Ch. 21 Managing Small Business Operations

Question 1

ABC Method

Answer 1

A system of classifying items in inventory by dollar velocity (purchase price x annual quantity consumed).

Question 2

Acceptance sampling

Answer 2

The measurement of random samples of products against predetermined standards to determine the acceptability of an entire lot.

Question 3

Associative forecasting

Answer 3

Forecasting that considers a variety of variables to determine expected sales.

Question 4

Attributes

Answer 4

Product or service parameters that can be counted as being present or absent.

Question 5

Bottleneck

Answer 5

Any point in the operations process where limited capacity reduces the production capability of an entire chain of activities.

Question 6

Constraint

Answer 6

The most restrictive of bottlenecks, determining the capacity of the entire system.

Question 7

Continuous manufacturing

Answer 7

A form of repetitive manufacturing with output that more closely resembles a product stream than individual products.

Question 8

Cooperative purchasing organization (coop)

Answer 8

An organization in which small businesses combine their demand for products or services in order to negotiate as a group with suppliers.

Question 9

Cycle counting

Answer 9

A method for counting different segments of the physical inventory at different times during the year.

Question 10

Demand management strategies

Answer 10

Operational strategies used to stimulate customer demand when it is normally low.

Question 11

Economic order quantity

Answer 11

An index that determines the quantity to purchase in order to minimize total inventory costs.

Question 12

Flexible manufacturing systems

Answer 12

Manufacturing operations that usually involve computer-controlled equipment that can turn out products in smaller or more flexible quantities.

Question 13

Inspection

Answer 13

The examination of a part of a product to determine whether it meets quality standards.

Question 14

ISO 9000

Answer 14

The standards governing international certification of a firm’s quality management procedures.

Question 15

Job shops

Answer 15

Manufacturing operations designed for short production runs of small quantities of items.

Question 16

Just-in-time inventory system

Answer 16

A method of cutting inventory carrying costs by making or buying what is needed just as it is needed.

Question 17

Lean production

Answer 17

An approach that emphasizes efficiency through elimination of all forms of waste in a company’s operations.

Question 18

Make-or-buy decision

Answer 18

A choice that companies must make when they have the option of making or buying component parts for products they produce, or the option of purchasing necessary services or providing them in-house.

Question 19

Operations

Answer 19

The processes use to create and deliver a product or service.

Question 20

Operations management

Answer 20

The planning and control of a conversion process that includes turning inputs into outputs that customers desire.

Question 21

Outsourcing

Answer 21

Contracting with a third party to take on and manage one of more of a firm’s functions.

Question 22

Perpetual inventory system

Answer 22

A method for keeping an ongoing current record of inventory.

Question 23

Physical inventory system

Answer 23

A method that provides for periodic counting of items in inventory.

Question 24

Poka-yoke

Answer 24

A proactive approach to quality management that seeks to mistake-proof a firm’s operations.

Question 25

Project manufacturing

Answer 25

Manufacturing operations used to create unique but similar products.

Question 26

Quality

Answer 26

The features of a product or service that enable it to satisfy customers’ stated and implied needs.

Question 27

Repetitive manufacturing

Answer 27

Manufacturing operations designed for long production runs of high-volume, standardized products.

Question 28

Statistical inventory control

Answer 28

A method of controlling inventory that uses a targeted service level, allowing statistical determination of the appropriate amount of inventory to carry.

Question 29

Supply Chain Operations Reference (SCOR) model

Answer 29

A list of critical factors that help in assessing a supplier’s performance.

Question 30

Synchronous management

Answer 30

An approach that recognizes the interdependence of assets and activities and manages them to optimize the entire company’s performance.

Question 31

Total quality management (TQM)

Answer 31

An all-encompassing management approach to providing high-quality products and services.

Question 32

Two-bin inventory system

Answer 32

A method of using two containers for each item in inventory, one to meet current demand and the other to meet future demand.

Question 33

Variables

Answer 33

Measured parameters that fall on a continuum, such as weight or length.