Chapter 1: Operations and Supply Chain Management Flashcards
Operations and supply chain management
is defined as the design, operation, and improvement of the systems that create and deliver the firm’s primary products and services
Operations
refers to manufacturing and service processes that are used to transform the resources employed by the firm into products desired by customers
Supply chain
refers to processes that move information and material to and from the manufacturing and service processes of the firm
Planning
consists of the processes needed to operate an existing supply chain strategically
Sourcing
involves the selection of suppliers that will deliver the goods and services needed to create the firm’s product
Making
is where the major product is produced, or the service is provided
Delivering
is also referred to as a logistics process
Returning
involves processes for products received back from customers who had problems with the product(s)
Intangible process
can’t measured or weighed (service)
Tangible good
has a physical dimension
Product-service bundling
refers to a company building service activities into its product offerings for its customers
Efficiency
means doing something at the lowest possible cost
Effectiveness
means doing the right things to create the most value for the customer
Value
could be defined by dividing value by price
Benchmarking
is a process in which one company studies the processes of another company to identify best practices
Days sales outstanding
is how many days it takes for the business to receive cash for sale of product
Cash cycle conversion
= Days sales outstanding + Days inventory – payable period
Cash conversion cycle time
is a formula used to define how long it takes a company to convert the money spend on raw materials into the profit it receives from the sale of a product
Receivables turnover
= Annual credit sales/ Average accounts receivable
Inventory turnover
COGS/ Average Inventory Value; measures the average number of times inventory is sold and replaced during the fiscal year
Asset turnover
= Revenue (or sales)/ Total assets; this is the amount of sales generated for every dollar’s worth of assets
Just in Time
is an integrated set of activities designed to achieve high-volume production using minimal inventories of parts that arrive exactly when they are needed
Total Quality Control
which aggressively seeks to eliminate causes of production defects
business process reengineering
approach seeks to make revolutionary changes as opposed to evolutionary changes
Six Sigma
is a statistical term to describe the quality goal of no more than 3.4 defects out of every million units
Sustainability
is the ability to maintain balance in a system
Triple bottom line
– a business strategy that includes social, economic, and environmental criteria
Business analytics
the use of current business data to solve business problems using mathematical analysis
