Midterm #1 Study Guide
Midterm #1 Study Guide BA 357
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This 5 page Study Guide was uploaded by Mikaela Mulvahill on Sunday January 17, 2016. The Study Guide belongs to BA 357 at Oregon State University taught by Dr. Guanyi Lu in Winter 2016. Since its upload, it has received 179 views. For similar materials see Operations Management in Business at Oregon State University.
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Date Created: 01/17/16
BA 357 MIDTERM #1 STUDY GUIDE Vocabulary Operations and Supply Chain Management o The design, operation, and improvement of the systems that create and deliver the firm’s primary products and services Inputs o Raw material, customers Outputs o Goods, services Resources o Labor, capital Strategy o Must be legal, but is not always ethical Straddling o Occurs when a firm seeks to match what a competitor is doing by adding incompatible features, services, or technologies to existing activities Order Winner o Differentiates the products or services of one firm from those of others o Are attributes that make the customer want that product Order Qualifier o Permits a firm’s products to be considered as possible candidates for purchase Productivity o The measure of how well a country, industry, or business unit is using its resources o Is a relative measure o Related to throughput rate Sustainability o Development is sustainable where “it meets the needs of the present without compromising the ability of future generations to meet their own needs” Environmentally Responsible Manufacturing (ERM) o A system which integrates product and process design issues with manufacturing issues to minimize environmental impacts Process o Any part of an organization that takes inputs and transforms them into outputs Cycle time o The average successive time between completions of two successive units Utilization o The ratio of time that a resource is actually activated relative to the time that it is available for use Buffer o A storage area between stages where the output of a stage is placed prior to being used in a downstream stage o Aka a waiting area, or queue Blocking o Occurs when the activities in a stage must stop because there is no place to deposit the item o Fast Slow Starving o Occurs when the activities in a stage must stop because there is no work o Slow Fast Bottleneck o Stage that limits the capacity of the process Pacing o Movement of items through a process is coordinated through a timing mechanism o Ie: assembly lines are usually paced Throughput rate o The output rate that the process is expected to produce over a period of time o The actual rate, aka what you actually do o Measures the actual output of a process o To find TR, the question should ask: How many UNITS per TIME PERIOD Ie: How many DOLLARS in 6 months? Capacity o The maximum rate with which the process can generate outputs o Is restrained by the bottleneck Flow time o The average time that is takes a unit to move through an entire process o This includes the time that the unit is spent actually being worked on along with the waiting time in a queue Efficiency o A ratio of the actual output of a process relative to some standard o Indicates the gain or loss in a process o Related to throughput rate Total average value of inventory o This is the total average investment in raw material, work in progress, and finished goods o Is valued at the cost to the firm, usually for accounting purposes Inventory o Is the number or value of all the flow units in a process Days of supply o Known as the average number of days until the firm would run out of an item if not replenished o Days of supply = flow time Inventory turns o Is known as the amount of times inventory turns over in a time period o Is the inverse of days of supply o You want these to be high Formulas Productivity o Total productivity= output produced / input used inputs could be the industry average o Multifactor productivity = output produced / labor + labor o Partial productivity = output / energy OR output / machine Utilization o Time activated / time available for use Cycle time o 1hr / throughput rate Throughput rate o 1hr / cycle time Little’s Law o Inventory = flow time * throughput time Efficiency o Actual output / designed output Days of supply o Days of supply = flow time o 1 yr / inventory turns Inventory turns o 1 yr / days of supply o COGS / Inventory o 1 / flow time Flows Capital Flow Information Flow Product/Material Flow 3 Tasks as an OM Professional *matching supply with demand Eliminate inefficiency Find the right balance Push the envelope Strategy Competitive Dimensions Price Quality Speed Flexibility *It all comes down to the PROCESS view The Triple Bottom Line Economic Prosperity Social Responsibility Environmental Stewardship Business Strategy WHERE do we compete WHAT products and services do we offer Operations and Supply Chain Strategy HOW do we compete o Op. Strategy is about setting broad policies and plans for using the resources of a firm to best support its long term corporate strategy How to compete: 1. Develop/refine the strategy (yearly) 2. Translate the strategy (quarterly) a. Ie: Initiatives, budgets, measures, targets 3. Plan operations and supply (monthly) a. Ie: Sales and operations plan, resource capacity, budgets 4. Translate… (stage 2) 5. Develop… (stage 1) Strategy and Sustainability 1. Corporate Strategy a. Enable every day low prices (EDLP) and above average profitability by procuring, distributing, and selling products, when and where needed, at a lower cost than any other competitive 2. Operations Strategy a. Short flow times b. Low inventory levels 3. Operations Functions a. Cross docking b. Proprietary electronic info. system (retail link) c. Fast transportation system d. Communication between retail stores 4. And then back to the corporate strategy stage Where does EDLP come from? Squeeze suppliers Poor compensation Performance Measures Inventory o Impact: use of working capital, reflected in the B/S (balance sheet) Throughput Rate o Impact: rate of revenue recognition, reflected in the I/S (income statement) Flow Time o Impact: lead time, responsiveness ***For more studying, go over the practice examples that the professor will be giving in class
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