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Final_Exam_Study_Guide_F24

Chapter 1: Introduction to OSCM Basics

Goods vs Services

  • Goods are tangible items that are produced, such as electronics, machinery, and clothing. They can be stored, inventoried, and transported. Goods can be classified further into durable goods (long-lasting) and consumable goods (used up quickly).

  • Services are intangible offerings, including education, healthcare, and consulting, that cannot be stored for later use. Services are consumed at the point of delivery, often resulting in a unique experience for each customer as they depend on the interaction and availability of service personnel.

Basic Financial Ratios

  • Financial ratios are essential for analyzing an organization's financial health, enabling comparisons over time and against industry benchmarks.

  • Common ratios include:

    • Profit Margin: Indicates the percentage of revenue that exceeds total costs, shedding light on operational efficiency.

    • Current Ratio: Measures an organization's ability to meet short-term obligations, calculated as current assets divided by current liabilities. A ratio above 1 implies financial stability.

    • Return on Equity (ROE): Assesses the profitability relative to shareholder equity, demonstrating how well the company uses investments to generate earnings.

Chapter 2: Strategy

Triple Bottom Line

  • The triple bottom line concept emphasizes evaluating business performance based on three pillars: social, environmental, and economic impacts.

  • This approach advocates for corporate responsibility, encouraging businesses to contribute positively to society, protect the environment, and achieve financial viability to ensure long-term sustainability.

Push vs Pull

  • Push Strategy involves production driven by forecasts and planned inventory levels, which can lead to overproduction and excess inventory if demand fluctuates.

  • Pull Strategy relies on actual customer demand, allowing for more efficient inventory management as products are made or ordered as they are needed, reducing waste and excess.

Quality

  • Maintaining high standards is vital in both product and service delivery. Quality assurance practices and certifications (like ISO) are essential in ensuring consistent quality.

  • Regular assessments and improvements should be integral to business operations to enhance customer satisfaction and competitive advantage.

Chapter 3: Demand Forecasting

Quantitative Techniques

Methods include:

  • Moving Average: A technique that smooths fluctuations in data to identify longer-term trends, ideal for stable demand patterns.

  • Weighted Average: This method assigns different weights to data points, giving more significance to recent data, allowing for more responsive forecasting.

  • Exponential Smoothing: Like weighted averages, it applies decreasing weights to older data, effectively incorporating recent trends.

  • Causal/Linear Regression: This statistical method analyzes relationships between variables; for example, how economic indicators might impact product demand.

Quant vs Qual

  • Quantitative Forecasting is numeric and data-driven, using historical data and statistical methods for accuracy.

  • Qualitative Forecasting relies on opinions and insights from experts, useful in uncertain conditions or when historical data is sparse.

Chapter 4: Capacity Planning

For Goods and Services

  • Strategies differ based on the nature of the output, with emphasis on matching capacity with demand for optimum efficiency.

Capacity Utilization

  • Utilization measures how much of potential output is actually produced, critical for efficiency assessments.

  • Formula: Utilization Rate = Actual Output / Maximum Capacity, helps in determining operational efficiency levels.

Chapter 4a: Learning Curve

Shapes & Progressions

  • Describes how time and cost often decrease with repeated production processes.

  • Experience Learning Curve (ELS) highlights that greater experience leads to improved efficiency and reduced costs over time.

Chapter 6: Manufacturing

Strategies

  • Various approaches exist to optimize manufacturing processes, including lean manufacturing, just-in-time production, and flexible manufacturing systems.

Cycle Times

  • Cycle Time is the total time from the start to the end of a production process, crucial for managing capacity and inventory levels.

Layouts

  • Layout refers to the physical arrangement of operations in manufacturing aimed at enhancing efficiency and workflow; types include process, product, and fixed-position layouts.

Break-even Points

  • Understanding the production level at which total revenues equal total costs assists businesses in pricing and production decisions, ensuring sustainability.

Chapter 7: Service Systems

Fundamentals

  • Principles that guide service systems focus on customer experience, process flow, and service quality.

Service Package

  • Comprises a blend of goods and services delivered to customers, designed to create value and enhance customer satisfaction.

Degrees of Customer Contact

  • Service delivery can involve varying levels of customer interaction, which can significantly influence service quality and satisfaction. High contact services (like personal training) contrast with low contact services (like online banking).

Chapter 8: Sales and Operations Planning (S&OP)

Attributes & Influencers

  • Various factors influence sales and operations plans, including market trends, economic conditions, and resource availability.

Cost/Capacity Considerations

  • Balancing costs against available capacity is vital for operational efficiency and profitability.

Staffing Strategies

  • Different approaches exist for efficiently managing the workforce, including recruitment, training, and scheduling techniques.

Chapter 9a: Enterprise Resource Planning (ERP)

Main Attributes & Modules

  • An ERP system is a centralized framework for managing business functions, integrating processes across finance, HR, production, and supply chain management.

Implementation

  • Steps for rolling out ERP systems include assessing needs, selecting suitable software, data migration, user training, and ongoing support.

Chapter 9: Material Requirements Planning (MRP)

Basic Attributes

  • An MRP system is designed to manage manufacturing processes by ensuring that materials are available for production in the right quantities and at the right time.

Inventory Allocation Logic

  • This dictates how inventory is distributed across production facilities, impacting efficiency and customer service levels.

Scheduling

  • Scheduling involves precise timing of manufacturing processes to optimize resource use and meet delivery deadlines.

Lot Sizing Considerations:

  • L4L (Lot for Lot): Orders quantity based on actual production needs, minimizing excess inventory.

  • EOQ (Economic Order Quantity): Strategy that seeks to minimize ordering and holding costs through optimized ordering quantities.

  • LUC & LTC: Other strategies that deal with lot sizing, focusing on unique operational needs.

Chapter 10: Quality Management

Basics & Costs

  • Understanding both internal and external quality costs is crucial for effective cost management and delivery of quality products/services.

Value of Quality Inspections

  • Quality checks play a significant role in maintaining standards and ensuring customer satisfaction by minimizing defects.

Six Sigma Basics

  • Six Sigma is a structured methodology aimed at reducing defects and improving processes by utilizing statistical tools and techniques.

Total Quality Management (TQM)

  • TQM is an organizational-wide approach focused on continuous improvement, driving quality enhancements across all operational areas.

Chapter 11: Inventory Management

Fundamentals & Decoupling Points

  • Managing inventory effectively is crucial for operational efficiency, involving key concepts such as safety stock and reorder points.

How Much & When to Order

  • Critical factors include demand forecasting, order lead time, and safety stock levels to maintain optimal stock levels.

Associated Costs

  • Inventory management involves costs associated with ordering, holding (storage), and shortage (lost sales) which must be carefully balanced.

Reorder Points

  • Essential to determine inventory levels at which new stock should be ordered; this includes considering safety stock to mitigate uncertain demand.

Replenishment Models:

  • Various models exist for inventory replenishment, including:

    • Fixed Order Quantity: Ordering a consistent amount each time inventory runs low.

    • Fixed Time Period: Ordering at consistent intervals regardless of inventory levels.

    • Single Period Models: Suitable for perishable items or short-life goods, focusing on one-time ordering based on forecasted demand.

Chapter 12: Lean

Fundamentals

  • Lean principles focus on eliminating waste and improving processes by maximizing customer value while minimizing resources.

Benefits for Manufacturing & Service Models

  • Lean methodologies can be effectively applied in both manufacturing and service contexts, leading to streamlined processes and enhanced responsiveness.

Determining Number of Kanban Cards

  • A Kanban system serves as a signal for production and inventory replenishment, promoting just-in-time inventory management.

Chapter 14: Logistics/Distribution

Basics & Options

  • Fundamental concepts in distribution networks include the flow of goods from producers to consumers and the importance of logistics planning.

Transportation Modes

  • Various methods exist for transporting goods, including air, land, sea, and rail, with each having advantages and disadvantages based on speed, cost, and range.

Warehousing Types

  • Different categories of storage facilities exist, including public, private, and dedicated warehouses, each serving distinct logistical needs.

Chapter 15: Theory of Constraints (TOC)

Main Objectives

  • The TOC focuses on identifying and managing constraints within an operation to improve process efficiency and throughput.

Bottlenecks & Critical Chain Resources (CCR)

  • Understanding bottlenecks is essential for effective process management, allowing organizations to optimize operations and minimize delays.

MS350: Final Exam Study Guide

  • The final exam will consist of a total of 75 questions covering all topics above, emphasizing the integration and application of OSCM concepts.