Chapter Definitions Flashcards
Operations management
The management of activities and resources that create goods and or provide services
Efficiency
Operating at the minimum cost and time
Effectiveness
Achieving quality and timeliness
Lead time
The time between ordering a good or service and receiving it
Model
An abstraction of reality, a simplified representation of something
System
A set of interrelated parts that must work together
Pareto phenomenon
A few factors account for a high percentage of results achieved
Craft production
Highly-skilled workers using simple, flexible tools to produce small quantities of customized goods
Division of labour
Breaking up a production process into small tasks so that each worker performs a small portion of the overall job
Interchangeable parts
Parts of a product made to such precision that they do not have to be custom-fitted
Mass production
System in which lower skilled workers use specialized machinery to produce high volumes of standardized goods
Total quality management
A system of management based on the principle that every staff member must be committed to maintaining high standards of work in every aspect of a company’s operations.
Lean production
System that uses minimal amounts of resources to produce a high volume of high-quality goods with some variety
E-commerce
Use of the internet to buy and sell goods and services
Supply chain
A sequence of organizations involved in producing and delivering a product
Competitiveness
ability and performance of an organization in the market compared to other organizations that offer similar goods or services
Strategy
The long-term plans that determine the direction and organization takes to become, or remain, competitive
Strategic planning
The managerial process that determines a strategy for the organization
Key purchasing criteria
The major elements influencing a purchase, price, quality, variety, and timeliness
Order qualifiers
Purchasing criteria that customers perceive as minimum standards of acceptability to be considered for purchase
Order winners
Purchasing criteria that causes selling organization to be perceived as better than the competition
Competitive priorities
Importance given to operations characteristics, cost, quality, flexibility and delivery
Mission
Where the organization is going now, its products and markets
Vision
Where the organization desires to be in the future
Values
Shared beliefs of the organization’s stakeholders
Tactics
Medium-term plans used as components of a strategy
Action plan
medium or short-term project to accomplish a specific objective, assigned to an individual, with a deadline and the resources needed
Operations strategy
comprises a set of well-coordinated policies, objectives, and action plans, directly affecting the operations function, which is aimed at securing a long-term sustainable advantage over the competition
Quality based strategy
Strategy that focuses on quality of an organization’s goods and services
Time based strategy
Strategy that focuses on reduction of time needed to accomplish tasks
Productivity
A measure of productive use of resources usually expressed as a ratio of output to input
Value added
The difference between the costs of inputs and the value or price of outputs
Demand forecast
The estimate of expected demand during a specified time period
CPFR
Collaborative Planning, Forecasting and Replenishment
Forecast horizon
The range of periods we are forecasting for
Elements of a good forecast
1) Timely
2) Accurate
3) Reliable
4) Meaningful Units (dollars and units)
5) In Writing
6) Simple to understand and use
7) Cost effective
Judgmental methods
use non quantitative analysis of historical data and analysis of subjective inputs from consumers, sales staff, managers, executives, similar products, and experts to help develop a forecast
Time series models
Extend the pattern of data into the future
Associative models
Use explanatory variables to predict future demand for the variable of interest
Delphi method
Experts complete a series of questionnaires, each developed from the previous one, to achieve a consensus forecast
Time series
A Time ordered sequence of observations taken at regular intervals of time
Level (average)
Horizontal pattern of Time series
Trend
A persistent upward or downward movement in data
Seasonality
Regular wave-like variations related to the calendar, weather, or recurring events
Cycles
Wave-like variations lasting more than one year
Irregular variations
Caused by unusual one-time explainable circumstances not reflective of typical behavior
Random variations
Residual variations after all other behaviours are accounted for, also called noise
Naive forecast
For a stable series, the next forecast equals the previous periods actual value
Moving average
Technique that averages a number of recent actual values as forecast for current period. It is updated as new values become available
Weighted moving average
a variation of moving average were more recent values in the time series are given larger weight in calculating forecast
Exponential smoothing
weighted averaging method based on previous forecast plus a percentage of the difference between that forecast and the previous actual value
Adaptive (or variable responsive) exponential smoothing
a version of exponential smoothing where the smoothing constant is automatically modified in order to prevent large forecast errors from occurring
Linear trend equation
Yt=a+bt, used to develop forecast when linear trend is present
Trend adjusted exponential smoothing
Variation of exponential smoothing used when a Time series exhibits trend
Seasonal variations
Regularly repeating wave-like movements and series values that can be tied to recurring events, weather, or calendar
Seasonal relatives
Proportion of average or trend for a season in the multiplicative model
Centered moving average CMA
Moving average position at the centre of the data that were used to compute it
Predictor variables
Variables that can be used to predict values of the variable of interest
Regression
Technique for fitting a line to a set of points
Least-squares line
Minimizes the sum of the squared deviations around the line
Forecast error
Difference between the actual value in the forecast value for a given period
Mean absolute deviation MAD
The average of absolute value of forecast errors
Mean squared error MSE
The average of square of forecast errors
Mean absolute percentage error MAPE
The average absolute percent forecast error
Bias
The sum of forecast errors
Control chart for forecast errors
A Time series plot of forecast errors that has limits for individual forecast errors
Tracking signal
A measure used to control the forecasting process, sum of forecast errors divided by mean absolute forecaster
Product design
Determining the form and function of the product
Reverse engineering
dismantling and inspecting a competitor’s product to discover what is composed of and how the components work, searching for own product improvements
Research and development r&d
Organized efforts that are directed toward increasing scientific knowledge and product or process innovation
Life cycle
Incubation, growth, maturity, saturation, and decline
Standardization
Extent to which there is absence of variety in a product or part
Mass customization
Producing basically standardized goods or services but incorporating some degree of customisation
Delayed differentiation
Producing but not quite completing a product until customer preferences are known
Modular design
Parts are grouped into modules that are easily replaced or interchanged. The product is composed of a number of modules or components instead of a collection of individual parts
Reliability
The ability of a product, part, or system to perform its intended function under normal conditions
Failure
Situation in which a product, part, or system does not perform as intended
Robust design
Design that can function over a broad range of conditions
Product liability
A manufacturer is liable for any injuries or damages caused by a faulty product
Remanufacturing
Refurbishing used products by replacing worn out or defective components
Design for disassembly
Design so that used products can be easily taken apart
Recycling
Recovering materials for future use
Concurrent engineering
bridging engineering design, manufacturing engineers, and staff from marketing, manufacturing, and purchasing together early in the design phase
Computer aided design CAD
Product design using computer graphics
Design for manufacturing DFM
Takes into account the organization’s manufacturing capabilities when designing a product
Design for assembly DFA
Focuses on reducing the number of parts in a product and an assembly methods and sequence
Quality function deployment QFD
A structured approach that integrates the “voice of the customer” into product design
Capacity
The upper limit on the workload that it operating unit can handle. Capacity is usually measured as maximum production rate or throughput. Alternatively, a major input is used, example size
Strategic capacity planning
systematic determination of facility and major machine equipment requirements to meet long-term demand for goods and services
Design capacity
The maximum output rate under ideal conditions
Effective capacity
a maximum of a trait that can be sustained given to work breaks, product mix, scheduling difficulties unexpected delays, machine and equipment maintenance, excetera. Also known as standard output rate
Efficiency
The ratio of actual output rate to effective capacity
Utilization
The ratio of uptime to available time
Factors influencing effective capacity
Facilities and machines Product mix Workers Planning an operational factors External factors
Capacity cushion
The excess of capacity over the average demand
Optimal operating level
The level of production that has the lowest average unit cost
Economies of scale
the economic conditions that favour larger plants and machine equipment by causing minimum average unit cost to decrease as size increases
Break Even point BEP
The quantity of output at which total cost and total revenue are equal
Payoff table
Table showing the payoff for each alternative under each state of nature of a one random variable problem
Decision tree
Graphical representation of the decisions, random variables and their probabilities and payoffs
Risk profile
The probability distribution of payoff of the best alternative
Expected value of perfect information EVPI
The difference between the expected payoff with perfect information on the expected payoff without the information
Expected value of sample information EVSI
the difference between the expected payoff with samples imperfect information and the expected payoff without sample information i.e. under risk
Sensitivity to probability
Terminating the range of probability for which an alternative has the best expected payoff
Process design
Determining the form and function of how goods and services are produced ie the sequence of operations
Make or buy
Decide whether to make a part or product in house or to buy it or a segment of production process from another company
Job shop
A process type used when a low quantity of high variety customized goods or services is needed
Batch process
What type of process used when a moderate quantity and variety of goods or services is desired
Repetitive process
A type of process used when higher quantities of more standardized goods or services are needed
Production line
A sequence of machines, work stations that perform operations on a part, product
Assembly line
A production line where parts are added to a product sequentially
Continuous process
Used when a high volume of highly standardized output is required
Technology
applications of scientific discoveries to the development and improvement of goods and services and or the processes that produce or provide them
Automation
Using machinery, equipment with sensing and control devices that enable it to operate automatically
American controlled machines NC
Machines that perform operations by following mathematical processing instructions
Robot
Machine consisting of a mechanical arm, a power supply, and a controller
Flexible manufacturing system FMS
a group of machining centres controlled by computer, with automatic material handling, robots or other automated equipment
Computer integrated manufacturing CIM
A system for linking a broad range of manufacturing and other activities through an integrating computer system
Process flow diagram
Shows the operations and movement of material between the operations
Product layout
Arrangement of production resources linearly according to the progressive steps by which a product is made
Process layout
Arrangement of production resources according to similarity of function
Cellular layout
Layout in which different machines are arranged in a cell that can process items that have similar processing requirements
Group technology
Grouping items with similar design or manufacturing characteristics into part families
Line balancing
Assigning tasks to workstations in such a way that the workstations have approximately equal time requirements
Precedence Network
Diagram that shows the tasks and their precedence requirements
Cycle time
The maximum time allowed at each workstation to complete its set of tasks on a unit
Percentage idle time
100 X sum of idle X per unit / actual number of workstation X cycle time
Decision variables
Choices in terms of amounts of either input or output
Objective function
A mathematical expression involving the decision variables that represent the objective example profit, cost
Constraints
Represent the requirements or limitations that restrict the available choices
Feasible solution space
The set of all feasible combinations of values of decision variables as defined by the constraints
Parameters
Coefficients of decision variables in the objective function and constraints
Graphical solution
solution method that involves drawing the feasible solution space and contras of the objective function on paper, finding the optimal solution by observation. This method applies to only two variable linear programs
Redundant constraint
A constraint that does not form a unique boundary of the feasible solution space
Multiple optimal solutions
when you’re active function line is parallel to the constraint line that forms a boundary of the feasible solution space, all points on that boundary are optimal
Binding constraint
A constraint that forms the optimal corner point of the feasible solution space
Surplus
Will be optimal very values of decision variables are substituted into the left side of a ≥ constrained, surplus is the amount the left side exceeds the right side
Slack
The optimal values of a decision variables are substituted into the left side of a ≤ constrained, slack is the amount the left side is less than the right side.
Sensitivity analysis
Assessing the impact of potential changes of the parameters, numerical values, of an LP model on its optimal solution
Range of optimality
range of values for an objective function coefficient over which the optimal solution values of the decision variables remain the same
Shadow price
amount by which the value of the objective function would change as a result of a one-unit change in the rhs value of a constraint
Range of feasibility
Range of values for its RHS of a constraint over which its shadow price remains the Same
3 Types of Automation
Fixed Automation - Most rigid (mass production)
Programmable Automation - CNC (Mechanical, Power Supply, Controller)
Flexible Automation - CAD, FMS, CIM
4 Types of Process Designs
1) Job Shop - Low volume high variety, skilled workers (small bakery)
2) Batch Processing - Moderate volume, moderate variety, moderate skill, equipment less flexible (books, paint, etc)
3) Repetitive (Assembly Line) - High volume, standardized, low skill (TV’s, Computers, Automotive)
4) Continuous - High volume, high standard equipment, doesn’t turn off, high fixed cost (paper mill, nuclear power plants, oil rig)
Work/job design
Specifying the content and method of the work or job
Specialization
Focussing the work or job to a narrow scope
Job enlargement
Giving a worker a larger portion of the total activity
Job rotation
Workers periodically exchange jobs
Job enrichment
Increasing employee responsibilities for planning, execution, and control of job
Self-directed team
A group of employees who perform the same function and are empowered to make certain decisions and changes in their work
Methods analysis
Breaks down the job into a sequence of tasks elements motions and improves it
Flow process chart
Chart used to examine the sequence of steps, tasks, element by focusing on movements of the worker or flow of material
Worker machine process chart
Used to determine portions of a work cycle during which a worker and his or her machine are busy or idle
Motion study
Systematic study of the human emotions used to perform a task element
Motion economy principles
Guidelines for designing motion efficient work procedures
Slow motion study
use of motion pictures and slow motion to study motions that otherwise would be too rapid to analyze
Simo chart
A chart that shows the motions performed by each hand, side-by-side, over time
Ergonomics
Fitting the job to the workers capability and size
Time study
Determining how long it should take to do a task. Also called work measurement
Standard Time
amount of time it should take a qualified worker to complete a specified task, working at a sustainable rate, and using given methods, tools and equipment, raw materials, and workplace arrangement.
Stopwatch Time study
Development of a standard time based on timing one worker over a number of cycles
Predetermined time standards
Publish data based on extensive research on element motion times
Work sampling
Technique for estimating the proportion of time that a worker spends on each activity or task or is idle
Time based pay
Compensation based on length of time an employee works
Output based pay
Compensation based on amount of output an employee produces
Skills/knowledge based pay
Rewarding workers who undergo training to increase their skills and knowledge
Locational breakeven analysis
Identifies the least fixed and variable cost location choice based on quantity to be produced
Factor rating
involves scoring the factors both quantitative and qualitative and determining the weighted score for each location, and choosing the location with the highest weighted score
Centre of gravity method
Method for locating a distribution centre or Warehouse that minimizes total distribution cost
Geographic information system GIS
A computer-based tool for collecting, storing, retrieving, and displaying location dependant demographic data on maps
Quality
The ability of a good or service to consistently meet or exceed customer expectations
Quality control
Monitoring, testing, and correcting quality problems after they occur
Quality assurance
Providing confidence that a product’s quality will be good by preventing defects before they occur
Continuous improvement
NeverEnding improvements to key processes as part of total quality management
Dimensions of quality of goods
Performance, aesthetics, special features, conformance, reliability, durability, perceived quality, and serviceability
Conformance to design specifications during production
The degree to which produced goods or services conform to the specifications of the designers
Failure costs
Cost caused by defective parts or products
Internal failures
Failures discovered during production
External failures
Failures discovered after delivery to the consumer
Appraisal (detection) costs
Cost of inspection and testing
Prevention cost
Cost of preventing defects from occurring
Quality at the source
Every employee is responsible for his own work
Zero defects
The philosophy that any level of defects is too high
ISO 14000
Set of international standards for assessing a company’s environmental performance
ISO 9001
International standard for quality management system, critical to international business
HACCP
Quality management system designed for food processors
Total quality management tqm
an approach to quality management on involves everyone in an organization and quality management and continued effort to improve quality and customer satisfaction
Poka-yoke (fail-safeing)
incorporating process design elements that prevent mistakes
Plan do study act pdsa cycle
A problem solving and quality improvement methodology used in the continuous improvement
Six Sigma
a more sophisticated statistical approach to problem-solving and quality improvement then used in the pdsa cycle of the continuous improvement
Process flow diagram
A diagram of the steps in a process
Check sheet
sheet of paper that provides a format for recording and organizing data in a way that facilitates collection and analysis
Histogram
A chart of the frequency distribution of observed values
Pareto analysis
Techniques for focussing attention on the most important problem, or opportunity for improvement
Scatter diagram
A plot of pairs of observations of two variables that can show the correlation between the two variables
Control chart
A line plot of time ordered values of a sample statistic with control limits
Cause and effect diagram
A diagram used to organize categorize and possible causes of a problem the effect, also called a fishbone diagram
Brainstorming
technique for generating a free flow of ideas on finding causes and solutions and implementing the solutions and a group of people
Quality circle
Group of workers who meet to discuss ways of improving the products or processes
Benchmarking
Process of measuring and organizations performance against the best in the same or another industry
Run chart
What time plot that can be used to track the values of a variable over time
5w2h approach
I’m outside of asking questions about a problem that begins with
What, why, where, when, who, how, and how much
Statistical quality control
Use of statistical techniques and sampling and monitoring and testing of quality of goods and services
Inspection
Appraisal of a good or service against standard
Statistical process control SPC
Statistical evaluation of the product in the production process
Random variation
Natural variation in the output of a process, created by countless minor factors
Assignable variation
Non random variability in process output, a variation whose cause can be identified
Central limit theorem
The distribution of sample averages tends to be normal regardless of shape of the process distribution
Control chart
A time order plot of a sample statistic with limits
Control limits
The dividing lines between random and a sign of all deviations from the mean of the distribution
Type 1 error
Concluding that a process has shifted (an assignable variation is present) when it has not (only random variation is present)
Type 2 error
Concluding that a process has not shifted (only random variation is present) when it has (an assignable variation is present)
Sample mean (x) control chart
The control chart for sample mean, used to monitor the process mean
Simple range (R) control chart
Control chart for sample range, used to monitor process dispersion or spread
Individual unit (X) control chart
Control chart for individual unit, used to monitor single observations (n=1)
Moving range (MR) control chart
Control chart for moving range, the difference between consecutive observations, used to monitor their dispersion or spread. When n=1
P-chart
Control chart for sample proportion of defectives, used to monitor the proportion of defective items generated by a process
C-chart
Control chart for sample number of defects per unit product, used to monitor the number of defects per unit product
Design specification
A range of acceptable values established by engineering design or customer requirements
Process variability
Actual variability in a process for a product
Process capability
The ability of a process to meet the design specification
Six Sigma quality
the more advanced version of problem solving, continuous improvement. It also refers to the goal of achieving process variability so small that the half width of design specification equals 6 standard deviations of the process
Design of experiments
performing experiments by changing levels of factors to measure their influence auto put and identifying best levels for each factor
