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OM Exam 2
Ch 5, 8, 19, 9, 10, 13
| Term | Definition |
|---|---|
| Quality (Defined by Business) | The ability of a product or service to consistently meet or exceed customer expectations |
| Performance | basic operating characteristics |
| Aesthetics | how a product looks, feels, etc. |
| Special Features | "extras" |
| Conformance | to specifications |
| Reliability | consistency of performance |
| Durability | how long it lasts |
| Perceived Quality | customer's view of quality |
| Serviceability | service after sales/repairs |
| Safety | risk or harm/injury |
| Ease of Use | how easy it is for the customer to use the product/service |
| Service after Use | how well the company "steps up" |
| Quality of Design | designing quality characteristics into a product or service |
| Quality of Conformance | making sure the product is produced according to the design/intent of designers |
| Appraisal Costs | cost of measuring, testing, & analyzing |
| Prevention Costs | cost incurred during production design |
| Failure Costs 1.Internal Failure Costs (before) 2.External Failure Costs (after) | difference between what it actually costs to produce/deliver & what it would cost if there were no failures 1.rework, downtime 2.complaints, returns |
| Total Quality Management | a philosophy that involves everyone in an organization in a continual effort to improve quality & achieve customer satisfactions |
| Six Sigma | a business process for improving quality, reducing costs, & increasing customer satisfaction |
| Continuous improvement | philosophy that seeks to make never-ending improvements to the process of converting inputs into outputs |
| Six Sigma Concepts - DMAIC | -Define: process improvement goals -Measure: baseline data -Analyze: to verify cause -Improve: based on analysis -Control: transition into production & monitor continuosly |
| Check Sheets | a tool for recording & organizing data to identify a problem |
| Flowcharts | a diagram of the steps in a process |
| Scatter diagrams | a graph that shows the degree & direction of relationship between two variables |
| Histograms | a chart of an empirical frequency distribution |
| Pareto analysis | technique for classifying problem areas according to degree of importance, & focusing on the most important |
| Control charts | a statistical chart of time-ordered values of a sample statistic, used to distinguish between random & nonrandom variability |
| Cause-and-effect diagrams | a diagram used to search for the cause(s) of a problem |
| Run Chart | tool for tracking results over a period of time |
| Quality Control | a process that measure output relative to a standard and acts when outputs don't meet standard |
| Phases of Quality Assurance | 1.Acceptance sampling 2.Process control 3.Continuous improvement |
| Process Control | a statistical procedure using control charts to see if any part of the production process is not functioning properly and could cause poor quality |
| Assignable Variation | a variation whose source can be identified |
| Random Variation | natural variations in the output process |
| Attribute Data | Product characteristic evaluated with a discrete choice: Good/bad, yes/no |
| Variable Data | Product characteristic that can be measured on a continuous scale: length, size, weight, height, time, velocity |
| Process is in Control when... | 1.No sample points are outside limits 2.Most points near process average 3.Equal number or points above & below centerline 4.Points appear randomly distributed |
| Static Inventory | only one opportunity to buy and sell units |
| Dynamic Inventory | ongoing need for units; reordering must take place |
| Dependent Demand | Items are used internally to produce a final product |
| Independent Demand | Items are final products demanded by external customers |
| Carrying or Holding Costs | Costs of holding an item in inventory |
| Ordering Costs | Costs of replenishing inventory |
| Shortage (stockout) Costs | Temporary or permanent lose of sales when demand cannot be met |
| Continuous (Perpetual) Inventory System | a continuous record of the inventory level for every item is maintained |
| Periodic Inventory System | Inventory on hand is counted at specific time intervals |
| Lead Time | Time interval between ordering and receiving the order |
| Cycle Counting | Physical count of items in inventory |
| Usage Rate | Rate at which amount of inventory is depleted |
| Capacity Planning | The upper limit or ceiling on the load that an operating unit can handle -perfect world |
| Design Capacity | Maximum obtainable output |
| Effective Capacity | Maximum capacity given product mix, scheduling difficulties, & other doses of reality -real world |
| Actual Output | Rate of out actually achieved--cannot exceed effective capacity |
| Break-even point | the volume of output at which total cost and total revenue are equal |
| Linear Programming | a model of linear relationships that represent a firm's objective & resource constraint |
| Linearity | The impact of decision variable is linear in constraints & objective function |
| Divisibility | non-integer values of decision variables are acceptable |
| Certainty | Value of parameters are known & constant |
| Non-Negativity | Negative values of decision variables are unacceptable |
| Binding Constraint | When a constraint forms the optimal corner point of the feasible solution space |
| Redundant Constraint | a constraint that does form a unique boundary of the feasible solution space |
| Shadow (Dual) Price | The amount by which the value of the objective function would change if there is a one unit change in the RHS of the constraint |
| Reorder Point | The level of inventory at which a new order should be placed |
| Safety Stock | a buffer added to the inventory on hand during lead time |
Created by:
NickUD
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