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Midterm Study Guide

by: Aimee Castillon

Midterm Study Guide MBUS 306

Aimee Castillon
GPA 3.61

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About this Document

Covers Chapters 1 to parts of Chapter 5
Managing projects/operations
Timothy Porter
Study Guide
Midterm 1, businessminor, Porter, operations, Management
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This 10 page Study Guide was uploaded by Aimee Castillon on Sunday October 9, 2016. The Study Guide belongs to MBUS 306 at George Mason University taught by Timothy Porter in Fall 2016. Since its upload, it has received 23 views. For similar materials see Managing projects/operations in Minor In Business at George Mason University.

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Date Created: 10/09/16
Midterm review Chapter 1 1. Define operations management a. Operations management- ​ activities that relate to the creation of goods and services through the transformation of inputs to outputs 2. Explain the distinction between production and productivity a. Production​ is the making of goods and services b. Productivity​ is the ratio of output (goods and services) divided by one or more inputs (i.e. labor, capital, management) 3. Compute ​single-factor productivity a. Productivity = units produced / input used i. I.e. 1000 units produced / 250 labor-hours = 4 units per labor hour 4. Compute multifactor productivity a. Multifactor productivity = ​ output / labor + material + energy + capital + misc. 5. Identify the critical variables in enhancing productivity a. Labor (~10%); capital (~38%); management (~52%) Chapter 2 1. Define mission and strategy a. Mission- ​ purpose or rationale of company’s existence b. Strategy​- how an organization expects to achieve its mission and goals 2. Identify and explain three strategic approaches to competitive advantage a. Differentiation- ​ distinguishing the offerings of an organization in a way that the customer perceives as adding value i. Experience differentiation- ​ engaging customers with a product through the five senses (i.e. DisneyWorld, Hard Rock Cafe) b. Low-cost leadership- ​ achieving maximum value as perceived by the customer i. DOES NOT IMPLY LOW VALUE OR LOW QUALITY c. Response​- set of values related to rapid, flexible, and reliable performance ​ i. Flexible response- ability to match changes in a marketplace where design innovations and volumes fluctuate sustainability (i.e. HP) ​ ii. Reliability of scheduling ii​i. Quickness of response- speed in product development, speed in production, and speed in delivery (i.e. Johnson Electric Holdings) 3. Understand the significance of key success factors and core competencies a. Key success factors (KSFs)​- activities or factors that are key to achieving competitive advantage b. Core competencies- ​ set of skills, talents, and capabilities in which a firm is particularly strong ● Both are significant in providing a competitive advantage for the organization 4. Use factor rating to evaluate both country and outsource providers ​ a. Factor-rating method provides objective way to evaluate outsource providers b. 5. Identify and explain four global operations strategy options a. International strategy: ​ global markets are penetrated using exports and licenses (i.e. Harley-Davidson) b. Multidomestic strategy: ​ operating decisions are decentralized to each country to enhance local responsiveness (i.e. McDonald’s) c. Global strategy: ​ operating decisions are centralized and the headquarters coordinates the standardization and learning b/t facilities (I.e. Texas Instrument) d. Transnational strategy: ​ combines benefits of global-scale efficiencies with the benefits of local responsiveness (i.e. Coca-Cola, Nestle) e. Chapter 3 1. Draw AOA and AON networks a. 2. Determine a critical path a. The​ critical path​ is the longest computed time path(s) through a network 3. Calculate the variance of activity times a. Optimistic time​ (a)- “best” activity completion time that could be obtained in PERT network b. Pessimistic time​ (b)- “worst” activity time that could be expected in a PERT network c. Most likely time​ (m)- most probable time to complete an activity in a PERT network d. Formulas i. Expected activity time (t) = (a + 4m + b)/6 2 ii. Variance = [(b - a)/6]​ iii. Project variance = Σ(variances of activities on critical path) 4. Crash a project a. Crashing- shortening activity time in a network to reduce time on the critical path so total completion time is reduced b. Steps: i. crash cost per period = (crash cost - normal cost) / (normal time - crash time) ii. Using current activity times, find critical path(s) in project network and identify critical activities iii. If there’s only one critical path, then select the activity on this critical path that: 1. Still be crashed 2. Has the smallest crash cost per period iv. If there’s more than one critical path, then select one activity from each critical path such that: 1. Each selected activity can still be crashed 2. Total crash cost of all selected activities is the smallest. v. Update all activity times. If desired due date has been reached, stop. If not, return to Step 2 Chapter 4 1. Understand the three time horizons and which models apply for each a. Short-range forecast ( < 1 year): planning purchasing, job scheduling, workforce levels, job assignments, and production levels b. Medium-range forecast (3 months ~ 3 years): sales planning, production planning and budgeting, cash budgeting, and analysis of various operating plans c. Long-range forecast (3+ years): planning new products, capital expenditures, facility location or expansion, and research and development 2. Explain when to use each of the four qualitative models a. Jury of executive opinion-​ opinion of a small group of high-level experts and managers to form a group estimate of demand b. Delphi method- ​ group process that allows experts to make forecasts i. Panel of experts, queried iteratively ii. 3 types of participants 1. Decision makers, staffers, and respondents c. Sales force composite​- Estimates from individual salespersons are reviewed for reasonableness, then aggregated d. Market survey​- ask the customer regarding future plans i. What consumers say and what they actually do may be different 3. Apply the naive, moving-average, exponential smoothing, and trend methods a. Naive approach: ​ assumes demand in next period is the same as demand in most recent period b. i. c. d. Trend projection-​ time-series forecasting method that fits a trend line to a series of historical data points and then projects the line into the future for forecasts 4. Compute three measures of forecast accuracy a. Forecast errors i. Mean Absolute Deviation (MAD) = Σ|actual − forecast|/ n 2 ii. Mean Squared Error (MSE) = Σ(Forecast errors) /n n iii. Mean Absolute Percent Error (MAPE) = ((∑ 100 actual − forecast /| i i| i=1 actual​) / n i​ 5. Develop seasonal indices a. Steps for “seasons” of 1 month i. Find average historical demand each season by summing the demand for that month in each year and dividing by number of years of data available ii. Compute average demand over all months by dividing total average annual demand by number of seasons iii. Compute seasonal index for season by dividing that month’s historical average demand by average demand over all months iv. Estimate next year’s total annual demand v. Divide this estimate of total annual demand by number of seasons, then multiply it by seasonal index for each month → seasonal forecast b. i. 6. Conduct a regression and correlation analysis a. Regression formula: b. Correlation formula: 7. Use a tracking signal a. Chapter 5 1. Define product life cycle a. May be any length from a few days to decades b. Operations function must be able to introduce new products successfully c. 2. Explain how time-based competition is implemented by OM a. Time-based competition i. b. Purchasing technology by acquiring a firm i. Speeds development ii. Issues concern the fit between acquired organization and product and the host c. Joint ventures i. Both organizations learn ii. Risks are shared d. Alliances- ​ cooperative agreements b/t independent organizations i. Useful when technology is developing ii. Reduces risks 3. Describe how goods and services are defined by OM a. Goods or services are first defined in terms of their function-- what are they to do 4. Describe the documents needed for production a. Assembly drawing​ shows exploded view of product i. Details relative locations to show how to assemble the product b. Assembly chart- ​identifies the point of production where components flow into subassemblies and ultimately into the final product i. c. Route sheet​ lists the operations and times required to produce a component i. d. Work order​- instructions to produce a given quantity of a particular item, usually to a schedule i. e. Engineering change notices (ECNs)-​ correction or modification to a product’s definition or documentation i. Engineering drawing ii. Bill of materials iii. Quite common with long product life cycles, long manufacturing lead times, or rapidly changing technologies iv. Configuration management- ​ product’s planned and changing components are accurately identified and control and accountability for change are identified and maintained 1. Need to manage ECNs has led to the development of configuration management systems 5. Explain how the customer participates in the design and delivery of services a. Service typically includes direct interaction with the customer - Process-chain-network (PCN) analysis f ​ ocuses on the ways in which processes can be designed to optimize interaction between firms and their customers - - Direct interaction region includes process steps that involve interaction b/t participants - The surrogate (substitute) interaction region includes process steps in which one participant is acting on another participant’s resources - The independent processing region includes steps in which the supplier and/or the customer is acting on resources where each has maximum control - All three regions have similar operating issues but the appropriate way of handling the issues differs across regions - Service operations exist only within the area of direct and surrogate interaction - PCN analysis provides insight to aid in positioning and designing processes that can achieve strategic objectives


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