Exam Flashcards
1
Q
What is Operations Management
A
Operation Management focuses on efficiently converting materials and labour into goods and services
2
Q
What is supply chain management?
A
The Networks involved in delivering a product or service to a customer
3
Q
What are the 5 R’s of Supply Chain Management
A
Right
- Product
- Place
- Price
- Time
- Quantity
4
Q
Who are the main people in a Supply Chain Network
A
Raw Material Supplier
Manufacturer
Distributor
Wholesaler
Retailer
Customer
5
Q
Suppliers have the ____ profit margin
A
Suppliers have the lowest profit margin
6
Q
What is Production Slicing?
A
Production Slicing is identifying the best location for each stage of the process
7
Q
What are the key challenges in operations Managment
A
- Choosing an Operations Mangement Strategy
- Managing Supply and Demand
- Inventory and Back-Order Fluctuations
8
Q
What are some supply challenges?
A
- raw materials
- supply disruptions
- productivity inefficiencies
9
Q
What are some demand challenges?
A
- sales shortfalls
- canabalisation
- larger than anticipated inventories
10
Q
What is canalbalisation?
A
When the introduction of a new product reduces the sales of an older product
11
Q
What is the bullwhip effect?
A
When small changes in demand produce larger distortions upstream
12
Q
What are the causes of the bullwhip effect?
A
- lack of communication
- incorrect forecasts
- too many discounts
- order batching
13
Q
What are the solutions to the bullwhip effect?
A
- more communication
- improve order planning
- limit promotion
- small but more frequent orders
- vertical integration
14
Q
What other uncertainties impact the supply chain?
A
- production capacity
- transportation times
- component availability
- natural disaster
- regulation
15
Q
What was the main reason of the KFC chicken shortage?
A
poor choice of distributor
16
Q
What is a Customer Value Proposition?
A
Why should a customer choose our product?
17
Q
What dimensions should be considered in the Customer Value Proposition?
A
Product Innovation Speed
Product Selection and Availability
Price
Branding
Customer Relationships
Value Added
18
Q
Function Productions have a ______ Innovation
A
Function Productions have a SLOW Innovation
19
Q
Innovation products have _______ Innovation
A
Innovation products have FAST Innovation
20
Q
Function Productions have ______ product variety
A
Function Productions have LESS product variety
21
Q
Innovative Productions have ______ product variety
A
Innovative Productions have MORE product variety
22
Q
Function Products have ______ demand
A
Function Productions have PREDICTABLE demand
23
Q
Innovative Products have ___________ demand
A
Innovative Products have UNPREDICTABLE demand
24
Q
Function Products have ___________ lifecycle
A
Function Products have LONG lifecycle
25
Innovative Products have ___________ lifecycle
Innovative Products have SHORT lifecycle
26
________ Products make the business ________ to run
LESS Products make the business SIMPLER to run
27
___________ choices can make decision making ___________
TOO MANY choices can make decision making COMPLICATED AND FRUSTRATING
28
The Long Tail Phenomena- ___% of products make up _____% of sales
The Long Tail Phenomena- 20% of products make up 80% of sales
29
What are the key elements of the Operating Model Canvas
- Suppliers
- Location
- Value Delivery Chain
- Organisation/People
- Information Systems
- Management Systems
30
In a PUSH strategy production is based on ____________________
In a PUSH strategy production is based on ANTICIPATED FUTURE DEMAND
31
In a PULL strategy production is based on ____________________
In a PULL strategy production is based on PRESENT DEMAND
32
A PUSH strategy focuses on ____________________
A PUSH strategy focuses on EFFICIENCY AND COST REDUCTION
33
A PULL strategy focuses on ____________________
A PULL strategy focuses on RESPONSIVENESS
34
PUSH OR PULL - Low Uncertainity
PUSH
35
PUSH OR PULL - High Uncertainity
PULL
36
PUSH OR PULL - High Importance on EoS
PUSH
37
PUSH OR PULL - Low Importance on EoS
PULL
38
PUSH OR PULL - Long Lead Times
PUSH
39
PUSH OR PULL - Short Lead Times
PULL
40
When should you use a hybrid push/pull strategy?
When products have HIGH DEMAND UNCERTAINTY by high importance on EoS
41
What is forecasting?
a prediction of future events
42
What are the 3 Golden Rules of Forecasting
1. Forecasts are always wrong
2. The Longer the Forecast the less accurate is will be
3. Aggregate forecasts are more accurate
43
What are the qualitative methods of forecasting?
- expert pannels
- delphi method
- sales force method
- market research
44
What should you use when a data set has NO TREND OR SEASONALITY?
Moving Average
Exponential Smoothing
45
What should you use when a data set has TREND and NO SEASONALITY?
Holts Method
46
What should you use when a data set has SEASONALITY BUT NO TREND
Seasonal Decomposition
47
Level
an average
48
Trend
a predictable increase over time
49
seasonality
a pattern of predictable and reoccuring shifts in level
50
random noise
unpredictable variations in data
51
A good forecast should _____________
A good forecast should NOT BE TOO REACTIVE
52
In a Moving Average Forcast is a LARGER N VALUE results in _____________
In a Moving Average Forcast is a LARGER N VALUE results in A SMOOTHER FORECAST
53
In a Moving Average Forcast is a SMALLER N VALUE results in _____________
In a Moving Average Forcast is a SMALLER N VALUE results in A MORE RESPONSIVE FORECAST
54
What is the formular for exponential smoothing?
alpha x previous demand + (1-alpha) x previous forecast
55
In an Exponentital Forcast is a SMALLER alpha VALUE results in _____________
In an Exponentital Forcast is a SMALLER alpha VALUE results in SLOW LEARNING
56
In an Exponentital Forcast is a LARGER alpha VALUE results in _____________
In an Exponentital Forcast is a LARGER alpha VALUE results in FAST LEARNING
57
In an Exponentital Forcast if there is a CHANGING LEVEL use a _____ alpha
In an Exponentital Forcast if there is a CHANGING LEVEL use a LARGER alpha
-
| larger alpha = more responsive and you want to capture the change
58
In an Exponentital Forcast if there is a STABLE LEVEL use a_____________ alpha
In an Exponentital Forcast if there is a STABLE LEVEL use a SMALLER alpha
59
What is the formular for holts method?
Current Forecast = previous level + previous trend
Previous Trend = alpha x previous demand + (1-alpha)x previous forecast
Previous Level = beta x difference in level + (1-beta)x previous forecast trend
60
How do you find L0 and T0 in Holt's Method
Sales (Intercept - x=0) = Level
Time (The Slope) = Trend
61
What are the steps to complete a seasonal decomposition?
1. calculate the seasonal average
2. calaculate the overall seasonal average
3. calculate the seasonal relative = seasonal average per season/ total average
4. deseasonalise the data = sales data/seasonal relative
5. complete forecasting (i.e exponential smoothing)
6. incorporate seasonality
62
MAD
Mean Absolute Deviation
63
MSE
Mean Squared Errors
64
MAPE
Mean Absolute Percentage
65
What does MSE show
a high percentage of large errors
66
When should MAPE be used?
when the demand range in wide
67
How do you calculate the forecast error?
Forecast - Actual Demand
68
MAD Formula
Sum of Absolute Errors/ Number of Forecasts
69
MSE Formula
Sum of squared errors/number of forecasts
70
MAPE Formula
sum of (absolute error/real demand)/number of forecast x 100
71
MFE
Mean Forcast Error
72
RSFE
Running Sum of Forecast Error
73
TS
Tracking Signal
74
MFE Formula
Sum of Forecast Error/Number of Errors
75
RSFE
Sum of Forecast Errors
76
TS Formula
MFE/MAD
77
Break Even Point in Units
Fixed Cost/Unit Contribution Margin
78
Breakeven Point $
Fixed Cost/ (1- (variable cost/sales)
79
Profit/Loss = Revenue - Cost or
Profit/Loss = (Selling Price per unit x Units Sold) - (Fixed Costs + (Variable Costs x Units Sold)
80
What is Price Elasticity
The degree to which demand responds to change
81
What is an inelastic demand?
Some sensitivity to price but people still buy stuff
82
What are some of the factors that influence price elasticity?
Necessity of the product
Quality
Brand Loyalty
Availability of Substitutes
Cost of Switching Suppliers
83
What are some considerations when setting a price?
Target Audience needs and expectations
Branding
Revenue Goals
Market Trends
84
What is a competitions based pricing? Why use it?
Its the competitors prices as the benchmark. It good for entering highly saturated markets. But it doesn't account for the cost of production or consumer demand
85
What is a cost plus pricing strategy?
Cost of Producing + Mark up on the cost
- often used by retailers that sell physical products
86
High Low Pricing?
Start Selling the product high and reduce it as it the product drops in relevance
- i.e black Friday sales
87
Skimming Pricing?
Charge the highest possible price and lower it over time as the product gets less popular as a gradual decrease
- technology
88
Dynamic Pricing
Fluctuates based on customer demand
- hotels, flights, uber
89
Freemium Pricing
offers a basic version for free and encourages the user to upgrade because of free trials, limited features of adds
90
Hourly Pricing
Trades time for Money
- cost per hour + mark up
often used by consultants and contractors
penalises the workers efficiency
91
Project Based Pricing
Charges a flat fee per project based on the value of the deliverable / time required to complete the project
92
Penetration Pricing
Entering the market at a low price to create customer loyalty and slowly increase the price
- netflix
93
Premium Pricing
Focus on the percieved value/brand of the product rather than the cost to produce the product
- luxury goods
94
Bundle Pricing
When you offer two or more complementary products and sell them for a single price
95
Geographic Pricing
Price is varied by location- compensates wages across regions
96
Price Anchoring
Establish a price point that customers subconsciously refer too when making their decision - a more expensive product, everything else seems cheaper (i.e wine bottles in a restaurant)
97
Time Limits
Creates a sense of urgency and increases purchase likihood
98
The decoy effect
Introducing a less attractive option to make the others more appealing
- the economic print only option
99
The 9 Digit Effect
20 --> 19.99
100
Payment in Installments/Pennies a day
Reframes a large expense as a smaller cost and reduces the perceived cost
101
What pricing strategy did starbucks use?
The Compromise Effect: when we have a set of choices people avoid the extremes
- more people buying grandes when the short was removed
102
What were Zara's success factors
- responsiveness to customer demand
- -speed to market
- local decision making responsibility
-batch sizes small
- production variety and scarcity
103
How much inventory did Zara have committed 6 months before?
15-25%
104
How much inventory did Zara have committed at the start of the season?
50-60%
105
At the start of the season how much of the collection was available?
25%
106
What are the benefits for Outsourcing?
- Cost efficiency
- competitiveness
- scalability
- focus more on core competency
- increased flexibility
- increase knowledge gained
107
What is the risk of Outsourcing?
- open up opportunties for competitors
- delivery time may be longer
108
What are the types of outsourcing?
- Dependency on Capacity
- Dependency on Knowledge
109
Make or Buy - High Customer Importance
Make
110
Make or Buy - High Innovation Speed
Make
111
Make or Buy - High Competitive Position
Make
112
Make or Buy - Lots of Capable Suppliers
Buy
113
Make or Buy - Modular Products
Buy
114
Make or Buy - Integral Products
Make
115
