Question | Answer |

What are the three basic functional areas? | Financial, Marketing, Operations. |

Supply chain: | Begins with supplier of raw materials to the final customer. |

Value-added | cost of inputs and the value or price of outputs |

Process: | one or more actions that transform inputs into outputs. |

What are the three categories of the business processes? | upper management process, operational process, supporting process |

Four types of variety of variations? | variety of goods, structural variation in demand, random variation, assignable variation
What do operation managers do? |

Lead time | gives customers realistic estimates of how long it will take to fill their orders |

Model | an abstraction of reality |

Physical models | look like their real-life counterparts |

Schematic models: | are abstract and are like graphs, charts, blueprints, and drawings |

Mathematical models: | are the most abstract like numbers, formulas, and symbols |

Quantitative Approaches: | obtaining mathematical solutions to managerial problems |

Systems approach: | there is a relationship with subsystems, but the whole is greater than the sum of its individual parts |

Pareto phenomenon: | a few factors account for a high percentage of the occurrence of some events 80/20 rule |

Frank Gilbreth: | industrial engineer who is often referred to as the father of motion study. He developed principles of motion economy that could be applied to incredibly small portions of a task. |

Henry Gantt: | recognized the value of nonmonetary rewards to motivate workers, developed a chart for scheduling. Harrington Emerson: |

Henry Ford | the great industrialist employed scientific management techniques in his factories. |

Taylor: | father of scientific management |

Lean system: | uses minimal amounts of resources to produce a high volume of high quality goods with some variety. |

Tatics: | are the methods and actions taken to accomplish strategies |

What operation strategy effects both external and internal factors? | technology |

Sustainability: | focuses on environmental friendly and energy efficient operations |

Core competencies | the special attributes or abilities that give an organization a competitive edge. |

Order qualifiers: | minimum standard of acceptability |

Order winners: | characteristic perceived as better then competition |

Productivity: | a measure of the effective use of resources usually expressed as the ratio of output to input. |

Judgmental forecasts: | forecasts that use subjective inputs such as opinions from consumer surveys, sales staff, managers, executives, and experts. |

Time-series forecasts: | simple attempt to project past experience into the future |

Associative models: | use equations that consist of one or more explanatory variables to predict demand. |

Delphi method: | process in which managers and staff complete a series of questionnaires, each made from the previous one |

Irregular variations: | unusual circumstance like weather |

Naïve forecast: | a forecast for any period that equals the previous periods actual value |

What are the two important aspects of forecasting? | expected level of demand, and degree of accuracy |

Mean absolute deviation (MAD) | the average absolute forecast error |

Mean squared error: | the average of squared forecast errors |

Moving average: | uses the last 3 numbers to average the next forecast. Disposing of any other numbers before. |

Weighted moving average: | more weight is assigned to the most recent numbers |

Exponential smoothing: | uses the percentage of the forecast error to determine the next forecast |

Trend-adjusted exponential smoothing | double smoothing |