Midterm #1 Flashcards
3 functions of business organizations
finance
operations
marketing
what is operation
transformation process from input to output
operations management
managaement of systems of processes that create goods and/or provide services
5 Ms of the Input part of operations
Management Methods Material Machines Maintenance
parts of the transformation process in operations
cutting machining storing transporting investing ...
output part of operations
value is added
final good/service
what does operations management include
forecasting capacity planning scheduling managing inventories assuring quality motivating employees ...
why is operations management important
operations contribute to economy
one of interval parts of any organization
what does feedback do for operations
makes sure we stay on right track (internal or external)
what is operations management
managing the process of transformation that creates products or services
what are centerpieces of wal-marts competetive strategy
logisitcs own warehouses own transportation system large database ...
succesful operations of Southwestern Airlines
point-to-point service not Hub and Spoke
no frills
simple operations
high utilization
hub
center of operations
what are keys for successfully competing
understanding competetive issues helps managers develop successful strategies
mission statement
reason for existence of organization
goals
details and scope of mission
what is strategy
plans for achieving organizational goals
provides focus for decision making
what are tactics
methods/actions taken to acomplish strategies
provide guidance to operations
what is an important part of strategy formulation
core competencies
environmental scanning
order qualifiers
order winners
what is core competencies
what brand image a company wants to have
part of environmental scanning
SWOT analysis
what are order qualifiers
minimum standards of acceptability for a potential purchase
what are order winners
goods or services that cause it to be better than the competitors
what is productivity
measure of effective use of recources
what is productivity expressed as
ratio of output to input
output/input
examples for input
labor
material
energy
…
examples for output
goods and services
partial productivity measure
units of output/units of one input
e.g. labor productivity - unity per hour/shift
what are multifactor productivitiy measures
multiple denomitators added together
units of output/combined units of input
e.g. output/labor + material
importance for productivity measurements
include the units of measurements
importance for multifactor productivity measures
added denominators need to be the same unit
productivity growth equation
(current productivity - previous productivity) / previous productivity X 100
what does productivity growth express
how productivity has changed over time
+ -> increase
- -> decrease
what is a forecast
statement about the future value of a variable of interest, such as demand
what needs to be always added to a forecast
a # of potential error
types of forcasting
qualitative
quantitative
qualitative forecast
based on knowledge and intuition
judgemental
quantitative forecast
time series
associative models
what is judgemental forcast
uses subjective inputs
examples of judgmental forecasts
executive opinions (longrange planning) sales force composite consumer surveys outside opinion opinions of managers and staff
what are sales force composite
retailer forecasts for the manufacturer
what are examples for outside opinions when it comes to judgemental forcasts
financial and consulting gurus and companies
mentod that underlies opinions of managers and staff when it comes to judgemental forecasts
delphi method -> series of questionnaires developed sequentially
subdivisions of time series forcasting
naive
averaging
trend
seasonality
what is time series forecasting
sequence of observations taken at regular intervals over a period of time
future values estimated from past values
types of variations in time series data
trend - longterm movement
seasonality - short term regular variations
cycles - longterm wavelike variations
irregular variations - caused by unusual circumstances
random variations - caused by chance
what is Naive forecasts
previous period´s actual value = forecast for any period
pros and cons of naive forecasts
pros: simple to use (no costs), easy understandable
cons: no high accuracy
techniques of averaging time series forecasting
moving average
weighted moving average
exponential smoothing
moving averages
average a # of most recent actual data
needs to be updated as new values become recent
what effect does n (time span) has on moving average
the larger n the smoother the average curve
the short n the closer average follows volatile trends
pros and cons of moving average
pros: easy to compute and understand
cons: all values are weighted equally
weighted moving average
assigns more weight o recent values in time series
what is important to remeber when choosing weight
needs to sum up to 1
how to choose weight
experience and trial and error
most recent past gets highest weight
how does weighted moving average have an advantage over normal moving average
it can vary the effects of past data points
exponential smoothing
based on previous forecast plus a percentage of forecast error
equation of exponential smoothiing
current forecast = previous forecast + alpha(actual - previous forecast)
relation between alpha and the forecast curve at exponential smoothing
the larger alpha, the more responsive
the smaller alpha, smoother the forecast curve
alpha = 1 -> naive forecast
models of seasonality
additive model
multiplicative model
additive model
seasonality factor expressed as quantitive
add or subtract from series average
multiplicative model
seasonality expressed as percentage of average amount
what is important for forecast accuracy
calculate error
measurements of forecasts accuracy
mean absoulte deviation (MAD)
mean squarred error (MSE)
Mean absolute percent error (MAPE)
why do different measures of forecasting accuracy exist
they describe forecasts from different perspectives (percentage can be different)
important factors that influence what forcasting technique is chosen
most important factors: cost, accuracy
other factors: availability of data, computer, time…
which forecasting technnique has the lowest costs
naive technique
the more complex the forecast, the more expensive
short term forecasting technique
moving average
exponential smoothing
long term forecasting
trend
the delphi method
executive opinion method
