Cheatography

# production Cheat Sheet (DRAFT) by casink

This is a draft cheat sheet. It is a work in progress and is not finished yet.

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 CHAPTER 10 CAPACITY MANAGEMENT 1) Explain the concept of capacity. Capacity is the capability of a manufa­cturing or service resource such as a facility, process, workst­ation, or piece of equipment to accomplish its purpose over a specified time period. Key Capacity Issues Capacity is determined by the resources available to the organi­zat­ion­—fa­cil­ities, equipment, and labor—how they are organized, and their efficiency as determined by specific work methods. Capacity can be viewed in one of two ways: 1. As the maximum rate of output per unit of time, or 2. As units of resource availa­bility. - Can the facility, process, or equipment accomm­odate new goods and services and adapt to changing demand for existing goods and services? - How large should facility, process, or equipment capacity be? - When should capacity changes take place? 2) Describe how to compute and use capacity measures. Capacity An automobile transm­iss­ion­-as­sembly factory normally operates two shifts per day, five days per week. During each shift, 400 transm­issions can be completed under ideal condit­ions. What is the capacity of this factory? Capacity = (2 shifts­/day) (5 days/week) (400 transm­iss­ion­s/s­hift) (4 weeks/­month) = 16,000 transm­iss­ion­s/month Safety capacity Safety capacity (often called the capacity cushion) is an amount of capacity reserved for unanti­cipated events, such as demand surges, materials shortages, and equipment breakd­owns. Average safety capacity (%) = 100% − Average resource utiliz­ation % Job Shop Capacity In a job shop, setup time can be a substa­ntial part of total system capacity. Capacity Required (Ci) = Setup Time (Si) + [Proce­ssing Time (Pi) x Order Size (Qi)] = Si + [(Pi) (Qi)] 3) Describe long-term capacity expansion strate­gies. Long-Term Capacity Strategies Comple­mentary goods and services can be produced or delivered using the same resources available to the firm, but whose seasonal demand patterns are out of phase with each other. Comple­mentary goods or services balance seasonal demand cycles and therefore use the excess capacity available Capacity expansion strategies require determ­ining • Amount • Timing • Form of capacity changes 1. One large capacity increase (Exhibit 10.6a). 2. Small capacity increases that match average demand (Exhibit 10.6b). 3. Small capacity increases that lead demand (Exhibit 10.6c). 4. Small capacity increases that lag demand (Exhibit 10.6d). 4) Describe short-term capacity adjustment strate­gies. Adjust Short-Term Capacity Levels • Add or share equipment: lease equipment as needed or set up a partne­rship arrang­ement with capacity sharing. Examples: mainframe computers, CAT scanner, farm equipment. • Sell unused capacity: sell idle capacity to outside buyers and even compet­itors. Examples: computing capacity, perishable hotel rooms. • Change labor capacity and schedules: short term changes in work force levels. Examples: overtime, extra shifts, temporary employees, outsou­rcing. • Change labor skill mix: hire the right people, cross-­tra­ining. • Shift work to slack periods: Example: build up inventory during slack times and hold for peak demand times. Shift and Stimulate Demand • Vary the price of goods or services: Examples: cheaper hotel rates on weekends; sales of overstocks • Provide customers with inform­ation: Example: automated messages with best times to call or visit • Advert­ising and promotion: Examples: after-­holiday sales, manufa­cturer or service coupons • Add peripheral goods and/or services: Examples: movie theater rentals at off-peak times, extended service hours. • Provide reserv­ations: a promise to provide a good or service at some future time and place. Examples: hotels, airlines, surgeries Revenue Management Systems • A revenue management system (RMS) consists of dynamic methods to forecast demand, allocate perishable assets across market segments, decide when to overbook and by how much, and determine what price to charge different customer (price) classes. • Examples: Managing overbo­oking in airlines, hotels, and cruise lines (yield manage­ment). 5) Explain the principles and logic of the Theory of Constr­aints. The Theory of Constr­aints (TOC) is a set of principles that focuses on increasing total process throughput by maximizing the utiliz­ation of all bottleneck work activities and workst­ations. • Throug­hput: amount of money generated per time period through actual sales. • Constr­aint: anything that limits an organi­zation from moving toward or achieving its goal. • A physical constraint is associated with the capacity of a resource (e.g., machine, employee). • A bottleneck work activity is one that effect­ively limits capacity of the entire process. • A nonbot­tleneck work activity is one in which idle capacity exists. • A nonphy­sical constraint is enviro­nmental or organi­zat­ional (e.g., low product demand or an ineffi­cient management policy or proced­ure).

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 CHAPTER 4 OPERATIONS STRATEGY 1 Explain how organi­zations seek to gain compet­itive advantage • Compet­itive advantage denotes a firm’s ability to achieve market and financial superi­ority over its compet­itors • Creating compet­itive advantage requires: o Unders­tanding customer needs and expect­ations o Building and leveraging operat­ional capabi­lities to support desired compet­itive priori­ties. 2 Explain approaches for unders­tanding customer wants and needs • Order qualifiers are basic customer expect­ations, generally considered the minimum perfor­mance level required to stay in business • Order winners are goods and service features and perfor­mance charac­ter­istics that differ­entiate one customer benefit package from another and win the customer’s business. 3 Describe how customers evaluate goods and services • Search attributes are those that a customer can determine prior to purchasing the goods and/or services o Color, price, freshness, style, fit, feel, hardness, and smell. • Experience attributes are those that can be discerned only after purchase or during consum­ption or use. o Friend­liness, taste, wear ability, safety, fun, and customer satisf­action. • Credence attributes are any aspects of a good or service that the customer must believe in, but cannot personally evaluate even after purchase and consum­ption. o Expertise of a surgeon or mechanic, the knowledge of a tax advisor. Customers evaluate services in ways that are often different from goods, such as: o Customers seek and rely more on inform­ation from personal sources when evaluating services 4 Explain the five key compet­itive priorities Represent the strategic emphasis that a firm places on certain perfor­mance measures and operat­ional capabi­lities within a value chain. o Cost o Almost every industry has a low price market segment. Examples include Southwest Airlines, and Walmart. o Quality o Time o Flexib­ility o Manifest in mass custom­ization strategies o Mass custom­ization is being able to make whatever goods and services the customer wants, at any volume, at any time for anybody, and for a global organi­zation, from any place in the world. o Innovation

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 CHAPTER 6 GOODS AND SERVICE DESIGN 1 Describe the steps involved in designing goods and services • Strategic mission and vision • Strategic and market analysis, and unders­tanding compet­itive priorities • Customer benefit package design and config­uration • Detailed goods, service, and process design • For manufa­ctured goods - Manufa­ctured design and develo­pment - Process selection and design • For services - Service and service delivery design - Service encounter design • Market introd­uct­ion­/de­plo­yment • Market­place evaluation 2 Explain the concept and applic­ation of quality function deployment Customer requir­ements - Wants and needs are reflected through the design of good or service • Voice of the customer: Customer requir­ements, as expressed in the customer’s own terms • Quality function deploy­men­t(QFD): Approach to guide the design, creation, and marketing of goods and services by: - Integr­ating the voice of the customer into all decisions • Determine customer requir­ements through the voice of the customer (VOC) • Define technical requir­ements of the product • Determine interr­ela­tio­nships between the technical requir­ements • Relati­onship matrix defines what technical requir­ements satisfy VOC needs • Customer priorities and compet­itive evaluation help select which VOC requir­ements the product should focus on 3 Describe how the Taguchi loss function, reliab­ility, design for manufa­ctu­rab­ility, and design for sustai­nab­ility are used for designing manufa­ctured goods Tolerance Design and the Taguchi Loss Function o Determ­ining the acceptable tolerance o “goal post model” o For most manufa­ctured goods, design blueprints specify a target dimension (called the nominal), along with a range of permis­sible variation (called the tolerance) o Narrow tolerances vs. Wide tolerances  Improved product functi­onality & perfor­mance vs. increased manufa­cturing cost o Taguchi Loss Function o Argued that the smaller the variation about nominal specif­ica­tion, the better is the quality o In turn, products are more consis­tent, would fail less freque­ntly, and thus, be less costly in the long run. o L(x) = k(x – T )2 o Where  L(x) - Monetary value of the loss associated with deviating from the target, T  x - Actual value of the dimension  k - Constant that translates the deviation into dollars 4 Explain the five elements of service delivery system design Facility location and layout o Location creates customers’ conven­ience o Great store layout, process design, and service encounter design are meanin­gless if the store is in the wrong location. o The internet is making physical locations less important for some inform­ati­on-­int­ensive services Servic­escape o All of the physical evidence a customer might use to form an impression o Provides the behavi­oural setting where service encounters take place o Standa­rdi­zation – enhances effici­ency, especially for multiple site organi­zations o For eg, McDonald’s Restau­rants, Subway o Types of Servic­escapes o Lean servic­escape enviro­nments: provide service using simple designs  Eg, FedEx drop-off kioks o Elaborate servic­escape enviro­nments: provide service using more compli­cated designs and service systems  Eg, Hospitals, airports, univer­sities Process and job design, technology and inform­ation support systems, organi­zat­ional structure 5 Describe the four elements of service encounter design Service Encounter Design o Focuses on the intera­ction, directly or indire­ctly, between the service provid­er(s) and the customer. o Principle elements: o Customer contact behaviour and skills  Physical or virtual presence of the customer in the service delivery system during service experience  Measured by the percentage of time the customer must be in the system relative to the total time it takes to provide the service  High-c­ontact system vs. low-co­ntact systems o Service Provider Selection, Develo­pment and Empowe­rment  Recruit and train employees to exceed customer expect­ations  Empowe­rment: giving people authority to make decisions based on what they feel is right, to have control over their work, to take risks and learn from mistakes, and to promote change. o Recogn­ition and reward o Service recovery and guarantees