Untitled Flashcards Set

Define operations management

Operations management is the administration of business practices to create the highest level of efficiency possible within an organization.

What are the three basic functions of a firm?

Marketing, Production/Operations, Finance/Accounting.

What are the 10 strategic operations management decisions?

Design of goods & services, managing quality, process & capacity design, location strategy, layout strategy, human resources & job design, supply chain management, inventory management, scheduling, maintenance.

What is the difference between goods and services?

Goods are tangible, can be stored, and resold; services are intangible, perishable, and consumed when produced.

What is the difference between production and productivity?

Production is the actual creation of goods/services, while productivity measures efficiency (output/input).

What are the two types of productivity measures?

The two types are single-factor productivity (output per unit of one input) and multi-factor productivity (output per unit of multiple inputs).

What are six reasons to globalize?

Reduce costs, improve supply chain, provide better goods & services, attract new markets, learn to improve operations, attract & retain global talent.

What is sustainability?

The ability to meet present needs without compromising future generations, focusing on environmental, economic, and social responsibility.

What is JIT?

A system that reduces waste by producing only what is needed, when it's needed, and in the amount needed.

What is the difference between JIT, Lean Operations, and Toyota Production System (TPS)?

JIT reduces inventory and increases efficiency. Lean operations include JIT but also eliminate waste and focus on continuous improvement. TPS is Toyota's system integrating JIT and lean principles.

What are Ohno’s 7 wastes?

Overproduction, waiting, transportation, inventory, motion, over-processing, defects.

What is the difference between a push and pull system?

A pull system produces items only when needed (demand-driven), while a push system produces based on forecasts, often leading to excess inventory.

What does Kaizen mean?

Kaizen is a Japanese term meaning 'continuous improvement,' emphasizing small, incremental changes to improve efficiency and quality.

What are three key focuses of JIT?

Eliminate waste, improve quality, reduce lead time.

What is Kanban?

Kanban is a visual scheduling system that controls workflow by signaling when to produce or move items in a JIT system.

What are the advantages of Kanban?

1. Reduces inventory 2. Increases efficiency 3. Enhances production flow 4. Reduces lead time 5. Improves communication and flexibility

What is Supply Chain Management?

Managing the flow of goods, services, and information from suppliers to customers.

What is the objective of supply chain management?

Minimize costs while maximizing value and efficiency.

What are six sourcing strategies?

1. Many suppliers - Competition drives down costs; may lead to quality inconsistency.

2. Few suppliers - Stronger relationships and better quality; increases dependency and risk.

3. Vertical integration - Greater control over supply chain; requires high investment.

4. Joint ventures - Shared risk and resources; can be complex to manage.

5. Keiretsu networks - Long-term partnerships; reduces flexibility.

6. Virtual companies - Flexible and scalable; relies on external providers, increasing vulnerability.

What are risks associated with supply chain management?

1. Supplier failures

2. Demand fluctuations

3. Natural disasters

4. Cybersecurity threats

5. Transportation disruptions

6. Compliance and regulatory issues.

What is forecasting?

Forecasting is the process of making predictions about future trends based on historical data and analysis.

What are three forecasting time horizons?

1. Short-range forecast: Up to 1 year, used for scheduling and inventory decisions.

2. Medium-range forecast: 1 to 3 years, used for budgeting and sales planning.

3. Long-range forecast: More than 3 years, used for strategic planning and new product

development.

Describe the steps that are used to develop a forecasting system.

1. Determine the purpose of the forecast.

2. Select the appropriate forecasting technique.

3. Gather and analyze historical data.

4. Make the forecast.

5. Monitor and revise the forecast as needed.

What are the two general forecasting approaches?

1. Qualitative approach: Uses expert judgment and opinions.

2. Quantitative approach: Uses mathematical models and historical data.

What are four qualitative forecasting methods?

1. Jury of executive opinion: Experts provide insights and reach a consensus.

2. Delphi method: Experts answer questions anonymously, and responses are refined through

multiple rounds.

3. Sales force composite: Salespeople estimate future sales.

4. Market survey: Customer opinions and preferences are gathered

What is the difference between a time-series model and an associative model?

Time-series uses historical data trends, while associative models use independent variables to predict demand. Such as sales and advertising spending.

What are the four components of time-series forecasting?

1. Trend: Long-term upward or downward movement.

2. Seasonality: Regular fluctuations due to seasons.

3. Cycles: Longer-term fluctuations influenced by economic or business cycles.

4. Random variations: Unpredictable fluctuations due to external factors.

What is the range of values for the coefficient of determination?

The coefficient of determination (R²) ranges from 0 to 1, where 0 indicates no explanatory power and 1 indicates perfect explanatory power of the independent variable over the dependent variable.

Explain, in your own words, the meaning of the correlation coefficient.

The correlation coefficient measures the strength and direction of the linear relationship between two variables, ranging from -1 to 1. A value closer to 1 indicates a strong positive correlation, while a value closer to -1 indicates a strong negative correlation. 0 being little to no relationship.

What is a qualitative forecasting model and when should it be used?

A qualitative forecasting model relies on expert opinions and is used when historical data is limited or unavailable, such as for new product launches.