Productivity/Forcasting

Conversion Process

A step or series of steps where value is added to an item or service.

CRP (Capacity Requirements Planning)

The function of establishing, measuring, and adjusting limits or levels of resources (labor and machines).

Design Capacity

The maximum expected output capability of a resource or system.

Effective Capacity

The expected output capability of a resource or system after accounting for scheduled down time (like for maintenance).

Efficiency

A measurement of the actual output relative to the standard output expected (effective capacity).

Frank and Lillian Gilbreth

Considered the founders of modern industrial management who were pioneers of time and motion studies. They also wrote Cheaper by the Dozen.

Frederick Taylor

An American mechanical engineer who sought to improve industrial efficiency. He is considered the father of scientific management.

Henry Ford

American industrialist who developed the assembly line technique for mass production.

Henry Gantt

American mechanical engineer and consultant who developed visual methods to aid in the management of projects.

Lag the Demand

A capacity acquisition strategy where expansion takes place only after the demand materializes and never exceeds the demand.

Lead the Demand

A capacity acquisition strategy where expansion takes place before the demand materializes and never falls behind the capacity growing requirements.

Output

The quantity or amount produced.

Production System

A transformational process that accepts inputs and converts them into the desired outputs.

Productivity

A measure of process output divided by input that helps us determine the effectiveness of the process.

Service System

A configuration of resources that deliver a valuable action or deed, rather than a tangible product, to satisfy a customer need or want.

Straddle the Demand

A capacity acquisition strategy where capacity exceeds demand after expansion but then falls behind demand before the next expansion installment takes place.

Utilization

A measurement of the actual output relative to the optimal output expected (design capacity).

Associative Models

Forecasting methods that use one or more variables that are believed to affect demand.

Coefficient of Determination (r squared)

A value between 0 and 1 that is used to express the strength of the relationship between two variables.

Correlation

The relationship between two sets of data such that when one changes, the other is likely to make a corresponding change. Same

Delphi Method

A qualitative forecasting method where opinions from experts are combined in a series of iterations that leads to convergence on a solution.

Forecast Bias

A deviation in the forecast that is consistently higher or lower than actual demand.

MAD (Mean Absolute Deviation)

The average of the absolute forecast errors.

MAPE (Mean Absolute Percentage Error)

A measure of the statistical variation in a forecast expressed as a percentage.

Market Surveys

A forecasting method that employs questionnaires or interviews, given to potential customers, to learn about consumer behavior.

Moving Average

An arithmetic mean of a certain number of the most recent observations.

Multiplicative Seasonal Index

A method that employs a number to adjust the forecast for seasonality.

Naive Forecast

A method where the forecast in the new period is equal to the actual demand in the previous period.

Product Lifecycle Stages

The steps a new offering goes through from its introduction to its end including introduction, growth, maturity and decline.

Qualitative Forecast

An approach for predicting demand that is based on intuition or judgmental evaluation.

Quantitative Forecast

An approach for predicting demand that is based on historical data.

Regression Analysis

A statistical technique that expresses the functional relationship between dependent and independent variables.

Sales Force Composite

A method where estimates from field salespeople are "rolled up" or aggregated to produce a forecast.

Time Series Models

A set of data that is distributed over time and exhibits one of the following patterns: seasonal, trend, cyclical, and random.

Trend Projection

A useful forecasting method when historical data exhibits an upward or downward pattern.

Weighted Moving Average

An averaging method in which the data is adjusted or weighted according to its importance.

14 Points

W. Edwards Deming's list of management practices to help companies increase their quality and productivity.

Capacity Expansion Strategy

An approach to a firm's acquisition of resources that will either lead, lag, or track the customer demand.