Midterm Flashcards
Operations Management
The design, operation, and improvement of the production system that creates the firm’s primary products and services.
Five P’s
people, plants, parts, processes, and planning
Strategic Decisions
Long-range business plans, such as the acquisition of new resources
Tactical Decisions
Medium range decisions, typically for the utilization of existing resources
Operational Decisions
Decisions that are narrowly focused for a short time frame, usually involving the execution of schedules or control activities`
Transformtion System
A user of resources to transform inputs into some desired outputs
Physical
Manufacturing
Locational
Transportation
Exchange
Retailing
Storage
Warehousing
Physiological
Health Care
Informational
Telecommunications
Current Issues in OM
o Coordinate the relationships between mutually supportive but separate organizations
o Increased co-production of goods and services
o Optimizing global supplier, production and distributions networks
o Managing the customer’s experience during the service encounter
o Raising the awareness of operations as a significant competitive weapon
Operations Strategy
Concerned with setting broad policies and plans for using the production resources of the firm to best support the firm’s long term competitive strategy
Stage 1 - Internally Neutral (don’t mess up)
The objective here is limited to minimizing the downside
Stage 2 - Externally Neutral (keeping up with the Joneses)
Operations is only required to match the performance of the competition. Industry practice is followed, but not initiated
Stage 3 - Internally Supportive (be consistent with corporate strategy)
A strategy is formulated and adhered to. Processes and technologies are screened for strategic consistency
Stage 4 - Externally Supportive (be a full partner in the company)
Operations is used to its fullest capability to seek a competitive advantage. Operations is fully involved with all major decisions, adopting a proactive rather than a reactive role.
Order Qualifier
A feature that must be present in the product for its purchase to even be considered
Order Winner
A product feature used to then select the product to be purchased from the pool of “acceptable” products which meet order qualifying standards
Productivity
Outputs/Inputs
Total-factor
Assessing productivity using the complete set of inputs
Multi-Factor
Using less than the total set of measures (though still more than one)
Dimensionless
The productivity figure has no “units.” Numerator (outputs) and denominator (inputs) are expressed in the same units
Productivity Growth
(P2-P1)/P1
External Factors
Safety, the environment, and crime
Improved Labor Inputs
Education, changing demographics
Capital-labor Substitution
The exchange of manual labor for some level of automation
Economies of Scale
In general, the bigger the better, at least for certain industries
Technological Change
New equipment and management
Project
Series of related jobs usually directed toward some major output and requiring a significant period of time to perform.
Project Management
Planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost, and time constraints of a project.
Pure Project
An autonomous, self-contained team is created which works full time on a project
Pure Project Advantages
- The project manager has full authority over the project
- Team members report to one boss
- Lines of communication are shortened/ decisions are made quickly
- Team pride, motivation, and commitment are high
Pure Project Disadvantages
- Duplication of resources
- Organizational goals and policies are ignored (teams members are often removed physically and psychologically from headquarters)
- The organization falls behind in its knowledge of new technology due to weakened functional divisions
- Since team members have not “home”, they are worried about life after project, and project termination is delayed
Functional Project
The project is housed within a single functional division.
Functional Project Advantages
- Team members can work on several projects
- Technical expertise is maintained within in the functional area even if individuals leave the project or organization
- Functional area is home after the project is completed, Functional specialists can advance vertically; no life after project fears
- A mass of specialized functional area experts create synergistic solutions to a projects technical problems
Functional Project Disadvantages
- Non-functional area tasks get short-changed
- Motivation of team members is often weak
- Needs of clients are secondary and are responded to slowly
Matrix Project
Utilizes people from several different functional areas. Project manager decides what to do and when tasks will be performed but the functional managers control which people and technologies are used.
Matrix Project Advantages
- Communication between functional divisions is enhanced
- PM is held responsible for successful completion of the project
- Duplication of resources is minimized
- Team members have a functional home; no life after project fears
- Policies of parent organization are followed; increases support for the project
Matrix Project Disadvantages
- Two bosses
- Doomed to failure unless PM has strong negotiation skills
- Sub optimization is a danger; PMs hoard resources from their own projects thus harming other projects
Early Finish
Early Start + Duration
Slack
LS - ES = LF - EF
Crash Costs
Costs to reduce the length of an activity by 1 time period
Administrative Costs
Costs to manage the project. A certain amount of money is required to just administer the project, over and above the cost of performing the various activities that make up the project
Penalty Costs
For eery time unit beyond the deadline, a penalty cost is imposed.
a
most optimistic time
m
most probable time
b
most pessimistic time
ET
(a + 4m + b)/6
standard deviation
(b-a)/6
variance
(b-a)^2/36
Conversion Process
Change the substance of the product. Material has been transformed from one substance to another
Assembly Process
Separate parts are physically joined or combined. Putting together a computer.
Fabrication Process
Change the shape or form of the product. Stamping out metal parts
Testing Process
Some from of inspection. Part is examined and measured against some criteria.
Job Shop
Produces a wide variety of products in a wide variety of quantities. Characterized by jumbled flow of materials through facility.
Batch
Closely related to the job shop, the batch system typically has a subset of products which are produced regularly. Has some level of standardization
Assembly Line
So named because the flow of product can be distinctly seen to move in lines, as typified by auto assembly.
Continuous Flow
Used for commodity items. It often produces a very high volume. So named because product rarely, if ever, stops.
