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Exam #1 Study Guide

by: Callie Lusk

Exam #1 Study Guide MGMT 314

Callie Lusk

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Here is a study guide of the information we have covered in class **Please note there were some things that were not on the powerpoints that are not included. They can be found in the book on the ...
Operations Management
Study Guide
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This 3 page Study Guide was uploaded by Callie Lusk on Thursday September 15, 2016. The Study Guide belongs to MGMT 314 at Western Kentucky University taught by Buchanan in Fall 2016. Since its upload, it has received 66 views. For similar materials see Operations Management in Management at Western Kentucky University.

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Date Created: 09/15/16
Operations Management Exam #1 Preparation Study Guide Chapter 1  Operations Management is the set of activities that create value in the form of goods and services by transforming inputs into outputs.  Marketing, Production/Operations, and Finance/Accounting are the essential functions for organizing.  Why should one study OM? o It’s one of the three major functions within a company and we want to study how people organize themselves for productive enterprise. o We want (and need) to know how goods and services are produced o We want to understand what operations managers do o OM is a costly part of an organization  Operations Managers plan, organize, staff, lead, and control within a company.  The 10 Critical Decisions include: o Design of goods and services o Managing quality o Process and capacity design o Location strategy o Layout strategy o Human resources/Job design o Supply-chain Management o Inventory/JRP/MIT o Scheduling o Maintenance  Productivity is the ratio of outputs (goods and services) divided by the inputs (labor and capital)  The labor productivity variables are labor, capital, and management Chapter 2  Six reasons to globalize a company: o It Reduce costs (labor, taxes, tariffs, etc.) o Improves supply chain o Provides better goods and services o Understands markets o Learns to improve operations o Attracts and retains global talent  Mission statements tell where an organization is going  Strategies are the plans of how to get where they want to go.  Competitive Advantage is a condition or circumstance that puts a company in a favorable or superior business position. o There are three strategies involved. They include:  Differentiation  Cost Leadership  Response  Key success factors support a core competence and implement strategy. Chapter 4  Forecasting is the process of predicting a future event  There are three Forecasting Time Horizons, which include: o Short-range: up to one year o Medium-range: three months to three years o Long-range: more than three years  As products pass through life cycles, forecasts are useful in projecting staffing levels, inventory levels, and factory capacity. The product life cycle includes introduction, growth, maturity, and decline.  There are three types of Forecasting: Economic, Technological, Demand  Human resources, Capacity, and Supply-chain management are all affected by the strategic importance of forecasting for the following: o Human resources: Hiring, Training, Laying off workers o Capacity: Undependable delivery, Loss of market, Loss of customers o Supply chain management: Good supplier relations and price advantages  There are seven steps involved in forecasting: o Determine the use of the forecast o Select the items to be forecasted o Determine the time horizon of the forecast o Select the forecasting model o Gather the data o Make the forecast o Validate and implement the results  There are two forecasting approaches: Qualitative and Quantitative o Qualitative is used when situation is vague and little data exist. It involves intuition and experience. Typical for new products o Quantitative is used when a situation is stable and historical data exists. It involved mathematical techniques and is typical for existing products and current technology.  Time-series forecasting is set of evenly spaced numerical data that is obtained by observing response variable at regular time periods.  There are components in time-series forecasting: o Trend: Persistent, overall upward or downward pattern and changes are due to population, technology, etc. o Cyclical: Repeating up and down movements and are affected by business cycles, political, and economic factors. o Seasonal: Regular pattern of up and down fluctuations and it’s due to weather conditions, etc. Typically occurs within a single year. o Random: Erratic, unsystematic, ‘residual’ fluctuations and is due to random variation or unforeseen approaches o Naïve Approach: Assumes demand in the next period is the same as demand in most recent period. It is sometimes cost effective and efficient  Seasonal variations in data are the multiplicative seasonal models that can adjust trend data in demand. Steps in the process include: Finding average historical demands for each season, computing the average demand over all seasons, computing a seasonal index for each season, estimating next year’s total demand, and dividing the estimate of total demand by the number of seasons, then multiply it by the seasonal index for that season.  Forecasting the service segment presents unusual challenges that include special needs for short-term records, a greater difference as function of industry and product, and holidays/other calendar events. 


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