Ids 355 2Nd Exam

Front 1

The upper limit or ceiling on the load that an operating unit can handle

Back 1

Capacity

Front 2

Capacity needs include

Back 2

Equipment
Space
Employee skills

Front 3

To achieve a match between the long-term supply capabilities of an organization and the predicted level of long-run demand

Back 3

Goal

Front 4

operating costs that are too high

Back 4

Overcapacity

Front 5

strained resources and possible loss of customers

Back 5

Undercapacity

Front 6

impact the ability of the organization to meet future demands
affect operating costs
are a major determinant of initial cost
often involve long-term commitment of resources
can affect competitiveness
affect the ease of management
are more important and complex due to globalization
need to be planned for in advance due to their consumption of financial and other resources

Back 6

Capacity decisions

Front 7

maximum output rate or service capacity an operation, process, or facility is designed for

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Design capacity

Front 8

Design capacity minus allowances such as personal time, maintenance, and scrap

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Effective capacity

Front 9

rate of output actually achieved--cannot exceed effective capacity.

Back 9

Actual output

Front 10

The rate of output actually achieved
It cannot exceed effective capacity

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Actual output

Front 11

Facilities
Product and service factors
Process factors
Human factors
Policy factors
Supply chain factors
External factors

Back 11

Determinants of Effective Capacity

Front 12

Build capacity in anticipation of future demand increases

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Leading

Front 13

Build capacity when demand exceeds current capacity

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Following

Front 14

Similar to the following strategy, but adds capacity in relatively small increments to keep pace with increasing demand

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Tracking

Front 15

Strategies are typically based on assumptions and predictions about:

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Long-term demand patterns
Technological change
Competitor behavior

Front 16

Extra capacity used to offset demand uncertainty

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Capacity Cushion

Front 17

Available capacity
Expertise
Quality considerations
The nature of demand
Cost
Risks

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Factors to consider to Outsource

Front 18

An operationin a sequence of operations whosecapacity is lower than that of theother operations

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Bottleneck operation:

Front 19

If output rate is less than the optimal level, increasing the output rate results in decreasing average per unit costs

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Economies of Scale

Front 20

Fixed costs are spread over a larger number of units
Construction costs increase at a decreasing rate as facility size increases
Processing costs decrease due to standardization

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Reasons for economies of scale:

Front 21

If the output rate is more than the optimal level, increasing the output rate results in increasing average per unit costs

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Diseconomies of Scale

Front 22

Distribution costs increase due to traffic congestion and shipping from a centralized facility rather than multiple smaller facilities
Complexity increases costs
Inflexibility can be an issue
Additional levels of bureaucracy

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Reasons for diseconomies of scale

Front 23

Something that limits the performance of a process or system in achieving its goals

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Constraint

Front 24

Focuses on the relationship between cost, revenue, and volume of output

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Cost-volume analysis

Front 25

tend to remain constant regardless of output volume

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Fixed Costs (FC)

Front 26

vary directly with volume of output

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Variable Costs (VC)

Front 27

The volume of output at which total cost and total revenue are equal

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BEP

Front 28

The difference between cash received from sales and other sources, and cash outflow for labor, material, overhead, and taxes

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Cash flow

Front 29

The sum, in current value, of all future cash flow of an investment proposal

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Present value

Front 30

A general approach to decision making that is suitable to a wide range of operations management decisions

Back 30

Decision Theory

Front 31

Identify the possible future states of nature
Develop a list of possible alternatives
Estimate the payoff for each alternative for each possible future state of nature
If possible, estimate the likelihood of each possible future state of nature
Evaluate alternatives according to some decision criterion and select the best alternative

Back 31

Process for Using Decision Theory

Front 32

The limitations on decision making caused by costs, human abilities, time, technology, and availability of information

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Bounded rationality

Front 33

The results of different departments each attempting to reach a solution that is optimum for that department

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Suboptimization

Front 34

Steps:
Identify the problem
Specify objectives and criteria for a solution
Develop suitable alternatives
Analyze and compare alternatives
Select the best alternative
Implement the solution
Monitor to see that the desired result is achieved

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Decision Process

Front 35

Failure to recognize the importance of each step
Skipping a step
Failure to admit mistakes

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Errors

Front 36

Environment in which relevant parameters have known values

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Certainty

Front 37

Environment in which certain future events have probable outcomes

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Risk

Front 38

Environment in which it is impossible to assess the likelihood of various future events

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Uncertainty

Front 39

Choose the alternative with the best of the worst possible payoffs

Back 39

Maximin

Front 40

Choose the alternative with the best possible payoff

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Maximax

Front 41

Choose the alternative with the best average payoff

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Laplace

Front 42

Choose the alternative that has the least of the worst regrets

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Minimax regret

Front 43

Determine the expected payoff of each alternative, and choose the alternative that has the best expected payoff

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expected monetary value (EMV)

Front 44

A schematic representation of the available alternatives and their possible consequences

Back 44

Decision tree

Front 45

represented by square nodes

Back 45

Decisions

Front 46

represented by circular nodes

Back 46

Chance events

Front 47

branches leaving a square node

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Alternatives

Front 48

branches leaving a circular node

Back 48

Chance events

Front 49

The difference between the expected payoff with perfect information and the expected payoff under risk

Back 49

Expected value of perfect information (EVPI)

Front 50

Determining the range of probability for which an alternative has the best expected payoff

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Sensitivity analysis

Front 51

prime location can be barrier to entry.

Back 51

Competitive positioning:

Front 52

diverse set of market generators.

Back 52

Demand management:

Front 53

plan for future economic changes and portfolio effect.

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Flexibility:

Front 54

contiguous, regional followed by “fill-in,” or concentrated.

Back 54

Expansion strategy:

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(Among Competitors) (e.g. Auto Dealers, Motels)

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Competitive Clustering

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(Same Firm) (e.g. An Bon Pain, Ice Cream Vendors)

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Saturation Marketing

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(e.g. Credit Cards, HMO)

Back 57

Marketing Intermediaries

Front 58

(e.g. telecommuting, e-Commerce)

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Substitute Communication for Travel

Front 59

(e.g. ATM, shoe repair)

Back 59

Separation of Front from Back Office

Front 60

(e.g. Amazon.com, eBay, FedEx)

Back 60

Impact of the Internet on Service Location

Front 61

Room rate, hotels within one mile, competitive room rate

Back 61

Competitive Factors:

Front 62

College, Hospital beds within one mile, Annual tourists

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Demand Generators:

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Family income, residential population

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Area Demographics:

Front 64

State population per inn, Distance to nearest inn

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Market Awareness:

Front 65

Sign visibility, Distance to downtown, Accessibility

Back 65

Physical Attributes:

Front 66

the sequence of organizations - their facilities, functions, and activities - that are involved in producing and delivering a product or service

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Supply Chain:

Front 67

Sometimes referred to as value chains

Back 67

Supply Chain:

Front 68

Forecasting
Purchasing
Inventory management
Information management
Quality assurance
Scheduling
Production and delivery
Customer service

Back 68

Supply chain functions and activities

Front 69

The strategic coordination of business functions within a business organization and throughout its supply chain for the purpose of integrating supply and demand management

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Supply Chain Management (SCM)

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People at various levels of the organization who are responsible for managing supply and demand both within and across business organizations.

Back 70

SCM Managers

Front 71

Determining appropriate levels of outsourcing
Managing procurement
Managing suppliers
Managing customer relationships
Being able to quickly identify problems and respond to them
Managing risk

Back 71

Key SCM Issues

Front 72

Involves movement of goods and services from suppliers to customers as well as handling customer service needs and product returns

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Product and service flow

Front 73

Involves sharing forecasts and sales data, transmitting orders, tracking shipments, and updating order status

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Information flow

Front 74

involves credit terms, payments, and consignment and title ownership arrangements

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Financial flow

Front 75

Product design often uses inputs from around the world
Some manufacturing and service activities are outsourced to countries where labor and/or materials costs are lower
Products are sold globally

Back 75

Global supply chains

Front 76

Language and cultural differences
Currency fluctuations
Political instability
Increasing transportation costs and lead times
Increased need for trust amongst supply chain partners

Back 76

Complexities

Front 77

is responsible for obtaining the materials, parts, and supplies and services needed to produce a product or provide a service.

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The purchasing department

Front 78

Develop and implement purchasing plans for products and services that support operations strategies

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The goal of procurement

Front 79

Identifying sources of supply
Negotiating contracts
Maintaining a database of suppliers
Obtaining goods and services
Managing supplies

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Duties of purchasing

Front 80

The main steps:
Purchasing receives the requisition
Purchasing selects a supplier
Purchasing places the order with a vendor
Monitoring orders
Receiving orders

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The Purchasing Cycle

Front 81

the use of electronic technology to facilitate business transactions

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E-business

Front 82

Have a global presence
Improve competitiveness and quality
Analyze customer interests
Collect detailed information
Shorten supply chain response times
Realize substantial cost savings

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Advantages of E-Business

Front 83

Evaluating the sources of supply in terms of price, quality, reputation, and service

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Vendor analysis

Front 84

A means of keeping current on suppliers’ production (or service) capabilities, quality and delivery problems and resolutions, and performance on other criteria

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Supplier audit

Front 85

Involves a detailed examination of a supplier’s policies and capabilities
The process verifies the supplier meets or exceeds the requirements of a buyer

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Supplier certification

Front 86

Oftentimes involves competitive bidding
Minimal interaction

Back 86

Short-term Supplier Relationship

Front 87

Often involves an ongoing relationship

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Medium-term Supplier Relationship

Front 88

Often involves greater cooperation that evolves into a partnership

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Long-term Supplier Relationship

Front 89

A supply chain initiative that focuses on information sharing among supply chain trading partners in planning, forecasting, and inventory

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Collaborative forecasting, planning, and replenishment (CFPR)

Front 90

Inventory velocity

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The speed at which goods move through a supply chain

Front 91

Inventory oscillations that become increasingly larger looking backward through the supply chain

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The bullwhip effect

Front 92

Holding inventory at a distribution center rather than at retail outlets

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Strategic buffering

Front 93

Vendors monitor goods and replenish retail inventories when supplies are low

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Vendor-managed inventory

Front 94

The process involved in responding to customer orders

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Order fulfillment

Front 95

Refers to the movement of materials and information within a facility and to incoming and outgoing shipments of goods and materials in a supply chain

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Logistics

Front 96

Overseeing the shipment of incoming and outgoing goods

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Traffic management

Front 97

A technology that uses radio waves to identify objects, such as goods in supply chains

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Radio frequency identification (RFID)

Front 98

The outsourcing of logistics management

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Third-party logistics (3-PL)

Front 99

The process of transporting returned items

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Reverse Logistics

Front 100

Screening returned goods to prevent incorrect acceptance of goods

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Gatekeeping

Front 101

Finding ways to minimize the number of items that are returned

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Avoidance

Front 102

Analyzing the procurement process to lower costs by reducing waste and non-value-added activities, increase profits, reduce risks, and improve supplier performance

Back 102

strategic sourcing

Front 103

Large lot sizes yield benefits in terms of quantity discounts and lower annual setup costs, but it increases the amount of safety stock (and inventory carrying costs) carried by suppliers

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Lot-size-inventory trade-off

Front 104

Suppliers prefer to ship full truckloads instead of partial loads to spread shipping costs over as many units as possible. This leads to greater holding costs for customers

Back 104

Inventory-transportation costs

Front 105

A technique whereby goods arriving at a warehouse from a supplier are unloaded from the suppliers truck and loaded onto outbound truck, thereby avoiding warehouse storage

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Cross-docking

Front 106

Suppliers like to ship in full loads, but waiting for sufficient orders and/or production to achieve a full load may increase lead time

Back 106

Lead time-transportation costs

Front 107

Greater product variety usually means smaller lot sizes and higher setup costs, as well as higher transportation and inventory management costs

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Product variety-inventory

Front 108

Production of standard components and subassemblies which are held until late in the process to add differentiating features

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Delayed differentiation

Front 109

Producing and shipping in large lots reduces costs, but increases lead time

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Cost-customer service

Front 110

Reducing one or more steps in a supply chain by cutting out one or more intermediaries

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Disintermediation

Front 111

A stock or store of goods

Back 111

Inventory

Front 112

Items that are ready to be sold or used

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Independent demand items

Front 113

Raw materials and purchased parts
Work-in-process
Finished goods inventories or merchandise
Maintenance and repairs (MRO) inventory, tools and supplies
Goods-in-transit to warehouses or customers (pipeline inventory)

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Types of Inventory

Front 114

Physical count of items in inventory made at periodic intervals

Back 114

Periodic System

Front 115

System that keeps track of removals from inventory continuously, thus monitoring current levels of each item

Back 115

Perpetual Inventory System

Front 116

Two containers of inventory; reorder
when the first is empty

Back 116

Two-bin system

Front 117

Bar code printed on a label that has information about the item to which it is attached

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Universal product code (UPC)

Front 118

A technology that uses radio waves to identify objects, such as goods in supply chains

Back 118

Radio frequency identification (RFID) tags

Front 119

Inventories are necessary to satisfy customer demands, so it is important to have a reliable estimates of the amount and timing of demand

Back 119

Forecasts

Front 120

Time interval between ordering and receiving the order

Back 120

Lead time

Front 121

A system that electronically records actual sales
Such demand information is very useful for enhancing forecasting and inventory management

Back 121

Point-of-sale (POS) systems

Front 122

A physical count of items in inventory

Back 122

Cycle counting

Front 123

Price reduction offered to customers for placing large orders

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Quantity discount

Front 124

When the quantity on hand of an item drops to this amount, the item is reordered.

Back 124

Reorder point

Front 125

The probability that demand will not exceed supply during lead time

Back 125

Service level

Front 126

Orders are placed at fixed time intervals

Back 126

Fixed-order-interval (FOI) model

Front 127

Model for ordering perishables and other items with limited useful lives

Back 127

Single-period model

Front 128

Generally, the unrealized profit per unit

Back 128

Shortage cost

Front 129

Different between purchase cost and salvage value of items left over at the end of the period

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Excess cost

Front 130

The goal of the_________ is to identify the order quantity that will minimize the long-run excess and shortage costs

Back 130

single-period model