Section 4: Key Terms and Formulas Flashcards
{Blank} is used to describe the assembly of low-variety, high-volume discrete products. Product layout has relatively high fixed costs and relatively low variable costs. Example: washing machine assembly.
Assembly line
{Blank} is a term used to describe a production process that aggregates similar products together to generate sufficient volume for efficient use in a facility.
Batch flow
{Blank} is the most limiting constraint on the system. It occurs at the point in the process that requires the longest time or has the slowest rate.
Bottleneck
{Blank} is a measure of an organization’s ability to sustainably provide customers with the demanded services or goods in the amount requested and in a timely manner, given current resources. Capacity also describes an organization’s maximum sustainable rate of production.
Capacity
{Blank} is very important because significant capital is usually required to build facilities and purchase the equipment to build capacity.
Capacity planning
{Blank} is a metric, or measure, used to determine how much capacity is actually being used on an average basis. Capacity Utilization = Actual Output / Design Capacity
Capacity utilization
{Blank} is any resource, including processes, resources, and market demand, whose capacity is less than or equal to demand for that resource.
Constraint
{Blank} does not usually identify individual units but rather a mixed product that flows in a continuous stream with low variety and high volume. This is different from product layout, which has relatively high fixed costs and relatively low variable costs, as in the case of the oil refining process.
Continuous flow process
{Blank} is the maximum achievable output of a process or system. based on what a service firm or a manufacturer can produce under ideal conditions for a short period of time.
Design capacity
{Blank} is the ability to produce more goods at a lower cost by utilizing the same equipment and production process.
Economies of scale
{Blank} can be expressed as building the necessary volume, as in economies of scale, by producing a variety of products in combination using the same process and equipment.
Economies of Scope
{Blank} is the maximum capacity given the product mix, equipment changeovers, and scheduled downtime of the production schedule.
Effective capacity
{Blank} is achieving an outcome with a minimum amount of effort; that is, mitigating waste or how much effective capacity is actually being used to achieve output.
Efficiency Rate
Efficiency = Actual Output / Effective Capacity
{Blank} is the placement of a facility with regard to a company’s customers, suppliers, and other facilities with which the company interacts.
Facility location
{Blank} are those which remain the same in all business conditions.
Fixed costs (FC)
