Ch. 21 Managing Small Business Operations Flashcards
ABC Method
A system of classifying items in inventory by dollar velocity (purchase price x annual quantity consumed).
Acceptance sampling
The measurement of random samples of products against predetermined standards to determine the acceptability of an entire lot.
Associative forecasting
Forecasting that considers a variety of variables to determine expected sales.
Attributes
Product or service parameters that can be counted as being present or absent.
Bottleneck
Any point in the operations process where limited capacity reduces the production capability of an entire chain of activities.
Constraint
The most restrictive of bottlenecks, determining the capacity of the entire system.
Continuous manufacturing
A form of repetitive manufacturing with output that more closely resembles a product stream than individual products.
Cooperative purchasing organization (coop)
An organization in which small businesses combine their demand for products or services in order to negotiate as a group with suppliers.
Cycle counting
A method for counting different segments of the physical inventory at different times during the year.
Demand management strategies
Operational strategies used to stimulate customer demand when it is normally low.
Economic order quantity
An index that determines the quantity to purchase in order to minimize total inventory costs.
Flexible manufacturing systems
Manufacturing operations that usually involve computer-controlled equipment that can turn out products in smaller or more flexible quantities.
Inspection
The examination of a part of a product to determine whether it meets quality standards.
ISO 9000
The standards governing international certification of a firm’s quality management procedures.
Job shops
Manufacturing operations designed for short production runs of small quantities of items.
Just-in-time inventory system
A method of cutting inventory carrying costs by making or buying what is needed just as it is needed.
Lean production
An approach that emphasizes efficiency through elimination of all forms of waste in a company’s operations.
Make-or-buy decision
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.
Operations
The processes use to create and deliver a product or service.
Operations management
The planning and control of a conversion process that includes turning inputs into outputs that customers desire.
Outsourcing
Contracting with a third party to take on and manage one of more of a firm’s functions.
Perpetual inventory system
A method for keeping an ongoing current record of inventory.
Physical inventory system
A method that provides for periodic counting of items in inventory.
Poka-yoke
A proactive approach to quality management that seeks to mistake-proof a firm’s operations.
Project manufacturing
Manufacturing operations used to create unique but similar products.
Quality
The features of a product or service that enable it to satisfy customers’ stated and implied needs.
Repetitive manufacturing
Manufacturing operations designed for long production runs of high-volume, standardized products.
Statistical inventory control
A method of controlling inventory that uses a targeted service level, allowing statistical determination of the appropriate amount of inventory to carry.
Supply Chain Operations Reference (SCOR) model
A list of critical factors that help in assessing a supplier’s performance.
Synchronous management
An approach that recognizes the interdependence of assets and activities and manages them to optimize the entire company’s performance.
Total quality management (TQM)
An all-encompassing management approach to providing high-quality products and services.
Two-bin inventory system
A method of using two containers for each item in inventory, one to meet current demand and the other to meet future demand.
Variables
Measured parameters that fall on a continuum, such as weight or length.
