OPS (PRELIMS M1-M3) Flashcards
The part of a business organization that is responsible for producing goods or services
operations
The management of systems or processes that create goods and/or provide services
operations management
are physical items that include raw materials, parts, subassemblies, and final products
Goods
Are activities that provide some combination of time, location, form or psychological value.
Services
SUCH AS
*Air travel
*Education
*Haircut
*Legal counsel
a SEQUENCE of activities and
organizations involved in producing and delivering a good or service
Supply chain
5 Sequence of Supply Chain
- Suppliers’ suppliers
- Direct Suppliers
- Producers
- Distributor
- Final Customers
4 Main parts of the Transformation Process
- Input
- Transformation/ Conversion Process
- Outputs
- Control
a set of interrelated parts that must work together
(You put together for a purpose)
System
Products are typically neither purely service- or purely goods-based.
Good Servive Continuum
Three basic functions of the business organization
– Marketing
– Operations
– Finance
MOF
Give 3 Finance and Operations function overlap
– Budgeting
– Economic Analysis of investment
– Provision of funds
All about money / finance
One or more actions that transform inputs into outputs
Process
Give 3 Marketing and Operations function overlap
– Demand data
– Prouct and service design
– Competitor analysis
– Lead time data
All about supply and demand
System design considers _______ (Give 5)
– Capacity
– Facility location
– Facility layout
– Product and service planning
– Acquisition and placement of equipment
These are generally tactical and operational decisions (Give 5)
They are all under ___________?
– Management of personnel
– Inventory management and control
– Scheduling
– Project management
– Quality assurance
All under system operation
_____ is a key tool used by all decision makers
Modeling
an abstraction of reality; a simplification of something.
Model
Common features of models: (Give 2)
– simplifications of real-life phenomena
– They omit unimportant details of the real-life systems they mimic so that attention can be focused on the most important aspects of the real-life system
What are the 3 categories of business processes
– Upper management processes
– Operational Processes
– Supporting Processes
OSU
A type of business processes that govern the operation of the entire organization.
Upper management processes
A type of business processes that ‘s considered as core processes that make up the value stream
Operational Processes
A type of business processes that support the core processes
Supporting processes
If:
Supply > Demand
Supply < Demand
Supply = Demand
Then
– Wasteful / Costly
– Opportunity loss / Customer Dissatisfaction
– Ideal
A type of process variation that has identifiable sources. This type of variation can be reduced, or eliminated, by analysis and corrective action
Assignable Variation
A Natural (process) variation that is present in all processes. Generally, it cannot be influenced by managers.
Random Variation
A type of process varation that are generally predictable. They are important for capacity planning.
Structural Variation in demand
A type of Process variation:
The greater the variety of goods and services offered, the greater the variation in production or service requirements.
Variety of goods or services
being offered
________ can be disruptive to operations and supply chain processes. They may result in additional costs, delays and shortages, poor quality, and inefficient work systems
Variations
For reading only
The operations function includes many interrelated activities such as:
Forecasting
Capacity planning
Facilities and layout
Scheduling
Managing inventories
Assuring quality
Motivating employees
Deciding where to locate facilities
And more . . .
noted
The Operations function consists of all activities _______ related to producing goods or providing services.
directly
A primary function of the operations manager is to guide the system by _________.
decision making
A primary function of the operations manager is to guide the system by decision making.
What are the 2 types of decisions considered
System design decisions
System operation decisions
True or False: System design are typically strategic decisions that usuall require short term commitment of resources
False. must be long term
True or False: Operations managers spend more time on system design decision than any other decision area
False: Must be System OPERATION decision
FOR READING ONLY
Typical operations decisions include:
What: What resources are needed, and in what amounts?
When: When will each resource be needed? When should the work be
scheduled? When should materials and other supplies be ordered?
Where: Where will the work be done?
How: How will he product or service be designed? How will the work be
done? How will resources be allocated?
Who: Who will do the work?
NOted
____ Serve as a consistent tool for evaluation and provide a standardized format for analyzing a problem
Models
True or False: Models are generally harder to use and more expensive than dealing with the real system
False. Easier and less expensive
True or False:
The use of models does not guarantee good decisions
True
A decision-making approach that frequently seeks to obtain a mathematically optimal solution
Supported by computer calculations
Often work together with qualitative approaches
Quantitative Approaches
All managers use this type of metric to manage and control operations. Which is?
Performance Metrics
Give atleast 5 example of performance metrics
- Profits
Costs
Quality
Productivity
Flexibility
Inventories
Schedules
Forecast accuracy
_____ is giving up one thing in return for
something else
Trade-off
It describes carrying more inventory (an expense) in order to achieve a greater level of customer service
Trade off
The business organization is a system composed of subsystems, Which are?
Marketing subsystem
Operations subsystem
Finance subsystem
MOF
What is this:
Emphasizes interrelationships among subsystems
Main theme is that the whole is greater than the sum of its parts
The output and objectives of the organization take precedence over those
of any one subsystem
Systems Approach
Recognizing this allows managers to focus their attention to those efforts that will do the most good
Priorities
a system in which highly skilled workers use simple, flexible tools to produce small quantities of customized goods
Craft Production
(Under pre-industrial revolution)
Historical Evolution of Oper. Mngmt
(Enumerate 5)
Industrial Revolution
Scientific management
Human relations movement
Decision models and management science
Influence of Japanese manufacturers
_______ describes a few factors account for a high percentage of occurrence of some event(s)
The critical few factors should receive the ______ (lowest or highest) priority
Pareto Phenomenon
highest
(yung few factors daw mas matindi impact)
Some key elements of the industrial revolution
Began in ______ in the _______s
Division of labor - ________,
Application of the _________, in the _____s
Cotton gin and _________ parts - Eli Whitney, 1792
First bullet
– England (1770)
Second bullet
– Adam Smith (1776)
Third
– “rotative” steam engine, (1780s)
Fourth
– interchangeable
Management theory and practice did not advance appreciably during this period
Industrial Revolution
it is a Movement that was led by efficiency engineer, Frederick Winslow Taylor
Scientific Management
Scientific Management was led by ___?
Frederick Winslow Taylor
______ is responsible for planning, carefully selecting and training workers, finding the best way to perform each job, achieving cooperation between management and workers, and
separating management activities from work activities
What movement?
Management
Scientific Management
Emphasis was on maximizing output
Scientific Management
____ emphasized the importance of the human element in job design
Human Relations Movement
Contributors of Human relations movement:
____ - applications of psychology
Lillian Gilbreth
Contributors of Human relations movement:
____ - Hawthorne studies on worker motivation, 1930
Elton Mayo
Contributors of Human relations movement:
_______ - motivation theory, 1940s; hierarchy of needs,
1954
Abraham Maslow
Contributors of Human relations movement:
_____ - Two Factor Theory, 1959
Frederick Hertzberg
Contributors of Human relations movement:
____ - Theory X and Theory Y, 1960s
Douglas Mcgregor
Contributors of Human relations movement:
____ - Theory Z, 1981
William Ouchi
Contributors of Decision MOdels and management Science
F.W Harris - ______________ (1915)
mathematical model for inventory management,
Contributors of Decision MOdels and management Science
______ - statistical procedures for sampling and
quality control, 1930s
Dodge, Romig, and Stewart
Contributors of Decision MOdels and management Science
____ – statistical sampling theory, 1935
Tippett
Contributors of Decision MOdels and management Science
____ - OR applications in warfare
Operations Research (OR) Groups
Contributors of Decision MOdels and management Science
____ - linear programming, 1947
George Dantzig
They Refined and developed management practices that increased productivity
Credited with fueling the “quality revolution”
Just-in-Time production
Japanese Manufacturers
5 Key issues for operations managers today
Economic conditions
Innovating
Quality problems
Risk management
Competing in a global economy
Using resources in ways that do not harm ecological systems that support human existence
Sustainability
______ often go beyond traditional environmental and economic measures to include measures that incorporate social criteria in decision making
Sustainability Measures
For reading only
Ethical issues that may arise in
many aspects of operations
management:
Financial statements
Worker safety
Product safety
Quality
The environment
The community
Hiring and firing workers
Closing facilities
Workers’ rights
noted
(siguro for reading only na rin)
In the past, organizations did little to manage the supply chain beyond their own operations and immediate suppliers which led to numerous problems:
which are? (give 4)
Oscillating inventory levels
Inventory stockouts
Late deliveries
Quality problem
_____ describes How effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services
Competitiveness
Identifying consumer wants and/or needs
Pricing and quality
Advertising and promotion
Marketing influence
5 Hierarchical Planning
Mission
Goals
Organizational strategies
Tactics
Functional strategies
MGOTF
- The reason for an organization’s existence
It answers the question “What business are we in?
Mission
Provide detail and the scope of the mission
Goals can be viewed as organizational destinations
Goals
The mission statement serves as the basis for
organizational goals
A plan for achieving organizational goals
Serves as a roadmap for reaching the organizational destinations
guides the organization by providing
direction for, and alignment of, the goals and strategies of the
functional units
a major success/failure factor
Strategy
Goals serve as the basis for organizational strategies
Type of strategy:
Overall strategies that relate to the entire organization
Support the achievement of organizational goals and mission
Organizational strategies
Type of strategy:
Strategies that relate to each of the functional areas and that support
achievement of the organizational strategy
Functional level strategies
The methods and actions taken to accomplish strategies
The “how to” part of the process
Tactics
The actual “doing” part of the process
Operations
The special attributes or abilities that give an
organization a competitive edge
To be effective core competencies and strategies need to be
aligned
Core Competencies
Effective strategy formulation requires taking into account the ____ and ____
Core competencies
Environmental scanning (SWOT)
SUCCESSFUL strategy formulation also requires taking into account:
Order qualifiers
Order winners
Characteristics that customers perceive as minimum standards of acceptability for a product or service to be considered as a potential for purchase
Order Qualifiers
Characteristics of an organization’s goods or services that cause it to be perceived as better than the competition
Order Winners
_______ is necessary to identify
Internal factors (Strengths and weaknesses)
External factors (Opportunities and threats)
Environmental scanning
Organization’s context often referred to by other terms such as:
* ______
* ______
* _______
…relative to its products, services, investments, and behavior towards its relevant interested parties
-Organizational environment
-Business environment
- Ecosystem of an organization
Issues only include negative factors or
conditions for consideration
False. also include positive factors
Understanding the _________can be facilitated
by considering issues arising from legal, technological, competitive, market, (cultural), social and economic environments, whether international, national, regional or local
External Context
Understanding the ________ can be facilitated
by considering issues related to values, culture,
knowledge and performance of the organization.
internal context
The approach, consistent with organization strategy, that is used to guide the operations function
Operations Strategy
Strategy that focuses on quality in all phases of an organization
Pursuit of such a strategy is rooted in a number of factors:
Trying to overcome a poor quality reputation
Desire to maintain a quality image
A desire to catch up with the competition
A part of a cost reduction strategy
Quality Based Strategies
Strategies that focus on the reduction of time needed to accomplish tasks
It is believed that by reducing time, costs are lower, quality is higher, productivity is higher, time-to-market is faster, and customer service is improved
Time-based strategies
A strategic approach for competitive advantage that emphasizes the use of flexibility to adapt and prosper in an environment of change
Involves the blending of several core competencies
Cost
Quality
Reliability
Flexibility
Agile operations
A TOP-DOWN management system that organizations can use to
clarify their vision and strategy and transform them into action
Develop objectives
Develop metrics and targets for each objective
Develop initiatives to achieve objectives
Identify links among the various perspectives
Finance
Customer
Internal business processes
Learning and growth
Monitor results
The balanced Scorecard Approach
The purpose of _______ to determine
conformity to (customer and regulatory) requirements, and facilitate the effective
deployment and improvement of the quality management system (QMS).
Quality Objectives
Covered and aligned with Quality Objective
Qualitative description
of success of Quality Objective
Key Result Area (KRA)
Core - Priority of Top Management for Monitoring & Decision Making to attain the
KRAs
Consider it with impact on KRA, easy to monitor, and data are available
Quantitative indicator of success of KRA
Key Performance Indicator (KPI)
Right format: Measurable Adjective & Specific Noun, and Not Redundant with other KPIs
Organizations of all types and sizes face internal and external factors and influences that makes it uncertain whether and when they will achieve their objectives. The effect this uncertainty has on an organization’s objectives is ________
risk
- Effect of uncertainty
- Characterized by reference to potential events and consequences or combination of these
Risk
“A result of a situation favorable to achieving an intended result.”
“An uncertainty that could have a positive effect leading to benefits or rewards”
Opportunity
_____ is Developing understanding of the
risk
Risk analysis
under risk analysis
- Criteria for occurrence (_______),
- Impact (_______),
- Detection (availability of prevention and _______) should be set.
– Likelihood
– severity
– detection
Likelihood rating
1 =
2 =
3 =
4 =
5 =
(not occured in the last 5 years)
Occurred in the last 1 – 3 years
Occurred at least once a year
Can occur within a quarter
Happens once or more times per month
Severity rating
1 =
2 =
3 =
4 =
5 =
1 = almost no effect
2 = Short disruption
3 = cause stoppage
4 = prolonged stoppage
5 = cause cessation
low risk range
Medium risk range
High risk range
(1-3)
(4-10)
(12 - 25)
Type of risk treatment
- Accept to pursue opportunity
- Changing likelihood
- Changing consequences
Treat
Type of risk treatment
Sharing risk with other
parties
Transfer
Type of risk treatment
- Avoidance
- Remove risk source
Terminate
Type of risk treatment
- Retain risk by informed
decision - Provide mitigation action
Take no Action
A measure of the effective use of resources, usually expressed as the ratio of output to input
its measure useful for
Tracking an operating unit’s performance over time
Judging the performance of an entire industry or country
Productivity
Productivity Solution:
output/input
______ is the result of managing and intervening in transformation or work processes
Productivity Improvement
Measuring productivity:
______: P=O/I in a given period of time (t).
Useful for benchmarking purposes.
Static
Measuring productivity:
______-: p(1)=O(1)/I(1); p(2)=O(2)/I(2); then p(2)/p(1) yields a dimensionless index that reflects change in productivity between periods. ((p(2)-p(1))/p(1))*100 yields the percentage change between periods
Dynamic
Measuring productivity:
Uses a single “I” factor;
e.g., output/labor-hour, sales/employee
Partial - Factor
Measuring productivity:
Uses more than one “I”
factor; e.g. output/direct costs (labor,
materials, and overhead)
Multi Factor
Measuring productivity:
Uses all “I” factors.
(Note: Total-Factor captures “trade-offs”
between input factors.)
Total Factor
______ productivity is difficult to measure and
manage because
It involves intellectual activities
It has a high degree of variability
Service Sector
A useful measure related to productivity (Service sector Productivity) is ________
process yield
5 factors affecting productivity
MCTQM
– Methods
– Capital
– Techonology
– Quality
– Management
True or False
Don’t confuse productivity with efficiency
True
The upper limit or ceiling on the load that an operating unit can handle
Capacity
________ > operating costs that are too high
Overcapacity
Capacity needs include
Equipment
Space
Employee skills
_______ > strained resources and possible loss of
customers
Undercapacity
The goal of ______ is To achieve a match between the long-term supply capabilities of an organization and the predicted level of long-term demand
Strategic Capacity Planning
Notes:
Key questions:
What kind of capacity is needed?
How much is needed to match demand?
When is it needed?
Related questions:
How much will it cost?
What are the potential benefits and risks?
Are there sustainability issues?
Should capacity be changed all at once, or through several smaller changes
Can the supply chain handle the necessary changes?
Definitions of Capacity
_______ - The maximum output rate or service capacity an operation, process, or facility is designed for
Design Capacity
Definitions of Capacity
_____ - Design capacity minus allowances such as personal time and maintenance
Effective Capacity
Determinants of Effective Capacity
Facilities
Product and service factors
Process factors
Human factors
Policy factors
Operational factors
Supply chain factors
External factors
Strategies are typically based on assumptions and predictions about:
- Long-term demand patterns
Technological change
Competitor behavior
Capacity Strategies
_____ - Build capacity in anticipation of future demand increases
Leading
Capacity Strategies
______ - Build capacity when demand exceeds current capacity
Following
Capacity Strategies
______ - Similar to the following strategy, but adds capacity in relatively small increments to keep pace with increasing demand
Tracking
It is the Extra capacity used to offset demand uncertainty
That = 100% utilization
Capacity Cushion
NOTE
Organizations that have greater demand uncertainty typically have greater capacity cushion
Organizations that have standard products and services generally have smaller capacity cushion
For reading only
STEPS in Capacity Planning
- Estimate future capacity requirements
- Evaluate existing capacity and facilities; identify gaps
- Identify alternatives for meeting requirements
- Conduct financial analyses
- Assess key qualitative issues
- Select the best alternative for the long term
- Implement alternative chosen
- Monitor results
noted
Forecasting Capacity Requirements
_____ considerations relate to overall level of capacity requirements
Require forecasting demand over a time horizon and converting those needs into capacity requirements
Long term considerations
Forecasting Capacity Requirements
______ considerations relate to probable
variations in capacity requirements
Less concerned with cycles and trends than with seasonal variations and other variations from average
Short term considerations
true or false
Calculating processing requirements requires
reasonably accurate demand forecasts, standard processing times, and available work time
true
____ is the The quantity of equipment required for an operation
Equipment Fraction
Di na kasama toh?
______ can present a number of challenges related to:
The need to be near customers ( Convenience)
The inability to store services (Cannot store services for consumption later)
The degree of demand volatility (Volume and timing of demand) (Time required to service individual customers)
Service Capacity Planning
