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OPM300
Drexel class notes
| Question | Answer |
|---|---|
| Operations Management | The management of systems or processes that create goods and/or provide services |
| Goods | Physical items (raw materials, parts, subassemblies, finished products, etc.) |
| Services | Activities that provide some combination of time, location, form or psychological value. |
| Supply chain | A sequence of activities and organizations involved in producing and delivering a good or service. |
| Purpose of operations management and supply chains | To add value through transformative processes (i.e. to create something from nothing). |
| Manufacturing and service organizations differ in 10 areas: | 1)Degree of customer contact 2)Uniformity of input 3)Labor content of jobs 4)Uniformity of output 5)Measurement of productivity 6)Production and delivery 7)Quality assurance 8)Amount of inventory 9)Evaluation of work 10)Ability to patent design |
| Process Management | One or more actions that transform inputs into outputs and its management. |
| 4 Sources of Process Variation | 1. The variety of goods and services being offered 2. Structural variation in demand 3. Random variation 4. Assignable variation |
| Operations Management | One of the three major functions of any business organization. Every aspect of business affects or is affected by operations. |
| Models | An abstraction of reality, a simplified representation of something. They play a significant role in operations management decision making. |
| The Need to Manage the Supply Chain | 1.The need to improve operations 2.Increasing levels of outsourcing 3.Increasing transportation costs 4.Competitive pressures 5.Increasing globalization 6.Increasing importance of e‐business |
| Competitiveness | The effectiveness of an organization in the marketplace relative to other organizations that offer similar products or services. |
| Strategy | The plans that determine how an organization pursues its goals. |
| Productivity | A measure of the effectiveness of an organization’s use of resources. |
| Operations’ impact on competitiveness | 1. Product and service design 2. Cost 3. Location 4. Quality 5. Quick response 6. Flexibility 7. Inventory management 8. Supply chain management 9. Service 10. Managers and workers |
| Why do organizations fail? | Ignore strats; No SWOT analysis; No Long‐term financial performance; Focus on product&service design & not design&improv; No investments in capital and human resources; No good internal communications & cooperation; Not considering customer wants & needs |
| Mission | An organization’s reason for existing |
| Mission Statement | A document which states the purpose of an organization |
| Goals | Provide more detail and describe the scope of the mission |
| Strategies | Plans for achieving organizational goals |
| Tactics | The methods and actions used to accomplish strategies |
| Productivity | An index that measures output(goods and services)relative to the input(labor, materials,energy, and other resources) used to produce it. Input divided by Output. |
| Productivity growth | The increase in productivity from one period to the next relative to the productivity in the preceding period. [Current Productivity-Previous Productivity divided Previous Productivity]*100 |
| Computing Productivity | The units of output used in productivity measures depend on the type of job performed |
| Forecast | A statement about the future value of a variable such as demand; |
| Features of Forecasting | 1) Assumption: The future will look like the past 2)Forecasts are not perfect due to randomness 3)Forecast errors tend to cancel out between items in a group 3)Forecast accuracy decreases as time horizon increases |
| Elements of a good forecast | 1. Timely 2.Accurate 3.Reliable 4.Meaningful5.units 6.Written 7.Simple to understand and use8.Cost-effective |
| Steps in Forcasting process | Determine the purpose of the forecast/Establish a time horizon/Select a forecasting technique/Obtain, clean and analyze the appropriate data/Make the forecast/Monitor the forecast |
| Approaches to forecasting | 1. Judgmental forecasts2. Time-series Forecasts 3. Associative models |
| Forecasting Accuracy formulas | Mean absolute deviation (MAD); Mean Squared Error (MSE); mean absolute percent error (MAPE) |
| Mean absolute deviation (MAD) | Sum of errors as absolute values (actual minus forecast) divided by n [(sigma of e)/ n] |
| Mean squared error (MSE) | Sum of squared errors {(actual minus forecast)^2} divided by n-1 [(sigma of e^2)/ (n-1)] |
| Mean absolute percent error (MAPE) | Sum of error as absolute values (actual minus forecast) divided by actual *100, then divided by n [(sigma of e/actual)*100/ n] |
| Seasonality | regularly repeating upward/downward movements in series values that can be tied to recurring events: weather variations, vacations/holidays, rush hour |
| Deseasonalized Data | Use linear equation to solve other periods independent is the period |
| Moving Average | last 3 actual periods divided by 3 |
| Weighted Average | Last 3 actual periods, each multiplied by a coefficient. The coefficients must sum to 1. |
| Exponential Smoothing | F(t)=F(t-1)*[A(t-1)-F(t-1)] |
| Project | A unique, one-time operation designed to accomplish a set of objectives in limited time. Most projects are expected to be completed based on time, cost, &performance targets. |
| Project Management | Deciding which projects to implement; Selecting the project manager; Selecting the project team Planning and designing the project Managing and controlling project resources Deciding if and when a project should be terminated |
| Project Managment - responsibilities | Manage project work, meet targets; Manage human resources; Manage communications; Manage project quality; Manage time, stay on schedule; Manage costs, stay within budget |
| Project Life Cycle | 1. Def:Concept & feasibility analysis 2. Plann:Details of work to be done, estimate human resources, time & cost.3. Execution: Completing the work of the project.4. Termination: Reassign personnel, complete lessons learned, etc. |
| Work Breakdown Structure (WBS) | Hierarchical listing of what must be done during the project. Establishes logical framework for ID'ing required activities for project. Time spent developing a detailed WBS typically greatly exceeds the time spent actually developing the project schedule. |
| PERT | Program Evaluation & Review Technique |
| CPM | Critical Path Method |
| Earliest Start (ES) | Earliest time a task can start |
| Earliest Finish (EF) | Earliest time a task can finish |
| Latest Start (LS) | Latest time a task can start |
| Latest Finish (LF) | Latest time a task can finish |
| Capacity | Upper limit or ceiling on the load that an operating unit can handle |
| Questions in Capacity planning | What kind of capacity is needed? How much is needed to match demand? When is the capacity needed? |
| Steps in the capacity planning process | Estimate. future cap. requirements Eval. current cap. &facilities & current gaps Identify alt. for meeting requirements Fin. anal of each alt. Assess key issues for each alt Select alt. to pursue for best long term Implement selected alt. Monitor r |
| Factors to consider in capacity planning: | 1.Available capacity 2.Expertise 3.Quality 4.considerations 5.The nature of demand 6.Cost 7.Risks |
| Developing capacity alternatives | Design flexibility into systems; Take stage of life cycle into account; Take a “big-picture” (i.e. systems) approach to capacity changes; Prepare to deal with capacity “chunks”; Attempt to smooth out capacity requirements; ID the optimal operating l |
| Constraint management | 1.ID the most pressing constraint. Remove if possible, repeat. 2.Change operation to achieve maximum benefit 3.process are supportive of the constraint. 4.Explore & eval. ways to overcome constraint.Is lengthy &expensive process. 5.repeat till good |
| Profit equation | Totoal Revenue-Total Cost= Revenue units*Quantity -[Fixed Cost + Variable Cost*Quantity] |
| Operation Strategy & Cap Decisions | Strategy Implications of cap decisions can be enormous |
| Decision Theory | You make the best possible decision today... What will future demand look like? How much will a new factory cost? How many units can the factory produce? |
| Maximin | Worst possible outcome in each alternative |
| Maximax | Best possible outcome in each alternative |
| Laplace | I.D. the average outcome |
| Expected Value | Fixed weighted coefficients, that their sum equals 1, multiply the alternative outcomes. |
| Expected Value of Perfect Infomation | Amount of money one is willing to pay to get perfect info. |
Created by:
bja34