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UM BMGT 322 - Exam 1 Study Guide

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Exam # 1 Study Guide Lectures: 1 - 4Lecture 1 (January 26)Operations and ProductivityWhat is Operations Management?Operations management is the set of activities that create value in the form of goods and services by transforming outputs into inputs.Production is the creation of goods and servicesPrimary Functions of All Organizations1. Marketing – Generates demand2. Production/operations – Creates the product3. Finance/accounting – Tracks how well the organization is doing, pays bills, collects the moneyTasks in OperationsCommercial bank – Teller scheduling, check clearing, collection, transactions, maintenance Airline – Ground support equipment, ground operations, flight operations, maintenance management scienceManufacturing – Facilities, production/inventory/quality control, design, process analysisSupply Chain DefinitionThe supply chain is a global network of organizations and activities that supply a firm with goodsand services while achieving high levels of efficiency and competitive advantage.Strategic Decisions in Operations ManagementOne of the 10 strategic decisions is the design of goods and services, which defines what is required of operations. Product design determines quality, sustainability, and human resources.BMGT 322 1st EditionSimilarities and differences between goods and servicesServices:- Intangible- Produced/consumed simultaneously- Unique- High customer interaction- Inconsistent product definition- Reselling unusualGoods:- Tangible- Product usually kept in inventory- Similar products produced- Limited customer involvement in production- Product standardization- Product has some residual valueCalculate Labor ProductivityProductivity = Units Produced / Input usedLabor Productivity = Units Produced / Labor-Hours UsedCalculate Multifactor ProductivityProductivity = Output / (Labor+Material+Energy+Capital+Miscellaneous)Lecture 2 (January 28) Decision MakingSteps in the Decision Making Process1. Clearly define the problem and the factors that influence it2. Develop specific and measurable objectives3. Develop a model4. Evaluate each alternative solution5. Select the best alternative6. Implement the decision and set a timetable for completionDefinitionsAlternative – a course of action or strategy that may be chosen by the decision makerState of Nature – an occurrence or a situation over which the decision maker has little or no controlMaximax – Find the alternative that maximized the maximum outcome for every alternativeMaximin – Find the alternative that maximizes the minimum outcome for every alternativeCalculate the Expected Monetary Value (EMV)EMV = (Payoff of 1st state of nature)*(probablilty of 1st state of nature)+(Payoff of 2nd state of nature)*(probability of 2nd state of nature) … + … +Calculate Expected Value of Perfect InformationEVPI = Expected value with perfect information – maximum EMVDecisions Using Maximax, Maximin, and Equally Likely Criterions1. Define the problem2. Structure or draw the decision tree3. Assign probabilities to the states of nature4. Estimate payoffs for each possible combination of decision alternatives and states of nature using maximax and maximin5. Solve Problem by working backward through the tree computing the EMV for each state of nature node to find highest EMVLecture 3-4 (February 2,4)Project ManagementPhases of Project Management1. Planning – goal setting, defining the project, team organization2. Scheduling – relate people, money, and supplies to specific activities and to each other3. Controlling – monitor resources, costs, quality, and budgets; revise plans and shirt resources to meet time and cost demandsEthical Issues in Project ManagementProject Management Institute has established an ethical code to deal with problems such as:1. Offers of gifts from contractors2. Pressure to alter status reports to mask delays3. False reports for charges of time and expenses4. Pressure to compromise quality to meet schedulesWork Breakdown Structure Level1. Project2. Major tasks in the project3. Subtasks in the major tasks4. Activities (or “work packages”) to be completedConvert Precedence Information into a PERT Chart1. Define the project and prepare the work breakdown structure2. Develop relationships among the activities – decide which activities must precede and which must follow others3. Draw the network connecting all of the activities4. Assign time and/or cost estimates to each activity5. Compute the longest time path through the network – this is called the critical path6. Use the schedule to help plan, schedule, monitor, and control the projectDefinitionsEarliest start (ES) = earliest time at which an activity can start, assuming all predecessors have been completedEarliest finish (EF) = earliest time at which an activity can be finishedLatest start (LS) = latest time at which an activity can start so as to not delay the completion time of the entire projectLatest finish (LF) = latest time by which an activity has to be finished so as to not delay the completion time of the entire projectActivity TimesOptimistic time (a) – if everything goes according to planPessimistic time ( b ) – assuming very unfavorable conditionsMost likely time ( m ) – most realistic estimateExpected Activity Distribution FormulaExpected time: t = (a + 4m +


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