Operations Management Exam 1

Front 1

Efficiency

Back 1

Doing something at the lowest possible cost

Front 2

Effectiveness

Back 2

Doing the right things to create the most value for the company

Front 3

Value

Back 3

The ratio of quality to price paid. Competitive "happiness" is being able to increase quality and reduce price while maintaining or improving profit margin

Front 4

Operations Management (OM)

Back 4

Design, operation, and improvement of the systems that create and deliver the firm's primary products and services

Front 5

Transformation process

Back 5

System by shich resources are used to convert inputs into desired output

Front 6

Core services

Back 6

Basic things that customers want from the products they purchase - for example, to be made correctly, customized to their needs, delivered on time, and price competitively

Front 7

Value-added services

Back 7

Services that differentiate the organization from competitors and build relationships that bind customers to the firm in a positive way

Front 8

Mass customization

Back 8

Producing products to order in lot sizes of one

Front 9

Operations strategy

Back 9

Setting broad policies and plans for using the resources of a firm to best support the firm's long-term competitive strategy

Front 10

Plant-within-a-plant (PWP)

Back 10

A concept in which different locations within a facility are dedicated to different priduct lines. Each location is operated according to its own strategy to minimize confusion associated with shifting from one type of strategy to another

Front 11

Straddling

Back 11

Occurs when a company seeks to match what a competitor is doing by adding new features, services, or technologies to existing activities. This often creates problems if certain trade-offs need to be made.

Front 12

Order winner

Back 12

A dimension that differentiates the products or services of one firm from those of another.

Front 13

Order qualifier

Back 13

A dimension used to screen a product or service as a candidate for purchase.

Front 14

Activity-system map

Back 14

A diagram that shows how a company's strategy is delivered through a set of supporting activities

Front 15

Core capabilities

Back 15

Skills that differentiate a manufacturing or service firm from its competitors; aka core competencies

Front 16

Key performance indicators (KPI)

Back 16

A set of measures that help managers evaluate a company's economic performance and spor the need for changes in operations. KPIs include financial measures such as days' cash on hand and operating income by unit or division, as well as nonfinancial metrics such as average time to respond to service calls, lead time, or percentage of sales from new products.

Front 17

Productivity

Back 17

A measure of how well resources are used.

Front 18

Process

Back 18

Any set of activities performed by an organization that takes inputs and transforms them into outputs ideally of greater value to the organization than the original inputs

Front 19

Cycle time

Back 19

The average time between completion of successive units is a process.

Front 20

Utilization

Back 20

The ratio of time that a resource is actually activated relative to the time that it is available for use

Front 21

Buffering

Back 21

A storage area between stages where the output of a stage is placed prior to being used in a downstream stage. Buffering allows the stages to operate independently.

Front 22

Blocking

Back 22

The activities in the stage must stop because there is no place to deposit the item just completed.

Front 23

Starving

Back 23

The activities in a stage must stop because there is no work

Front 24

Bottleneck

Back 24

A resource that limits the capacity or maximum output of the process

Front 25

Make-to-order

Back 25

A process that is activated only in response to an actual order

Front 26

Make-to-stock

Back 26

A process that produces standard products that are stored in finished goods inventory. The product is delivered quickly to the customer from the finished goods inventory

Front 27

Hybrid

Back 27

Combines the features of both make-to-order and make-to-stock. Typically, a generic product is made and stocked at some point in the process. These generic units are customized in a final process to meet actual orders

Front 28

Pacing

Back 28

Movement of items through a process in coordinated through a timing mechanism. Most processes are not paced, but assembly lines usually are paced

Front 29

Productivity

Back 29

The ratio of output to input. Taking a dollar value of the output and dividing by the dollar value of the inputs usually measures total factor productivity. Alternatively, partial factor productivity is measured based on an individual input and often is not calculated using dollar values (an example would be units/person)

Front 30

Efficiency

Back 30

A ratio of the actual output of a process relative to some standard

Front 31

Run time

Back 31

The time required to produce a batch of parts

Front 32

Setup time

Back 32

The time required to prepare a machine to make a particular item

Front 33

Operation time

Back 33

The sum of the setup time and run time for a batch of parts that are run on a machine

Front 34

Throughput time

Back 34

The average time that it takes a unit to move through an entire process. Usually the term kead time is used to refer to the total time that it takes a customer to receive an order (includes time to process the order, throughput time, and delivery time)

Front 35

Throughput rate

Back 35

The output rate that the process is expected to produce over a period of time

Front 36

Process velocity (or throughput ratio)

Back 36

The ratio of the total throughput time to the value-added time

Front 37

Value-added time

Back 37

The time in which useful work is actually being done on the unit

Front 38

Little's Law

Back 38

State a mathematical relationship between the throughput rate, throughput time, and the amount of work-in-process inventory. Throughput time is equal to work-in-process divided by the throughput rate.