PTOM Flashcards
(38 cards)
What is Operations Management (OM)?
Management of business processes used to design, produce, distribute and deliver goods and/or services.
OM requires management of the network of physical, capital, information and human resources utilized by the business processes.
Why study Operations Management?
Companies make money by offering products/services to customers.
OM ensures that products/services have desired characteristics through effective management.
What are the desired characteristics of products/services managed by OM?
- Price (cost-effective)
- Quality
- Responsive (time)
- Variety (flexibility)
These characteristics contribute to customer satisfaction and business profitability.
What is the formula for Return on Assets (ROA)?
ROA = [Sales / Total Asset] * [(Sales - Total Cost) / Sales]
Traditional approach: ROA = (Sales - Total Cost) / Total Asset.
How can operations impact financial performance?
- Reduce total costs
- Increase sales
- Reduce total assets
Operations management affects both revenue and cost structure, leading to improved financial outcomes.
What is the difference between Tactical and Strategic Operations?
Tactical Operations involve inventory management and new-product development, while Strategic Operations focus on operations strategy and supply-chain management.
Tactical operations are more short-term focused, whereas strategic operations are long-term.
What is a bottleneck in a process?
A resource (or task) that limits the flow with the highest utilization.
Identifying bottlenecks is crucial for improving process efficiency.
What is a process?
A collection of tasks connected by a flow of goods and information that transforms inputs to outputs.
Processes are fundamental to operations management.
What are the elements of a process?
- Inputs: Labor, materials, energy, capital, knowledge
- Outputs: Products composed of finished goods and/or services
- Task: An activity on input which makes it closer to the output
- Flow: Movement of goods and/or information in the process
- Storage: No task is being performed and/or good is not being transported
Understanding these elements helps in analyzing and improving processes.
What is the purpose of a process flow diagram?
To visualize the flow of tasks, inputs, and outputs in a process.
It helps identify inefficiencies and bottlenecks.
Define cycle time in a process.
Time between completion of successive units.
Cycle time is critical for understanding process efficiency.
What does capacity represent in a process?
Outputs per unit time.
Capacity is determined by the cycle time of the bottleneck task.
What is utilization in the context of operations?
Utilization = Time Required (Used) / Time Available.
It measures the efficiency of resources in a process.
What is the difference between offshoring and outsourcing?
Offshoring involves relocating business processes to another country, while outsourcing refers to contracting out business functions to third parties.
Both strategies can help reduce costs and focus on core competencies.
What are functional products?
Products that are stable and have predictable demand.
They typically require an efficient supply chain.
What are innovative products?
Products that have unpredictable demand and require a responsive supply chain.
These products often involve higher risk and investment.
What is the bullwhip effect?
A phenomenon where small changes in consumer demand lead to larger changes in demand at the wholesale, distributor, manufacturer, and raw material supplier levels.
It can cause inefficiencies in supply chain management.
What is the importance of inventory management in operations?
It determines how much inventory to hold to meet customer demand while minimizing costs.
Effective inventory management can enhance service levels and reduce waste.
What is the waterfall model in new product development?
A sequential design process where progress flows in one direction through stages of conception, initiation, analysis, design, construction, testing, and maintenance.
It contrasts with agile methodologies which allow for iterative development.
Fill in the blank: The main priority of operational performance metrics is _______.
continuous improvment
These metrics help companies gauge their efficiency and effectiveness in operations.
What is a bottleneck in a process?
The resource with the lowest capacity.
A bottleneck limits the overall capacity of the process.
What is CT_process?
2.5 min/unit
CT_process stands for cycle time for the process.
What is the capacity_process in the example?
0.4 unit/min
This indicates how many units can be processed per minute.
What does it mean if there is an imbalance in a process?
It indicates that one or more resources are not aligned with the overall process capacity.
Imbalance can lead to inefficiencies in production.
