Exam 2 Flashcards
1
Q
the objective of sales and operating plan is to:
A
reach consensus on a single operating plan that allocates the critical resource of people, capacity, materials, time, and money to most effectively meet the market place in a profitable way
2
Q
draw the sales and operating process in terms of the customer pyramid
A
customer strategic plan business plan sales and operating planning (the combining of manufacturing, lab, finance, HR, acc, and sales and marketing)
3
Q
the objective shortened:
A
to reach a consensus on a single operating plan
4
Q
sales and operating planning with the combining of mfg, lab, finance, HR, acc, and sales and marketing) is ______ planning level
A
medium to intermediate planning level
5
Q
name the three types of processes and give their lengths.
A
- detailed (days, weeks out: short term)
- tactical = SOP!! (months out)
- strategic (years out) long range planning
6
Q
detailed planning examples
A
limited ability to adjust capacity; day to day, hour by hour; lowest risk
7
Q
tactical planning examples
A
workforce, inventory, subcontracting, and logistical decision; planning number somewhat; “aggregated” (month by month); lowest risk
8
Q
strategic planning examples
A
brick and mortar and major process choice decision; planning done at a very high level; high risk
9
Q
timelines for the different processes
A
rolling horizon:
- long range varies by industry, usually updated annually
- intermediate (SOP) plans updated updated monthly
- short-term plans updated daily/weekly
10
Q
inputs to the production planning system:
A
external to firm:
- external capacity (like subcontractors)
- competitor’s behavior
- raw material availability
- market demand
- economic conditions
internal to firm
- current physical capacity
- current workforce
- inventory levels
- activities required for production
11
Q
what are aggregate operations plans?
A
~ product group or broad category
~ specifies the optimal combination of:
- production rate (units completed per unit of time)
- workforce level (number of workers needed in a period)
- inventory on hand
12
Q
why use aggregate operation plans?
A
forecasting is always wrong by some amount, but it is more accurate if we forecast by groups of families = aggregate the demand
13
Q
why do companies use S&OP?
A
- many companies have a hard time establishing a solid game place for everything and as a result performance suffers
- S&OP is an essential management tool in the age of rapid changes and increasing customer demand and supply chains around the world
- it is called “top management’s handle on the business”
14
Q
Relevant costs: the 4 cost tyeps
A
- basic production costs
- inventory holding costs
- costs associated with changes in the production rate
- backorder costs
remember: it’s okay to plan for any of these depending on the firm’s competitive strategy
15
Q
what are production planning strategies?
A
plans for meeting demand
16
Q
what are some tradeoffs involved in choosing a production planning strategy?
A
workers employed, work hours, inventory, and shortages
17
Q
what are the three types of planning production strategies?
A
- chase strategy
- mixed strategy
- level strategy
18
Q
chase strategy
A
match the production rate by hiring and laying off employees; must have a pool of easily trained applicants to draw on; produce to exact monthly production requirements by varying workforce size
19
Q
mixed strategy
A
stable workforce, and vary the number of hours worked through flexible work schedules or overtime or subcontracting
20
Q
level strategy
A
demand changes are absorbed by fluctuating inventory levels orders backlogs, and lost sales; product to meet expected average demand by maintaining a constant workforce
21
Q
what is a pure strategy?
A
when a firm uses just one of these approaches…either level or chase
22
Q
usually firms use a _____ strategy
A
mixed strategy: mostly level but you go a little higher or lower when you know you need to
23
Q
what are the two types of mixed strategies:
A
- product to meet the mimimim expected demand using a constant workforce and subcontract to meet additional requirements
- product to meet expected demand for all but the first two months using a constant workforce and use overtime to meet additional output requirements
24
Q
peak demand strategy
A
variables used: undertime or excess capacity, subcontracting
competitive priorities: delivery speed, conformance, flexibility
environments where most common: emergency services, easily obtainable substitutes, cost of back orders high
25
level production strategy
variables used: inventory (both carrying and backlogs)
competitive priorities: low cost, design quality, delivery speed
environments where common: repetitive manufacturing, continuous processes, highly skilled professionals, cost of capacity changes high
26
chase demand strategy
variables used: workforce size, overtime/undertime, subcontracting
competitive priorities: flexibility, design quality, delivery speed
environments where commmon: pure service, job shops, batch manufacturing, cost of inventory high
27
when does level scheduling work best?
- entire system can be banned to minimize inventory and WIP
- product modifications are up-to-date because of low amount of WIP
- smooth flow through production system
- purchased items from vendors can be delivered when needed often directly to the production line
28
requirements for a level scheduling
- production needs to be repetitive
- system must obtain excess capacity
- output must be fixed for a period of time
- smooth relationship among purchasing, marketing and production
- the cost of carrying inventory must be high
- equipment costs must be low
- workforce must be multi-skilled
29
"hard benefits" of S&OP
- higher customer services
- lower finished goods inventories
- more stable production/service rates
- faster and more controlled new product instructions
- reduced obsolescence
- shorter customer lead times
30
"soft benefits" of S&OP
- enhanced teamwork in executive and mid-management groups
- better decision with less effort
- one set of numbers, in both units and dollars, to run the business
- a tight linkage between strategic plans and day-to-day activities
- a window into the future for the organization
31
why must sufficient supply be available at all times for the demand occurs in service environments?
because services typically cannot be inventoried
32
what is the key to satisfying customer demand in service environments?
planning sufficient capacity!!
33
yield management
the process of allocating the right type of capacity to the right type of customer at the right price and time to maximize revenue or yield; has existed as long as there has been limited capacity for servicing customers
34
what is the main question with yield management:
what can we do to take the demand spikes and dips and make them smoother? i.e. get customers to come when we want them to come and are prepared for them?
35
examples of yield management
- started with: American airlines computerized reservation system (SABRE)
- airlines making flights on tuesdays, wednesdays and saturdays cheaper
- happy hours at bars and restaurants
- hotels: one set of rates during the week and another set during the weekend
36
what are the 5 yield management success factors?
1. demand can be segmented by customer
2. fixed costs are high and variable costs are low
3. inventory is perishable
4. product can be sold in advance
5. demand is highly variable
37
yield management is most common when:
price is variable and duration is predictable
38
the essence of yield management is:
the ability to manage demand
39
the 4 types of firms:
1. make to stock firms
2. assemble to order firms
3. make to order firms
4. engineer to order firms
40
make to stock
firms that serve customers from finished goods inventory; most common; examples include TV, clothing, packaged food products; essential issue in satisfying customers it balancing level of inventory against level of customer experience--> trade off between costs of inventory and level of customer service must be made
41
assemble to order
make it up to a certain point and then stop and wait for a customer order to finish; an example is a Dell computer; one capacity required is a design that enables as much flexibility as possible in combining components; there are sig advantages from moving the customer order decoupling point from finished goods to components
42
make to order
assemble, but don't put anything together; a really simple example would be subway; make the customer's product from raw materials, parts and components
43
engineering to order
firms that will work with the customer to design and then make the product; the most rare
44
make to order and engineer to order
- boeings process for making commercial aircraft is an example
- customer order decoupling point could be in either raw material at the manufacturing site or the supplier
- depending on how similar the products are it might not even be possible to preorder parts
45
lead time
time needed to respond to a customer order
46
customer order decoupling point
where inventory is positioned to allow entities in the supply chain to operate independently; where you stop and wait for customer order
47
what are buffer stocks
extra materials; can help deal with any variations in either supply or demand;
48
what type of firm will most likely benefit fro buffer stocks?
make to stock - bc based on forecast which we know is wrong so this type of firm will most benefit from buffer stocks
49
little's law (important)
the flow of items through a production process
| inventory = throughput rate x flow time
50
throughput
long term average RATE of flow through the process; ONE clicker is finished every 1/2 hour
51
flow time
time to make one item; a single unit to traverse the entire process; 5 min for 1 clicker
52
inventory
inventory on floor; held by firm for future use
53
inventory turns (important)
the cost of goods sold divided by the average inventory value
54
production layout strategy based on the type of ______
firm (depends on the firm's target market)
55
the two things that go into a product process matrix / decide what kind of process to use
1. sales volume
| 2. variety of products / customization
56
from a product process matrix point of view, a continuous process is:
high volume and low customization / low variety
57
continuous processes details:
- liquid, gas, slurry (not individual items)
- very few product types and high volume
- individual products can't be distinguished until packaging (1 QT, 2 QT, etc)
- not very common
- example: gas
58
name the levels of production layouts from least detailed to most complex:
1. continuous - gas
2. assembly line - cars
3. manufacturing cell (overlaps its before and after)
4. workcenter
5. project
59
assembly line details:
- a single path through the process
- all products follow the same path
- workflow is sometimes paced with a conveyor belt
- example: cars
60
work center layout details
- focused on a particular type of operation
- machines that perform the same type of operation are grouped together (for example, all the lathes are in one area)
- different location for different physical things
- this way is more flexible if a machine goes down or worker can't show up, but also takes quite a bit of time to go from place to place
61
manufacturing cells details:
- dissimilar machines are grouped together...for example one lathe, one mill and one drill press
- objective of this grouping is to product products requiring similar production sequences and steps in the most efficient manner
- typically quicker because multiple machines that you need are all in one place
- however, it is hard when the cell is designed to manufacture a specific type of x, but now they need to product y but cell isn't designed for that
62
what is the most popular type of flexible line layout and why?
the U-shaped cell - gives better operator access to the equipment and may reduce need for operators
63
product layout strategy details:
- most rare
- most customization and least volume
- material brought to the product
64
the three aspects of assembly line design
1. workstation cycle time
2. assembly-line balancing
3. precedence relationship
65
workstation cycle time
- a uniform time interval in which a moving conveyor passes a series of workstations (also the time between successive units coming off the line)
- the time to complete a task
- example: the time to attach the hood of a car takes 2.5 min
- so for every car moving on the assembly line, the worker attaching the hood has 2.5 minutes of work
66
assembly-line balancing
assigning tasks to a series of workstations so that the required cycle time is met and idle time is minimized.....it may be easier to think of workstations as people, although they can be machines or combination of persons/machines
67
precedence relationship
the order in which tasks must be performed in an assembly process
68
when you minimize the idle time, you will be able to:
accomplish the tasks with the fewest workers
69
assembly line balancing steps:
1. specify the sequential relationships among tasks
2. determine the required workstation cycle time
3. determine theoretical minimum number of workstations
4. assign tasks one at a time until the sum of tasks is equal to the workstation cycle time
5. evaluate efficiency of the balance
6. rebalance if needed
70
assembly line balancing: selecting the assignment rule
- prioritize tasks in order of largest number of following tasks
- break ties with secondary rule (longest task time)
71
ways to improve the cycle time
1. split tasks into smaller tasks
2. use parallel workstations
3. use a more proficient worker
4. work overtime in affected workstation
5. redesign the process
72
service package
bundle of goods and services that is offered:
- supporting facility
- facilitating goods
- information
- explicit services
- implicit services
73
supporting facility
the physical resources such as buildings, equipment, etc.
74
facilitating goods
materials purchased by the consumer or provided by the customer
75
information
data that is provided by the customer to enable efficient and customized service
76
explicit services
the benefits that are readily observable and which make up the essential features of the service
77
implicit services
psychological benefits or other extrinsic features of the service (prestige, privacy, etc.)
78
operational classification of services
- service organizations are classified according to the customers they service and the service they provided to those customers
- customer contact
- creation of the service
- the physical presence of the customer in the system
- service systems with a high degree of customer contact are more difficult to control
- the work process involved in providing the service itself
79
service organization design
- services cannot be stored in inventory
- in services, capacity becomes the dominant issue...too much capacity leads to excessive costs but insufficient capacity leads to lost customers
- waiting line models provide a powerful mathematical tool for analyzing many common service situations
- services can be physical or virtual
80
service-system design matrix:
the lower the sales opportunity, the higher the product efficiency...and lower sales opportunity the lower degree customer/service contact:
1. mail contact
2. internet and on-site technology
3. phone contact
4. face-to-face tight specs
5. face to face loose specs
6. face to face total customization
81
service blueprinting
- the standard tool for service process design is the flowchart
- distinction b/w high customer contact and those that the custom does not see.."line of visibility"
82
fail-safing
using the service blueprint to the identity opportunities for failure and then establishing procedures to prevent mistakes from becoming defects (poke-yokes)
83
poka-yokes
procedures that block the inevitable mistake from becoming a service defect (avoid mistakes)
84
types of poka-yokes
- warning methods (steps that lead to mistakes trigger a reminder)
- physical or visual contact methods (parts can only fit together in the correct way)
- the three t's (task to be done, treatment accorded to the customer, tangible features of the service facility)
85
a central problem in many service settings is the management of _____
waiting time: reducing waiting time costs money, but raises customer satisfaction and throughput
86
when the people waiting are employees:
it is easy to evaluate and value their time
87
when the people waiting are customers:
it is more difficult to value their time (sales lost is one value)
88
arrivals often vary greatly over a time period, but service capacity is usually :
fixed
89
waiting line factors
- number of arrivals over the hours that the service system is open
- we can control arrivals through short lines, specific hours for specific customers, and specials
- customers demand varying amounts of service, often exceeding normal capacity
- we can affect service time by using faster or slower servers
90
managing queues
- segment the customers
- train your servers to be friendly
- inform your customers of what to expect
- try to divert the customs attention when waiting
- encourage customers to come during slack periods
91
queuing system analysis
the source population - who are your customers?
- population size - finite or infinite
- customer arrival rates are random
- customer arrival characteristics
- arrival patterns - steady or seasonal
- size or arrival rates - individuals or groups
- degree of patience (will they wait)
92
queuing system factors
1. length
2. number of lines
3. queue discipline - priority rule or set of rules that determine the order of service for customers who are waiting in line
93
length
how much waiting room is available
94
number of lines
how many servers are working
95
queue discipline
how do new arrivals enter the line? How do you decide which custom to serve next?
96
service time distribution
what is the service rate and how much does it vary?
97
line structure
what does the process look like?
- single channel, single phase
- single channel, multiphase
- multichannel, single phase
- multichannel, multiphase
- mixed
98
service time distribution
1. constant - service is automated and not customized to individual customers
2. variable - service is provided by humans, can be customized to individual customers, we calculate this service rate
99
computer simulation of waiting lines
- some waiting lines problems are very complex
- equations assume that waiting lines are independent
- some problems have conditions do not meet the requirements of the equations
100
some waiting line problems are very complex
- servers with different capabilities, multiple customer types
101
equations assume that waiting lines are independnet
when one service is the input to the next, we can no longer use the simple formulas
102
some problems have conditions do not meet the requirements of the equations
variable or finite populations, specific arrival/service distributions
