Chapter 1 - Introduction to Operations

Chapter 1 - Introduction to Operations

• Operations is a business organization responsible for transforming inputs into goods/services.
• Operations management encompasses many cost elements that affect price but does not determine the price to customers.
• Operations management manages systems or processes that create goods and/or provide services within an organization's supply chain.
• The supply chain includes suppliers, direct suppliers, operations, distributors, and final customers.
• Effectiveness is achieving a goal or objective.
• Efficiency is achieving a goal using fewer resources (labor, material, machines, less overhead).
• Goods/manufacturing and services have different characteristics, but similarities in degree of customer contact and uniformity of input/output exist.
• Labor content of goods is more consistent than that of services.
• Operations, marketing, and finance are interconnected business functions.
• Vision and mission statements guide organizational goals and strategies.

Chapter 2 - Competitiveness, Strategy and Productivity

• Strategy is a plan for achieving organizational goals, serving as a roadmap.
• Strategy formulation includes core competencies and SWOT analysis.
• Core competencies are strengths, skills, knowledge and capabilities that differentiate a company from competitors. They are not suitable for outsourcing.
• Productivity is the ratio of outputs to inputs, tracked over time, compared to previous internal results, industry results, or national results.
• Units of measure are needed to define productivity i.e., parts/hour, parts/machine, etc.
• Productivity is stated as "output per input". Increasing the ratio improves productivity.
• Calculate productivity increase or decrease using the formula (current - previous)/previous.

Chapter 3 - Forecasting

• Forecasting is a statement about the future value of a variable.
• Forecasts are usually close but not precise.
• Accuracy decreases as the forecast horizon increases.
• Trends, seasonality, and techniques for forecasting including naïve, average, moving averages, and weighted moving average are used to smooth variations, utilize history, and give more emphasis to recent data.
• Forecast error = Actual - Forecast.

Chapter 4 - Product & Service Design

• 3Rs - Reduce, reuse, and recycle
• Reduce functions, cost (cheaper materials), and quantity of parts.
• Reuse/remanufacture/refurbish worn out or defective parts.
• Recycle materials for future use and packaging.
• Sustainability goals should be incorporated into product design considerations.
• Reverse engineering involves examining competitor products for cost-effective and efficient processes for product or service generation.

Chapter 5 - Capacity

• Capacity types include equipment, space, and number of employees (direct)
• Capacity is needed in units like square feet, number of machines/workstations.
• Two types of capacity and two key terms are needed to be known.

Chapter 6 - Process Selection and Facility Layout

• Process types include job shop (low volume, high mix), intermittent (medium volume, moderate mix), repetitive (medium to high volume, low mix), and continuous (very high volume, low mix )
• Effective capacity considers personal time, maintenance, holidays, scrap, and other allowances for production.
• Efficiency is actual output divided by effective capacity and is expressed as a percentage.
• Utilization is actual output divided by design capacity and is expressed as a percentage.
• Bottlenecks occur when a step has lower capacity than other steps in the production process.
• Variability in demand can be managed with overtime, furloughs, subcontracting, or reducing work force as needed.

Chapter 9 - Management of Quality

• Dimensions of customer expectations for products, price isn't a quality dimension.
• Quality dimensions include performance (key characteristics and utilization), special features, conformance (fit for use), reliability, aesthetics, durability, perceived quality, and serviceability (warranty, repairs, and handling of complaints).
• Benefits of good quality include maintaining and strengthening reputation, ability to charge more, increased market share, and lower warranty costs.
• Costs of poor quality include losses in customers and business, increased liabilities, decreased productivity, scrap, rework, and low productivity.
• Four costs of quality are appraisal (inspection), prevention (training and planning), internal failure (before delivery of good/service), and external failure (after delivery, warranty, and recall).

Chapter 10 - Quality Control

• Quality control determines how much to inspect and how often.
• Cost of inspection vs. cost of passing a defective product/service should be compared.
• Inspection timing should be considered at various stages in the production process.
• Control charts, flow charts, Pareto charts, histograms, and check sheets can be used to visually or quantitatively analyze manufacturing processes.

Chapter 12 - Inventory Management

• Inventory types include raw materials, work in process, finished goods, tools, and supplies, along with maintenance, repair, and operations, as well as in-transit materials.
• Inventory functions include meeting and satisfying customer demand, avoiding stockouts, taking advantage of economic order quantities, and managing costs in addition to managing delays in product costs.
• Inventory costs include purchase costs, holding costs, ordering costs, setup costs, and shortage costs.
• A-B-C classification is a system to categorize inventory items based on value and importance for inventory management.
• Key inventory terms include cycle count, safety stock, and reorder point.

Chapter 14 – JIT and Lean Operations

• Lean Operations uses fewer resources than other systems and excels in productivity, lower costs, shorter cycle times, and higher quality.
• Lean operation's primary goal is matching supply to demand in a smooth flow.
• Goals of lean Operations include eliminating or reducing waste (muda) throughout an operation's processes.
• Japanese terms like Poka-yoke (fail-safe), Kaizen, Kanban, Muda (waste), are used to define lean operational practices.

Chapter 15 - Supply Chain Management

• Purchasing cycle steps include requisition generation, supplier selection, order placement, order monitoring, goods received, and payment.
• 3-way matching involves quantity and price verification of purchase order, dock receipt, and invoice.

This quiz focuses on the foundational concepts of operations management as discussed in Chapter 1. You'll explore the relationships between operations, marketing, and finance, and examine the efficiency and effectiveness of transforming inputs into goods and services. Test your understanding of key terms and principles that guide organizational goals.