Om Ch 11-13, 15, 17

Front 1

Forecasting

Back 1

the process of projecting the values of one or more variables into the future

Front 2

Good forecasts:

Back 2

drive analyses and decisions related to operations

Front 3

Poor forecasting can result in:

Back 3

Poor inventory and staffing decisions resultin in part shortages, inadequate customer service and many customer complaints

Front 4

Planning horizon

Back 4

the length of time on which a forecast is based

Front 5

time bucket

Back 5

the unit of measure for the time period used in a forecast

Front 6

time series

Back 6

a set of observations measured at successive points in time or over successive periods of time

Front 7

trend

Back 7

the underlying pattern of growth or decline in a time series

Front 8

Seasonal patters

Back 8

characterized by repeatable periods of ups and downs over short periods of time

Front 9

cyclical patterns

Back 9

regular patterns in a data series that take place over long periods of time

Front 10

random variation (noise)

Back 10

the unexplained deviation of a time series from a predictable pattern, such as a trend, seasonal or cyclical patterns

Front 11

irregular variation

Back 11

a one time variation that is explainable

Front 12

Forecast error

Back 12

the difference between the observed value of the time series and the forecast or At - Ft

Front 13

Statistical forecasting

Back 13

based on the assumption that the future will be an extrapolation of the past

Front 14

a moving average forecast

Back 14

an average of the most recent "k" observations in a time series

Front 15

Single exponential smoothing (SES)

Back 15

is a forecasting technique that uses a weighted average of past time-series values to forecast the value of the time series in the next period

Front 16

Regression analysis

Back 16

a method for building a statistical model that defines a relationship between a single dependent variable and one or more independent variables, all of which are numerical

Front 17

multiple linear regression model

Back 17

a liner regression model with more than one independent variable

Front 18

judgmental forecasting

Back 18

relies upon opinions and expertise of people in developing forecasts

Front 19

Delphi method

Back 19

consists of forecasting by expert opinion by gathering judgements and opinions of key personnel based on their experience and knowledge of the situation

Front 20

bias

Back 20

tacking signal provides a method for doing this by quantifying - the tendency of forecasts to consistently be larger or smaller than the actual values of the time series.

Front 21

inventory

Back 21

any asset held for future use or sale

Front 22

inventory management

Back 22

involves planning, coordinating, and controlling the acquisition, storage, handling, movement distribution and possible sale of raw manterials, component parts and subassemblies, supplies and tools, replacement parts, and other assets that are needed to meet customer wants or needs

Front 23

raw materials, component parts, subassemblies and supplies

Back 23

are inputs to manufacturing and service-delivery processes

Front 24

work-in-process (WIP) inventory

Back 24

consists of partially finished products in various stages of completion that are waiting further processing

Front 25

finished goods inventory

Back 25

are completed products ready for distribution or sale to customers.

Front 26

safety stock inventory

Back 26

an additional amount that is kept over and above the average amount required to meet demand

Front 27

ordering costs (setup costs)

Back 27

incurred as a result of the work involved in placing orders with suppliers or configuring tools, equipment, and machines within a factory to produce an item

Front 28

inventory-holding or inventory-carry costs

Back 28

the expenses associated with carrying inventory

Front 29

shortage or stockout costs

Back 29

costs associated with a SKU being unavailable when needed to meet demand.

Front 30

unit cost

Back 30

the price paid for purchased goods or the internal cost of producing them

Front 31

stock-keeping unit (SKU)

Back 31

a single item or asset stored at a particular location

Front 32

independent demand

Back 32

demand for an SKU that is unrelated to the demand for other SKUs and needs to be forecast

Front 33

Dependent demand

Back 33

hod by SKUs if their demand is directly related to the demand of other SKUs and can be calculated without needing to be forecasted

Front 34

Deterministic

Back 34

demand is it when uncertainty is not included in its characterization

Front 35

Stochastic demand

Back 35

incorporates uncertainty by using probability distributions to characterize the nature of demand.

Front 36

static demand

Back 36

stable demand

Front 37

dynamic demand

Back 37

varies over time

Front 38

lead time

Back 38

the time between the placement of an order and its receipt

Front 39

stockout

Back 39

the inability to satisfy the demand for an item

Front 40

backorder

Back 40

occurs when a customer is willing to wait for an item

Front 41

lost sale

Back 41

occurs when the customer is unwilling to wait and purchases the item elsewhere

Front 42

Fixed quantity system

Back 42

the order quantity or lot size is fixed that is, the same amount Q, is ordered every time

Front 43

inventory position

Back 43

defined as the on-hand quantity (OH) plus any orders placed but which have not arrived (called scheduled receipts SR) minus any backorders (BO)

Front 44

Economic order quantity (EOQ) model

Back 44

a classic economic model developed in the early 1900s that minimized the total cost, which is the sum of the inventory-holding cost and the ordering cost

Front 45

cycle inventory (order or lot size inventory)

Back 45

inventory that results from purchasing or producing in larger lots than are needed for immediate consumption or sale.

Front 46

service level

Back 46

the desired probability of not having a stockout during a lead-time period

Front 47

fixed period system (FPS) (periodic review system)

Back 47

one i which the inventory position is checked only at fixed intervals of time, T, rather than on a continuous basis

Front 48

resource management

Back 48

deals with the planning, execution and control of all the resources that are used to produce goods or services in a value chain

Front 49

Aggregate planning

Back 49

the development of a long-term output and resource plan in aggregate units of measure

Front 50

disaggregation

Back 50

the process of translating aggregate plans into short-term operational plans that provide the basis for weekly and daily schedules and detailed resource requirements

Front 51

execution

Back 51

refers to moving work from one workstation to another, assigning people to tasks, setting priorities for jobs, scheduling equipment and controlling processes

Front 52

Aggregate planning options

Back 52

-demand management
-production-rate changes
-workforce changes
-inventory changes
-facilities, equipment and transportation

Front 53

level production strategy

Back 53

plans for the same production rate in each time period

Front 54

chase demand strategy

Back 54

sets the production rate equal to the demand in each time period

Front 55

master production schedule (MPS)

Back 55

a statement of how many finished items are to be produced and when they are to be produced

Front 56

final assembly schedule (FAS)

Back 56

defines the quantity and timing for assembling subassemblies and component parts into a final finished good

Front 57

materials requirements planning (MRP)

Back 57

a forward-looking demand-based approach for planning the production of manufactured goods and ordering materials and components to minimize unnecessary inventories and reduce costs

Front 58

dependent demand

Back 58

demand that is directly related to the demand of other SKUs and can be calculated without needing to be forecasted

Front 59

Bill of labor (BOL)

Back 59

hierarchial record of analogous to a BOM that defines labor inputs necessary to create a good or service

Front 60

End items

Back 60

finished good scheduled in the MPS or FAS that must be forecast

Front 61

parent item

Back 61

manufactured from one or more components

Front 62

components

Back 62

any item other than the end item that goes into a higher-level parent item

Front 63

subassembly

Back 63

always has at least one immediate parent and also has at least one immediate component

Front 64

MRP explosion

Back 64

the process of using the logic of dependent demand to calculate the quantity and timing of orders for all subassemblies and components that go into the support the production of the end items

Front 65

time buckets 2

Back 65

the time period size used in the MRP explosion process and usually are one week in length

Front 66

Gross requirements (GR)

Back 66

the total demand for an item derived from all its parents

Front 67

scheduled or planned receipts (S/PR)

Back 67

orders that are due or planned to be delivered

Front 68

Planned order receipt (PORec)

Back 68

specifies the quantity and time an order is to be received

Front 69

Planned order release (PORel)

Back 69

specifies the planned quantity and time an order is to be released to the factory or a supplier

Front 70

Projected on-hand inventory (POH)

Back 70

the expected amount of inventory on hand at the beginning of the time period considering on-hand inventory from the previous period plus scheduled receipts or planned order receipts minus the gross requirements

Front 71

Lot sizing

Back 71

the process of determining the appropriate amount and timing of ordering to reduce costs

Front 72

Lot-for-lot

Back 72

an ordering schedule that covers the gross requirements for each week

Front 73

action bucket

Back 73

the current time period

Front 74

Fixed order quantity (FOQ)

Back 74

rule uses a fixed order size for every order or production run

Front 75

periodic order quantity (POQ)

Back 75

orders a quantity equal to the gross requirement quantity in one or more predetermined time periods minus the projected on-hand quantity of the previous time period

Front 76

Capacity requirements planning (CRP)

Back 76

process of determining the amount of labor and machine resoures required to accomplish the tasks of production on a more detailed level, taking into account all component parts and end items in the materials plan

Front 77

Capacity requirements planning (CRP)

Back 77

process of determining the amount of labor and machine resoures required to accomplish the tasks of production on a more detailed level, taking into account all component parts and end items in the materials plan

Front 78

Quality management

Back 78

refers to systematic policies, methods, and procedures used to unsure that goods and services are produced with appropriate levels of quality to meet the needs of customers

Front 79

fitness for use

Back 79

is the ability of a good or service to meet customer needs

Front 80

quality of conformance

Back 80

the extent to which a process is able to deliver output that conforms to the design specifications

Front 81

specifications

Back 81

targets and tolerances determined by designers of goods and services

Front 82

service quality

Back 82

consistently meeting or exceeding customer expectations (external focus) and service delivery system performance criteria (internal focus) during all service encounters

Front 83

Influential leaders in modern quality management

Back 83

-W. Edwards Deming
-Joseph Juran
-Philip B. Crosby

Front 84

W. Edwards Deming

Back 84

-14 point philosophy
-Deming cycle - composed of 4 stages : plan, do, study, act

Front 85

Joseph Juran

Back 85

focused on 3 major quality processes called the Quality trilogy
1. quality planning
2. quality control
3. quality improvement

Front 86

Philip B crosby

Back 86

5 absolutes of quality managment

Front 87

Gap model (5)

Back 87

1. the discrepancy between customer expectations and management perceptions of those expectations.
2. the discrepancy between management perceptions of what features constitute a target level of quality and the task of translating these perceptions into executable specifications.
3. the discrepancy between quality specifications documented in operating and training manuals and plans and their implementation
4. the discrepancy between actual manufacturing and service delivery system performance and external communications to the customer
5. the difference between the customer's expectations and perceptions

Front 88

ISO 9000:2000 (international organization for standardization)

Back 88

1. customer-focused organization
2. Leadership
3. involvement of people
4. process of approach
5. system approach to management
6. continual improvement
7. factual approach to decision making
8. mutually beneficial supplier relationships

Front 89

six sigma

Back 89

business improvement approach that seeks to find and eliminate causes of defects and errors in manufacturing and service processes by focusing on outputs that are critical to customers and results in clear financial return for the organization

Front 90

defect

Back 90

any mistake or error that is passed on to the customer

Front 91

unit of work

Back 91

the output of a process or an individual process step

Front 92

defects per unit =

Back 92

number of defects discovered / number of units produced

Front 93

GE's 6 sigma problem solving approach employs 5 phases

Back 93

1. define
2. measure
3. analyze
4. improve
5. control

Front 94

6 sigma 7 general groups

Back 94

1. elementary statistical tools
2. advanced statistical tools
3. product design and reliability
4. measurement
5. process control
6. process improvement
7. implementation and teamwork

Front 95

cost of quality

Back 95

refers to specifically to the costs associated with avoiding poor quality or those incurred as a result of poor quality

Front 96

prevention costs

Back 96

are those expended to keep nonconforming goods and services from being made and reaching the customer

Front 97

appraisal costs

Back 97

those expended on ascertaining quality levels through measurement and analysis of data to detect and correct problems

Front 98

internal failure costs

Back 98

are costs incurred as a result of unsatisfactory quality that is found before the delivery of a good or service to the customer

Front 99

external failure costs

Back 99

are incurred after poor-quality goods or services reach the customer

Front 100

The seven QC tools

Back 100

1. flowcharts
2. run and control charts
3. checksheets
4. histograms
5. pareto diagrams
6. cause and effect diagrams
7. scatter diagrams

Front 101

Kaizen

Back 101

focuses on a small gradual and frequent improvements over the long term with minimum financial investment and with participation by everyone in the organization

Front 102

kaizen blitz

Back 102

an intense and rapid improvement process in which a team or a department throws all its resources into an improvement project over a short time period as opposed to traditional kaizen applications which are performed on a part time basis

Front 103

Poka-yoke

Back 103

an approach for mistake-proofing processes using automatic devices or methods to avoid simple human error

Front 104

lean enterprise

Back 104

refers to approaches that focus on the elimination of waste in all forms, and smooth, efficient flow of materials and information throughout the value chain to obtain faster customer response, higher quality and lower costs

Front 105

lean operating systems

Back 105

manufacturing and service operations that apply the principles of lean enterprise

Front 106

Principles of lean operating systems

Back 106

1. elimination of waste
2. increased speed and response
3. improved quality
4. reduced cost

Front 107

th 5Ss

Back 107

derived from Japanese terms: seiri (Sort), seiton (set in order), seiso (shine) seiketsu (standardize) and shisuke (sustain)

Front 108

visual controls

Back 108

indicators for operating activities that are laced in plain sight of all employees so that everyone can quickly and easily understand the status and performance of the work system

Front 109

Single minute exchange of dies (SMED)

Back 109

refers to quic setup or changeover of tooling and fixtures in processes so that multiple products in smaller batches can be run on the same equipment

Front 110

batching

Back 110

the process of producing large quantities of items as a group before being transferred to the next operation

Front 111

single-piece flow

Back 111

the concept of ideally using batch sizes of one

Front 112

Lean tools and approaches

Back 112

-the 5Ss
-Visual controls
-Single minute exchange of ties
-small batch and single-piece flow
-quality and continuous improvement
-total productive maintenance
-manufactured good recovery

Front 113

total productive maintenance (TPM)

Back 113

focused on ensuring that operating systems will perform their intended function reliably

Front 114

just in time systems

Back 114

-push
-pull

Front 115

push system

Back 115

produces finished goods inventory in advance of customer demand using a forecast of sales

Front 116

pull system

Back 116

employees at a given operation go to the source of required parts, such as machining or subassembly, and withdraw the units as they need them

Front 117

Kanban

Back 117

flag or piece of paper that contains all relevant information for an order; part number, description, process area used, time of delivery, quantity available, quantity delivered, production quantity, and so on

Front 118

K =
(where K = the number of Kanban cards)

Back 118

K = average daily demand during lead time plus a safety stock / number of units per container