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Questions and Answers
What is the primary purpose of Enterprise Resource Planning (ERP) systems?
What is the primary purpose of Enterprise Resource Planning (ERP) systems?
Which of the following scheduling methods prioritizes tasks based on the earliest due date?
Which of the following scheduling methods prioritizes tasks based on the earliest due date?
What is a significant challenge in service scheduling compared to operations scheduling?
What is a significant challenge in service scheduling compared to operations scheduling?
Which type of scheduling specifically deals with ensuring maintenance tasks are performed at the right time?
Which type of scheduling specifically deals with ensuring maintenance tasks are performed at the right time?
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What historical development directly preceded the emergence of ERP systems in the 1990s?
What historical development directly preceded the emergence of ERP systems in the 1990s?
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What does the term 'makespan' refer to in scheduling performance measures?
What does the term 'makespan' refer to in scheduling performance measures?
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How is the average number of jobs in the system calculated?
How is the average number of jobs in the system calculated?
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What is the formula for calculating job tardiness?
What is the formula for calculating job tardiness?
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Which scheduling method emphasizes processing jobs in order of longest time first?
Which scheduling method emphasizes processing jobs in order of longest time first?
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What contributes to the job flow time of a process?
What contributes to the job flow time of a process?
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Which quality dimension for products refers to the ease of obtaining repair services?
Which quality dimension for products refers to the ease of obtaining repair services?
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What is the key component of service quality that measures how well services are performed within expected timeframes?
What is the key component of service quality that measures how well services are performed within expected timeframes?
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In the context of quality measures, what does the yield formula primarily assess?
In the context of quality measures, what does the yield formula primarily assess?
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Which index specifically evaluates quality cost in relation to production expenses?
Which index specifically evaluates quality cost in relation to production expenses?
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What quality dimension assesses whether the product adheres to established specifications?
What quality dimension assesses whether the product adheres to established specifications?
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Which of the following measures the consistency of service delivery?
Which of the following measures the consistency of service delivery?
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What is the primary function of Operations Management (OM) in an organization?
What is the primary function of Operations Management (OM) in an organization?
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What does the quality-productivity index represent?
What does the quality-productivity index represent?
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Which dimension is most closely related to the reputation and intangible aspects of a product?
Which dimension is most closely related to the reputation and intangible aspects of a product?
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Which of the following best describes the 'process view' of Operations Management?
Which of the following best describes the 'process view' of Operations Management?
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In which area would Operations Management NOT typically be involved?
In which area would Operations Management NOT typically be involved?
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Which of the following is NOT considered an input in the transformation process of Operations Management?
Which of the following is NOT considered an input in the transformation process of Operations Management?
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What key trend in Operations Management involves minimizing waste and achieving efficiency?
What key trend in Operations Management involves minimizing waste and achieving efficiency?
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Which department is NOT directly considered part of the Operations Management framework?
Which department is NOT directly considered part of the Operations Management framework?
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Which components are classified as 'support functions' in operations?
Which components are classified as 'support functions' in operations?
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What is one of the main objectives of studying Operations Management according to its learning objectives?
What is one of the main objectives of studying Operations Management according to its learning objectives?
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What characterizes the Continuous Review System?
What characterizes the Continuous Review System?
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In the ABC inventory classification system, what percentage of inventory items typically account for 70-80% of the dollar value?
In the ABC inventory classification system, what percentage of inventory items typically account for 70-80% of the dollar value?
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What is a primary feature of the Periodic Review System?
What is a primary feature of the Periodic Review System?
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What is the classification criterion for C items in the ABC System?
What is the classification criterion for C items in the ABC System?
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Which of the following describes the record-keeping approach for A items?
Which of the following describes the record-keeping approach for A items?
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How does the order quantity for B items typically vary?
How does the order quantity for B items typically vary?
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Which characteristic is NOT typical of C items management policies?
Which characteristic is NOT typical of C items management policies?
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Which inventory system allows the order quantity (Q) to vary?
Which inventory system allows the order quantity (Q) to vary?
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What is the role of the smoothing parameter in exponential smoothing?
What is the role of the smoothing parameter in exponential smoothing?
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In order to eliminate the need for overtime and subcontracting in workforce planning, what calculation is necessary based on the production target?
In order to eliminate the need for overtime and subcontracting in workforce planning, what calculation is necessary based on the production target?
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What is the effective capacity in capacity planning?
What is the effective capacity in capacity planning?
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To achieve a target inventory level of 10 units from an ending inventory of 48 units, how many units need to be reduced?
To achieve a target inventory level of 10 units from an ending inventory of 48 units, how many units need to be reduced?
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What does design capacity refer to in a manufacturing context?
What does design capacity refer to in a manufacturing context?
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When a capacity shortage is diagnosed, which initial question should be asked?
When a capacity shortage is diagnosed, which initial question should be asked?
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Which option correctly defines utilization in a capacity planning context?
Which option correctly defines utilization in a capacity planning context?
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What total reduction in production is required to reach the target inventory level considering the adjustments needed?
What total reduction in production is required to reach the target inventory level considering the adjustments needed?
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Study Notes
MOS 3330 Course Overview
- The course covers Introduction to Operations Management, Supply Chain Management, and Inventory Management (among other topics)
- The course is divided into various modules, each with different learning objectives.
- Tests 1 & 2 cover specific modules
- The final exam covers the entire course
- Formula sheets are provided for support
INTRODUCTION TO OPERATIONS MANAGEMENT
- Learning objectives include:
- Defining Operations Management (OM)
- Reasons for studying OM
- Distinguishing goods from services
- Current trends in OM
Operations Management (OM)
- OM is defined as the transformation of inputs into finished goods and services.
- Organizational view of OM considers the various departments in a manufacturing or service organization, like marketing, sales, and finance.
- A process view of OM focuses on the transformation of inputs into outputs.
- Inputs to the process include raw materials, employee skills, facilities, and equipment.
- Transformation includes physical location, exchange, physiological, psychological, and informational processes leading to finished goods and services.
- Operations Management involves planning, design, coordinating, and executing operations-related activities.
Why Study OM?
- OM is crucial for all organizations & contributes to overall corporate strategy
- A significant portion of the Canadian workforce (25%) works in the goods-producing sector, and is managed by OM professionals
- OM professionals manage production/service, technology, people, and projects, making strategic decisions.
Goods vs. Services
- Services are intangible, customer-interactive, and consumed immediately. Producing goods is often more automated and easier to measure quality and productivity
- Services are labor and knowledge-intensive and difficult to automate; total productivity is often Output / Input.
- Many cases may not be clear-cut.
SUPPLY CHAIN MANAGEMENT
- Learning objectives include:
- Understanding supply chains
- Key subjects within supply chain management
- The bullwhip effect
- Supply chain strategies
- Supplier relationships
Supply Chain
- A supply chain is the network of facilities, functions, and activities involved in producing and delivering products or services from suppliers to customers.
- Supply chain management coordinates the movement of goods through the supply chain and controls information, such as sales data, forecasts, promotions, and inventory levels.
Supply Chain Subjects
- Logistics
- Purchasing
- Sourcing
- The bullwhip effect
- Sustainability
Logistics
- Shipping, delivery, transportation costs
- Traffic management (highway, rail/water, pipeline, air)
- Distribution Management (facility location, customer proximity, infrastructure, inventory)
- Third-party logistics (3PL)
- International business
Purchasing
- Ordering, receiving, quality, quantity, price, and time
- Purchasing Cycle: requisition, selection of supplier, placement of order, and receiving order.
- Interface with accounting, engineering, and legal teams
- Develop a supplier base: selection, evaluation, and maintenance
Sourcing
- Supplier selection strategies (single sourcing vs. multiple sourcing)
- Considerations such as price, quality, services, and location
Bullwhip Effect
- Information distortion along the supply chain
- Customer demand gets distorted as information reaches suppliers
- Contributing factors: batch ordering, high order cost, free return policy, promotional pricing, lack of visibility on end-demand, inaccurate forecast, long lead times, localized reaction, and mistrust
Supply Chain Strategies
- Physical proximity, plant-direct shipping, and cross-docking
- Strategies to improve supply chain and eliminate bullwhip effect
Supplier Relationships
- Collaborative Planning, Forecasting, and Replenishment (CPFR)
- Process for trading partners to share information on forecasting, replenishment, and planning for better working together.
- Guidelines for information sharing, operating agreements, and Standards (VICS) to build collaborative and strategic relationships
Business Relationships
- Open market
- Multiple suppliers
- Short term decisions
- Price based decision
- Adversarial
- Cooperative
- Fewer suppliers
- Longer term contacts
- Move away from price based purchase
- Win-win relationship
- Collaborative
- Joint Planning
- Technology Sharing
- Strategic Relationship
- Future: mass collaboration across the industry
Sustainability in Supply
- The reduced use of resources and harm to the environment.
- The efforts that businesses make to decrease the environmental and human impact of products from sourcing materials through production, to storage, delivery, and transportation
- Sustainable Supply Chain Management focuses on speed, cost, and reliability of operations, adding the preservation of environmental and societal values to those goals to address global issues such as climate change, water security, deforestation, human rights, fair labor practices, and corruption.
Inventory Management
- Learning Objectives include:
- The purpose of inventory
- Inventory control systems
- Costs associated with inventory
- Economic Order Quantity (EOQ) models
- Safety stock
Inventory
- A stock of items or materials kept to satisfy future demand
- Raw materials, parts, and supplies; work-in-process items
- Finished goods, rework items, tools, machinery, and equipment.
Inventory Control Systems
- Q System (fixed quantity)
- P System (fixed time period)
- ABC System
Inventory Costs
- Ordering costs (fixed costs), holding costs (keeping items in inventory), and shortage costs (loss of sales, production)
Economic Order Quantity (EOQ) Models
- A mathematical model for determining order quantity and when to reorder inventory
- Assumptions made: constant, known demand; certain supply received in a batch; known, constant lead time between order placement and order receipt; and, fixed costs, information and no shortages and no back orders.
Safety stock
- Safety stock is excess inventory. It's used to buffer against demand/supply variability during lead time, and increase in order quantity.
- It minimizes shortage costs and is also used in the EOQ model for anticipation inventory
Forecasting
- Learning Objectives include:
- Understanding qualitative and quantitative methods
- Overview of the forecasting process
- Time series methods
- Forecast error measures
Forecasting
- Translation of past experiences & present events into future predictions.
- Strategic: future products and markets
- Planning: product demand
- Forecasting horizon: short-, mid-, and long-range
Types of forecasting methods
- Qualitative (subjective or judgment based)
- Quantitative (numerical data and mathematical models)
- Causal methods (looking for a relationship between factors to be forecasted and other factors, external or internal)
- Time series methods
Forecasting Process
- Identifying the purpose
- Gathering historical data
- Examining the data (plotting)
- Selecting suitable models
- Computing forecasts for historical data and validating accuracy
- Assessing forecast accuracy & adjusting as needed
- Including qualitative information
- Monitoring forecast results
Time Series Forecasting Models
- Using statistical analysis of historical data; past demand as a predictor
- Considering average, trend, seasonality, cycles, and random variations in demand patterns
Time series forecasting models
- Naïve model
- Simple moving average
- Weighted moving average
- Exponential smoothing
- Adjustment for seasonality
Time Series Analysis
- The average
- Trend
- Seasonality
- Cycles
- Random movement
Forecast Accuracy
- Evaluation of forecasts through error measures like Mean Absolute Deviation (MAD), Mean Absolute Percentage Deviation (MAPD), Mean Squared Error (MSE), and Cumulative Error
Machine Learning (ML) in Demand Forecasting
- AI-enabled systems learn from data instead of pre-defined rules to make predictions regarding future trends and demand
Machine Learning Forecasting Process
- Data gathering
- Data pre-processing
- Model training
- Model evaluation
Aggregate Planning
- Learning Objectives include:
- Definition of aggregate production plan
- Aggregate planning strategies
- Generating basic aggregate plans
- Modifying/improving plans
- Capacity strategies
Aggregate Planning
- A business plan for the production plan to meet aggregate demand.
- Planning horizons: long-term (2-10 years), medium-term (6-18 months), and short-term (weekly/daily).
- Basic planning is the creation of a plan to meet demand
Aggregate planning strategies
- Active strategy (influencing demand) and Reactive strategy (managing supply and capacity).
- Techniques: incentives, sales promotions, advertising, and pricing, product strategy, overtime and undertime, hiring and hiring, subcontracting and inventory levels (to compensate for demand variability) - approaches: Level approach (constance rate of production)
- and Chase approach (variable production rate)
Generating basic aggregate plans
- Choosing either a level or chase approach
- Determining the production rate (regular, overtime, subcontracting), inventory level and backorders, and workforce levels (hiring/firing) to balance total cost (production, inventory, and workforce)
Modifying/Improving plans
- Including organization policies & physical constraints as needed
Capacity strategies
- Assessing and adjusting production capacity.
- Techniques: analyzing capacity efficiency, capacity lead, capacity lag, and incremental expansion strategies
Material Requirements Planning (MRP)
- Learning Objectives include:
- What MRP is and does
- Inputs and outputs of MRP
- Scheduling basics
- Scheduling sequencing rules
Material Requirements Planning (MRP)
- Computerized system for inventory control and production planning.
- Determined requirements of dependent demand inventory (parts, components, and raw materials)
- Explosions: breaking down products
- Netting: calculating materials required
- Offsetting: scheduling orders
- Lot-sizing: determining batch sizes for production/procurement.
Master Production Schedule (MPS)
- A plan for individual products that states the requirements for individual end items and the quantities required by a given date
Inventory Master File (IMF)
- A detailed record of components, information needed for ordering from customers, and scheduling of production and delivery of products
Product Structure File (PSF)
- A record of the relationships between products
- The various components (parts & materials) required for a product
MRP as an Analysis Tool
- MRP is not a demand planning tool
- It's a tool to determine the required materials and components, based on production plans, and determine shortage issues ahead of actual production.
- Planning actions to get the right material at the right time
- Example: Estimate production outcome & identify potential shortage before actual production, to purchase or produce more ahead of time, to move jobs forward (expediting) or backward (de-expediting) to see if the solution would work
Production Scheduling
- Allocation of resource to tasks, the last planning stage before production
- Objectives: meet customer due dates; minimize job lateness and response time, completion time, overtime, idle time, work in progress (WIP) inventory, maximize labor or equipment utilization.
- Scheduling Techniques: method analysis, time study method.
High Volume vs. Low Volume Production
- High volume has repetitive processes and optimized production technology (OPT)
- Low volume has intermittent operations involving coordination difficulty for diverse orders
Sequencing Rules
- First come, first served (FCFS)
- Last come, first served (LCFS)
- Earliest due date first (EDD)
- Shortest processing time first (SPT)
- Longest processing time first (LPT)
Other Types of Operations Scheduling
- Scheduling service operations
- Complicated because demand is often variable and hard to forecast
- Service scheduling (appointments, reservations, posted schedules)
- Staff Scheduling (peak demand, floating, on call, seasonal)
- Maintenance (repair & preventative maintenance)
Enterprise Resource Planning (ERP)
- Learning Objectives include:
- Definition of enterprise resource planning
- Historical development of ERP
- ERP enablers
- Implementation issues
- Project management basics
Enterprise Resource Planning (ERP)
- Integrated software modules controlling and coordinating business processes in an enterprise, extending from the manufacturing origins.
- MRP, MRP II, and CRP
- Technological enablers include electronic communications and advances in computer-to-computer data sharing (EDI).
- Success and Mixed Results (in 1990s)
ERP Implementation Issues
- Technical (data handling, inaccuracy, training)
- Behavioral (lack of management or employee support, unrealistic expectations, etc.)
Project Management
- Project life cycle phases (concept, feasibility analysis, planning, execution, and termination)
- Scope management (identifying needs and constraints)
- Human resource management (allocation of roles and responsibilities)
- Time management (schedules, estimation techniques, etc.)
Process and Product Design
- Learning Objectives include:
- Classifying process types
- Classifying facility layout types
- Understanding manufacturing technology
- Product design basics
Process
- A process is a way of transforming inputs into outputs, with types such as:
- fixed position, jumbled flow, line flow, and continuous flow
- Approaches to customer orders (make-to-order, make-to-stock, or assemble-to-order)
- Amount of customization
- Understanding product variety and standardisation
Product Design
- Defining product characteristics
- General steps: idea development, screening, preliminary design & testing, and final design
- Techniques: concurrent engineering & CAD methods
Just-In-Time (JIT) Systems
- Learning Objectives include:
- JIT origins & philosophy
- JIT key elements
- Implementation issues
- Job design basics
Just-In-Time Systems
- A philosophy that eliminates waste in manufacturing or service process
- Need only what, when it is needed
JIT Systems Origins and Philosophy
- Origins in the Japanese manufacturing industries, particularly Toyota (reducing inventory to improve efficiency and performance)
- Focus on eliminating all waste within the organization
Types of Waste
- Process waste
- Waiting time
- Extra/unnecessary inventory
- Poor layout
- Transportation waste
- Overproduction
- Movement
- Inventory
Key Elements of JIT System
- Work cells, pull production system, reducing variability in components (supply), and improving quality/reliable suppliers
Alternative Job Designs
- Job rotation, enlargement, and enrichment
- Use of Teams:
- Problem-solving Teams
- Special-purpose Teams
- Self-directed Teams
- Work measurement: Method analysis & Time study
Quality
- Learning Objectives include:
- What is quality
- Quality measures
- Costs of quality
- Process improvement
- Continuous improvement
Quality
- Producer's perspective: quality of design and quality of conformance
- Consumer's perspective: fitness for use
- Overall features and characteristics to satisfy different needs
Quality Measures
- Scrap, rework, errors, shipping costs, productivity, quality index
Costs of Quality
- Tangible and intangible costs related to managing product/service quality
- Internal failure costs (scrap, rework, downtime)
- External failure costs (returns, repairs, warranty, lost sales)
- Appraisal costs (testing, inspection, etc.)
- Prevention costs (design, training, quality planning)
Quality and Profitability
- Improved quality leads to higher sales, lower costs, higher prices, and greater efficiency
Quality Improvement
- Continuous improvement ("kaizen"), process improvement, innovation, specific tools for measurement and improvement
Statistical Process Control (SPC)
- To prevent poor product quality and use process improvement tools
- To monitor production process, especially in terms of quality and pattern detection
- Statistical measures of the production process (pattern tests)
- Processes that can be controlled, using various charts:
- p-chart: Proportion of defectives in a sample
- c-chart: Number of defective features in a sample
- R-chart: Range (difference between largest and smallest values)
- X-chart: Average of a sample of values
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Description
Test your knowledge on Enterprise Resource Planning (ERP) systems and various scheduling methods. This quiz covers key concepts such as task prioritization, job tardiness, and scheduling performance measures. Perfect for students and professionals looking to deepen their understanding of these critical business topics.
