructions for robots and machinery to produce the product efficiently.

Computer-Integrated Manufacturing (CIM)

The integration of CAD/CAM software with flexible manufacturing systems to automate almost all stages of designing, testing, and producing a product.

Deming Chain Reaction

A concept stating that improving quality leads to decreased costs (from less rework, fewer mistakes, and better resource use), which improves productivity, captures market share through better quality and lower prices, and enables a business to stay in business and provide more jobs.

Total Quality Management (TQM)

An organizational approach that expects everyone to take responsibility for quality improvement, emphasizing customer focus, employee empowerment, prevention over correction, and continuous improvement.

Baldrige National Quality Program

A national initiative that encourages American firms to focus on quality improvement.

ISO 9000 Certification

A family of generic standards for quality management systems established by the International Organization for Standardization.

Six Sigma

A quality management approach characterized by ambitious quality targets, extensive employee training, and a long-term commitment to resolving quality-related issues.

Lean Production

A production philosophy emphasizing the elimination of waste across all aspects of the manufacturing and production process.

Just-in-Time (JIT) Production

A production system that emphasizes manufacturing goods only to meet actual current demand rather than stockpiling inventory.

ISO 14000

A family of generic standards for environmental management established by the International Organization for Standardization.

Green Practices

Firms try to become greener by finding

environmentally friendly ways to carry out processes

required to produce and distribute goods and services

Human Resource (HR) Management

Maximizing the effectiveness of the workforce by recruiting world-class talent, promoting career development, and determining workforce strategies to boost organizational effectiveness.

Job Analysis

The examination of specific tasks that are assigned to each position, independent of who might be holding the job.

Job Description

An explanation of the responsibilities for a position.

Job Specifications

The specific qualifications needed to hold a position.

Internal Recruitment

Seeking employees who are currently within the firm to fill open positions.

External Recruitment

Seeking new employees from outside the firm.

Application

A selection tool used to reject unqualified candidates, rather than to actually choose qualified candidates.

Structured Interviews

Developing a list of questions beforehand and asking the same questions in the same order to each candidate.

Contingent Workers

Employees who do not accept regular, full-time jobs, including temporary full-time workers, on-call workers, and contract agency workers.

Orientation

Introducing employees to company culture and providing administrative information.

On-the-job Training

A training approach where employees learn as they go.

Apprenticeship

A training program where a beginner serves as an assistant to a fully trained worker before gaining full credentials.

Off-the-job Training

Classroom training that happens away from the job during work hours.

Computer-based Training

Training delivered via the Web that plays a crucial role in off-the-job training.

Management Development

Programs that help current and potential executives develop the skills required to move into leadership positions.

Performance Appraisal

A formal feedback process that requires managers to give their subordinates feedback on a one-to-one basis.

Compensation

The combination of pay and benefits provided to employees.

Wages

Pay calculated for the number of hours or days worked.

Salaries

Pay received for a fixed period of time.

Commission

Payment provided as a percentage of sales, where larger commissions typically accompany smaller base pay.

Bonuses

Lump-sum payments, typically awarded to reward strong performance from individual employees.

Profit Sharing

Plans that reward employees with a share of company profits above and beyond predetermined goals.

Stock Options

The right to buy shares of company stock at some future date for the price of the shares on the day that the company awarded the options.

Pay for Knowledge

An approach involving awarding bonuses and pay increases in exchange for increases in knowledge, such as earning an MBA.

Benefits

Noncash compensation provided to employees, such as health insurance, vacation, retirement, and childcare.

Cafeteria-style Benefits

A benefits plan providing a set dollar amount to be spent on company benefits, offering employees greater flexibility.

Flextime

A scheduling policy that allows workers to choose when they start and finish, as long as they complete the required number of hours.

Compressed Workweek

A scheduling arrangement where an employee works a full-time number of hours in less than the standard workweek.

Remote Work

Working remotely while connecting to the office via phone or broadband networks.

Job Sharing

An arrangement that allows two or more employees to share a single full-time job.

Civil Rights Act of 1964 & Title VII

Federal legislation prohibiting workplace discrimination based on race, color, religion, sex, or national origin.

Equal Employment Opportunity Commission (EEOC)

A federal agency designed to regulate and enforce Title VII.

Fair Labor Standards Act, 1938

Federal legislation establishing minimum wage and requiring overtime pay for hours worked over $40$ hours per week.

Equal Pay Act, 1963

Federal legislation mandating equal pay for equal work.

Occupational Safety and Health Act, 1970

Legislation mandating safety equipment and requiring minimum exposure to workplace hazards.

Immigration Reform and Control Act, 1986

Federal legislation requiring employers to verify employment eligibility for workers.

Americans with Disabilities Act, 1990

Federal legislation prohibiting discrimination against disabled individuals and requiring employers to make reasonable accommodations.

Family and Medical Leave Act, 1993

Legislation requiring employers with $\ge 50$ employees to offer up to $12$ weeks of job-secure, unpaid leave for birth, adoption, or serious illness of a spouse, child, or parent.

Affirmative Action

Policies designed to increase employment and educational opportunities for minority groups.

Sexual Harassment

Workplace discrimination against an individual based on his or her gender.

Accounting

A system for recognizing, organizing, analyzing, and reporting information about the financial transactions that affect an organization to help users make better economic decisions.

Financial Accounting

The branch of accounting that prepares financial statements for external stakeholders such as stockholders, creditors, and government regulators, governed by GAAP.

Managerial Accounting

The branch of accounting that provides proprietary financial and nonfinancial reports and analysis to internal stakeholders to assist with planning, projections, and decision making.

Financial Accounting Standards Board (FASB)

The private board that establishes generally accepted accounting principles (GAAP).

Generally Accepted Accounting Principles (GAAP)

A standard set of accounting rules and principles used in the preparation of financial statements to ensure they are relevant, reliable, consistent, and comparable.

Accrual Accounting

An accounting method that recognizes revenue when earned and matches expenses to the revenues they helped produce, rather than when cash changes hands.

Cash Accounting

An accounting method that recognizes revenue only when cash is received and expenses only when cash is paid.

Public Accountants

Accountants who provide services such as tax preparation, external auditing, or management consulting to clients on a fee basis.

Management Accountants

Accountants who work within a single company to provide analysis, prepare reports and financial statements, and assist managers.

Government Accountants

Accountants who perform accounting functions for local, state, or federal government agencies.

Balance Sheet

A primary financial statement reporting the firm's financial position at a specific point in time by detailing assets, liabilities, and owner's equity.

Fundamental Accounting Equation

The basic equality reflected on the balance sheet: $\text{Assets} = \text{Liabilities} + \text{Owner Equity}$.

Income Statement

A financial statement that reports revenues, expenses, and net income resulting from a firm's operations over a specified accounting period: $\text{Net Income or Loss} = \text{Revenue} - \text{Expenses}$.

Statement of Cash Flows

A financial statement identifying the amount of cash that flowed into and out of a firm from operating, investing, and financing activities.

Horizontal Analysis

An analytical method that compares account values reported on financial statements over two or more years to identify percentage changes, trends, and patterns.

Master Budget

A firm's overall plan of action for a specified time period that integrates both operating and financial budgets.

Operating Budgets

Budgets that communicate an organization's sales and production goals and identify the resources needed to achieve them.

Financial Budgets

Budgets that focus on a firm's financial goals and identify the financial resources needed to achieve them.

Top-Down Budgeting

A budgetary approach in which top management prepares the budget with little or no input from middle and supervisory managers.

Bottom-Up Budgeting

A participatory budgeting approach where middle and supervisory managers actively participate in preparing budget estimates.

Static Budget

A budget created based on the assumption of a single forecasted level of sales.

Flexible Budget

A scenario-based budget created over a range of possible sales levels to show appropriate budgeted cost levels for each.

Activity-Based Costing (ABC)

A costing technique that assigns product costs based on the links between activities that drive costs and the production of specific products.

Out-of-Pocket Costs

Explicit costs involving direct payments of money or other resources by the firm.

Implicit Costs

Opportunity costs that arise when a firm uses owner-supplied resources without direct cash outlay.

Finance

The business function concerned with finding the best sources and uses of financial capital to maximize the value of the firm to its owners.