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Management > Chapter 21 Packet Notes > Flashcards

Chapter 21 Packet Notes Flashcards

1
Q

The process used to create and deliver a good or service (value) to customers.

A

Operations

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2
Q

The planning and control of a conversion process that includes turning inputs into outputs (products and/or services) that customers desire.

A

Operations Management

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3
Q
  • How much flexibility is required to satisfy customers over time?
  • What is customer demand today? for the future? Are facilities and equipment adquate to keep up with demand?
  • What options are available for satisfying customers?
  • What skills or capabilities set the firm apart from its competitors such that the firm can best take advantage of these distinctive features in the market?
  • Does the competitive environment require certain capabilities that the enterprise lacks?
A

Important Questions about Operations Factors

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4
Q

Products are tangible, services are intangible

A

Managing Operations in a Service Business

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5
Q
  • Managing can produce goods for inventory; service operations cannot store or bank services.
  • Productivity and quality is more easily measured in manufacturing than service operations.
  • Quality is more difficult to establish and control in service than in manufacturing operations.
  • Customers are more involved in service than manufacturing operations and can influence the quality or service.
  • Technology can enable customers to provide more o ftheir own services.
A

Managing Operations in a Service Business

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6
Q

Input → Process → Output

A

The Operations Processes

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7
Q
  • Job Shop
  • Project Manufacturing
  • Repetitive Manufacturing
  • Flexible Manufacturing
  • Capacity Considerations
  • Planning and Scheduling
  • Incorporates demand management strategies
A

Types of Mnufacturing Operations

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8
Q

Operation in which short production runs are used to produce small quantities of items.

A

Job Shop

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9
Q

Operations used to create unique but similar items.

A

Project Manufacturing

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10
Q

Operations in which long production runs are used to produce a large quantity of standardized product.

A

Repetitive Manufacturing

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11
Q

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

A

Flexible Manufacturing

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12
Q
  • Capacity limits a firm’s ability to meet demand.
  • Capacity determines startup (fixed) costs.
  • Ability to adjust capacity differs among firms.
A

Capacity Considerations

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13
Q
  • Involves attempting to achieve the orderly, sequential flow of products or services to market.
  • Is critical in service industry operations.
A

Planning and Scheduling

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14
Q

Strategies to stimulate customer demand when it is normally low.

A

Incorporates Demand Management Strategies

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15
Q
  • Objectives of Inventory Management
  • Inventory Cost Control
  • ABC Inventory Classification
  • Just-in-time inventory (JIT) system
A

Inventory Management and Operations

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16
Q
  • Ensuring continuous operations
  • Maximizing sales
  • Protecting assets
  • Optimizing inventory investment
A

Objectives of Inventory Management

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17
Q

To support customer demand and balance sheet concerns is critical for a healthy business.

A

Balancing Inventory

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18
Q

The quantity to purchase in order to minimize total inventory costs.

  • Total Inventory Costs = Total Carrying Costs + total Ordering Costs
A

Economic Order Quantity (EOQ) - inventory cost control

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19
Q

A system of classifying items in inventory by relative value.

  • Category A (close/continuous control)
  • Category B (moderate control)
  • Category C (periodic control)
A

ABC Inventory Classification

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20
Q

High-value or critical production component items.

A

Category A (Close/Continuous Control)

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21
Q

Less costly, secondary importance items.

A

Category B (Moderate Control)

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22
Q

Low-cost and noncritical items.

A

Category C (Periodic Control)

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23
Q

A demand (pull) method of reducing inventory to an absolute minimum.

  • New inventory items arrive at the same time that the last inventory item is placed in service.
A

Just in Time Inventory (JIT) System

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24
Q
  • Closer coordination with suppliers
  • Consistent quality production
  • Lower safety stock levels
A

JIT Promotes:

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25
Q
  • Physical inventory system
  • Cycle counting
  • Perpetual inventory
  • Two-bin inventory system
A

Inventory Record-Keeping System

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26
Q

Provides for periodic counting of items in inventory.

A

Phyiscal Inventory System

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27
Q

Counts different segments of the physical inventory at different times during the year.

A

Cycle Counting

28
Q
  • Keeps a running record of inventory.
  • Does not require a physical count except to ensure the accuracy of the system.
A

Perpetual Inventory

29
Q

A method of inventory control based on use of two containers for each item in inventory: one to meet current demand and the other to meet future demand.

A

Two-Bin Inventory System

30
Q
  • Quality as a competitive tool
  • Quality
  • Total quality management (TQM)
A

Operations Management and Quality

31
Q

Quality is a must in international compeition.

A

Quality as a Competitive Tool

32
Q
  • The features of a product or service that enable it to satisfy customers’ needs.
  • A perception of the customer as to the suitability of the product or service of a firm.
A

Quality

33
Q

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

A

Total Quality Management (TQM)

34
Q

Employee Participation

  • Employee performance is a critical quality variable
  • The implementation of work teams and empowerment of employees to build workplace involvement.
  • Quality circle
A

Tools and Techniques of TQM

35
Q

A group of employees who meet regularly to discuss quality-related problems.

A

Quality Circle

36
Q
  • Customer driven
  • Organizational commitment
  • Culture of continuous improvement
A

Essential Features of Total Quality Management

37
Q
  • Customer expectations
  • Customer feedback
A

Customer Focus of Quality Management

38
Q
  • Quality is the extent to which a product or service satisfies customer’s needs and expectations.
    • Product quality
    • Service quality
    • Produce and service quality combinations (good for funeral business).
  • “The customer is the focal point of quality efforts”
A

Customer Expectations

39
Q

Customers are the eyes and ears of the business for quality matters.

A

Customer Feedback

40
Q
  • The inspection process
  • Poka-Yoke
A

Quality Assurance Using Inspection Versus Poka-Yoke

41
Q

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

  • Occurs after the fact- the defective good has already been produced.
A

The Inspection Process

42
Q

A proactive approach to quality management that seeks to mistake-proof a firm’s operations, thus avoiding problems and waste before they can occur.

A

Poka-Yoke

43
Q

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

A

ISO 9000

44
Q
  • Providing an excellent combination of tangible products and intangible services.
  • Providing personalized, high contact services.
  • Providing service quality without regard to the profitability of the customer.
  • Developing good measures to control service quality.
A

Opportunities for Small Service Companies

45
Q
  • Purchasing
  • The importance of purchasing
  • Make-or-buy decisions
  • Outsourcing
  • Cooperative purchasing organization (COOP)
  • Diversifying sources of supply
  • Forming strategic alliances with suppliers
  • Forecasting supply needs
  • Using information systems
A

Purchasing Policies and Practices

46
Q

The process of obtaining materials, equipment, and services from outside.

A

Purchasing

47
Q

The process of acquiring quality raw material inputs affects:

  • The timely and consistent production of quality products.
  • Retailer sales of finished products to customers.
  • The costs of products, their profitability and their selling prices.
A

The Importance of Purchasing

48
Q

A firm’s choice between producing and purchasing component parts for its products.

A

Make-or-Buy Decisions

49
Q
  • Increased utilization of plant capacity
  • Assurance of supply of critical components
  • Maintaining secrecy in designs and processes
  • Saving on transportation costs and supplier profits
  • Closer coordination and control of overall process
  • Higher quality components for inputs
A

Reasons for Making

50
Q
  • Outside supplier is cheaper and/or higher quality
  • Investment savings on space, personnel, equipment
  • Less diversified managerial experience and skills required
  • Greater flexibility in matching supply and demand
  • increased focus on production of core product/services
  • No risk of equipment obsolescence
A

Reasons for Buying

51
Q

Purchasing products or services that are outside the firm’s area of competitive advantage.

A

Outsourcing

52
Q

Small business combine demand for products or services to negotiate as a group with suppliers.

A

Cooperative Purchasing Organization (COOP)

53
Q

Reasons for having a sole supplier:

  • outstanding supplier quality
  • Quantity discounts for volume purchases
  • single orders too small to divide among suppliers
  • quality of supplier-customer relationship

Reasons for having multiple suppliers:

  • Choice of best quality, price, and service
  • Supplier competes for business
  • Insurance against input interruptions
A

Diversifying Sources of Supply

54
Q

An organizational relationship that links two or more business entities in a common endeavor. It involves close coordination of buyers and sellers to:

  • Reduce product introduction lead time
  • Improve product quality
  • Engage in joint problem solving
  • Make joint adjustments to market conditions
  • Involve the supplier early in product development
A

Forming Strategic Alliances With Suppliers

55
Q

Considers a variety of variables to determine expected sales.

A

Forecasting Supply Needs- Associative Forecasting

56
Q

Increases operational effeciencies by reducing inventory management, ordering, payment collection, and personal costs.

A

Using Information Systems

57
Q

Emphasizes efficiency through the elimination of all forms of waste in a firm’s operations- using the minimum amount of resources to satisfy the greatest customer wants and needs.

A

Lean Production

58
Q
  • Defects are costly because they have to be repaired or scrapped
  • Overproduction must be stored and may never be sold.
  • Transportation can be minimized by locating close to suppliers and customers.
  • Waiting can be wasteful because resources are idle.
  • Inventory in excess of the minimum required is unproductive and costly.
  • Motion, whether by product, people, or machinery, can be wasteful.
  • Processing itself is wasteful if it is not productive.
A

Lean Production Characteristics

59
Q

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

A

Synchronous Management

60
Q

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

A

Bottleneck

61
Q

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

A

Constraint

62
Q
  • Add capacity
  • Increase efficiency
  • Filter production
A

Common Methods for Addressing Bottlenecks and Constraints

63
Q
  • Expand resources
  • Subdivide the work
  • Outsource production to a company with more capacity.
A

Add Capacity

64
Q
  • Arrange schedules so that the resource takes no breaks (for example, have employees take breaks during setup, teardown, or maintenance activities)
  • Schedule maintainance on nights, weekends, and holidays rather than during productive time.
  • Increase productivity through training, upgraded tools, or automation.
A

Increase Efficiency

65
Q
  • Inspect quality prior to a constraint.
  • Allow only work that achieves goals and contributes to performance (that is, a finished goods inventory would be unnecessary).
A

Filter Production

Management (33 decks)

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