Demand-Based Options
includes two reactive options and one proactive option
Reactive option
the operations department uses inventories and back
... [Show More] 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
quality circle
A team of volunteer production employees and their supervisors who meet regularly to solve quality problems.
fishbone diagrams
cause and effect diagrams
cause and effect diagrams
A chart that identifies potential causes of particular quality problems.
flowchart
a schematic diagram of the sequence of steps involved in an operation or process. It provides a visual tool that is easy to use and understand
checkists
a list of common defects and the number of observed occurrences of these defects
control chart
used to evaluate whether a process is operating within expectations relative to some measured value such as weight, width, or volume
scatter diagram
graphs that show how two variables are related to one another.
What diagram? as production speed increases, so does the number of defects.
Scatter diagram
Pareto Analysis
a technique used to identify quality problems based on their degree of importance
Histograms
a chart that shows the frequency distribution of observed values of a variable
quality function deployment (QFD)
A tool used to translate the preferences of the customer into specific technical requirements.
Quality at the source
the belief that it is far better to uncover the source of quality problems and correct it than to discard defective items after production.
Malcolm Baldrige National Quality Award
An award given annually to companies that demonstrate quality excellence and establish best practice standards in industry.
Deming prize
A Japanese award given to companies to recognize efforts in quality improvement
ISO 9000
A set of international quality standards and a certification demonstrating that companies have met all the standards specified
ISO 14000
A set of international standards and a certification focusing on a company's environmental responsibility.
Technical Feasibility
the degree to which an individual or group of individuals is physically and mentally able to do the job
Economic Feasibility
the degree to which the value a job adds and the cost of having the job done create profit for the company
Behavioral Feasibility
the degree to which an employee derives intrinsic satisfaction from doing the job
job enlargement
A horizontal expansion of the job through increasing the scope of the work assigned.
job enrichment
A vertical expansion of the job through increased worker responsibility.
job rotation
Workers shift to different jobs to increase understanding of the total process.
methods analysis
Process concerned with the detailed process for doing a particular job.
work measurement
Determines how long it should take to do a job.
standard time
the time it should take a qualified operator, working at a sustainable pace and using the appropriate tools and process, to do the job
periodic counting
usually annually; satisfies auditors that the inventory records accurately reflect the value of the inventory on hand
cycle counting
Prespecified items are counted daily.
Which continuous improvement method does C pk measure?
How close one is to a target and how consistent one is with the average performance
What are two important aspects of Six Sigma?
People involvement, technical tools
Which capacity planning measurement tells how much capacity a company is using?
Capacity utilization
A manufacturing company decides to open a new distribution center location in order to minimize distribution costs to warehouses or stores.
What tool should the manufacturing company use to determine where the new distribution center should be located?
By using the center-of-gravity approach
In which organizational layout would one expect to see items arranged by type?
Process
Which design work system minimizes repetitiveness in tasks by assigning employees the role of planning and scheduling?
Job enrichment
Which work system acknowledges the benefits of employee proficiency?
Labor specialization
Which concept takes a total system approach to creating an efficient operation and combines concepts such as just-in-time (JIT), total quality management (TQM), and continuous improvement?
lean systems [Show Less]