OM 300 Study Guide TEST 1 PDF

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Download OM 300 Study Guide TEST 1 PDF

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Chapter 1 What is Operations Management? The set of activities that create value in the form of goods and services by transforming inputs into outputs ―Creating value by efficiently/effectively transforming inputs into outputs What are the 3 main functions of any business? Marketing (generates demand), Finance/Accounting (Tracks how well the organization is doing, pay bills, collects the money) Operation/Production (creates, produces and delivers the product) What types of decisions do Operations Managers make? 10 OM Decisions 1) Design of goods and services 2) Managing Quality 3) Process and capacity design 4) Location and Strategy 5) Layout strategy 6) Human resources and job design 7) Supply-chain management 8) Inventory management 9) Scheduling 10)Maintenance Differences between goods and services

Productivity – What is it? How is it calculated? ―Single- and Multi-factor productivity calculations Productivity is the measure of process improvement, represents output relative to input. Single Factor: (Units Produced)/(Labor hours used) Multifactor: (Output)/(Labor + Material + Energy + Capital + Misc)

Percent Change: (New - Old) / (Old) Which 3 factors affect productivity? Not sure on this one*** Quality( may change while the quantity of inputs remains constant. External Elements (may cause an increase or decrease in productivity. Precise Units of Measure (may be lacking) Chapter 2

A global view of operations ―Examples of global companies Sony - Headquartered in Japan, but have manufacturers across the world Volvo- Sweedish company, but actually owned by a chinese company, but operates across the world Haier- Chinese Company, Owns GE appliances, Haier produces products in Lexington Kentucky that they sell across the entire world Boeing ―Why companies choose to expand globally 6 reasons domestic business operations decide to change to some form of international operation 1) Improve the supply chain by locating in countries with unique resources available 2) Reduce costs (lower direct costs, Trade agreements help reduce tariffs) 3) Improve Operations (Learn from management innovations in other countries, Reduce Response time to customer’s needs) 4) Understand Markets (Interaction with global customers and suppliers can lead to new opportunities, Extend product life style i.e how long people are willing to purchase it) 5) Improve Products (Sharing ideas across industries and around the globe helps firms develop/create better goods and services) 6) Attract and retain global talent (More Job opportunities for growth and protection from economic downturn)

Developing mission and supporting strategies Mission Statement: tells an organization where it is going Strategy: Tells the organization how it will get there ―Hierarchy of strategies (i.e. business strategy vs. operations strategy) ―How do companies achieve competitive advantages? Strategies for Competitive Advantage 1) Differentiation a) Considers everything that impacts customer’s perception of value

2) Cost leadership a) Provide maximum perceived value b) Does not imply low quality 3) Response a) Flexibility- responds to market changes in design innovation and volumes b) Reliability- meeting schedules c) Timeliness - Quickness in design, production and delivery ―Product life cycle implications How do companies go about developing strategies? ―SWOT, KSFs, Core Competencies 1) Analyze the environment 2) Determine the corporate mission 3) Form a strategy 1)Provide a SWOT Analysis a) Formal review of internal strengths and weaknesses and external opportunities and threats 2) Identify key success factors and core competencies -

Never outsource your core competencies Factors that are key to achieving competitive advantage Core competencies - set of skills, talents and capabilities in which a firm is particularly strong

3) Integrate OM with other activities 4) Implement the 10 strategic OM decisions

Outsourcing – benefits/risks Transferring activities that traditionally have been internal to external suppliers Subcontracting - contract manufacturing Examples of outsourced activities: Legal services, travel services, payroll, production Advantages: cost savings, gaining outside expertise, improving operation and service, maintaining a focus on core competencies, accessing outside technology

Disadvantages: increased logistics and inventory costs, loss of control, potential creation of future competition, negative impact on employees, risks may not manifest themselves for years

Chapter 3

What are the three primary activities involved in managing a project? 1) Planning - Goal setting, project definition, team organization 2) Scheduling a) Relate people, money and supplies to specific activities b) Relate activities to each other 3) Controlling a) Monitor resources, costs, quality and budgets b) Revise plans/shift resources to meet time and budget demands What are the responsibilities of a project manager and what types of ethical issues could arise? On time, on budget and of the highest quality, Motivate, direct and inform project personnel, Ethical Code Ethical Issues that can arise: Crane example in new york, they had a deadline and used the crane even though weather conditions made it unsafe to do so. What is the main difference between using a Gantt chart versus using the CPM/PERT techniques? What are the steps for using CPM/PERT techniques? 1) 2) 3) 4) 5)

Define project and prepare work breakdown structure Develop relationships among activities Draw the network connecting all activities Assign duration and/or cost estimate each activity Compute the longest path through activities with no slack time in the network (critical path) 6) Use the network to help plan, schedule, monitor and control the project a) Overall project duration and completion day b) Identification of critical and noncritical activities c) Probability the project will be completed by a specific date d) Statuses of schedule, budget and resources e) Ways to complete the project faster in the least costly manner ―Draw network diagram, forward pass, backward pass, calculate slack and determine the critical path ―Execute the CPM/PERT techniques What is the main difference between CPM and PERT techniques? CPM says that this activity takes exactly this amount of time PERT gives 3 different kinds of estimates CPM assumes fixed duration estimate per activity PERT uses probability distribution for activity durations How are expected activity durations and variations calculated within the PERT technique and how is the overall project duration calculated? Expected activity duration

T = (a+ 4m+b)/6 Variance V = ((b-a)/6)^2 Calculate the probability of project completion Z = (due date - expected date of completion)/ Project Standard Deviation What are the advantages and disadvantages of CPM/PERT techniques? Pros: -

Useful for large project Relatively easy to use Graphical networks highlight relationships among activities Critical path identifies ctivities to be closely monitored Responsibility

Cons: -

Activities have to be clearly defined Precedence relationships established Time estimates can be subjunctive Too much focus on critical path

Chapter 4 What is forecasting? Discuss differences between 3 forecasting time horizons Economic forecasts: medium to long range-forecasts Technological forecasts: long range forecasts Demand: all time horizons How does forecasting affect human resources, capacity planning and the supply chain? 7 steps to forecasting ―Use, items, time horizon, model, data, make and validate Qualitative vs. Quantitative forecasting approaches Qualitative: Vagueness, little to no historical data exists, intuition, experience Quantitative: Stable, Historical data exists, mathematical technique Compare the four main qualitative forecasting approaches and the pros and cons of each Jury of executive opinion: small groups of executives and managers combine experience and statistical models (college football playoffs) Delphi Method: Iterative group process continues until a consensus is reached Sales force composite: salespeople forecast their sales on a regional level and then combine to national levels

Market survey: ask the customer What is time-series forecasting? Naive approach, moving averages, exponential smoothing, trend projection What are the components of a time-series forecast? ―Trend, seasonality, cycles, random variation Demonstrate ability to calculate forecasts based on each time-series forecasting approach ―Naïve, moving averages/weighted moving averages, exponential smoothing, trend projection How is forecast error measured and compared across multiple forecasts? Calculate a forecast for data with seasonal variation

What is associative forecasting? Use regression analysis to calculate forecast...