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51 Cards in this Set
- Front
- Back
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Operations strategy
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Approach, consistent with the organizational/corporate strategy, used to guide the operations of the firm
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Competativeness
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How effectively an organization meets the needs of customers relative to others that offer similar goods or services
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Distinctive Competencies
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The special attributes or abilities that give an organization a competitive edge
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Environmental Scanning
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The considering of events and trends that present threats or opportunities for a company.
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key external factors
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Economic conditions
Political conditions Legal environment Technology Competition Markets |
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Key internal factors
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Human Resources
Facilities and equipment Financial resources Customers Products and services Technology Suppliers |
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productivity
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Partial measures
output/(single input) Multi-factor measures output/(multiple inputs) Total measure output/(total inputs) |
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productivity growth
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Current Period Productivity – Previous Period Productivity/
Previous Period Productivity |
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labor productivity
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Units of output per labor hour
Units of output per shift Value-added per labor hour |
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machine productivity
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Units of output per machine hour
machine hour |
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Capital productivity
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Units of output per dollar input
Dollar value of output per dollar input |
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Eenergy productivity
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Units of output per kilowatt-hour
Dollar value of output per kilowatt-hour |
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operations management
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Operations Management (OM) may be defined as the design, operation and improvement of the systems (called production or operations systems) that create and deliver the firm’s primary products and/or services to meet customer demand
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Competing with Operations
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How operations may give a competitive edge
How does our operations management function fit with the overall strategy of the firm |
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Forecasting
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We want to produce goods or services to satisfy customer requirements. But what are the requirements?
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Production/Operations Systems
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Value adding Transformation process
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Inputs
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(e.g., parts, labor/machines, and decisions
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Processes
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(e.g., value-adding activities)
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Outputs
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(e.g., products and services)
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Transformation process
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value adding
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Input
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Money
Machinery/Plants Materials/Parts Manpower Labor Overhead Skills Know how |
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output (goods and services )
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Physical--Manufacturing
Location--Transportation Exchange--Retailing Storage--Warehousing Physiological--Health Care Informational--Telecommunications |
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Firms spend almost 75%-90% of their total expenses on operations
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Activities in other areas of business organizations such as finance, accounting, human resources, marketing, management information systems, logistics are all interrelated with operations management activities
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goods
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Tangible product
Low customer interaction Can be inventoried Some aspects of quality measurable Selling is distinct from production Product is transportable Site of facility important for cost Often easy to automate |
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services
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Intangible product
High customer interaction Difficult to inventory Quality difficult to measure Selling is part of service Provider, not product is transportable Site of facility important for customer contact Often difficult to automate |
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Forecast is
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a statement of the future
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Forecasting
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All forecasts are wrong!
Forecasting techniques (we would study) generally assume that the underlying causal system of the past will continue in the future Forecast accuracy decreases as the time period covered by the forecast increases Forecasts for a group of items are better than for a individual product |
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Why forcast
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Accounting: New product/process estimates, profit projections, cash management
Finance: Equipment needs, amount of funding needs Marketing: Plan new products, pricing and promotions Human resources: Hiring activities |
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Naïve method
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First, find the pattern in the data and use it to forecast the demand for the next time period
If no pattern is found, just use the previous period’s actual sales/demand as a forecast for the next time period. |
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Averages Method
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Uses the average of all the available data to find the forecast.
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Terminology used
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D = Actual sales/demand
F = Forecast t = time index n = number of time periods |
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Forecasting Methods
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Naïve Method
Average Moving Average Weighted Moving Average Exponential Smoothing |
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Time Series Methods for Averages
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Naïve Method
Average Moving Average Weighted Moving Average Exponential Smoothing |
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Time Series Method for Trend
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Linear Regression
Exponential Smoothing with Trend |
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Time Series Method for Seasonality
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Multiplicative Seasonal Method
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forecasting methods Qualitative
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: Subjective, based on opinions of individuals
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forecasting methods
Time series analysis |
Using past data to predict future demand
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forecasting methods
Causal methods |
Assumes that demand is related to some underlying factor(s) in the environment
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t = time
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t = month
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D = Demand
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D
t = Demand on that time |
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F = Forcast
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F
t = Forcast on that time |
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E = error
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t = Error or E = D - F |
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Error =
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D - F
Demand - forrecast |
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Error Squared = E * E
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Error Squared =
2 E = t |
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Absolute Error = a positive error
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Absolute Error = the error in a positive
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CFE = Cumulative forecast error (bias)
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CFE = add up all errors
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Average forecast error = So Add all the errors and divide by the amount of time periods
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E = Average forcast error or _ E = CFE/N |
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MSE = Mean squared error = the average of all errors
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MSE =
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P value
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is the probability of an observed / more extreme result arising by chance
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Student tuition is $150 per semester credit hour. The
state supplements school revenue by $100 per semester credit hour. Average class size for a typical 3-credit course is 50 students. Labor cost are $4,000 per class, materials costs are $20 per student per class , and overhead costs are $25,000 per class. |
output = 50 student * 3 credit hours* 150$ tuition + 100$ in state support
$37,500 / class inputs = Labor + Materials + overhead $4,000+$20/student * 50 student /class + 25000 = 30000/ class 375000/30000 = 1.25 = Multifactor productivity |
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Natalie Attire makes fashionable garments. During a particular weed employees worked 360 hours to produce a batch of 132 parments, of which 52 were seconds (meaning flawed). Seconds are sold for $90 each at Attires factor outlet store. The remaining 80 parments are sold to retail distribution at $200 each. What is the labor productivity ratio of this manufacturing process?
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Value of output = 52 flawed * 90 =4680 + 80 garments * 200 = 16000 so 4680+16000 =
Value of output = $20680 Labor hours of input = 360 hours Labor productivity = output / input = 20680 / 360 = $57.44 in sales per hour |
