Operations and Supply Chain Management - C720 OA Prep Guide| 215 questions and answers

Output represent the final good or service that is produced for the consumer. are worth more to the consumer than the total cost of the inputs. Inputs People Capital Material Energy Outputs Services Goods Ethics a sense of what is right and wrong that guide behavior. Unethical Business Practices Anything related to fraud, wrong doing, dishonesty, etc., even if it is to protect the company, is considered ________ _________ _______. Sustainability defined as the ethical issues an organization faces to balance financial performance while maintaining social responsibility standards and a responsible environmental profile. competitive advantage a capability that customers value, such as short delivery lead-time or high product quality that gives an organization an edge against its competition. VIRAL uses as a framework. VIRAL framework for competitive advantage. Advantage must provide: Value to consumers Inimitable - not easily imitated Rare Aptitude - capability Lifespan - sustainability to earn appropriate returns on the advantage. SWOT analysis strengths, weaknesses, opportunities, threats can assist in future planning to achieve objectives. Strengths characteristics of the business or project that lend an advantage within the scope of the study. Weaknesses characteristics of a business or project that result in a disadvantage, relative to others. opporunities elements that the project could exploit to its advantage. Threats elements in the environment that could cause trouble for the business or project Productivity is a mathematical calculation; it is the ratio of the outputs achieved divided by the inputs consumed to achieve those outputs. Inventory the term for goods available for sale and raw materials used to produce goods available for sale. Can help businesses meet demand and work more efficiently. 6 types of inventory Raw Materials Work-in-Process (WIP) Finished Goods Replacement Parts Inventory Supplies Transportation (Pipeline) Raw Materials Inventory these parts and materials are obtained from supplies and are used in the production process. Work-in-process (WIP) inventory these are partly finished parts, components, subassemblies, or modules. finished goods inventory 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 Inventory 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) inventory the portion of inventory that is in the process of being shipped through the distribution system. Peak Demand occurs in response to planned events such as advertising, publicity, or promotion. Ex. release of a popular game franchise's latest version. Seasonal Demand as shoppers adjust their purchase velocity in line with holidays, especially Christmas. Unexpected Demand occurs due to a usually-unexpected event. Chase demand 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. They may choose to provide overtime by asking workers to stay on the job beyond their normally scheduled time. Safety Stock 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. An organization may underestimate demand, experience disruptions in its supply chain or delays in production that lead to late delivery of the product. Perpetual and Periodic Inventory Systems systems that companies use to track inventory. Although mostly used separately, they can also be used together. perpetual inventory system Continuously monitors inventory levels. AKA continuous review system. Requires human input (cashier) and the ordering of more inventory is triggered by reorder point. periodic inventory system randomly monitors inventory levels. AKA fixed order interval system. Not expensive to implement or maintain. perpetual inventory system -used for inventory that requires an exact inventory balance at all times. -most suitable for big businesses, large retail stores, and/or banks. -most appropriate for high value and high volume items. -best for accurate financial statements -expensive to implement and maintain. periodic inventory system -requires physical count to know exact inventory balances. -used when a supplier will only deliver at specific time intervals (during open window) -Most appropriate for low value and low value items -most appropriate for small businesses -inexpensive to implement and maintain. ABC analysis 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. Pareto Principle Dollar usage follows this. 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. ABC Classification based on focusing efforts where the payoff is highest. Economic Order Quantity (EOQ) and Economic Production Quantity (EPQ) two models used to help companies control the cost of ordering, receiving, and holding inventory. EOQ (Economic Order Quantity) -For inventory that doesn't require production. -when demand is constant and known. -when cost/unit does not depend on order quantity. -most appropriate for retail stores or companies that order finished goods. EPQ (economic production quantity) -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. Holding Costs the costs of holding or "carrying" inventory over time. may include costs paid for storage space, interest paid on borrowed money to finance the inventory, and any losses incurred due to damage or obsolescence. Quantity Discount Model a discount offered in price for ordering above a specified amount. transportation discounts a discount offered on shipping costs for ordering above a specified amount. revenue sharing when 2 or more companies partner and divide 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 specified, desired attribute. -the capacity to satisfy customers' needs. -consistently meeting or exceeding the customer's needs and expectations. -is everyones responsibility in the organization. Internal orientation of quality directly measures 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. Service Quality five dimensions of quality often used by customers to judge ________ quality. reliability (service quality) ability to perform the promised service dependably and accurately Five Dimensions of Service Quality reliability, responsiveness, assurance, empathy, tangibles Responsiveness willingness to help customers and provide prompt service Assurance the knowledge of and courtesy by 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. Quality of Goods (8) performance, features, reliability, durability, conformance, serviceability, aesthetics, perceived quality Quality of goods definition the factors that comprise the quality of goods are quite different from the factors that comprise quality service. 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 The degree to which a product's design and operating characteristics meet 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, smells, or tastes