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MGT 3501-Ops > Exam 2 > Flashcards

Exam 2 Flashcards

1
Q

what is a service

A

anything sold that cannot be dropped on your foot; cannot be inventoried, intangible, and time perishable

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2
Q

what does time perishable mean

A

today’s capacity cannot be used to meet tomorrow’s demand

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3
Q

what is the fastest growing service sector globally

A

healthcare

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4
Q

what is the purpose of providing good service

A

customer retention, grow the business (positive reviews, word of mouth, etc), good service equals more money

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5
Q

a _____% increase in customer loyalty can increase profits ____-____%

A

5
25
85

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6
Q

is it better to meet customer expectations or exceed them?

A

short term- exceed them

long term - meet them

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7
Q

how are starbucks and waho both so successful in customer satisfaction even though they are so different in how they treat them

A

they set customer expectations and meet them

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8
Q

How do you set customer expectations

A

reputation and marketing; keep their promise by meeting those expectations

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9
Q

how do you measure customer satisfaction

A

surveys, retention rate, net promoter score

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10
Q

how many positive reviews does it take to cancel out one negative review

A

12

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11
Q

when customer expectations are in line with expectations set by the firm, satisfaction is ____

A

high

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12
Q

most conflict comes from

A

a misunderstanding of expectations

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13
Q

customer ____ drives customer satisfaction

A

compatibility

the fit between the needs of the individual customer and the firm’s ability to meet those needs is important

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14
Q

in a service environment what is the reality about variability

A

it cannot be eliminated
customers measure quality of service by how their variability is accommodated
customers introduce variability but complain about inconsistency

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15
Q

five types of customer variability

A

arrival, request, capability, effort, and subjective preference variability

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16
Q

arrival variability

A

customers arrive at times when there are not enough service providers

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17
Q

request variability

A

travelers request a room with a view; don’t know what they will request when they get here

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18
Q

capability variability

A

a patient being unable to explain symptoms to a doctor; how helpful are customers in helping us serve them

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19
Q

effort variability

A

shoppers leaving carts in the parking lot; not putting forth the effort

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20
Q

subjective preference variability

A

interpreting service action differently; the most difficult to overcome

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21
Q

what is our choice when facing variability

A

accommodate it or reduce it

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22
Q

customers that rely on good customer experiences tend to

A

accommodate the variability

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23
Q

companies that rely on operational simplicity tend to

A

try to reduce variability

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24
Q

four strategies for dealing with variability

A

classic reduction, classic accommodation, uncompromised reduction, low cost accommodation

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25
Q

classic reduction

A

ex. restaurant menu; companies that use this tend to attract customers who are willing to trade-off an excellent service for low price

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26
Q

uncompromised reduction

A

uses knowledge of the customer to develop procedures that enable good service, while minimizing variability; try to reduce variability in a way that customers don’t really notice; ex. college chooses students with test scores in a narrow range so the school does not have to support more than one curriculum

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27
Q

classic accommodation

A

involves experienced/more employees to compensate for variations among customers; costs more and forces company to bear brunt of variability; success of strategy hinges on company’s ability to persuade customer to pay more

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28
Q

low cost accommodation

A

companies persuade customers to serve themselves; experience varies with customer’s capability and effort; effective for high arrival or request variability; customer has to feel compensated so lower prices

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29
Q

what is behavioral science/economics

A

the study of why people act and make decisions the way they do

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30
Q

why is behavioral science important

A

if you understand the dynamics of decision making, you can influence it in your favor

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31
Q

rational decision making

A
  1. consider the options, then pick the one that maximizes profit or experience 2. assess pros and cons objectively without prejudice
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32
Q

irrational decision making

A

allows irrelevant biases, emotions, and environment to influence our decisions

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33
Q

predictably irrational

A

susceptible to the same influences over and over

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34
Q

we as humans are

A

predictably irrational

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35
Q

how to influence behavior in service operations

A

not all parts of an encounter are equal
finish strong
always leave them wanting more

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36
Q

recovery paradox

A

customers after a service failure and appropriate recovery have higher repurchase intention and loyalty than customers who are satisfied at the very beginning; recovery must be “appropriate” in the eyes of customer and some failure is not recoverable (safety related or repeated failure)

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37
Q

framing expectations

A

expectations change the way we perceive experiences (ex. blind taste test the same bottles were equal but when given different price tags people said higher price wine was better)

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38
Q

we inherently expect higher priced items to be ______ quality and this extends to brand name, packaging, presentation…

A

quality

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39
Q

why does framing expectations work

A

confirmation bias; we don’t want to admit that we were wrong so we convince ourselves that the higher priced thing was better

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40
Q

the lesson from framing expectations

A

start with a higher price to frame expectations then offer a discount to get down to market price (college tuition)

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41
Q

decoy effect

A

want you to purchase the bundle so when facing two options for the same price but one has more stuff, you choose that one cause you think you are getting a deal

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42
Q

free effect

A

people have an emotional response to “free” and there is pain associated with spending money (so even if it is more profitable to spend money to get the higher gift card, people will still choose the free option)

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43
Q

what is the number one characteristic employees want from managers

A

to show that they care about their career and well being (do that by understanding what motivates them and how they perceive different events)

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44
Q

what is the most important part of any company

A

employees

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45
Q

behavioral management theory

A

people have different wants and needs that motivate them; people react differently to every situation; turn management into leadership

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46
Q

pitfall of having subject matter experts as managers

A

they have a harder time relating and understanding especially when the employees are not on the same level as them; pros also know what to do so easily that they have trouble communicating it and hard to teach (not a lot of time spent in conscious brain)

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47
Q

what is the most valuable commodity in the world

A

data

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48
Q

data analytics

A

process of inspecting, cleaning, and modeling data with the goal of discovering useful information to support decision making

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49
Q

why is data analytics important

A

support decision making to take action; to make predictions about the possibility of a future event; helps you focus (or target) specific customers or problems

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50
Q

data dilemma

A

convenience of personalization vs. invasion of privacy

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51
Q

4 types of data analytics

A

descriptive, diagnostic, predictive, and prescriptive

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52
Q

descriptive analytics

A

answers the question what happened?; gives valuable insight into the past; signals something is wrong/right without explaining why

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53
Q

diagnostic analytics

A

answers why something happened; measure data against other data to find relationships and dependencies

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54
Q

predictive analytics

A

answers what is likely to happen; uses the finding of diagnostic analytics to detect tendencies, clusters and exceptions, and to predict future trends

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55
Q

prescriptive analytics

A

answers what action to take; takes the predicted options and suggests a range of prescribed actions and the potential outcomes of each action (self driving cars and AI)

56
Q

what field of business has data analytics transformed

A

marketing

57
Q

no need for expensive and ineffective shotgun approach; now use

A

targeted marketing to send targeted advertisements to the right people, at the right time, with the right message

58
Q

data analytics is also super helpful in operations with

A

forecasting (manpower planning)

59
Q

how many data points does google collect on you

A

5,000

60
Q

examples of data analytics in operations

A

optimization models (how can we maximize calories while minimizing cost); credit acceptance (cluster a prospective customer into a group); route optimization

61
Q

predictive maitenance

A

condition based monitoring; maintenance should be done at the right time on the right part; ideally want to fix/maintain a part before it fails; use sensors to monitor conditions of parts at all times

62
Q

IOT

A

internet of things

63
Q

what real world events can cause productions variability

A

machine downtime, human attendance, human emotions, quality defect rate, raw material supply issues

64
Q

what does having a buffer between stations do to throughput

A

reduces the impact of variability

changes the output of dice reduced the variability directly

65
Q

real world ways to reduce production variability

A

backup machinery, automation, backup suppliers

66
Q

what does reducing the amount of variability do to throughput

A

levels the output (makes it more consistent and can plan better) . and reduces the range

67
Q

which is better buffer or reducing variability

A

increasing WIP inventory costs money and reducing variability is difficult to do but better (have to attack the root cause of variability

68
Q

why is waiting line management important

A

no one likes to wait in lines even when waiting at home; time is valuable, perception that the business is poorly run; smart phones have greatly softened the negative experience

69
Q

one thing that disney does to handle lines

A

virtual queues

70
Q

what times of variability contribute to waiting times

A

arrival, request, effort, and capability

71
Q

what are techniques to reduce or eliminate waiting

A

online troubleshooting; automation (self check out and ATMs); be transparent; segregate customers (disney fastpass and I85 toll lanes); distract them

72
Q

waiting line mgt is very important for what types of companies

A

airlines, amusement parks, fast food chains (chick fil a)

73
Q

what are some decisions disney or GDOT have to make when segregating customers

A

it is based on value

74
Q

what can be used to help calculate optimal number of workers, queues, lines, etc for the manager to evaluate

A

simulation software

75
Q

do we want to eliminate waiting all together

A

probably not; impulse buying in grocery stores; waiting a little longer can increase sales

76
Q

why is quality important

A

everything we buy we expect a certain level of quality (order qualifier/order winner); also penalty for poor quality is much greater than the benefit of good quality

77
Q

what is the most important part on any product

A

the one that fails

78
Q

one example of poor quality management

A

challenger; did not keep track of the manufacturer recommendation so used the o ring in much colder temp; part design was fine but NASA’s application of how they used it was wrong

79
Q

name a few companies that have suffered for quality issues

A

chipoltle (e coli); samsung exploding phones, boeing

80
Q

what is the definition of quality

A

hard to pin down but you know it when you see it

81
Q

quality is not the same as

A

luxury

82
Q

how can you recover from poor quality

A

be honest and up front; if you have built up a good reputation you can recover; does not need to be a pattern of behavior

83
Q

types of quality

A

product, process, and decision quality

84
Q

product quality

A

characteristics that meet customers acceptabilty

85
Q

process quality

A

consistent results within a specified range

86
Q

decision quality

A

ethical or moral? like Volkswagon turning off the car emissions during the tests

87
Q

costs of quality

A

appraisal, prevention, internal failure, external failure, and opportunity costs

88
Q

appraisal costs

A

inspecting, auditing, testings

89
Q

prevention costs

A

efforts to keep defects from occurring

90
Q

internal failure costs

A

caught internally and either scrapped or corrected

91
Q

external failure costs

A

defect seen by the customer

92
Q

opportunity costs

A

loss of future business due to quality issues (hard to quantify but very large)

93
Q

total quality management (TQM)

A

manage the entire organization to excel in all dimensions of products and services that are important to customers

94
Q

two operational goals of total quality management

A
  1. careful design of the product or service 2. ensure the organization’s systems can consistently produce the design
95
Q

six sigma

A

a philosophy and set of methods to eliminate defects in products and processes; seeks to reduce variation in the processes that lead to defects; (goal is no more than 3.4 defects per million opportunities)

96
Q

what is the overall focus of the six sigma methodology

A

to understand and achieve what the customer wants

97
Q

Six Sigma DMAIC

A

define, measure, analyze, improve, control

98
Q

define

A

identify customers and their priorities

99
Q

measure

A

determine how to measure the process and how it is performing

100
Q

analyze

A

determine the most likely causes of defects

101
Q

improve

A

identify means to remove the causes of defects

102
Q

control

A

determine how to maintain improvements

103
Q

who implemented lean manufacturing

A

toyota

104
Q

lean manufacturing

A

activities designed to achieve high-volume production using minimal inventory and work; identify and eliminate waste, improve timing of production resources (just in time), remove anything that does not add value in the eyes of customer

105
Q

lean is based on the logic that

A

nothing will be produced until it is needed

106
Q

who gets to define what a defect is

A

the customer

107
Q

push manufacturing

A

workers maximize output of their workstations regardless of customer demand; efficiency of each station is the goal and focuses on keeping individuals busy; high WIP inventory and bottlenecks; make same amount of items regardless of sales (downside lots of defects)

108
Q

pull manufacturing

A

production line is controlled by the last operation (sales); efficiency of entire process is goal; want material busy and not just people; operators only work when there is a need; controls/eliminates WIP and bottlenecks; no buffer in system if problem arises

109
Q

two lean concepts

A

quality at the source and just-in-time production

110
Q

quality at the source

A

do it right the first time and if something goes wrong stop the process immediately (workers are personally responsible and become empowered)

111
Q

just-in-time production

A

producing what is needed, when it is needed and nothing more; anything over the minimum is waste; typically applied to repetitive manufacturing; exposes problems otherwise hidden by inventory; vendors deliver several times a day

112
Q

six sigma tools

A

flowchart, run chart, pareto chart, checksheet, cause and effect diagram, opportunity flow diagram, process control chart

113
Q

flow chart

A

a diagram of the sequence of operations

114
Q

run chart

A

depict trends in data over time; time is always the x axis

115
Q

checksheet

A

basic form to standardize data collection

116
Q

fish bone diagram

A

shows what the possible causes of a problem are in a standardized way; helpful in defining root causes (equipment, personnel, procedures, material, customers, information, other)

117
Q

process control chart

A

used to assure that processes are in statistical control; monitor process in real time; upper and lower limit

118
Q

project

A

a series of tasks that need to be completed in order to reach a specific outcome

119
Q

project management

A

planning, directing, and controlling resources to meet the technical, cost and time constraints of the project

120
Q

success is defined as

A

being on time, on budget and on scope; key resource is people’s time

121
Q

project management constraint theory

A

the triangle; scope, cost, and time

122
Q

types of project organization

A

pure project, functional project, and matrix project

123
Q

pure project

A

self contained team works full time on a project; PM is manager of employee; one project at a time

124
Q

functional project

A

may work on multiple projects within your function; needs of project may coincide with daily job

125
Q

matrix project

A

blends functional and pure; uses people from different functional areas to work on project under PM; employees have two bosses; PM must be able to negotiate

126
Q

most important part of the success/failure of a project

A

statement of work

127
Q

statement of work

A

written description of the objectives to be achieved, with a brief statement of the work to be done and a proposed high level schedule; must be clear; sets expectations, prevents scope creep

128
Q

critical path method

A

activities in a project that form the longest chain in terms of their time to complete; if any task on the CP are delayed the entire project is delayed

129
Q

immediate predecessor

A

activity that needs to be completed before another activity can begin

130
Q

popular tool to visualize tasks and their relationships

A

Gantt charts

131
Q

burndown chart

A

track actual progress against planned progress

132
Q

pitfall of burndown

A

how do you measure actual progress

133
Q

earned value mgt (EVM)

A

combined measurement of scope, schedule, and cost in a project (adding cost as a metric helps identify discrepancies in work accomplished to date)

134
Q

one major factor these systems don’t take into account

A

the quality

135
Q

how to measure quality

A

pull in experts to evaluate at milestones

MGT 3501-Ops (4 decks)

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