Midterms Flashcards
Goods
physical items that include raw materials, parts, subassemblies such as motherboards that go into computers, and final products such as cell phones and automobiles.
activities that provide some combination of time, location, form, or psychological value.
Services
processes that either provide services or create goods.
Processes
sequence of organizations—their facilities, functions, and activities—that are involved in producing and delivering a product or service
Supply chain
provide raw materials, parts, equipment, supplies, and/or other inputs to the organization, and they deliver outputs that are goods to the organization’s customers.
External supply chain
part of the operations function itself, supplying operations with parts and materials, performing work on products, and/or performing services.
Internal part of supply chain
Value-added
Difference between the cost of inputs and the value or price of outputs.
non-profit organizations, the value of outputs (e.g., highway construction, police and fire protection) is their value to society; the greater the value-added, the greater the effectiveness of these operations.
True or false
True
In for-profit organizations, the value of outputs is measured by the prices that customers are willing to pay for those goods or services. Firms use the money generated by value-added for research and development, investment in new facilities and equipment, worker salaries, and profits.
Consequently, the greater the value added, the greater the amount of funds available for these purposes. Value can also be psychological, as in branding.
True or false
True
Implies an act
Delivery of service
Production of goods
Results in tangible output
services such as Internet providers, utilities, and mail service do not. When there is a high degree of contact, the interaction between server and customer becomes a “moment of truth” that will be judged by the customer every time the service occurs.
Degree of customer contact
Services often have a higher degree of labor content than manufacturing jobs do, although automated services are an exception.
Labor content of jobs
Function of business organizations
OPERATIONS
FINANCE
MARKETING
storing, transporting, repairing
Transformation procecesses
To ensure that the desired outputs are obtained, an organization takes measurements at various points in the transformation process
feedback
control
compares them with previously established standards to determine whether corrective action is needed
Service operations are often subject to a higher degree of variability of inputs. Each client, patient, customer, repair job, and so on presents a somewhat unique situation that requires assessment and flexibility. Conversely, manufacturing operations often have a greater ability to control the variability of inputs, which leads to more-uniform job requirements.
uniformity of inputs
can be more difficult for service jobs due largely to the high variations of inputs.
Measurement of productivity
Quality assurance
more challenging for services due to the higher variation in input, and because delivery and consumption occur at the same time. Unlike manufacturing, which typically occurs away from the customer and allows mistakes that are identified to be corrected, services have less opportunity to avoid exposing the customer to mistakes.
Many services tend to involve less use of inventory than manufacturing operations, so the costs of having inventory on hand are lower than they are for manufacturing. However, unlike manufactured goods, services cannot be stored. Instead, they must be provided “on demand.”
inventory
Manufacturing jobs are often well paid, and have less wage variation than service jobs, which can range from highly paid professional services to minimum-wage workers.
wages
Product designs are often easier to patent than service designs, and some services cannot be patented, making them easier for competitors to copy.
ability to patent
Points of comparison
Degree of customer contact Labor content of jobs Uniformity of inputs Measurement of productivity Quality assurance Inventory Ability to patent Wages
consists of one or more actions that transform inputs into outputs.
process
Businesses are compose of may interrelated processes. Generally, there are three (3) business processes:
Upper-management processes
Operational processes.
Supporting processes
These govern the operation of the entire organization. Ex. Organizational governance and organizational strategy.
upper management processes
Operational processes
These are the core processes that made up the value stream. Ex. Purchasing, production/service, marketing & sales.
Ex: Accounting, HR, and IT
Supporting processes. These support the core processes.
Ideally, the capacity of a process will be such that its output just matches demand.
True or false
True
To be effective, it is not necessary for managers to be able to deal with variation.
True or false
False
To be effective, it is ALSO necessary for managers to be able to deal with variation.
. It can be due to variety or variability. For example, random variability is inherent in every process; it is always present. In addition, variation can occur as the result of deliberate management choices to offer customers variety.
Process variation
Four basic sources of variation:
Variety of goods and services being offered
Structural variation in demand
Random variation
Assignable variation
These variations, which include trends and seasonal variations, are generally predictable. They are particularly important for capacity planning.
Structural variation in demand
The greater the variety of goods and services, the greater the variation in production or service requirements.
Variety of goods and services being offered
These variations are caused by effective inputs, incorrect work methods, out-of-adjustment equipment, and so on. This type of variation can be reduced or eliminated by analysis and corrective action.
Assignable variation
Random variation
This natural variability is present to some extent in all processes, as well as in demand for services and products, and it cannot generally be influenced by managers.
SCOPE OF OPERATIONS MANAGEMENT
product and service design, process selection, selection and management of technology, design of work systems, location planning, facilities planning, and quality improvement of the organization’s products or services.
operations function includes many interrelated activities
forecasting, capacity planning, scheduling, managing inventories, assuring quality, motivating employees, deciding where to locate facilities, and more.
Forecasting
such things as weather and landing conditions, seat demand for flights, and the growth in air travel.
essential for the airline to maintain cash flow and make a reasonable profit. (Too few or too many planes, or even the right number of planes but in the wrong places, will hurt profits.)
Capacity planning
Locating facilities
according to managers’ decisions on which cities to provide service for, where to locate maintenance facilities, and where to locate major and minor hubs.
important in achieving effective use of workers and equipment.
Facilities and layout
planes for flights and for routine maintenance; scheduling of pilots and flight attendants; and scheduling of ground crews, counter staff, and baggage handlers.
Scheduling
Competition is the driving force in many organizations
True or false
True
, it is essential for organizations to determine what combinations of factors are important to customers, which factors are order qualifiers, and which are order winners.
True or false
True
_______ plans for achieving organizational goals. They provide focus for decision making. Strategies must take into account present and future customer wants, as well as the organization’s strengths and weaknesses, threats and opportunities.
Strategies
____________ strategies are narrower in scope and should be linked to overall strategies.
Functional
______strategies and_______ strategies are among the most widely used strategies business organizations employ to serve their customers and to become more productive.
Quality based
is a measure of the use of resources. There is considerable interest in productivity both
Productivity
Business organizations want higher productivity because it yields _______ and helps them to become more competitive.
lower costs
Nations want _______________ because it makes their goods and services more attractive, offsets inflationary pressures associated with higher wages, and results in a higher standard of living for their people.
higher productivity
means that business organizations must frequently assess their competitors’ strengths and weaknesses, as well as their own, to remain competitive.
Competitive pressure
Strategy formulation
critical because strategies provide direction for the organization, so they can play a role in the success or failure of a business organization.
________strategies need to be aligned with the goals and strategies of the overall organization.
Functional strategies and supply chain
3 primary business strategies
low cost, responsiveness, and differentiation.
a key factor in the cost of goods and services. Increases in productivity can become a competitive advantage.
productivity
High productivity is particularly important for organizations that have a strategy of _______
low costs
vital inputs for the design and the operation of the productive systems because they help managers to anticipate the future.
forecasts
Forecasting techniques can be classified as _______________
qualitative or quantitative.
___________ rely on judgment, experience, and expertise to formulate forecasts; quantitative techniques rely on the use of historical data or associations among variables to develop forecasts. Some of the techniques are simple,
Qualitative techniques
rely strictly on the examination of historical data; predictions are made by projecting past movements of a variable into the future without considering specific factors that might influence the variable.
time series techniques
All forecasts tend to be accurate; therefore, it is important to provide a measure of accuracy
True or false
false
inaccurate
Control of forecasts involves deciding whether a forecast is performing adequately, typically using a _______
control chart
_____________ is a key factor in satisfying the customer.
Product and service design
Successful design often incorporates many of these basic principles:
Determine what customers want as a starting point; minimize the number of parts needed to manufacture an item or the number of steps to provide a service; simplify assembly or service, standardize as much as possible; and make the design robust.
__________ efforts can play a significant role in product and process innovations, although these are sometimes so costly that only large companies or governments can afford to underwrite them.
Research and development
Reliability of a product or service is often a key dimension in the eyes of the customer.
Measuring and improving reliability are important aspects of product and service design, although other areas of the organization also have an influence on reliability.
_______________is one approach for getting customer input for product or service design.
Quality function deployment
A range of factors can cause an organization to design or redesign
economic, legal, political, social, technological, and competitive pressures.
Among considerations that are generally important are legal, ethical, and environmental.
True or false
True
Minimum standards of acceptability
Order Qualifiers
Better than competition
Order winners
SWOT Approach
Analysis of strength,weakness,opportunities and threats
The monitoring of events and trends that present as threats or opportunities for a company
Environmental scanning
Economic conditions
general health and direction of the economy ,inflation,deflation,interest rates,tax and tariffs
favorable and unfavorable attitudes towards business,political stability and instability, wars
Political conditions
laws.regulations,trade restrictions,minimum wage laws,product liability laws,patents
Legal environment
technology
rate of which product innovations is occurring, current and future process of technology (equipment,materials,handling) and design technologies.
competition
External factor
number and strength of competitors,basis of competition (price, quality, special features), and ease of market entry
markets
External factor
size,location,brand loyalties,ease of entry,potential for growth,long-term stability, and demographics
