Chapter 10

Question 1

Operations Management

Answer 1

A set of methods and technologies
used in the production of a good or a service

Question 2

Service Operations

Answer 2

A production activities that yield tangible
and intangible service products

Question 3

Goods Production

Answer 3

A production of activities that yield tangible
products

Question 4

Time Utility

Answer 4

When the product is available

Question 5

Place Utility

Answer 5

Where the product is available

Question 6

Ownership (Possession) Utility

Answer 6

Consumption or use of product

Question 7

Form Utility

Answer 7

Product’s form (the transformation of raw
materials into a finished product)

Question 8

Difference Between Service and Manufacturing Operations

Answer 8

In interacting with customers, services can be intangible and unstorable, the customer’s presence in the operations process, and service quality considerations

Question 9

Goods-Producing Processes

Answer 9

Methods and technologies used in the production of goods & services are classified by the type of transformation technology, type of process (analytic or synthetic, and the amount of customer contact)

Question 10

Types of Transformation Technology

Answer 10

Chemical processes, fabrication processes, assembly processes, transport processes, and clerical processes

Question 11

Analytic Process

Answer 11

Resources are broken down in the production process (Extracting minerals from ore)

Question 12

Synthetic Process

Answer 12

Resources are combined in the production process (Paint production)

Question 13

Service-Producing Processes (2 types)

Answer 13

Customers are involved in and can affect the
transformation process
Low-contact systems: customers do not need to be physically present
High-contact system: customers need to be physically present

Question 14

Business Strategies (Driver of Operations)

Answer 14

Quality, Lower prices, Flexibility, and Dependability

Question 15

Operations planning methods

Answer 15

All successful operations are carefully planned and implemented (Capacity, quality, location, layout, and methods planning)

Question 16

Capacity Planning—Goods and Services

Answer 16

Amount that a firm can produce under normal conditions

Question 17

Process Layout

Answer 17

Equipment and people are grouped
by function

Question 18

Cellular Layout

Answer 18

Used when families of products can follow similar flow paths

Question 19

Product Layout

Answer 19

Organizing equipment and people to produce one
type of product (assembly lines, robotics, lean manufacturing)

Question 20

Flexible manufacturing system

Answer 20

A production system that allows a single factory to produce small batches of different goods on the same production line

Question 21

Soft manufacturing

Answer 21

Emphasizes computer software and computer networks instead of production machines

Question 22

Scheduling Goods Operations

Answer 22

Master Production Schedule (top level), Which products, when, what resources, what time period

Question 23

Scheduling Service Operations (low and high contact)

Answer 23

Low-contact services: Based on desired completion dates and/or arrival
High-contact services: Customer is directly involved (impacts scheduling)

Question 24

Gantt Charts

Answer 24

Diagram of steps in the project and time required for each (Can be used to check progress)

Question 25

PERT Charts

Answer 25

Specifies the sequence and critical path of steps in a project (Can identify activities that will cause delay)

Question 26

Operations Control

Answer 26

Monitoring performance by comparing results to original plans and schedules

Question 27

Materials Management

Answer 27

Planning, organizing, and controlling the flow of materials from purchase to the distribution of finished goods (Transportation, purchasing, inventory control, supplier selection, warehousing)

Question 28

Tools for Process Control

Answer 28

Worker training, Just-in-time production systems, Material requirements training, and Quality control

Question 29

Just-in-Time Production Systems (JIT)

Answer 29

Parts are delivered when they are needed (Resources continually flow from raw materials to the finished product, Saves on warehouse costs, and Smooth movement of product components)

Question 30

Materials Requirements Planning (MRP)

Answer 30

Computerized bill of materials estimates production needs. Resources are acquired and put into production only as needed

Question 31

Manufacturing Resource Planning (MRP II)

Answer 31

Advanced version of MRP; ties all parts of the organization into production activities (Production, marketing, inventory, finance, and human resources)

Question 32

Quality

Answer 32

A product’s fitness for use in terms of offering the features that consumers want

Question 33

Measuring Productivity

Answer 33

Labour productivity = Gross Domestic Product (GDP)/Total Number of Workers

Question 34

Domestic Productivity

Answer 34

Productivity affects the standard of living: employees (wages), investors (profits), customers (prices)

Question 35

True or False: Service productivity is higher than manufacturing productivity

Answer 35

False; Manufacturing productivity is higher than service productivity

Question 36

Company Productivity benefit + Impacts

Answer 36

High productivity gives a competitive edge; Lower costs allow for lower prices, more profit or higher wages Impacts: investors buying stock, employee profit-sharing plans, managers’ plans for the future

Question 37

Total quality management (TQM)

Answer 37

Includes all activities and parts of the business (customers, suppliers, employees), Leadership and customer focus are key, Requires the highest level of commitment (no defects are tolerable), Highlights continuous improvement, and all employees are responsible for maintaining quality standard

Question 38

Performance Quality

Answer 38

Refers to the features of a product and how well it performs

Question 39

Quality Reliability

Answer 39

Refers to the consistency or repeatability of performance

Question 40

Quality Ownership

Answer 40

The idea that quality belongs to each person who creates or destroys it while performing a job

Question 41

Quality-Assurance Tools

Answer 41

competitive product analysis, value-added analysis, statistical process control, quality/cost studies, quality-improvement teams, benchmarking, getting closer to the customer, ISO 9000:2000 and ISO 14000, re-engineering, and adding value through supply chains

Question 42

Value-Added Analysis

Answer 42

Evaluation process to determine the value added by all work activities, material flows, and paperwork

Question 43

Statistical Process Control (SPC)

Answer 43

SPC methods enable managers to analyze variations in production data (Detect when adjustments are needed to create products with high quality reliability)

Question 44

Process Variation

Answer 44

Change in employees, materials, work methods, or equipment that affects output quality

Question 45

Control Chart

Answer 45

Statistical process control method (results plotted on a diagram) - Results outside the control limits are easily spotted (checked)

Question 46

Quality/Cost Studies

Answer 46

Assessing quality-related costs and identifying areas with cost-saving potential (Quality costs are associated with making, finding, repairing or preventing product defects)

Question 47

Benchmarking (internal and external)

Answer 47

Compares the quality of a firm’s output with the quality of the output of the industry’s leaders Internal: Compare to past performance External: Compare to competitors' best practices

Question 48

ISO 9000:2000 and ISO 14000 (Environmental)

Answer 48

Program certifying that a company meets the rigorous standards of the International Organization for Standardization (ISO). Firms are measured by product testing, employee training, record-keeping, and correcting defects

Question 49

Business Process Re-Engineering

Answer 49

Redesigning business processes to improve performance, quality, and productivity

Question 50

Supply Chain (Value Chain)

Answer 50

A group of companies and stream of activities involved in getting the product from the raw material stage to the end consumer

Question 51

Supply-Chain Management benefits

Answer 51

Offers a competitive edge because companies are working together to improve overall flow of goods o Customers get better value o Smooth flow of accurate information reduces unwanted inventory o Materials move faster to business customers and consumers

Question 52

Value Chains

Answer 52

Include production, exchange distribution and consumption activities.

Question 53

Two general categories of acitivities

Answer 53

Primary activities: these are geared towards all facets of the life cycle of the product or service (logistics and operations) Secondary activities (i.e. procurement activities, human resource management, technology related activities, the firm’s internal infrastructure and processes) which are required for the primary activities to occur.