C215 WGU Operations Mgmt Study Guide

Demand-Based Options - includes two reactive options and one proactive option Reactive option - the operations department uses inventories and back orders to react to demand fluctuations Proactive option - marketing tries to shift the demand patterns to minimize demand fluctuations Capacity-Based Options - changes output capacity to meet demand finished goods inventory - used to absorb demand fluctuations; allows your company to develop a stable work environment Shifting demand - proactive marketing approach to leveling demand in which your company tries to change consumer buying patterns by offering incentives level aggregate plan - maintains a constant workforce and produces the same amount of product in each time period of the plan The level plan is often used with make-to-stock products such as... - stereos, kitchen appliances, and hardware To calculate the number of employees needed... - divide the number of units needed per month by the monthly output per employee chase aggregate plan - produces exactly what is needed to satisfy demand during each period This may be a better option when a company produces make-to-order products such as custom cabinets, special-purpose equipment, one-of-a-kind items, or highly perishable products - chase aggregate plan hybrid aggregate plan - uses a combination of options. With this plan, your company might maintain a stable workforce supplemented by an inventory buildup and some overtime production to meet demand. Sales and operations planning - integrates the medium-range functional plans developed by marketing, operations, engineering, and finance aggregate plan - Includes the budgeted levels of finished products, inventory, backlogs, workforce size, and aggregate production rate needed to support the marketing plan Also called production plan - Aggregate plan Supports marketing plan - Aggregate plan master production schedule - The anticipated production schedule for the company expressed in specific configurations, quantities, and dates point of departure - the percentage of normal capacity your company is currently operating at Duration of the change - the length of time you expect to need the different level of capacity Steps to Develop an Aggregate Plan - Step 1 Identify the type of aggregate plan Step 2 Based on the aggregate plan, determine the aggregate production rate. Step 3 Calculate the size of the workforce. Step 4 Test the aggregate plan. Step 5 Evaluate the plan's performance Psychological criteria - a subjective definition that focuses on the judgmental evaluation of what constitutes product or service quality support services - how the quality of a product or service is judged Value for price paid - a definition of quality that consumers often use for product or service usefulness Conformance to specifications - measures how well the product or service meets the targets and tolerances determined by its designers Fitness for use - focuses on how well the product performs its intended function or use continuous improvement - A philosophy of never-ending improvement. benchmarking - Studying the business practices of other companies for purposes of comparison. plan-do-study-act (PDSA) cycle - describes the activities a company needs to perform in order to incorporate continuous improvement in its operation external customers - those that purchase the company's goods and services internal customers - employees of the organization who receive goods or services from others in the company