Supply chain exam 2

There are two broad categories of forecasting methods. These are?

Qualitative & Quantitative

The first rule of forecasting is that forecasts are always?

Wrong by some amount

Forecast error is calculated as (At - Ft). A negative value for the error means what happened? A positive value for the error means what happened?

bias

random- errors that are not explained by the model being used

positive- forecast below actual

negative- above actual

If a forecast is tracking actual demand reasonably well, the running algebraic sum of forecast errors should "bounce around" what value?

Zero

What is forecast bias? How would the tracking signal change from period to period if the forecast is becoming biased?

When a consistent mistake is made (+ or -)

TS= run alg sum/MAD

if becoming biased, tracking signal will be bigger negative number if over forecasted or bigger positive if under forecasted

Causal forecasting

uses independent variables, other than time to predict future demand. The independent variable must be a leading indicator

Once a precedence diagram is created, the critical path can be identified. What is the critical path? What does it tell us?

the longest sequence of tasks that must be completed to finish a project

Once a precedence diagram is created, a set of four dates can be determined for each activity. Name these four dates and explain what they mean. What is true about these dates for activities on the critical path?

Earliest start time, earliest finish time, latest start time, latest finish time

What is slack? How is it calculated? Can an activity on the critical path have slack?

amount of allowable delay in an activity

Calculation= Late start-early start or Late finish-early finish

Activities are either critical or non-critical. Can either or both of these types of activities be started after its early start date without delaying the project?

Non critical will not affect the project if delayed. Critical will affect the start date if delayed

Defining/managing quality must start by knowing and understanding who and what?

who the customer is, what are their expectations, how do they measure quality

List the three fundamental steps for quality management chapter 12 slide 5

Design Quality (fitness for use)

Specifications

Conformance Quality

The contemporary understanding of the relationship between these four costs says that the total of these costs will be a minimum when?

When there is a low defect rate

The contemporary understanding of these four costs says that a continuing, steady investment in which of these costs is necessary to minimize the total of the four?

Prevention cost

Under the concept of total quality management, quality management starts at what level in the organization? Why?

senior level as they have all the resources

Describe Pareto chart

Help to break down a problem into the relative contributions of its components. They are based on the common empirical finding that a large percentage of problems is due to a small percentage of causes.

Describe cause and effect (aka fishbone) diagram

Show hypnotize relationships between potential causes and the problem under study

Describe Checksheet

Basic forms that help standardize data collection

Statistical quality control starts with a process capability study leading to the calculation of a process capability ratio. In order to say that a process is statistically capable of consistently good output, the value of this ratio needs to be (a) less than, equal to, or greater than (b) what number?

One

SPC (statistical process control) charts are used to monitor the output of a process in order to verify that the process is continuing to perform in a statistically normal manner. If a process starts to operate in statistically abnormal manner, the SPC chart can directly tell you what about the abnormal performance?

When did this start happening and try to identify the cause of why this abnormality started to happen

five quality "gaps"

word of mouth communication

personal needs

expected quality

past experiences

external communications to customers

the walk-through audit

-Service delivery system should conform to customer expectations

-Customer impression of service is influenced by use of all senses

-Service managers lose sensitivity owing to familiarity

-A detailed service audit from a customer's perspective is needed

SERVQUAL document

-Measures the five dimensions of service quality

-Pairs an expectation statement with a corresponding perception statement

-Most important function is to track trends over time

primary objective of walk-through audit and servqual document?

gain an understanding of customer perceptions about a service product

Be familiar with the concept of the unconditional service guarantee. What are its primary features? How might it reinforce customer loyalty?

Unconditional, easy to understand and communicate, meaningful, easy to invoke, easy to collect

Using the exponential smoothing formula (Ft+1 = Ft + a (At - Ft)a, an adjustment is made at the end of each time period to the smoothed forecast based upon the actual demand in the period just ended. In order to increase the formula's responsiveness to actual demand, which action would be taken?

Increase the value of alpha

Cumulative forecast error is used to determine how well a forecast is tracking actual demand. One measure is an ongoing, algebraic sum of forecast errors (sometimes called the running sum of forecast errors—RSFE). This running, algebraic sum is the numerator of the tracking signal. For a

particular item's forecast, you notice that the RSFE over the last few time periods has become an ever-larger negative number. (The formula for forecast error is At - Ft.) This means:

That the forecast is consistently higher than the demand

Another measure of forecast error is the mean absolute deviation of forecast errors—MAD (which is also the denominator of the tracking signaI). This measure is best described as:

a measure of the average error regardless of algebraic sign

For which of the following would the application of project management methods, like PERT/CPM

precedence network diagrams, be least appropriate?

Developing a new software package for financial planning

Project management uses two primary types of charts, horizontal bar graphs called Gantt charts and the PERT/CPM precedence diagrams. Which of the following is not shown on a PERT/CPM

precedence diagram?

A direct comparison of the projects activities relative to a common time scale

If a project will be delayed if an activity starts after its early start date, then the activity

Is on the critical path

Consistent with class discussion, which of the following choices reasonably complete the

following statement?

Quality ____________________.

is defined by the customer, is imperative for long-run business success

Which of the choices best completes the following statement?

Following the Total Quality (TQ) concept, a company's quality efforts should start with an

understanding of the needs of ________.

The customer

In the long run, as processes are improved, product and service quality ____________ and total cost of quality will ___________.

Consistent with the total quality concept, which of the following pairs of words best completes the preceding statement?

increases, decrease

Which choice best completes the following statement?

In order to ensure lasting quality improvement, proposed process changes, which have been tested and found to be effective, must ___________

become the new operating standard

A quality management tool that enables visual comparison of the relative frequency of occurrence of several types of customer complaints is a:

Pareto chart

In the context of the Total Quality philosophy, which of the following pairs of words best completes the following sentence?

In attempting to improve quality, it is important that effort is expended on probable ___________ and not on _____________.

root causes, the most visible symptoms

One expert in the field of quality management is fond of saying that "quality is free." By this phrase he probably means that:

In the long run, the least cost way to provide a product is to do it right the first time

Which of the following is least descriptive of the Total Quality philosophy?

Primarily focus on inspection of outgoing products

The text and the Hewlett Packard videotape both discussed quality. Although the specific terms and points of emphasis varied somewhat, the fundamental characteristics of quality improvement processes or systems are essentially the same. Which of the following is NOT a key feature of these processes?

Stop the improvement process once specific targets are achieved

Your customers are complaining about slow response time from your field service technicians.

Which of the following tools would you use to show the relationship between the possible causes of this problem?

cause and effect diagram

When using an SPC chart to monitor a process, when an output measurement point falls outside of the control limits, the SPC chart can directly tell us

When the measurement was made

SPC Chart

A process used to monitor standards, make measurements and take corrective action as a product or services is being produced

Qualitative forecasting

uses the judgment and opinions of knowledgeable individuals to predict outcomes

Quantitative forecasting

relies on existing data to predict future sales (looks into the past and bases the forecast on that)

Four fundamental forecasting laws

Almost always wrong by some amount

More accurate for groups or families than for individual SKUs

More accurate for shorter time periods

No substitute for calculated demand

Design Quality (fitness for use)

the ability of a good or service to meet customer needs

Specifications

are targets and tolerances determined by designers of goods and services

Conformance quality

the extent to which a process is able to deliver output that conforms to design specifications

Time series analysis

based on the idea that data relating to past demand can be used to predict future demand

Simulation

mainly based on feeding quantitative data into a model to produce quantitative results in a structured sequential process

Appraisal costs

costs of the inspection and testing to ensure that the product or process is acceptable

Prevention costs

sum of all the costs to prevent defects

Internal failure costs

costs for defects incurred within the system

External failure costs

costs for defects that pass through the system

Short term time series analysis

less than 3 months

used for tactical decisions

Medium term time series analysis

forecasting 3 months to 2 years

used to develop a strategy that will be implemented over the next 6 to 18 months

Long term time series analysis

Greater than 2 years

useful for detecting general trends and identifying major turning points

Pure project

a self-contained team works full time on the project

Functional project

Responsibility for the project lies within one functional area of the firm. Employees from that area work on the project, usually only part time

Matrix project

A blend of pure and functional project structures - people from different functional areas work on the project, possibly only part-time

Early start time

Earliest time a task can begin due to predecessor durations

Late start time

The latest time that a task can start to maintain the schedule

Early finish time

the earliest an activity is expected to be completed

Late finish time

The latest possible date an activity can be completed without delaying the project's completion