C215 Study Guide
Operation Management
(Western Governors
University)
,C215 Study Guide – Operations Management
Competency 6: Management & Planning (27%) (includes ch. 12, 13, 14, 16)
Chapter 16 – Project Management
1. Life Cycle of a Project:
a.
2. Program Evaluation & Review Technique (PERT): Network planning technique used to determine
a project’s planned completion date and identify the project’s critical path.
a.
3. Critical Path (CP): The longest sequential path through the network diagram.
4. Activity on Node (AON): Networking diagramming notation that places activities in the nodes and
arrows to signify precedence relationships.
5. Beta Probability Distribution: Lists all subassemblies, component parts, and raw materials that go into
an end item and shows the usage quantity of each required.
6. Deterministic Time Estimate: Assumption that the activity duration is known w/certainty.
7. Most Likely Time Estimate: The normal time that the activity is expected to take.
8. Optimistic Time Estimate: The shortest time period in which the activity can be completed.
9. Pessimistic Time Estimate: The longest time period in which the activity will be completed.
10. Precedence Relationships: Establishes the sequencing of activities to ensure that all necessary
activities are completed before a subsequent activity is begun.
11. Probabilistic Time Estimate: Process that uses optimistic, most likely, and pessimistic time estimates.
12. Project: Endeavor with a specific objective, multiple activities and defined precedence relationships,
to be completed in a specified time period.
13. Project Activities: Specific tasks that must be completed and that require resources.
14. Slack: The amount of time an activity can be delayed w/o affecting the project’s planned completion.
1
, Chapter 13 – Aggregate Planning Options
1. Aggregate Planning: Includes the budgeted levels of finished products, inventory, backlogs,
workforce size, and aggregate production rate needed to support the marketing plan.
2. Types of Aggregate Plans:
a. Level Aggregate Plan: A planning approach that produces the same quantity each time
period. Inventory and back orders are used to absorb demand fluctuations.
b. Chase Aggregate Plan: A planning approach that varies production to meet demand each period.
c. Hybrid Aggregate Plan: A planning approach that uses a combination of level and
chase approaches while developing the aggregate plan.
3. Aggregate Planning Options:
a. Capacity-based Options: Options that allow the firm to change its current operating capacity.
b. Demand-based Options: A group of options that respond to demand fluctuations through
the use of inventory or back orders, or by shifting the demand pattern
4. Developing the Aggregate Plan:
a. Step 1: Identify the aggregate plan that matches your company’s objectives: level, chase,
or hybrid.
i. If maintaining a stable workforce is important, you might choose to use a level plan. If
outstanding customer service is your objective, a chase plan might be best. Most
likely, your company will choose a hybrid plan that allows multiple objectives to be
met.
b. Step 2: Based on the aggregate plan, determine the aggregate production rate.
i. use the level plan with inventories and back orders, the aggregate production rate is
set equal to average demand. In addition, if you allow no back orders, the size of the
workforce is changed initially so that all demand is met on time.
ii. use the chase aggregate plan, calculate how much output capacity you need each
period. Calculate how many units will be produced on regular time and overtime and how
many units will be subcontracted.
c. Step 3: Calculate the size of the workforce.
i. use the level aggregate plan, calculate how many workers you need to achieve
the average production rate needed.
ii. change capacity each period with hires and fires, calculate how many workers you
need each period and make the necessary changes in the workforce
iii. change capacity through a variety of options, calculate how much of a particular
option you need each period
d. Step 4: Test the aggregate plan.
i. Using the production rate and initial workforce size, calculate your inventory levels
(excesses and shortages), any shortages you face, expected number of employees
hired and fired, and when you will need overtime
ii. Calculate the total costs for your plan
e. Step 5: Evaluate the plan’s performance in terms of cost, customer service, human
resources, and operations.
i. critical to evaluate it in terms of cost, customer service, operations, and human
resources. Cost comparisons are simple if you are comparing similar ending positions—
that is, plans with the same ending inventory level or producing the same number of
units
5. Effectiveness of the Aggregate Plan:
a. Point of Departure: The percentage of normal capacity of company is currently using.
b. Magnitude of the Change: The relative size of the change needed.
c. Duration of the Change: The expected length of time the different capacity levels needed.
6. Back Orders: Unfilled customer orders.
2
Operation Management
(Western Governors
University)
,C215 Study Guide – Operations Management
Competency 6: Management & Planning (27%) (includes ch. 12, 13, 14, 16)
Chapter 16 – Project Management
1. Life Cycle of a Project:
a.
2. Program Evaluation & Review Technique (PERT): Network planning technique used to determine
a project’s planned completion date and identify the project’s critical path.
a.
3. Critical Path (CP): The longest sequential path through the network diagram.
4. Activity on Node (AON): Networking diagramming notation that places activities in the nodes and
arrows to signify precedence relationships.
5. Beta Probability Distribution: Lists all subassemblies, component parts, and raw materials that go into
an end item and shows the usage quantity of each required.
6. Deterministic Time Estimate: Assumption that the activity duration is known w/certainty.
7. Most Likely Time Estimate: The normal time that the activity is expected to take.
8. Optimistic Time Estimate: The shortest time period in which the activity can be completed.
9. Pessimistic Time Estimate: The longest time period in which the activity will be completed.
10. Precedence Relationships: Establishes the sequencing of activities to ensure that all necessary
activities are completed before a subsequent activity is begun.
11. Probabilistic Time Estimate: Process that uses optimistic, most likely, and pessimistic time estimates.
12. Project: Endeavor with a specific objective, multiple activities and defined precedence relationships,
to be completed in a specified time period.
13. Project Activities: Specific tasks that must be completed and that require resources.
14. Slack: The amount of time an activity can be delayed w/o affecting the project’s planned completion.
1
, Chapter 13 – Aggregate Planning Options
1. Aggregate Planning: Includes the budgeted levels of finished products, inventory, backlogs,
workforce size, and aggregate production rate needed to support the marketing plan.
2. Types of Aggregate Plans:
a. Level Aggregate Plan: A planning approach that produces the same quantity each time
period. Inventory and back orders are used to absorb demand fluctuations.
b. Chase Aggregate Plan: A planning approach that varies production to meet demand each period.
c. Hybrid Aggregate Plan: A planning approach that uses a combination of level and
chase approaches while developing the aggregate plan.
3. Aggregate Planning Options:
a. Capacity-based Options: Options that allow the firm to change its current operating capacity.
b. Demand-based Options: A group of options that respond to demand fluctuations through
the use of inventory or back orders, or by shifting the demand pattern
4. Developing the Aggregate Plan:
a. Step 1: Identify the aggregate plan that matches your company’s objectives: level, chase,
or hybrid.
i. If maintaining a stable workforce is important, you might choose to use a level plan. If
outstanding customer service is your objective, a chase plan might be best. Most
likely, your company will choose a hybrid plan that allows multiple objectives to be
met.
b. Step 2: Based on the aggregate plan, determine the aggregate production rate.
i. use the level plan with inventories and back orders, the aggregate production rate is
set equal to average demand. In addition, if you allow no back orders, the size of the
workforce is changed initially so that all demand is met on time.
ii. use the chase aggregate plan, calculate how much output capacity you need each
period. Calculate how many units will be produced on regular time and overtime and how
many units will be subcontracted.
c. Step 3: Calculate the size of the workforce.
i. use the level aggregate plan, calculate how many workers you need to achieve
the average production rate needed.
ii. change capacity each period with hires and fires, calculate how many workers you
need each period and make the necessary changes in the workforce
iii. change capacity through a variety of options, calculate how much of a particular
option you need each period
d. Step 4: Test the aggregate plan.
i. Using the production rate and initial workforce size, calculate your inventory levels
(excesses and shortages), any shortages you face, expected number of employees
hired and fired, and when you will need overtime
ii. Calculate the total costs for your plan
e. Step 5: Evaluate the plan’s performance in terms of cost, customer service, human
resources, and operations.
i. critical to evaluate it in terms of cost, customer service, operations, and human
resources. Cost comparisons are simple if you are comparing similar ending positions—
that is, plans with the same ending inventory level or producing the same number of
units
5. Effectiveness of the Aggregate Plan:
a. Point of Departure: The percentage of normal capacity of company is currently using.
b. Magnitude of the Change: The relative size of the change needed.
c. Duration of the Change: The expected length of time the different capacity levels needed.
6. Back Orders: Unfilled customer orders.
2
