OM 300 1st Edition Exam 1 Study Guide Chapters 1 5 Chapter 1 Operations management is the activities that create value through goods and services by transforming inputs into outputs Essential Functions of OM are Marketing Production operations Finance accounting 5 Basic Management Functions are Planning Organizing Staffing Leading Controlling 10 Strategic Decisions in OM Design of goods and services Managing quality Process and capacity design Location strategy Layout strategy Human resources and job design Supply chain management Inventory management Scheduling Maintenance What is Productivity Productivity Units Produced Inputs Used This can measure improvement and represents output relative to input Single Productivity one resource input Units produced Labor hours uses Multi Factor Productivity multiple resource inputs Output Labor Material Energy Capital Miscellaneous Multi Factor is also known as total factor productivity Measurement Problems Quality External Elements and Precise units are essential for improved productivity Chapter 2 Six Reasons to Globalize Your Organization Reduce costs improve supply chain Provide better goods and services Understand markets learn how to improve operations and attract retain global talent A mission statement tells where you are going gives boundaries and focus and is an organization s reason for being A strategy is the how behind achieving your mission often involves SWOT analysis A SWOT analysis looks for an organization s strengths weaknesses opportunities and threats The factors that affect the mission are Philosophy and Values Profitability and Growth Public Image Benefit to Society Environment Customers The strategies for competitive advantage include differentiation better or different product cost leadership cheaper and response faster Chapter 3 The phases of project management are planning scheduling and controlling AON AOA Networks AON Activity on node AOA Activity on arrow Must go in order ie A must happen before B Project Crashing Involves shorter activity durations to keep on schedule o Calculate the crash cost per time period o Crash Cost Per Period Crash Cost Normal Cost Normal Time Crash Time o Find critical path and critical activities using current activity times Ch 4 most problem intensive chapter Forecasting is how organizations try to predict future events 3 Types Forecasting Time Horizons a Short Range Forecast ranges from less than 3 months to 1 year typically most accurate uses different methodologies than long term b Medium Range Forecast ranges from 3 months 3 yrs more comprehensive issues than short term involving planning products plants and processes c Long Range Forecast predicts further than 3 years more comprehensive issues than short term involving planning products plants and processes Qualitative Quantitative Forecasting approach Qualitative Forecasts use more emotional factors such as the person s intuition values and personal experiences Quantitative Forecasts use data and mathematical modeling to predict events Types of Time Series Jury of Executive Opinion Delphi Method Sales Force Composite Consumer Market Survey Na ve Approach Time Series Model of Quantitative Approach Assumes demand will remain the same in the next period and the most recent period Approach can sometimes be cost effective and efficient Exponential Smoothing problem New Forecast Last period s forecast a Last period s actual demand Last period s forecast where a is the smoothing constant and ranges from 0 1 Mean absolute deviation MAD problem MAD Actual Forecast n Mean Squared Error MSE Problem MSE Forecast errors 2 n Ch 5 The 1st rule of business is that you have to have products that sell The Life Cycle Assessment LCA is a formal analysis of a product s environmental impact from production to decline 3 External Product Development Strategies Differentiation Low Cost Rapid Response What is computer aided design CAD CAD uses computers to design products first and create the necessary engineering documents Why is using CAD beneficial to an organization CAD results in shorter development cycles improved product accuracy and lower cost The designs can also easily be sent out internationally to aid in production Ch 5 Supplement Corporate Social Responsibility is concerned with how goods and services affect people and impact the environment Businesses that take steps to protect people and the future and choose to do what s right can be beneficial to all stockholders Sustainability involves meeting the needs of the present without depriving future generations 3 R s of Sustainability Reduce Reuse Recycle Triple Bottom Line 3 P s People Planet Profit businesses must be concerned with these when making decisions None of this can exist without economic sustainability businesses must still turn a profit What is a Carbon Footprint This measures the amount of carbon dioxide and other greenhouse gases released into the air while creating products or services When organizations work to lower this amount they are working to protect the environment and practicing corporate responsibility