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Midterm Exam - Flashcards

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Class:SCM 352 - Operations Management
Subject:Supply Chain
University:University of Nevada - Las Vegas
Term:Spring 2010
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Operations management creating (the right) goods and services and delivering (successfully) to customers.
good is a physical product that you can see and touch. Examples: oranges, flowers, televisions, soap, airplanes, fish, furniture, coal, lumber, personal computers, paper, and industrial machines.
durable good is a product that typically lasts at least three years. Examples: Vehicles, dishwashers, and furniture.
non-durable good is perishable and generally lasts for less than three years. Examples: toothpaste, software, shoes, fruit
Generated by Koofers.com
service is any primary or complementary activity that does not directly produce a physical product.
Service management integrates marketing, human resources, and operations functions to plan, create, and deliver goods and services, and their associated service encounters
service encounter is an interaction between the customer and the service provider.
moments of truth any episodes, transactions, or experiences in which a customer comes into contact with any aspect of the service delivery system, and thereby has an opportunity to form an impression
Generated by Koofers.com
customer benefit package is a clearly defined set of tangible and intangible features that the customer recognizes, pays for, uses, or experiences. combination of goods and services configured in a certain way to provide value to customers. consists of a primary good or service, coupled with peripheral goods and/or services
primary good or service is the “core” offering that attracts customers and responds to their basic needs. For example, the primary service of a personal checking account is the capability to do convenient financial transactions
Peripheral goods or services are those that are not essential to the primary good or service, but enhance it.
variant is a CBP attribute that departs from the standard CBP and is normally location- or firm-specific.
Generated by Koofers.com
Process a sequence of activities that create a result (how things get done). This is what Ops. Mgrs. deal with.
Value is the perception of the benefits associated with a good, service, or bundle of goods and services.
value chain network of facilities that enable the flow of goods, services, information from immediate (1st-tier) suppliers, then through the firm, to create goods and services and deliver them to the firm’s 1st-tier customersDefinition
supply chain includes the value chain but focuses primarily on the physical movement of goods and materials, through the supply, production, and distribution processes (also includes 2nd-tier suppliers, and end-customers).
Generated by Koofers.com
Outsourcing the opposite of vertical integration; to buy INSTEAD of make
Backward vertical integration acquiring suppliers
Forward vertical integration acquiring distributors or customers
simple service work such as standard credit card processing, billing, and writing simple software programs in the 90s
Generated by Koofers.com
skilled knowledge work such as engineering, graphics, and computer chip design today. Massachusetts General Hospital uses radiologists located in Bangalore, India, to interpret CT scans.
Value chain integration value chain members working together to ensure product availability at the right place, the right time, the right cost, the right quantity, and the desired levels of quality.
Offshoring Building, acquiring, or moving processes from a domestic location to another country while maintaining ownership and control.
Performance measurement quantifying the performance of an organization’s goods, services, processes, and people.
Generated by Koofers.com
Customer-satisfaction measurements provide customer ratings of goods and service features; indicate customer’s likely future buying behavior. Measured in three areas: 1) goods quality, 2) service quality, and 3) response time. Other customer-focused measures: customer retention, customer complaints, warranty claims
Goods quality physical performance; meets design specifications; reliability
Service quality service delivery system performance.
Tangibles physical facilities, equipment, appearance of employees (i.e., the physical evidence).
Generated by Koofers.com
Reliability ability to perform the promised service dependably and accurately
Responsiveness willingness to help customers and provide prompt recovery to service upsets
Assurance knowledge of the service-providers, and their ability to inspire trust and confidence
Empathy caring attitude and individualized attention provided.
Generated by Koofers.com
Processing time is the time it takes to perform some task.
Queue time is the time spent waiting
balking stopping short
reneging go back on a promise, undertaking, or contract
Generated by Koofers.com
Flexibility The ability to adapt quickly to changing requirements.
Goods and service design flexibility is the ability to develop a wide range of customized goods and services to meet different or changing customer needs (Dell Comp.)
Volume flexibility is the ability to respond quickly to changes in the volume and type of demand.
Innovation the ability to create new and unique goods and services that create a competitive advantage.
Generated by Koofers.com
Learning Creating, acquiring, and transferring knowledge, and modifying the behavior of employees in response to change.
Productivity Outputs/Inputs Output measures: Sales $; # units produced; # customers successfully served; others Input measures: labor hrs. or $, energy used, material $; costs of all inputs
Value of a Loyal Customer quantifies total revenue or profit each customer generates for a firm over their buying life. VLC = (P)(RF)(CM)(BLC) where: P = revenue/unit RF = # purchases/yr CM = profit contribution margin, % BLC = buyer life cycle, or 1/(defection rate)
Competitive advantage ability to achieve market and financial superiority over competitors Must: Understand customer requirements Build the right products/services
Generated by Koofers.com
Competitive priorities how the firm plans to use cost, quality, service capabilities in their supply chains to compete.
Dissatisfiers when expected features are not present, then customers are dissatisfied
Satisfiers extras that customers typically want
Exciters/delighters new or innovative goods or service features that customers do not expect
Generated by Koofers.com
The 5 Competitive Priorities Cost Quality Time (Service) Flexibility Innovation
Mass customization ideal: making what the customer wants, at any volume, at any time, for anyone, sent to anyplace in the world
Strategy a plan that integrates an organization’s goals, policies, and actions
core competencies which are the strengths that are unique to that organization
Generated by Koofers.com
Order Qualifiers basic customer expectations-dissatisfiers and satisfiers-are generally considered the minimum performance level required to stay in business
Order winners are goods and service features and performance characteristics that differentiate one customer benefit package from another, and win the customer's business
Corporate strategy defines the business units of the corporation (SBUs) based on the desired product families; decides the acquisition and allocation of resources among those SBUs
Business unit strategy defines the focus for SBUs. Major decisions: which markets to pursue and how best to compete in those markets.
Generated by Koofers.com
functional strategy set of decisions that marketing, finance, operations, and other depts. develop to support the particular business strategy.
Operations strategy How the firm’s processes are designed and organized to produce the type of goods and services to support the corporate and business strategies
strategic vision describes where the organization is headed and what it intends to be
Involves--Operations design choices decisions on what type of process structure is best suited to produce the goods and services Types of processes and alternative designs Supply chain integration and outsourcing Technology Capacity and facilities (size, timing, location) Inventory Trade-offs among these areas
Generated by Koofers.com
search attributes are those that a customer can determine prior to purchasing the goods and/or services
experience attributes are those that can be discerned only after purchase or during consumption or use
credence attributes are any aspects of a good or service that the customer must believe in, but cannot personally evaluate even after purchase and consumption
Hard technology refers to equipment and devices that perform a variety of tasks in the creation and delivery of goods and services.
Generated by Koofers.com
Soft technology is the application of the Internet, computer software, and information systems to provide data, information, and analysis and to facilitate the accomplishment of creating and delivering goods and services.
E-service refers to using the Internet to provide services to customers and/or support the sale of goods.
intermediary is any entity - real or virtual - that coordinates and shares information between buyers and sellers
return facilitators specialize in handling all aspects of customers returning a manufactured good or delivered service and requesting their money back, repairing the manufactured good and returning it to the customer, and/or invoking the service agreement
Generated by Koofers.com
Computer-integrated manufacturing systems represent the union of hardware, software, database management, and communications to automate and control production activities from planning and design to manufacturing and distribution
numerical control machine tools, which enable the machinists skills to be duplicated by a programmable device that controls the movements of a tool used to make complex shapes
computer numerical control machines, the operations are driven by a computer
robot programmable machine designed to handle materials or tools in the performance of a variety of tasks
Generated by Koofers.com
CNC machines programmable machines that will do exactly the same operation repeatedly.
CAD/CAE enables engineers to design, analyze, test, simulate, and “manufacture” products before they physically exist.
CAM involves computer control of the manufacturing process.
Flexible manufacturing systems consist of two or more computer-controlled machines linked by automated handling devices (ie, conveyors).
Generated by Koofers.com
Enterprise Resource Planning systems--integrate accounting, customer relationship management, supply chain management, manufacturing, sales, human resources—using a single shared database ERP allows departments, units, and trading partners to share information and communicate with each other easily
Customer relationship management --a business strategy designed to learn more about customers’ wants, needs, and behaviors in order to build customer relationships, and grow revenues and profits.
Revenue management systems Forecasting demand, allocating perishable assets (ie, seats on an airline), deciding when to overbook and by how much, determining what price to charge different customers
scalability is a measure of the contribution margin required to deliver good/service as the business grows and volumes increase
Generated by Koofers.com
high scalability is the capability to serve additional customers at zero or extremely low incremental costs
low scalability implies that serving additional customers requires high incremental variable costs
forecasting is the process of projecting the values of one or more variables into the future
planning horizon is the length of time on which a forecast is based
Generated by Koofers.com
time bucket the unit of measure for the time period used in a forecast -might be a year, a quarter, a month, etc.
time series is a set of observations measured at successive points in time or over successive periods of time
bullwhip effect overplan/over bill put safety stock on forecast in order to plan ahead (excess safety stock)
trend is the underlying pattern of growth or decline in a time series
Generated by Koofers.com
seasonal patterns are characterized by repeatable periods of ups and downs over short periods of time
cyclical patterns are regular patterns in a data series that take place over long periods of time
random variation (noise) is the unexplained deviation of a time series from a predictable pattern, such as a trend, seasonal, or cyclical pattern
irregular variation is a one-time variation that is explainable
Generated by Koofers.com
forecast error is the difference between the observed value of the time series and the forecast, or At - Ft
statistical forecasting is based on the assumption that the future will be an extrapolation of the past. Use historical data to predict future values
moving average (MA) forecast is an average of the most recent "k" observations in a time series. Work best for short planning horizons when there is no major trend, seasonal, or business cycle patterns' demand is relatively stable
single exponential smoothing (SES) is a forecasting technique that uses a weighted average of past time-series values to forecast the value of the time series in the next period
Generated by Koofers.com
regression analysis is a method for building a statistical model that defines a relationship between a single dependent variable and one or more independent variables, all of which are numerical
multiple linear regression model a linear regression model with more than one independent variable
judgmental forecasting relies upon opinions and expertise of people in developing forecasts. When no historical data is available you can only use this method.
delphi method consists of forecasting by expert opinion by gathering judgments and opinions of key personnel based on their experience and knowledge of the situation
Generated by Koofers.com
bias the tendency of forecasts to consistently be larger or smaller than the actual values of the time series
robust goods that are insensitive to external sources of variation
reliability is the probability that a manufactured good, piece of equipment, or system performs its intended function for a stated period of time under specified operating conditions
quality function deployment is both a philosophy and a set of planning and communication tools that focuses on customer requirements in coordinating the design, manufacturing, and marketing of goods or services
Generated by Koofers.com
voice of the customer requirements, as expressed in the customer's own terms. Represent what customers expect a product or service to do
serial system is the product of the individual probabilities of each process in a system; if one component fails, the system fails.
parallel systems functions are independent and the entire system will fail only if all components fail (redundancy).
prototype testing is the process by which a model (real or simulated) is constructed to test the good's physical properties or use under actual operating conditions, as well as consumer reactions to the prototypes
Generated by Koofers.com
quality engineering refers to a process of designing quality into a manufactured good based on a prediction of potential quality problems prior to production
value engineering refers to cost avoidance or cost prevention before the good or service is created
value analysis refers to cost reduction of the manufactured good or service process
failure-mode-and-effects analysis is a technique in which each component of a product is listed along with the way it may fail, the cause of failure, the effect or consequence of failure, and how it can be corrected by improving the design
Generated by Koofers.com
product and process simplification is the process of trying to simplify designs to reduce complexity and costs and thus improve productivity, quality, flexibility, and customer satisfaction
green manufacturing a focus on improving the environment by better good or service design
design for environment is the explicit consideration of environmental concerns during the design of goods, services, and processes and includes such practices as designing for recycling and disassembly
ISO 14000 a voluntary set of environmental standards that are administered by the International Organization for Standardization
Generated by Koofers.com
service delivery system design includes facility location and layout, the servicescape, service process and job design, technology and information support systems, and organizational structure
servicescape is all the physical evidence a customer might use to form an impression. The servicescape also provides the behavioral setting where service encounters take place. Three principle dimensions: 1. Ambient conditions 2. Spatial layout and functionality 3. Signs, symbols, and artifacts
service process design is the activity of developing an efficient sequence of activities to satisfy both internal and external customer requirements
service encounter design focuses on the interaction, directly or indirectly, between the service-provider(s) and the customer
Generated by Koofers.com
customer contact refers to the physical or virtual presence of the customer in the service delivery system during a service experience
customer-contact requirements are measurable performance levels or expectations that define the quality of customer contact with representatives of an organization
empowerment simply means giving people authority to make decisions based on what they feel is right, to have control over their work, to take risks and learn from mistakes, and to promote change
service upset is any problem a customer has - real or perceived - with the service delivery system and includes terms such as service failure, error, defect, mistake, or crisis
Generated by Koofers.com
service recovery is the process of correcting a service upset and satisfying the customer
service guarantee is a promise to reward and compensate a customer if a service upset occurs during the service experience
custom are generally produced and delivered as one-of-a-kind or in small quantities, and are designed to meet specific customers' specifications
Option/assemble-to-order are configurations of standard parts, subassemblies, or services that can be selected by customers from a limited set
Generated by Koofers.com
standard are made according to a fixed design, and the customer has no options from which to choos
projects are large-scale, customized initiatives that consist of many smaller tasks and activities that must be coordinated and completed to finish on time and within budget
job shop processes are organized around particular types of general-purpose equipment that are flexible and capable of customizing work for individual customers
flow shop processes are organized around a fixed sequence of activities and process steps, such as an assembly line to produce a limited variety of similar goods or services
Generated by Koofers.com
continuous flow processes create highly standardized goods or services, usually around the clock in very high volumes
product process matrix is a model that describes the alignment of process choice with the characteristics of the manufactured good
pathway is a unique route through a service system
customer-routed services are those that offer customers broad freedom to select the pathway that are best suited for their immediate needs and wants from many possible pathways through the service delivery system
Generated by Koofers.com
provider-routed services constrain customers to follow a very small number of possible and predefined pathways through the service system
service encounter activity sequence consists of all the process steps and associated service encounters necessary to complete a service transaction and fulfill a customer's wants and needs
product life cycle is a characterization of product growth, maturity, and decline over time
task is a specific unit of work required to create and output
Generated by Koofers.com
activity is a group of tasks needed to create and deliver an intermediate or final output
process map (flowchart) describes the sequence of all process activities and tasks necessary to create and deliver a desired output or outcome
process boundary is the beginning or end of a process
value stream refers to all value-added activities involved in designing, producing, and delivering goods and services to customers
Generated by Koofers.com
reengineering has been defined as "the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed
utilization is the fraction of time a workstation or individual is busy over the long run
throughput the average number of entities completed per unit time-the output rate-from a processq
bottleneck is the work activity that effectively limits throughput of the entire process
Generated by Koofers.com
flow time (cycle time) is the average time it takes to complete once cycle of a process
Generated by Koofers.com

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 Operations management creating (the right) goods and services and delivering (successfully) to customers.
 goodis a physical product that you can see and touch. Examples: oranges, flowers, televisions, soap, airplanes, fish, furniture, coal, lumber, personal computers, paper, and industrial machines.
 durable good is a product that typically lasts at least three years. Examples: Vehicles, dishwashers, and furniture.
 non-durable good is perishable and generally lasts for less than three years. Examples: toothpaste, software, shoes, fruit
 serviceis any primary or complementary activity that does not directly produce a physical product.
 Service management integrates marketing, human resources, and operations functions to plan, create, and deliver goods and services, and their associated service encounters
 service encounter is an interaction between the customer and the service provider.
 moments of truth any episodes, transactions, or experiences in which a customer comes into contact with any aspect of the service delivery system, and thereby has an opportunity to form an impression
 customer benefit package is a clearly defined set of tangible and intangible features that the customer recognizes, pays for, uses, or experiences.

combination of goods and services configured in a certain way to provide value to customers.

consists of a primary good or service, coupled with peripheral goods and/or services
 primary good or service is the “core” offering that attracts customers and responds to their basic needs. For example, the primary service of a personal checking account is the capability to do convenient financial transactions
 Peripheral goods or services are those that are not essential to the primary good or service, but enhance it.
 variantis a CBP attribute that departs from the standard CBP and is normally location- or firm-specific.
 Processa sequence of activities that create a result (how things get done). This is what Ops. Mgrs. deal with.
 Valueis the perception of the benefits associated with a good, service, or bundle of goods and services.
 value chain network of facilities that enable the flow of goods, services, information from immediate (1st-tier) suppliers, then through the firm, to create goods and services and deliver them to the firm’s 1st-tier customersDefinition
 supply chain includes the value chain but focuses primarily on the physical movement of goods and materials, through the supply, production, and distribution processes (also includes 2nd-tier suppliers, and end-customers).
 Outsourcingthe opposite of vertical integration; to buy INSTEAD of make
 Backward vertical integration acquiring suppliers
 Forward vertical integration acquiring distributors or customers
 simple service worksuch as standard credit card processing, billing, and writing simple software programs in the 90s
 skilled knowledge worksuch as engineering, graphics, and computer chip design today. Massachusetts General Hospital uses radiologists located in Bangalore, India, to interpret CT scans.
 Value chain integration value chain members working together to ensure product availability at the right place, the right time, the right cost, the right quantity, and the desired levels of quality.
 OffshoringBuilding, acquiring, or moving processes from a domestic location to another country while maintaining ownership and control.
 Performance measurement quantifying the performance of an organization’s goods, services, processes, and people.
 Customer-satisfaction measurements provide customer ratings of goods and service features; indicate customer’s likely future buying behavior.

Measured in three areas: 1) goods quality, 2) service quality, and 3) response time.
Other customer-focused measures: customer retention, customer complaints, warranty claims
 Goods quality physical performance; meets design specifications; reliability
 Service quality service delivery system performance.
 Tangiblesphysical facilities, equipment, appearance of employees (i.e., the physical evidence).
 Reliabilityability to perform the promised service dependably and accurately
 Responsivenesswillingness to help customers and provide prompt recovery to service upsets
 Assuranceknowledge of the service-providers, and their ability to inspire trust and confidence
 Empathycaring attitude and individualized attention provided.
 Processing time is the time it takes to perform some task.
 Queue time is the time spent waiting
 balkingstopping short
 reneginggo back on a promise, undertaking, or contract
 FlexibilityThe ability to adapt quickly to changing requirements.
 Goods and service design flexibility is the ability to develop a wide range of customized goods and services to meet different or changing customer needs (Dell Comp.)
 Volume flexibility is the ability to respond quickly to changes in the volume and type of demand.
 Innovationthe ability to create new and unique goods and services that create a competitive advantage.
 LearningCreating, acquiring, and transferring knowledge, and modifying the behavior of employees in response to change.
 ProductivityOutputs/Inputs


Output measures: Sales $; # units produced; # customers successfully served; others
Input measures: labor hrs. or $, energy used, material $; costs of all inputs
 Value of a Loyal Customer quantifies total revenue or profit each customer generates for a firm over their buying life.


VLC = (P)(RF)(CM)(BLC) where:
P = revenue/unit
RF = # purchases/yr
CM = profit contribution margin, %
BLC = buyer life cycle, or 1/(defection rate)
 Competitive advantage ability to achieve market and financial superiority over competitors

Must:
Understand customer requirements
Build the right products/services
 Competitive priorities how the firm plans to use cost, quality, service capabilities in their supply chains to compete.
 Dissatisfierswhen expected features are not present, then customers are dissatisfied
 Satisfiersextras that customers typically want
 Exciters/delightersnew or innovative goods or service features that customers do not expect
 The 5 Competitive PrioritiesCost
Quality
Time (Service)
Flexibility
Innovation
 Mass customizationideal: making what the customer wants, at any volume, at any time, for anyone, sent to anyplace in the world
 Strategya plan that integrates an organization’s goals, policies, and actions
 core competencies which are the strengths that are unique to that organization
 Order Qualifiersbasic customer expectations-dissatisfiers and satisfiers-are generally considered the minimum performance level required to stay in business
 Order winnersare goods and service features and performance characteristics that differentiate one customer benefit package from another, and win the customer's business
 Corporate strategydefines the business units of the corporation (SBUs) based on the desired product families; decides the acquisition and allocation of resources among those SBUs
 Business unit strategydefines the focus for SBUs. Major decisions: which markets to pursue and how best to compete in those markets.
 functional strategyset of decisions that marketing, finance, operations, and other depts. develop to support the particular business strategy.
 Operations strategy How the firm’s processes are designed and organized to produce the type of goods and services to support the corporate and business strategies
 strategic vision describes where the organization is headed and what it intends to be
 Involves--Operations design choices decisions on what type of process structure is best suited to produce the goods and services

Types of processes and alternative designs
Supply chain integration and outsourcing
Technology
Capacity and facilities (size, timing, location)
Inventory
Trade-offs among these areas
 search attributesare those that a customer can determine prior to purchasing the goods and/or services
 experience attributesare those that can be discerned only after purchase or during consumption or use
 credence attributes are any aspects of a good or service that the customer must believe in, but cannot personally evaluate even after purchase and consumption
 Hard technology refers to equipment and devices that perform a variety of tasks in the creation and delivery of goods and services.
 Soft technology is the application of the Internet, computer software, and information systems to provide data, information, and analysis and to facilitate the accomplishment of creating and delivering goods and services.
 E-servicerefers to using the Internet to provide services to customers and/or support the sale of goods.
 intermediaryis any entity - real or virtual - that coordinates and shares information between buyers and sellers
 return facilitatorsspecialize in handling all aspects of customers returning a manufactured good or delivered service and requesting their money back, repairing the manufactured good and returning it to the customer, and/or invoking the service agreement
 Computer-integrated manufacturing systems represent the union of hardware, software, database management, and communications to automate and control production activities from planning and design to manufacturing and distribution
 numerical controlmachine tools, which enable the machinists skills to be duplicated by a programmable device that controls the movements of a tool used to make complex shapes
 computer numerical controlmachines, the operations are driven by a computer
 robotprogrammable machine designed to handle materials or tools in the performance of a variety of tasks
 CNC machines programmable machines that will do exactly the same operation repeatedly.
 CAD/CAE enables engineers to design, analyze, test, simulate, and “manufacture” products before they physically exist.
 CAMinvolves computer control of the manufacturing process.
 Flexible manufacturing systems consist of two or more computer-controlled machines linked by automated handling devices (ie, conveyors).
 Enterprise Resource Planning systems--integrate accounting, customer relationship management, supply chain management, manufacturing, sales, human resources—using a single shared database

ERP allows departments, units, and trading partners to share information and communicate with each other easily
 Customer relationship management --a business strategy designed to learn more about customers’ wants, needs, and behaviors in order to build customer relationships, and grow revenues and profits.
 Revenue management systems Forecasting demand, allocating perishable assets (ie, seats on an airline), deciding when to overbook and by how much, determining what price to charge different customers
 scalabilityis a measure of the contribution margin required to deliver good/service as the business grows and volumes increase
 high scalabilityis the capability to serve additional customers at zero or extremely low incremental costs
 low scalabilityimplies that serving additional customers requires high incremental variable costs
 forecastingis the process of projecting the values of one or more variables into the future
 planning horizonis the length of time on which a forecast is based
 time bucketthe unit of measure for the time period used in a forecast
-might be a year, a quarter, a month, etc.
 time seriesis a set of observations measured at successive points in time or over successive periods of time
 bullwhip effectoverplan/over bill put safety stock on forecast in order to plan ahead
(excess safety stock)
 trendis the underlying pattern of growth or decline in a time series
 seasonal patternsare characterized by repeatable periods of ups and downs over short periods of time
 cyclical patternsare regular patterns in a data series that take place over long periods of time
 random variation (noise)is the unexplained deviation of a time series from a predictable pattern, such as a trend, seasonal, or cyclical pattern
 irregular variationis a one-time variation that is explainable
 forecast erroris the difference between the observed value of the time series and the forecast, or At - Ft
 statistical forecastingis based on the assumption that the future will be an extrapolation of the past. Use historical data to predict future values
 moving average (MA)forecast is an average of the most recent "k" observations in a time series. Work best for short planning horizons when there is no major trend, seasonal, or business cycle patterns' demand is relatively stable
 single exponential smoothing (SES)is a forecasting technique that uses a weighted average of past time-series values to forecast the value of the time series in the next period
 regression analysisis a method for building a statistical model that defines a relationship between a single dependent variable and one or more independent variables, all of which are numerical
 multiple linear regression modela linear regression model with more than one independent variable
 judgmental forecastingrelies upon opinions and expertise of people in developing forecasts. When no historical data is available you can only use this method.
 delphi methodconsists of forecasting by expert opinion by gathering judgments and opinions of key personnel based on their experience and knowledge of the situation
 biasthe tendency of forecasts to consistently be larger or smaller than the actual values of the time series
 robustgoods that are insensitive to external sources of variation
 reliabilityis the probability that a manufactured good, piece of equipment, or system performs its intended function for a stated period of time under specified operating conditions
 quality function deploymentis both a philosophy and a set of planning and communication tools that focuses on customer requirements in coordinating the design, manufacturing, and marketing of goods or services
 voice of the customerrequirements, as expressed in the customer's own terms. Represent what customers expect a product or service to do
 serial systemis the product of the individual probabilities of each process in a system; if one component fails, the system fails.
 parallel systemsfunctions are independent and the entire system will fail only if all components fail (redundancy).
 prototype testingis the process by which a model (real or simulated) is constructed to test the good's physical properties or use under actual operating conditions, as well as consumer reactions to the prototypes
 quality engineeringrefers to a process of designing quality into a manufactured good based on a prediction of potential quality problems prior to production
 value engineeringrefers to cost avoidance or cost prevention before the good or service is created
 value analysisrefers to cost reduction of the manufactured good or service process
 failure-mode-and-effects analysisis a technique in which each component of a product is listed along with the way it may fail, the cause of failure, the effect or consequence of failure, and how it can be corrected by improving the design
 product and process simplificationis the process of trying to simplify designs to reduce complexity and costs and thus improve productivity, quality, flexibility, and customer satisfaction
 green manufacturinga focus on improving the environment by better good or service design
 design for environmentis the explicit consideration of environmental concerns during the design of goods, services, and processes and includes such practices as designing for recycling and disassembly
 ISO 14000a voluntary set of environmental standards that are administered by the International Organization for Standardization
 service delivery system designincludes facility location and layout, the servicescape, service process and job design, technology and information support systems, and organizational structure
 servicescapeis all the physical evidence a customer might use to form an impression. The servicescape also provides the behavioral setting where service encounters take place. Three principle dimensions:
1. Ambient conditions
2. Spatial layout and functionality
3. Signs, symbols, and artifacts
 service process designis the activity of developing an efficient sequence of activities to satisfy both internal and external customer requirements
 service encounter designfocuses on the interaction, directly or indirectly, between the service-provider(s) and the customer
 customer contactrefers to the physical or virtual presence of the customer in the service delivery system during a service experience
 customer-contact requirementsare measurable performance levels or expectations that define the quality of customer contact with representatives of an organization
 empowermentsimply means giving people authority to make decisions based on what they feel is right, to have control over their work, to take risks and learn from mistakes, and to promote change
 service upsetis any problem a customer has - real or perceived - with the service delivery system and includes terms such as service failure, error, defect, mistake, or crisis
 service recoveryis the process of correcting a service upset and satisfying the customer
 service guaranteeis a promise to reward and compensate a customer if a service upset occurs during the service experience
 customare generally produced and delivered as one-of-a-kind or in small quantities, and are designed to meet specific customers' specifications
 Option/assemble-to-orderare configurations of standard parts, subassemblies, or services that can be selected by customers from a limited set
 standardare made according to a fixed design, and the customer has no options from which to choos
 projectsare large-scale, customized initiatives that consist of many smaller tasks and activities that must be coordinated and completed to finish on time and within budget
 job shop processesare organized around particular types of general-purpose equipment that are flexible and capable of customizing work for individual customers
 flow shop processesare organized around a fixed sequence of activities and process steps, such as an assembly line to produce a limited variety of similar goods or services
 continuous flow processescreate highly standardized goods or services, usually around the clock in very high volumes
 product process matrixis a model that describes the alignment of process choice with the characteristics of the manufactured good
 pathwayis a unique route through a service system
 customer-routed servicesare those that offer customers broad freedom to select the pathway that are best suited for their immediate needs and wants from many possible pathways through the service delivery system
 provider-routed servicesconstrain customers to follow a very small number of possible and predefined pathways through the service system
 service encounter activity sequenceconsists of all the process steps and associated service encounters necessary to complete a service transaction and fulfill a customer's wants and needs
 product life cycleis a characterization of product growth, maturity, and decline over time
 taskis a specific unit of work required to create and output
 activityis a group of tasks needed to create and deliver an intermediate or final output
 process map (flowchart)describes the sequence of all process activities and tasks necessary to create and deliver a desired output or outcome
 process boundaryis the beginning or end of a process
 value streamrefers to all value-added activities involved in designing, producing, and delivering goods and services to customers
 reengineeringhas been defined as "the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed
 utilizationis the fraction of time a workstation or individual is busy over the long run
 throughputthe average number of entities completed per unit time-the output rate-from a processq
 bottleneckis the work activity that effectively limits throughput of the entire process
 flow time (cycle time)is the average time it takes to complete once cycle of a process
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