MAR3203 EXAM 1 UCF

What is operations management

is the set of activities that creates value in the form of goods and services by transforming inputs into outputs.

what are the three main essentials functions to create goods and services

marketing, operations, fiance

Marketing

one of three main essentials to create goods/service

which generates the demand, or at least takes the order for a product or service

Production/ operations

one of three main essentials to create goods/services

which creates, produces, and delivers the product.

Finance/ accounting

one of three main essentials to create goods/services

which tracks how well the organization is doing, pays the bills, and collects the money

supply chain

is a global network of organizations and activities that supply a firm with goods and services.

Members of the supply chain collaborate to achieve high levels of customer _______ , _________ , and competitive _________.

satisfaction, efficiency, advantage

OM transforms ______ to _______

inputs to outputs

Why study OM?

1. OM is one of three major functions of any organization, we want to study how people organize themselves for productive enterprise

2. We want (and need) to know how goods and services are produced

3. We want to understand what operations managers do

4. OM is such a costly part of an organization

Which is NOT one of what operations managers do?

Promote org.

Which of these is one of the three major functions within an​ organization?

marketing

Which of the following is NOT one of the four reasons that we study​ OM?

We want to understand what marketing managers do.

Which of these is one of the 10 strategic OM​ decisions?

all of the above

Which of the following OM decisions determines how a good or service is produced and commits management to specific​ technology, quality, human​ resources, and capital​ investment?

process and capacity design

Which of the following best defines​ scheduling?

Determines and implements​ intermediate- and​ short-term schedules that effectively and efficiently utilize both personnel and facilities while meeting customer demands.

Which of the following OM decisions determines customers quality expectations and establishes polices and procedures to identify quality

managing quality

Process and capacity design

-How is a good or service produced?

-Commits management to specific technology, quality, resources, and investment

Location strategy

-Nearness to customers, suppliers, and talent.

-Considering costs, infrastructure, logistics, and government.

Layout strategy

-Integrate capacity needs, personnel levels, technology, and inventory

-Determine the efficient flow of materials, people, and information

Supply Chain Management

-Integrate supply chain into the firm's strategy.

-Determine what is to be purchased, from whom, and under what conditions.

Inventory Management

-Inventory ordering and holding decisions

-Optimize considering customer satisfaction, supplier capability, and production schedules

Maintenance

-Consider facility capacity, production demands, and personnel

-Maintain a reliable and stable process

The person who introduced​ standardized, interchangeable parts was

Eli Whitney

The person who believed that management must do more to improve the work environment and processes so that quality can be improved was

W. Edwards Deming

Which of the following does NOT contribute to​ OM?

unsystematic processing of data

Services

Economic activities that typically produce an intangible product (such as education, entertainment, lodging, government, financial, and health services)

Productivity

the ratio of outputs (goods and services) divided by the inputs (resources such as labor and capital)

Production is a measure of _____ ONLY and not a measure of _____

output , efficiency

formula for productivity

units produced/inputs used

The use of just one resource input to measure productivity

single-factor productivity

Formula for single-factor productivity

units produced/labor hours used

Multifactor productivity Formula

Units produced / Labor + Material + Energy + Capital + Miscellaneous

Output

units produced

Which of these statements accurately captures a current trend in​ operations?

A current trend is industry 4.0 and rapid product development.

What is the goal for mass​ customization?

The goal is to produce customized​ products, whenever and wherever needed.

Which of the following trends is NOT part of the exciting OM challenges currently facing operations​ managers?

local focus

customers, talent, and suppliers are worldwide.

Globalization

Reasons to Globalize

1. Improve the supply chain

2. Reduce costs (labor, taxes, tariffs, etc.)

3. Improve operations

4. Understand markets

5. Improve products

6. Attract and retain global talent

Which reason to globalize determines interaction with foreign customers, suppliers, and other competitive businesses, international firms inevitably learn about opportunities

Understanding Markets

Which reason to globalize determines locating facilities in countries where unique resources are available; may be human resource expertise, low-cost labor, or raw material.

Improve Supply Chain

Improve Operations

- understand differences between how business is handled in other countries

- international operations can improve response time and customer service

Resources View

a method managers use to evaluate the resources at their disposal and manage or alter them to achieve competitive advantage

an alternative perspective from issues in Op. Strat

Value Chain Analysis

a way to identify those elements in the product/service chain that uniquely add value

an alternative perspective from issues in Op. Strat

areas where the firm adds its unique value through product research, design, human resources, supply-chain management, process innovation, or quality management.

value chain analysis

Five Forces Model

a method of analyzing the five forces in the competitive environment

These potential competing forces are immediate rivals, potential entrants, customers, suppliers, and substitute products.

What does operating in a system with many other external factors influence

strategy development and execution and require constant scanning of the environment.

Operations manager needs to understand that the firm is operating in a system with many other external factors. What are these factors?

economic, to legal, to cultural.

Which of the following is NOT an OM​ strategy/issue during the maturity phase of the product life​ cycle?

high production costs

Which of the following is NOT an OM​ strategy/issue during the introduction stage of the product life​ cycle?

long production runs

Which of the following is NOT an OM​ strategy/issue during the growth stage of the product life​ cycle?

reduce capacity

Key Success Factors

are those activities that are necessary for a firm to achieve its goals

core competencies

are the set of unique skills, talents, and capabilities that a firm does at a world-class standard.

They allow a firm to set itself apart and develop a competitive advantage.

core competencies

What is a way to integrate OM with other activities

activity map

Activity Map

a graphical link of competitive advantage, KSFs, and supporting activities

Outsourcing

transferring a firm's activities that have traditionally been internal to external suppliers

What three global trends are causing outsourcing to expand

(1) increased technological expertise

(2) more reliable and cheaper transportation

(3) the rapid development and deployment of advancements in telecommunications and computers.

Forecasting

Predicting future events; may involve taking historical data (such as past sales) and projecting them into the future with a mathematical model.

Short-range forecast

Up to 1 year, generally less than 3 months

Purchasing, job scheduling, workforce levels, job assignments, production levels

Medium-range forecast

3 months to 3 years

Sales and production planning, budgeting

Long range forecast

3+ years

New product planning, facility location, research and development

Step 1 in forecasting system

Determine use of forecast

Step 2 in forecasting system

Select items to be forecasted

Step 3 in forecasting system

Determine time horizon of the forecast

Step 4 in Forecasting System

Select the forecasting model

Step 5 in Forecasting System

Gather the data needed to make the forecast

Step 6 in Forecasting System

Make the forecast.

Step 7 in Forecasting System

Validate and implement the results

What are the 4 components of time series forecasting

Trend, Cyclical, Random, Seasonal

What is time series forecasting

Set of evenly spaced numerical data

- based only on past values, no other variables are important

Trend

is the gradual upward or downward movement of the data over time

Changes in income, population, age distribution, or cultural views may account for movement in trend.

Seasonal

is a data pattern that repeats itself after a period of days, weeks, months, or quarters.

Cyclical (cycle)

are patterns in the data that occur every several years

Random

"blips" in the data caused by chance and unusual situations. They follow no discernible pattern, so they cannot be predicted

Naive Approach

assumes demand in next period is the same as demand in most recent period

Sometimes cost effective and efficient

can be a good starting

What approach is this?

Naive Approach

Compared to a global​ strategy, a multidomestic strategy has

higher local responsiveness and lower cost reduction.

Which of the following is a reality each company faces regarding its forecasting​ system?

Outside factors that we cannot predict or control often impact the forecast.

Inventory Management

is to strike a balance between inventory investment and customer service

One of the most expensive assets of many companies representing as much as 50% of total invested capital

WHAT DOES THIS REPRESENT?

The importance of inventory

Less inventory _____ costs but ________ chances of running out

lowers, increases

type of inventory

-Purchased but not processed

Raw material

ABC Analysis

Divides inventory into three classes based on annual dollar volume

Class A

high annual dollar volume

Class B

medium annual dollar volume

Class C

low annual dollar volume

Used to establish policies that focus on thefew critical parts and not the many trivialones

ABC analysis