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This 5 page Class Notes was uploaded by Erika Briggs on Thursday February 4, 2016. The Class Notes belongs to BUS 351 at Indiana State University taught by Kym Pfrank in Spring 2016. Since its upload, it has received 15 views. For similar materials see Intro to Operations Management in Business at Indiana State University.
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Date Created: 02/04/16
Chapter 1 Operations and Supply Chain Management includes Product design Purchasing Manufacturing Service operations Logistics Distribution Success depends on Strategy Processes to deliver products and services Analytics to support the decisions needed to manage the firm What is Operations and Supply Chain Management? Operations- manufacturing and service processes used to transform resources into products Process Activities: Planning, sourcing, making, delivering, returning Efficiency- doing something at the lowest possible cost Effectiveness- doing the right things to create the most value for the customer Value- attractiveness of a product relative to its cost Management efficiency ratios Labor Activity Net income per employee Revenue (or sales) per employee Asset Productivity Receivables turnover ratio Inventory turnover Asset turnover Receivable Turnover = Annual Credit Sales Average Accounts Receivable Inventory Turnover = Cost of Goods Sold Average Inventory Value Asset Turnover= Revenue (or Sales) Total Assets Chapter 2 Shareholders- ind. Or companies that legally own one or more shares of stock in the company Stakeholder- ind or org who are directly or indirectly influenced by the actions of the firm Triple bottom line- evaluating the firm against social, economic, and environmental criteria Adding sustainability requirement means meeting value goals without compromising the ability of future generations to meet their own needs Corporate strategy- provides overall direction and coordinates operational goals with those of the larger organization Operations and effectiveness- performing activities in a manner that best implements strategic priorities at a minimum cost Competitive Dimensions Price Quality Delivery Speed Delivery Reliability Coping with Changes in Demand Flexibility and new product introduction speed Trade Offs Management must decide which parameters of performance are critical and concentrate resources on those characteristics. Straddling- seeking to match a successful competitor by adding features, services, or technology to existing activities (often a risky strategy) Order qualifiers- dimensions that are necessary for a firm’s products to be considered for purchase by customers Order winners- criteria used by customers to differentiate the products and services of one firm from those of other firms Productivity Measurement How well you are using resources, relative measure Productivity=outputs Inputs Assessing Risk Supply Chain risk is the likelihood of a disruption that would impact the ability of a company to continuously supply products. Chapter 3 Forecasting Vital function and impacts every significant management decision Finance and accounting use forecast as the basis for budgeting and cost control. Marketing relies on forecasts to make key decisions such as new product planning and personnel compensation. Production uses forecasts to select suppliers, determine capacity requirements, and to drive decisions about purchasing ….. Four basic types of forecasts 1. Qualitative 2. Time series analysis 3. Casual relationships 4. Simulation Time Series analysis is based on the idea that data ….. Components of demand Average demand for a period of time Trend Seasonal element Cyclical elements Random variation Autocorrelation Trends -identification of trend lines is a common starting point when developing a forecast -common trend types include linear, s-curve, asymmetric, and exponential Time Series Analysis -Using the past to predict the future Short term (less than 3 months) Medium term (3 months to 2 years) Long term (greater than 2 years) Moving Average Weighted Moving Average -simple moving average formula implies equal weighting for all periods -sum of the weights must be equal to 1 Chapter 4 Strategic Capacity Management Capacity- the ability to hold, receive, store, or accommodate -In business, viewed as the amount of output that a system is capable of achieving over a specific period of time -Capacity management needs to consider both inputs and outputs Strategic Capacity Planning -Determining the overall level of capacity-intensive resources that best supports the company’s long-range competitive strategy -Facilities -Equipment -Labor force size Capacity Planning Concepts -Capacity utilization rate-measure of how close the firm is to its best possible operating level Economies of Scale- the idea that as a plant gets larger and volume increases, the average cost per unit tends to drop Capacity Focus-the idea that a production facility works best when it is concentrated on a limited set of production objectives Capacity flexibility- the ability to rapidly increase or decrease product levels or the ability to shift rapidly from one product or service to another Considerations in changing capacity System balance Frequency of capacity additions External sources of capacity Decreasing capacity Decision Trees -Schematic model of the sequence of steps in a problem-including the conditions and consequences of each step Chapter 5 Project Management Project- series of related jobs, usually directed toward some major output and requiring a significant period of time to perform Project management- planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost and time restraint of the project Project management is important because at the higher levels of an organization management often involves juggling more than one project. Project Structure Pure project- a self-contained team works full time on the project. Functional project- responsibility for the project lies within one functional area of the firm. Matrix project- a blend of pure and functional project structures- people from different areas work on the project Pure Project Advantages- project manager has full authority, team reports to one boss, shortened communication lines, team pride Disadvantages- duplication of resources, organizational goals and policies are ignored, lack of technology transfer, team members have no functional area “home” Functional Project Advantages- can work on several projects, critical mass of specialized knowledge, technical expertise maintain in functional area Disadvantages- needs of the client are secondary and are responded slowly, motivation in team is weak Matric Project Advantages- better communication, manger holds responsibility, duplication of resources are minimized, policies are followed Disadvantages- too many bosses, depends on project manager’s negotiating skills, potential for sub-optimization Defining the project Statement of teamwork- written description of the objectives to be achieved Task- further subdivision of a project- usually shorter than several months and performed by a single group or organization Work package-group of activities combined to be assignable to a single organizational unit Earned Value Management- a technique measuring project progress in an objective manner -has the ability to combine measurements of scope, schedule, and cost in a project -provides a method of evaluating the relative success of a project at a point in time.
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