Managing Production/Operations and Outbound Logistics

Comprehensive vocabulary flashcards covering operations management, productivity, quantitative and qualitative forecasting, scheduling, work study, and outbound logistics from Chapter 11.

Production

The creation (manufacturing) of goods and services via a process of transformation of resources into desired outputs.

Operations Management

The set of activities designed to manage the direct resources required to create goods and services.

Efficiency

How well a task is performed, using the least resources and with a minimum amount of waste (doing a job well).

Effectiveness

Developing and using the correct manufacturing strategy in order to do the right thing.

Productivity

The ratio of output (products and services) divided by one or more resource inputs (such as land, labour, capital, and management).

Total Productivity

Output relative to the five major resource inputs of a business: $\frac{\text{Output}}{\text{Labour} + \text{capital} + \text{materials} + \text{entrepreneurship} + \text{knowledge}}$.

Partial Productivity Measures

Measures that calculate output relative to only one, two, or three inputs (such as output per labour hour, tons shipped per employee, or units produced per kilowatt hour).

Long-Term Production and Operations Planning

Futuristic decision-making covering aspects such as the location selection and size of the operating unit, business size, optimal production quantities, layout design, product design, technology, machinery, and job design.

Medium-Term Production and Operations Activities

Operations management decision-making covering a period of between one and five years, concerned with inventory management, sales forecasts, developing the production plan, production and quality control, and the production budget.

Short-Term Production and Operations Activities

Day-to-day activities covering a period spanning from one day to less than one year, dealing with compiling and implementing the work plan, materials management, quality control, maintenance, replacement, and worker safety.

Forecasting

Both an art and a science that attempts to predict future events as accurately as possible, using historical data, mathematical models, and extrapolation.

Sales Forecast

An estimate of consumer demand that projects future achievable sales revenue, also known as the sales budget, which forms the foundation of a business plan.

Quantitative Forecasting

A forecasting approach using mathematical models that rely on historical data and/or causal variables to forecast demand.

Qualitative Forecasting

A subjective forecasting approach that incorporates factors such as the decision-maker's intuition, emotions, personal experiences, and value system.

Naïve Approach

A quantitative forecasting technique that assumes historical performance will be repeated, implying that demand in the next period will equal demand in the immediately preceding period.

Moving Averages

A quantitative forecasting method that calculates an average of past-period data for a specific time series ($n$ periods) to smooth out short-term irregularities and forecast the next period's demand.

Exponential Smoothing

A time-series forecasting method that uses only the most recent forecast and actual value along with a smoothing constant or alpha ($\alpha_t$) between $0$ and $1$: $F_t = F_{t-1} + \alpha_t (A_{t-1} - F_{t-1})$.

Linear Regression Analysis

A straight-line mathematical causal model describing functional relationships between independent variables and a dependent response variable (such as sales).

Delphi Method

A qualitative forecasting approach that relies on a panel of experts whose feedback is collected, statistically summarised, and deliberated across several rounds until consensus is reached.

Production Plan

A master scheduling document based on demand forecasts that incorporates a production units budget and a production costs budget.

Production Units Budget

A budget expressing predicted product demand in quantitative terms, calculated as budgeted sales volume plus closing inventory minus opening inventory.

Production Costs Budget

A budget that makes provision for costs arising from planned production volume, comprising direct raw materials, direct labour, and general manufacturing costs budgets.

Routing

The documentation of the path of raw materials through the production process on a routing sheet, detailing operations, sequence, setup and run times, personnel, inspection, and scrap rates.

Loading

Assigning tasks to work or processing centres to minimise costs, idle time, or completion times, based on available machine capacity and required human skills.

Scheduling

Assigning due dates to specific jobs to establish the timing of operations and match operations with capacity and performance.

Forward Scheduling

A scheduling category where production activities begin as soon as job requirements are received and delivery dates are calculated in advance.

Backward Scheduling

A scheduling category that begins with the final due date and schedules operations in reverse order by subtracting lead times to determine the start time.

Dispatching

The final release of job orders to workers for completion according to a planned sequence or established priority rules.

Expediting

Devoting special attention and shifting workstation priorities to speed up an unsatisfactory or urgent job ahead of others (frowned upon in a JIT environment).

Total Quality Management (TQM)

A quality assurance management philosophy that permeates every action and intent of the firm to meet the predetermined quality standards of the customer.

Organising

The process of combining individuals, groups, and facilities into a formal structure of tasks, authority, and information relationships.

Waiting Line Theory (Queuing)

An optimisation approach used for capacity decisions that balances customer waiting time against system utilisation.

Linear Programming

A mathematical modelling technique used for optimisation comprising linear relationships for resource trade-offs and a single objective function evaluated under resource restrictions.

Simulation

Solving an operational problem by re-enacting real-world activities, often using computers, to optimise scheduling and capacity.

Breakeven Analysis

An optimisation technique used to calculate the point where total production cost equals sales revenue (income).

Programme Evaluation and Review Technique (PERT)

A project management technique using network diagrams or flow sheets to determine the critical path through several activities.

Quality Circles

Small groups of employees who regularly meet voluntarily to analyse work-related issues and improve operations, quality, safety, and productivity.

Gantt Chart

A horizontal bar chart used in operations or project scheduling showing required activities alongside their starting and finishing times.

Work Study

A detailed, systematic, and critical analysis of all variables affecting the efficiency and economy of a work situation in order to eliminate waste and make improvements.

Method Study

A component of work study that systematically records and critically evaluates existing and proposed methods of performing a task to determine easiest and most effective methods.

Work Measurement

The application of techniques designed to establish the time for a qualified worker to carry out a specified job at a defined level of performance.

Standard Time

The total allowed time to complete a job under specific circumstances, calculated by summing the basic time and the relaxation allowance.

Basic Time

The time taken by a qualified worker to perform a specified job at a standard performance expressed as an average of the working period.

Relaxation Allowance

A time allowance added to basic time during which a worker has time for personal needs, relaxation, and rest.

Customer Service

The support that businesses offer customers before and after buying products to create an easy and enjoyable experience and establish reliability.

Pre-Transaction Elements

Customer service elements related to corporate policies, organizational structures, or service programmes established before transactions occur.

Transaction Elements

Customer service variables directly involved in performing the physical distribution function, such as product availability and delivery reliability.

Post-Transaction Elements

Customer service elements supportive of the product while in use, including product guarantees, parts and repair service, complaint procedures, and product replacements.

Acceptable Quality Level (AQL)

A service standard threshold that businesses should avoid establishing below $100\%$, as doing so limits rather than encourages superior performance.

Place (in Outbound Logistics)

The element of the marketing mix where logistics and marketing converge, encompassing customer service levels, transportation, warehousing, inventory holding, and order processing.