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88 Cards in this Set
- Front
- Back
An operation in a sequence of operations whose capacity is lower that of the other operations
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Bottleneck Operation
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The volume of output at which total cost and total revenue are equal
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Break-Even Point
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The upper limit or ceiling on the load that an operating unit can handle
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Capacity
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Extra capacity used to offset demand uncertainty
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Capacity Cushion
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The difference between cash received from sales and other sources, and cash outflow for labor material, overhead, and taxes
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Cash Flow
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Something that limits the performance of a process or system in achieving its goals
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Constraint
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The maximum designed service capacity or output rate
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Design Capacity
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If the output rate is more than the optimal level, increasing the output rate results in increasing average unit costs
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Diseconomies of Scale
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If the output rate is less than the optimal level, increasing the output rate results in decreasing average unit
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Economies of Scale
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Design capacity minus personal and other allowances
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Effective Capacity
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The sum, in current value, of all future cash flows of an investment proposal
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Present Value
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The limitations on decision making caused by costs, human abilities, time, technology, and availability of information
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Bounded Rationality
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Environment in which relevant parameters have known values
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Certainty
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A schematic representation of the available alternatives and their possible consequences
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Decision Tree
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The best expected value among the alternatives
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Expected Monetary Value Criterion
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The difference between the expected payoff with perfect information and the expected payoff under risk
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Expected Value of Perfect Information
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Choose the alternative with the best average payoff of any of the alternatives
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Laplace
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Choose the alternative with the best possible payoff
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Maximax
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Choose the alternative with the best of the worst possible payoffs
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Maximin
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Choose the alternative that has the least of the worst regrets
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Minimax Regret
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Table showing the expected payoffs for each the expected payoffs for each alternative in every possible state of nature
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Payoff Table
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The difference between a given payoff and the best payoff for a state of nature
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Regret
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Environment in which certain future events have probable outcomes
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Risk
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Determining the range of probability for which an alternative has the best expected payoff
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Sensitivity analysis
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The result of different departments each attempting to reach a solution that is optimum for that department
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Suboptimization
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Environment in which it is impossible to assess the likelihood of various future events
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Uncertainty
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A tool used to organize data into logical categories
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Affinity Diagram
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Costs of activities designed to ensure quality or uncover defects
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Appraisal Costs
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Annually award given by the US government to recognize quality achievements of US companies
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Baldrige Award
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Process of measuring performance against the best in the same or another industry
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Benchmarking
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Technique for generating a free flow of ideas in a group of people
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Brainstorming
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A diagram used to search for the cause(s) of a problem; also called fishbone diagram
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Cause-and-effect Diagram
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A tool for recording and organizing data to identify a problem
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Check Sheet
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Philosophy that seeks to make never-ending improvements in the process of converting inputs into outputs
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Continuous Improvement
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A statistical chart of time-ordered values of a sample statistics
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Control Chart
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Prize established the japanese and awarded annually to firms that distinguish management programs
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Deming Prize
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Performance, aesthetics, special features, conformance, reliability, durability, perceived, quality, and serviceability
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Dimensions of Quality
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A six-sigma process: define, measure, analyze, improve, and control
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DMAIC
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European award for organizational excellence
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European Quality Award
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Failures discovered after delivery to the customer
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External Failures
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Incorporating design elements that prevent incorrect procedures
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Fail-safing
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Costs caused by defective parts or products or by faulty services
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Failure Costs
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A method of asking questions about a process that include what, why, where, when,who how, and how much
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5W2H Approach
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A diagram of the steps in a process
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Flowchart
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A chart of an empirical frequency distribution
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Histogram
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Failures discovered during production
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Internal Features
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Technique for identifying problem areas and collecting imformation
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Interviewing
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A set of international standards on quality management and quality assurance, critical to international business
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ISO 9000
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A set of international standards for assessing a company's environmental performance
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ISO 14000
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A set of international standards that pertains to the quality and performance of office equipment that contains reused components
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ISO 24700
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Japanese term for continuous improvement
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Kaizen
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An approach to continuous improvement that integrates lean operation principles and six sigma techniques
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Lean/Six Sigma
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Technique for classifying problem areas according to degree of importance, and focusing on the most important
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Pareto Analysis
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A framework for problem solving and improvement activities
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Plan-to-study-act Cycle
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Costs of preventing defects from occurring
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Prevention Costs
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A systematic approach to improving a process
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Process Improvement
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The ability of a product or service to consistently meet or exceed customer expectations
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Quality
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The philosophy of making each worker responsible for the quality of his or her work
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Quality At the Source
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Groups of workers who meet to discuss ways of improving products or processes
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Quality Circles
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The degree to which goods or services conform to the intent of the designersr
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Quality of Conformance
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Intention of designers to include or exclude features in a product or service
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Quality of Design
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An approach that evaluates the financial return of investment in quality
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Return on Quality
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Tool for tracking results over a period of time
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Run Chart
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A graph that shows the degree and direction of relationship between two variables
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Scatter Diagram
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A business process for improving quality, reducing costs, and increasing customer satisfaction
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Six Sigma
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A philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction
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Total Quality Management
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In process, output, a variation whose cause can be identified; a nonrandom variation
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Assignable Variation
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Generate data that are counted
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Attributes
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Control chart for attributes, used to monitor the number of defects per unit
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C-chart
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The distribution of sample averages tends to be normal regardless of the shape of the process distribution
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Central Limit Theory
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A time-ordered plot of sample statistics, used to distinguish between random and nonrandom variability
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Control Chart
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The dividing lines between random and nonrandom deviations from the mean of the distribution
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Control Limits
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Appraisal of goods or services
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Inspection
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Control chart used to monitor the central tendency of a process
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Mean Control Chart
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Control chart for attributes, used to monitor the proportion of defective items in a process
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P-chart
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The inherent variability of process output relative to the variation allowed by the design specification
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Process Capability
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Natural or inherent variability in a process
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Process Variability
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A process that evaluates output relative to a standard and takes corrective action when output doesn't meet standards
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Quality Control
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Natural variation in the output of a process, created by countless minor factors
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Random Variation
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Control chart used to monitor process dispersion
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Range Control Chart
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A test for patterns in a sequence
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Run-Test
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A theoretical distribution of sample statistics
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Sampling Distribution
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A range of acceptable values established by engineering design or customer requirements
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Specifications
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Statistical evaluation of the output of a process
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Statistical Processing Control
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Concluding a process is not in control when it actually is
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Type I Error
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Concluding a process is in control when it is not
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Type II Error
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Sequence of observations with a certain characteristic
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Run
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Generate data that are measured
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Variables
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