Operations Management Chapter 5

Front 1

Design capacity

Back 1

The maximum designed service capacity output rate

Front 2

Effective Capacity

Back 2

Design capacity minus personal and other allowances

Front 3

Capacity Cushion

Back 3

Extra capacity used to offset demand uncertainty

Front 4

Bottleneck operation

Back 4

An operation in a sequence of operations whose capacity is lower than that of other operations

Front 5

Economies of scale

Back 5

If the output rate is less that the optimal level, increasing the output rate results in decreasing average unit costs

Front 6

Diseconomies of scale

Back 6

If the output rate is more than the optimal level, increasing the output rate results in increasing average unit costs

Front 7

Constraint

Back 7

Something that limits the performance of a process or system in achieving its goals

Front 8

Indifference point

Back 8

The quantity that would make two alternatives equivalent

Front 9

Cash flow

Back 9

The difference between cash received from sales and other sources, and cash outflow for labor, material, overhead, and taxes

Front 10

Present value

Back 10

The sum, in current value, of all future cash flows of an investment proposal