Pre Midterm 1 Flashcards

Operations

set of purposeful activities you do as part of a work plan to achieve pre-decided objectives

Operations Management

administration of business activities to create the highest level of efficiency possible within an organization

Supply chain network

1. supplier

2. manufacturer

3. distributor

4. retailer

5. customer

Supply chain costs

1. transportation

2. production

3. purchase

4. inventory

Supply chain value (net value)

= product worth - all costs

Decision phases of a supply chain

1. SC strategy/ decision (how to structure SC over next several years)

2. SC planning (decisions over the next quarter or year)

3. SC operation (daily or weekly operational decisions)

Strategy

a plan to achieve an objective

Competitive strategy

defines the set of customer needs a firm seeks to satisfy through its products/services relative to its competitors

4 different competitive strategies

1. price

2. variety

3. delivery response time

4. quality

Productivity

ratio of outputs divided by inputs (higher is better)

Forecasting

process of predicting future events based on historical data

Time series forecasting

predicting the future based on the past

Measures of forecast errors

MAE = |Ft - At| / N (average of absolute errors)

MAPE = average of % errors (abs Ft-At / At)

RMSE = square root of (Ft-At)² / N

Tracking signal

Ft-At/MAE (>3.75 positive bias < - 3.75 negative bias)

Process

a transformation/production process that uses resources to convert inputs into some desired output

Bottleneck

station with the longest processing time

Max output rate of a system

maximum capacity = 1 / bottleneck time

Process time of system

= bottleneck process time

process cycle time

time required for one init to move through the entire process

Completion time of system

Completion time (x) = cycle time + (x+1) (process time of system)

Process Types

1. simple (single sequence)

2. parallel

3. simultaneous (multiple different activities occur at the same time)

4. Set up times (require prep before production starts)

Throughput

= actual production rate (not max production rate)

Make to Stock (MTS)

AKA push

• consists of goods

• produced in advance

• Prioritizes fast delivery / cost

• risk is over or under stock

Make to Order (MTO)

• consists of services

• prioritizes flexibility

• mostly consists of services

• risk is queues

Components of a waiting line system

1. arrival characteristics (population size, behaviour, arrival timing)

2. Queue characteristics (length, priority)

3. Service pattern (number of servers, time distribution)

Customer behaviours in a queue

1. Balking (never joins)

2. Reneging (joins then leaves)

3. Jockeying (switches lines)

Bullwhip effect

small fluctuations in consumer demand cause progressively larger swings in inventory and orders as you move up the chain toward raw mats and manufacturers

Commonly observed patterns in the bullwhip effect

1. Oscillation: inventory levels and order quantities fluctuate over time

2. Amplification: Small changes become larger as you move up the supply chain

3. Delay: it takes time for the wave to travel down the whip