MGSC 395 Operations Management Exam 2 Review

This set of flashcards covers key vocabulary terms and definitions from the Operations Management course, specifically focusing on waiting lines, Lean Systems, Capacity Planning, and Constraint Management.

Waiting Lines

A queue of customers waiting for service, often analyzed using Little's Law.

Little's Law

A theorem that states the average number of customers in a system is equal to the arrival rate multiplied by the average time spent in the system.

Service Facilities

The locations where service is provided to customers, can include physical spaces or machines.

Priority Rule

A guideline that dictates the order in which customers are served in a waiting line.

Patient Customer

A customer who waits in line until they are served.

Impatient Customer

A customer who may leave the line before being served or choose not to enter the queue.

Service Capacity

The maximum number of customers that can be served in a given time period.

Single Line System

A waiting line arrangement where customers queue up in a single line to be served by multiple service points.

Multiple Lines System

A waiting line arrangement with multiple queues, where each queue leads to a different service point.

Operating Characteristics

Key metrics that describe how a waiting line operates, including line length and waiting time.

Utilization Rate

The ratio of actual output to potential output, indicating how effectively a service facility is being used.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the scale of output increases.

Diseconomies of Scale

Increased per-unit costs that can occur when a company or industry grows beyond an optimal point.

Kanban

A scheduling system for lean and just-in-time (JIT) production that uses visual signals to control the flow of materials.

5S Methodology

A system for organizing workspace to optimize efficiency and effectiveness by eliminating waste and improving flow.

Takt Time

The rate at which a finished product needs to be completed to meet customer demand; “beat time/rate time”

Poka-Yoke

Error-proofing methods aimed at designing systems that minimize fail-safe systems and human error.

Theory of Constraints (TOC)

A management philosophy that seeks to identify and manage the constraint that limits the output of a system.

Constraint

Any factor that limits the performance of a system and restricts its output. Physical, Demand & Management

Bottleneck

A resource whose available capacity limits the organization's ability to meet product volume or demand.

Line Balancing

The process of assigning work to multiple workstations to achieve a more balanced workflow.

Linear Programming

A mathematical method for determining a way to achieve the best outcome in a given mathematical model.

Objective Function

A mathematical equation that defines the goal of an optimization problem, typically to maximize or minimize a value.

Constraints

Conditions that must be satisfied in an optimization problem, defining feasible regions.

Feasible Region

The set of all possible points that satisfy the constraints of an optimization problem.

Push Vs Pull production

Push: Production begins in advance of customer needs

Pull: Customer demand activates production or service

Just-in-Time Inventory (JIT)

Keep the minimum stock & link a processes, build the right amount at the right moment, & deliver right when the customer needs it.

8 Types of Waste

‘DOWNTIME’ Acronym

“D’ of Waste

Defects: Products that don’t meet expectations, requiring rework or scrap

“O” of Waste

Overproduction: Producing more than what is needed or before it is needed

“W” of waste

Waiting: Delays when people, machines, or materials remain idle

“N” of Waste

Non-utilized talent: Underutilizing employees’ skills, knowledge, and creativity

“T” o Waste

Transportation: Unnecessary movement of products & materials

“I” of Waste

Inventory: Excess products and materials occupying storage space

“M” of Waste

Motion: Unnecessary movement of people or equipment

“E” of Waste

Extra-processing: more work or higher quality than is required by the customer

TPM

“Total productive/preventative maintenance” - to reduce unplanned downtime

What causes waiting lines to form?

The Demand for Service doesn’t meet the System Capacity

Hejunka

The leveling of production load by both volume and product mix

Jidoka

Automatically stopping the process when something is wrong and then fixing the problems on the line itself as they occur

5S Terms

Sort, Straighten, Shine, Standardized and Sustain

Sort Definition

Separate needed items from unneeded items (including tools, parts, materials, and paperwork), and discard the unneeded

Straighten Definition

Neatly arrange what is left, with a place for everything and everything in its place. Organize the work area so that it is easy to find what is needed

Shine Definition

Clean and wash the work are and make it shine

Standardize Definition

Establish schedules and methods of performing the cleaning and sorting. organize the cleanliness that results from regularly doing the first 3 S practices so that perpetual cleanliness and a state of readiness are maintained.

Sustain Definition

Create discipline to perform the first 4 S practices, whereby everyone understands, obeys, and practices the rules when in the plant. implement mechanisms to sustain the gains by involving people and recognizing them through a performance measurement system. (hardest step)

VSM Metrics

Taky Time, Cycle Time, Setup Time, Per Unit Process Time, & Capacity

Basic Elements of Waiting Line

Customer population - waiting line - priorty rule - service facilities -

VSM Development

Select product(s), Define current state, create ideas for future-state, and form and implement improvement plan.

What is Lead time?

The time between different steps of production; the amount of time wasted by waiting

Capacity

The maximum rate of output that our system can achieve

Capacity Decisions

Deciding between amount to meet customer demand; too much or too little can have serious consequences

Capacity cushion

The amount of reserve capacity a process uses to handle sudden change; varies by industry

Operational Stability Elements

Hejunka, Standard Work, TPM & Supply Chain

What is waste?

Anything that doesn’t add value for the customer

Role of inventory in manufacturing

Acts as a buffer for companies

By using JIT Inventory

Companies are at a bigger risk if they don’t act to correct problems quickly

What kind of production does Just-in-Time processing necessitate?

Pull Production

Why Standard Work?

Pre-cursor of continuous improvement; Need Standards across company to produce products of quality in short time frame

What Drives capacity changes?

Marketing & Sales, Accounting, Finance, Human Resources, Information Systems, Operations & Supply Chain

Considerations of long-term capacity planning

Economies & Diseconomies of Scale and timing + sizing

Economes of Scale Includes

Spreading Fixed Costs, Reducing Construction Costs, Cutting costs of purchased materials and finding process advantages

Diseconomies of Scales includes

Complexity, Loss of Focus and Inefficiencies

Capacity requirement =

processing hours required for year’s demand/hours available from a single capacity unit(employee or machine) after deducting capacity cushion

Expand in advance vs wait-and-see

Long-Term Capacity plannng Strategy

1 - Estimate future capacity requirements
2. Identify gaps by comparing
requirements with available capacity
3. Develop alternative plans for reducing
the gaps
4. Evaluate each alternative, both
qualitatively and quantitatively, and
make a final choice

7 key principles of toc

balance flow, maximize output/efficiency, bottleneck effects, inventory needed in front of bottlenecks,

Drum-Buffer-Rope System

A planning and control system that regulates the flow of work-in-process materials at the bottleneck or the capacity constrained resource (CCR) in a productive system

Buffer

Plans early flow into Bottleneck
→ protects against disruptions

Rope

Tie material release to drumbeat
→ Control throughput through system

Bottleneck

sets the production rate (“beat”)
→ linked to market demand

High Variability?

Causes capacity problems & ideally use lower utilization rate to combat

Actvity-on-Node (AON) networks

Nodes = activities

Arcs = precedence relationships

Theoretical Minimum (TM)

Total time required to assemble each unit/cycle time

Idle Time

(number of stations)(cycle time) - total time required to assemble each unit)

Efficienty

The ratio of productive time to total time, expressed as a percent

Balance Delay

The amount by which efficiency falls short of
100%

Optimization Problem

The problem of finding the best solution from all feasible solutions

Linear Programming restricts

1. Linearity
• Constraints are linear
• Objective function is linear
2. Often, decision variables are nonnegative

Objective function

function to minimize or maximize

Decision variables

what to find optimal values for

Constraints

limitations on the possible solutions

Feasible region

set of solutions that don’t violate constraints