POM Exam 2 Main Concepts
Questions and Answers16
Service Processes: - ANSWERS --high degree of personalization often required, the speed of
delivery needed, the direct customer contact, and the inherent variability of service encounters
-The buffering and scheduling mechanisms that a manufacturing operation has is often not
available to this operation
-require much higher levels of capacity relative to demand.
-meets demand as it rises,
-imposes a greater need for flexibility on the workers involved in providing the services.
Crashing - ANSWERS -refers to the compression or shortening of the time to complete the
project. On one hand it costs money to expedite an activity, and on the other hand it costs
money to sustain the project
Production Process: - ANSWERS -used to make everything that we buy ranging from the
apartment building in which we live to the ink pens with which we write.
Lead Time - ANSWERS -The time needed to respond to a customer order
Customer Order Decoupling Point - ANSWERS -The place where inventory is positioned to allow
processes or entities in the supply chain to operate independently. Selection of these is a
strategic decision that determines customer lead times and can greatly impact inventory
investment.
Make-to-stock - ANSWERS -A production environment where the customers are served "on-
demand" from finished goods inventory. Essential issue in satisfying customers is to balance the
,level of inventory against the level of customer service. Examples: Televisions, Clothing,
Packaged food products
Assemble-to-order - ANSWERS -A production environment where the preassembled
components, subassemblies, and modules are put together in response to a specific customer
order, Examples: Dell computers, Subway subs
Make-to-order - ANSWERS -A production environment where the product is built directly from
raw materials and components in response to a specific customer order
Engineer-to-order - ANSWERS -Here the firm works with the customer to design the product,
which is then made from purchased materials, parts, and components. Boeing's process for
making commercial aircraft is an example
Lean Manufacturing - ANSWERS -The attempt to achieve high customer service with minimum
levels of inventory investment
Total average value of inventory - ANSWERS -The total average investment in raw material,
work-in-process, and finished goods inventory. This is valued at the cost to the firm. Commonly
tracked in accounting systems and reported in financial statements
Inventory Turn - ANSWERS -The cost of goods sold (COGS) divided by the total average value of
inventory.
Days-of-supply - ANSWERS -The number of days of inventory of an item. If an item were not
replenished, this would be the number of days until the firm would run out of the item (on
average). Also, the inverse of inventory turn expressed in days... = 365/Inventory turn
Little's Law - ANSWERS -A mathematical expression that relates inventory, throughput, and flow
time. There is a long-term relationship between the inventory, throughput, and flow time of a
production system in steady state. Inventory = Throughput rate x Flow time
, Throughput - ANSWERS -A long-term AVERAGE rate that items flow through a process
Flow Time - ANSWERS -The time it takes a unit to flow through a process from BEGINNING to
END
Production Processes: - ANSWERS -These are types of ___:
Project layout, work center, manufacturing cell, assembly line, continuous process
Project Layout - ANSWERS -The product, because of its sheer bulk or weight, remains fixed in a
location. Equipment is moved to the product rather than vice versa
Work center - ANSWERS -A process structure suited for low-volume production of a great
variety of nonstandard products. These sometimes are referred to as a departments and are
focused on particular type of orientation
Manufacturing Cell - ANSWERS -An area where simple items that are similar in processing
requirements are produced
Assembly Line - ANSWERS -A process structure designed to make discrete (separate) parts. Parts
are moved through a set of specially designed workstations at a controlled rate.
-The steps are done in areas referred to as stations, and typically the stations are linked by some
form of material handling device.
Continuous Process - ANSWERS -An often automated process that converts raw materials into a
finished product in one continuous process that follows a predetermined sequence of steps.
Such structures are usually highly automated and, in effect, constitute one integrated machine
that may operate 24 hours a day to avoid expensive shutdowns and start-ups.
Questions and Answers16
Service Processes: - ANSWERS --high degree of personalization often required, the speed of
delivery needed, the direct customer contact, and the inherent variability of service encounters
-The buffering and scheduling mechanisms that a manufacturing operation has is often not
available to this operation
-require much higher levels of capacity relative to demand.
-meets demand as it rises,
-imposes a greater need for flexibility on the workers involved in providing the services.
Crashing - ANSWERS -refers to the compression or shortening of the time to complete the
project. On one hand it costs money to expedite an activity, and on the other hand it costs
money to sustain the project
Production Process: - ANSWERS -used to make everything that we buy ranging from the
apartment building in which we live to the ink pens with which we write.
Lead Time - ANSWERS -The time needed to respond to a customer order
Customer Order Decoupling Point - ANSWERS -The place where inventory is positioned to allow
processes or entities in the supply chain to operate independently. Selection of these is a
strategic decision that determines customer lead times and can greatly impact inventory
investment.
Make-to-stock - ANSWERS -A production environment where the customers are served "on-
demand" from finished goods inventory. Essential issue in satisfying customers is to balance the
,level of inventory against the level of customer service. Examples: Televisions, Clothing,
Packaged food products
Assemble-to-order - ANSWERS -A production environment where the preassembled
components, subassemblies, and modules are put together in response to a specific customer
order, Examples: Dell computers, Subway subs
Make-to-order - ANSWERS -A production environment where the product is built directly from
raw materials and components in response to a specific customer order
Engineer-to-order - ANSWERS -Here the firm works with the customer to design the product,
which is then made from purchased materials, parts, and components. Boeing's process for
making commercial aircraft is an example
Lean Manufacturing - ANSWERS -The attempt to achieve high customer service with minimum
levels of inventory investment
Total average value of inventory - ANSWERS -The total average investment in raw material,
work-in-process, and finished goods inventory. This is valued at the cost to the firm. Commonly
tracked in accounting systems and reported in financial statements
Inventory Turn - ANSWERS -The cost of goods sold (COGS) divided by the total average value of
inventory.
Days-of-supply - ANSWERS -The number of days of inventory of an item. If an item were not
replenished, this would be the number of days until the firm would run out of the item (on
average). Also, the inverse of inventory turn expressed in days... = 365/Inventory turn
Little's Law - ANSWERS -A mathematical expression that relates inventory, throughput, and flow
time. There is a long-term relationship between the inventory, throughput, and flow time of a
production system in steady state. Inventory = Throughput rate x Flow time
, Throughput - ANSWERS -A long-term AVERAGE rate that items flow through a process
Flow Time - ANSWERS -The time it takes a unit to flow through a process from BEGINNING to
END
Production Processes: - ANSWERS -These are types of ___:
Project layout, work center, manufacturing cell, assembly line, continuous process
Project Layout - ANSWERS -The product, because of its sheer bulk or weight, remains fixed in a
location. Equipment is moved to the product rather than vice versa
Work center - ANSWERS -A process structure suited for low-volume production of a great
variety of nonstandard products. These sometimes are referred to as a departments and are
focused on particular type of orientation
Manufacturing Cell - ANSWERS -An area where simple items that are similar in processing
requirements are produced
Assembly Line - ANSWERS -A process structure designed to make discrete (separate) parts. Parts
are moved through a set of specially designed workstations at a controlled rate.
-The steps are done in areas referred to as stations, and typically the stations are linked by some
form of material handling device.
Continuous Process - ANSWERS -An often automated process that converts raw materials into a
finished product in one continuous process that follows a predetermined sequence of steps.
Such structures are usually highly automated and, in effect, constitute one integrated machine
that may operate 24 hours a day to avoid expensive shutdowns and start-ups.
