Terms Flashcards
OPERATIONS MANAGEMENT
The set of activities that creates value in the form of goods and services by transforming inputs into outputs
Productivity
The ratio of outputs (goods and services) divided by the inputs (resources, labor & capital)
Mission
Tells an organization where it is going
Strategy
Tells the organization how to get where its going
Competitive advantage
Implies the creation of a system that has a unique advantage over competitors
Delphi method
Uses an interactive group process that allows experts to make forecasts
Jury of executive opinion
Takes the opinion of a small group of high-level managers and results in a group estimate of demand
Sales force composite
Based on salespersons’ estimates of expected sales
Market survey
Solicits input from customers or potential customers regarding future purchasing plans
Time series
Uses a series of past data points to make a forecast
Malcolm Baldrige Award
National quality award after a former secretary of commerce
ISO 9000
Set of quality standards developed by the International Organization for Standardization
Quality
The ability of a product or service to meet customer needs
Prevention costs
Costs associated with reducing the potential for defective parts or services I.e training
Appraisal costs
Costs related to evaluating products, processes, parts,and services I.e inspectors
Internal failure costs
Costs that result from production of defective parts or services before delivery to customers I.e rework
External failure costs
Costs that occur after delivery of defective parts or services I.e returned goods
Six Sigma
A program to save time, improve quality, and lower costs
D-M-A-I-C
Defines Measures Analyzes Improves Controls
TQM Tools
Check sheets, flow charts, scatter plots, cause-and-effect diagrams, Pareto charts, histogram, and statistical process control
Inspection
A means of ensuring that an operation is producing at the quality level expected
Employee empowerment
Involving employees in every step of the production process
Quality circle
A group of employees who meet regularly to solve work-related problems
Benchmarking
Selecting a demonstrated standard of performance that represents the very best performance for a process or an activity
Natural vs. assignable variation
Natural- expected variability; common cause
Assignable- variation that can be traced to a specific cause
X-bar control chart
Tells us whether changes have occurred in the central tendency (the mean) of a process
R-chart
Tracks the “range” within a sample; it indicates that a gain or loss in uniformity has occurred in dispersion of a production process
P-chart
A quality control chart that is used to control attributes
Eliminate waste
Waste is anything that doesn’t add value from the customer point of view I.e strange, inspection,delay
Seven wastes
Overproduction, queues, transportation, inventory, motion, over processing and defective products
Just-in-time
Focuses on continuous and forced problem solving via throughput and reduced inventory
5Ss
A lean production checklist
- sort
- simplify
- shine
- standardize
- sustain
Cycle time
The time between the arrival of raw materials and the shipping of finished products
Pull system
Results in materials being produced only when requested and moved to where it is needed just as it is needed
MAD
Mean absolute average
= sum(errors)/count(errors)
Seasonal index
Seasonal average / overall average
Errors
= abs(actual-forecast)