WGU C720 Complete OA Prep Guide |153 questions and answers

Inputs People, capital, material, money Outputs Services and goods Sustainability Defined broadly in operations and supply chain management as the ethical issues an organization faces to balance financial performance while maintaining social responsibility standards and a responsible environmental profile. VIRAL Acronym - A framework for competitive advantage. Viral, Inimitable, Rare, Aptitude, Lifespan. The advantage must provide Value to consumers; it should be Inimitable (not easily imitated), Rare, and an organization must have the Aptitude (capability) and Lifespan (sustainability) to earn appropriate returns on the advantage. Productivity A mathematical calculation; it is the ratio of the outputs achieved divided by the inputs consumed to achieve those outputs. 6 Types of Inventory o Raw Materials o Work In Progress o Finished Goods o Replacement Parts Inventory o Supplies o Transportation Raw Materials These parts and materials are obtained from suppliers and are used in the production process. Work-in-process (WIP) These are partly finished parts, components, sub-assemblies, or modules. Finished Goods Items are ready to ship to the customer. No more work is required. Replacement parts inventory These are maintained to replace other parts in machinery or equipment as those parts wear out Supplies Parts or materials are used to support the production process but not usually a component of the product. These items, such as lubricant and cutting tools, are consumed in the production process. Transportation (pipeline): The portion of inventory that is in the process of being shipped through the distribution system. 4 Types of Demand o Peak o Seasonal o Unexpected o Chase Peak Demand Demand which occurs in response to planned events such as advertising, publicity or promotion. The release of a popular game franchise's latest version often causes peak demand for a few days or weeks. Seasonal Demand Demand as shoppers adjust their purchase velocity in line with holidays, especially Christmas. But Halloween, Thanksgiving and even St. Patrick's Day also create seasonal demand for certain kinds of merchandise. Unexpected Demand Demand which occurs due to a usually-unexpected event. For example, an underdog school may upset a favorite during the NCAA's basketball tournament, causing a run on their merchandise. Chase Demand Demand that occurs when a company has to adjust production by rates to match demand by varying the workforce and using overtime. Companies vary the workforce by adding or reducing the number of employees on duty at any given time. And they may choose to provide overtime by asking workers to stay on the job beyond their normally scheduled time. Safety Stock A cushion of inventory to protect against unexpected demand. In this way, they can continue to meet customer demand without delays. Stock Out Occurs when inventory is depleted. Perpetual Inventory System Continuously monitors inventory levels and is also called a continuous review system. Requires human input (i.e. cashier) and the ordering of more inventory is triggered by reorder point. o Requires an exact inventory balance at all times o Best for big businesses, retail stores, or banks o High value and high volume o Expensive to implement and maintain Periodic Inventory System Randomly monitors inventory levels and is also called the fixed order interval system. o Requires a physical count periodically o Used when a supplier will only deliver at specific time intervals o Low value and volume o Used for small businesses o Inexpensive to implement and maintain ABC analysis Has been developed to determine which inventory items should receive the highest level of control. By multiplying the dollar value of each item by its annual usage, a dollar usage value can be obtained. Dollar usage follows the Pareto Principle in that frequently, only 20% of all the items account for 80% of the total dollar usage, while the remaining items frequently account for only 20% of the dollar usage. This principle leads to the _____ classification, which is based on focusing efforts where the payoff is highest Pareto Principle Only 20% of all the items account for 80% of the total dollar usage, while the remaining items frequently account for only 20% of the dollar usage. This principle leads to the ABC classification, which is based on focusing efforts where the payoff is highest Economic Order Quantity (EOQ) For inventory that doesn't require production, when demand is constant and known, when cost per unit does not depend on order quantity. Most appropriate for retail stores or companies that order finished goods. Economic Production Quantity (EPQ) For inventory that will be used in production, When incremental ordering and depletion of inventory is allowed, Also called production order quantity. Most appropriate for manufacturing and production companies The goal of firms using the EOQ & EPQ model Minimize the total annual costs of ordering and holding inventory by varying the order quantity. Quantity discount model A discount offered in price for ordering above a specified amount Transportation discounts A discount offered on shipping cost for ordering above a specified amount Revenue Sharing When 2 or more companies partner and divides the profits received based on an agreement between all parties involved. Reserve Capacity When a company stores, or pays another company to store, excess inventory to be used for unexpected demand Quality the degree to which a specific product conforms to its design characteristics or specifications The amount of a specific, desired attribute The capacity to satisfy customers' needs Consistently meeting or exceeding the customer's needs and expectations Is everyone's responsibility in the organization Internal orientation of quality Directly measure characteristics of the product or service, such as the number of packages delivered on time or the thickness of an engine part based on manufactures specification. External orientation of quality Fitness for use for the customer or the capacity to satisfy customer's needs. Quality Function Deployment (QFD) Taking customer expectations and transforming them into specific actions designed to meet those expectations Reliability Ability to perform the promised service dependably and accurately. Responsiveness Willingness to help customers and provide prompt service. Assurance Knowledge and courtesy of employees and their ability to convey trust and confidence. Empathy Provision of caring, individualized attention to customers. Tangibles Appearance of physical facilities, equipment, personnel, and communication materials, including access and effectiveness of Internet-based information. Performance Primary operating characteristics of a product. Features Secondary characteristics that supplement the product's basic functioning. Reliability (quality of goods) Length of time a product will function before it fails, or the probability it will function for a stated period of time. Conformance Degree to which a product's design and operating characteristics match pre-established standards. Durability Ability of a product to function when subjected to hard and frequent use. Serviceability Speed, courtesy, and competence of repair. Aesthetics How a product looks, feels, sounds, tastes, or smells. Perceived Quality The image, advertising, or brand name of a product. Crosby Used the phrase "Do it right the first time." Wrote a book in 1979 entitled "Quality is Free" Concept of zero defects as a measurable object Emphasized the importance of considering all costs of quality Juran Focus was on the customer's perception of quality Quality must be built on three elements: o Quality planning o Quality control o Quality improvement. Focused on Fitness for use and Pareto Principle Taguchi Used Robust Design Parabolic Quality Loss Function Perfecting of experiments to create higher quality products and processes Argues that quality must be designed into a product Deming Had a 14-point quality plan Statistical Process Control (SPC) "System" caused defects, not employees Endorsed the elimination of fear in the organization Modified Walter Shewart's Plan-Do-Check-Act (PDCA) to Plan-Do-Study-Analyze (PDSA)