Operations 2

Front 1

A process maybe "out of control" when?

Back 1

-a point is outside the limits
-series of points lands on one side of the overall avg.
-series of points show strong trend

Front 2

Probability that four consecutive points plotted below mid point of control chart?

Back 2

50% chance up or 50% chance below probability = (0.50)^4 =6.25%
for five consecutive = (.50)^5= 3.125%

Front 3

want to balance shortage and overage?

Back 3

expected over stocking cost = expected under stocking cost
Pus * Cus = Pos * Cos

Front 4

How much to order?
Q = mean
Q> mean
Q< mean
-cost of under stock is very high
-overstocking cost is very high (diamonds/expensive goods)

Back 4

It depends
-Q>mean large order quant.
-Q<mean low stock small order

Front 5

False?
-over the course of the project the critical path changes
-best to manage project by various paths
-focus solely on critical path
-allocate resources to keep balance

Back 5

-focus solely on critical path

Front 6

Measure the cost of shortage of cups at Starbucks which measures customer service best?

Back 6

cycle fill rate = probability of running out before next order
= (1-Pus) * 100%
used when concerned with shortage

Front 7

Measure cost of shortage of tea @ starbucks which is best measures customer service?

Back 7

unit fill rate =expected % demand missed
-used when managers are concerned with extremity of shortage likelihood of shortage
(want TV but not avaliable)

Front 8

replenishment lead time
(D x L)

Back 8

potential time to run out b/w ordering and receiving new order
- 50% chance of running out if set at D x L

Front 9

In a continuous review inv. system if the ROP is set = avg. demand during lead time what is the corresponding service level?

Back 9

50% just based on avg. NOT accounting for variability
right in the middle of the bell curve

Front 10

For the same amount of safety stock which inv. system results in a better service level?

Back 10

continuous order as often as you want emergency order inv. level availiable

Front 11

Which of the following is NOT a characteristic of periodic review inv. system?

Back 11

incorporate price discount

Front 12

A sequence of activities in a project

Back 12

path

Front 13

The longest time sequence of activities in a project

Back 13

critical path

Front 14

used when two activities have the same starting and finishing points

Back 14

dummy activity

Front 15

the difference in time length of any path and the critical path

Back 15

path slack

Front 16

statistical distribution used to describe variability of an activity time

Back 16

beta distribution

Front 17

statistical distribution used to describe path variability

Back 17

normal distribution

Front 18

shortening an activity by allocating additional resources

Back 18

crashing

Front 19

The Four types of Variability Pooling

Back 19

1.) Location (centralization)
2.) Product (universal design)
3.) Lead time (consolidated distribution postponement delayed differentation)
4.) capacity (chaining worksharing)

Front 20

Location Pooling

Back 20

centralizing the storage of inventory used to buffer demand of mult. retail locations
drawback: moves inventory further away from customer
why works? reduces demand uncertainty allowing to reduce inventory increase service expand product line

Front 21

Product Pooling

Back 21

most effective when coefficient of variation on universal is lower than coefficient variation of individual products
-may lack a key function, more expensive to produce eliminate brand names

Front 22

Lead time pooling: when does delay differentiation make sense?

Back 22

product variety is created late in process
product variety can be added quickly and cheaply
components are inexpensive relative to genetic components
ex: only stock base color paint make all white then add color

Front 23

Flexibility

Back 23

allows production shifts to high selling products to avoid lost sales
-most effective to create long chains and when capacity = expected demand
-least valuable when capacity is very high or very low

Front 24

risk pooling strategies most effective when..

Back 24

total demand uncertainty is lower than individual uncertainty

Front 25

disruptions "shocks" can be worsened when...

Back 25

centralized inventory pooling

Front 26

should store more inventory ________ to pool the _________ demand uncertainty
and when there is a disaster more inventory held _______

Back 26

upstream
downstream
downsteam

Front 27

High volume should be stored
More variability demand
More expensive products

Back 27

-closer to customer
-farther upstream to enhance pooling
-farther upstream to reduce # in inventory

Front 28

Innovative Product vs Functional Product

Back 28

-high margin short life cycle high demand variability "responsive"
ex: high end ski coat
-low margin long life cycle low uncertainty in demand "efficient"
ex: toilet paper

Front 29

What is Bullwhip effect
Causes of Bullwhip effect

Back 29

demand variability increases as you move up the supply chain from customers towards supply
-order batching, forecasting, pricing, shortage

Front 30

Reorder Point is
- equal to safety stock plus lead time
- equal to expected demand during lead time plus safety stock
- equal to the economic order quantity plus safety stock
- equal to expected demand during the lead time

Back 30

ROP = expected demand during lead time plus safety stock

Front 31

EOQ economic order quantity

Back 31

square root: (2 * D S) / H