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Quality
The ability of a product or service to consistently meet or exceed customer expectations
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Quality of Design
Intention of designers to include or exclude features in a product or service
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Quality of conformance
The degree to which goods or services conform to the intent of the designers
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Ease-of-use
Increase the likelihood that a product will be used for its intended purpose and in such a way that it will continue to function properly and safely
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After-the-sale service
taking care of issues and problems that arise after the sale
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Appraisal costs
costs of activities designed to ensure quality or uncover defects
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prevention costs
all TQ training, TQ planning, customer assessment, process control, and quality improvement costs to prevent defects from occuring
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Failure costs
costs incurred by defective parts/products or faulty services
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Internal failure costs
costs incurred to fix problems that are detected before the product is delivered to the customer
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External failure costs
all costs incurred to fix problems that are detected after the product is delivered to the customer
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Total quality management
A philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction
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TQM Approach
- 1. Find out what the customer wants
- 2. Design a product that meets or exceeds their wants
- 3. Design processes that facilitate doing the job right the first time
- 4. keep track of results
- 5. Extend these concepts throughout the supply chain
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PDSA Cycle
Plan-Do-Study-Act
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Quality Circle
groups of workers who meet to discuss ways of improving products
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Supply chain
the sequence of organizations - their functions, facilities, and activities - that are involved in producing and delivering a product or service (value chains)
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Facilities
- the sequence of the supply chain begins with basic suppliers and extends all the way to the final customer
- - warehouses
- - factories
- - processing centers
- - distribution centers
- - retail outlets
- - offices
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Functions and activities of supply chain
- - forecasting
- - purchasing
- - inventory management
- - information management
- - scheduling
- - customer service
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Supply chain management
the strategic coordination of business functions within a business organization and throughout its supply chain for the purpose of integrating supply and demand management
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Key SCM issues
the goal of SCM is to match supply to demand as effectively and efficiently as possible
- - determine appropriate levels of outsourcing
- - managing suppliers
- - managing customer relationships
- - managing risk
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Procurement
The purchasing department is responsible for obtaining the materials, parts, and supplies and services needed to produce a product
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The goal of procurement
develop and implement purchasing plans for products and services that support operations strategies
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E-Business
the use of electronic technology to facilitate business transactions
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Supplier management
- -choosing suppliers
- - supplier audits
- - supplier certification
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The bullwhip effect
variations in demand cause inventory fluctuations to fluctuate and get out of control
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Logistics
refers to the movement of materials, services, cash, and information in a supply chain
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Strategic sourcing
analyzing the procurement process to lower costs by reducing waste and non-value-added activities, increase profits, reduce risks, and improve supplier performance
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Process selection
refers to deciding on the way production of goods will be organized
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Technology innovation
the discovery and development of new or improved products, services, or processes for producing or providing them
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layout
the configuration of departments, work centers, and equipment, with particular emphasis on movement of work (customers or materials) through the system
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Product layout
layout that uses standardized processing operations to achieve smooth, rapid, high-volume flow
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Process layout
layouts that can handle varied processing requirements
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fixed position layout
layout in which the product or project remains stationary, and workers, materials, and equipment are moved as needed
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service layout
can be categorized as product, process, or fixed position
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Line balancing
= the process of assigning tasks to a workstation in such a way that the workstations have approximately equal time requirements
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Goal of line balancing
obtain task grouping that represent approximately equal time requirements since this minimizes idle time along the line and results in a high utilization of equipment and labor
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Why is line balancing important?
- 1. It allows us to use labor and equipment more efficiently
- 2. To avoid fairness issues that arise when one workstation must work harder than another
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Job enlargement
giving a worker a larger portion of the total task by horizontal loading
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Job rotation
workers periodically exchange jobs
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Job Enrichment
increasing responsibility for planning and coordination tasks, by vertical loading
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Standard time
the amount of time it should take a qualified worker to complete a specified task, working at a sustainable rate, using given methods, tools and equipment, raw material inputs, and workplace arrangement
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Stopwatch Time Study
- used to develop a time standard based on observations of one worker taken over a number of cycles
- 1. Define the task to be studied
- 2. Determine # of cycles to observe
- 3. Time the job, and rate the worker's performance
- 4. Compute the standard time
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Work Sampling
A technique for estimating the proportion of time that a worker or machine spends on various activities and the idle time
-does not require timing an activity or involve continuous observation of the activity
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Location decisions are based on:
- - profit potential or cost and customer service
- - finding a number of acceptable locations from which to choose
- - position in the supply chain
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Location Cost-Profit-Volume Analysis
- - technique for evaluating location choices in economic terms
- 1. Determine the fixed and variable costs for each alternative
- 2. Plot the total-cost lines for all alternatives on the same graph
- 3. Determine the location that will have the lowest total cost for the expected level of output
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Factor rating
general approach to evaluating locations that includes quantitative and qualitative inputs
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Center of Gravity method
-treats distribution costs as a linear function of the distance and the quantity shipped
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Quality Control
- a process that evaluates output relative to a standard and takes corrective action when output doesn't meet standards
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Inspection
An appraisal activity that compares goods or services to a standard
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Quality of conformance
a product or service conforms to specifications
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Control Chart
a time ordered plot of representative sample statistics obtained from an ongoing process, used to distinguish between random and nonrandom variability
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Variables generate data that are
measured
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attributes generate data that are
counted
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p-Chart
control chart used to monitor the proportion of defectives in a process
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c-Chart
control chart used to monitor the number of defects per unit
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Process Capability
Once a process has been determined to be stable, it is necessary to determine if the process is capable of producing output that is within an acceptable range
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Tolerances or specifications
range of acceptable values established by engineering design or customer requirements
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Process variability
natural or inherent variability in a process
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Process Capability
The inherent variability of process output (process width) relative to the variation allowed by the design specification
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Linear Programming
A powerful quantitative tool used by operations and other manages to obtain optimal solutions to problems that involve restrictions or limitations
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Model formation
- 1. list and define the decision variables
- 2. State the objective function
- 3. List the constraints
- 4. Non-negativity constraints
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Project
a nonrepetitive set of activities directed toward a unique goal within a limited time frame.
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Product or service profiling
linking key product or service requirements to process capabilities
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Production line
standardized layout arranged according to a fixed sequence of production tasks
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Assembly line
standardized layout arranged according to a fixed sequence of assembly tasks
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Cycle time
the maximum time allowed at each workstation to complete its set of tasks on a unit
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Output rate =
operating time per day / cycle time
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Cycle time =
operating time / desired output rate
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Balance delay
percentage of idle time of a line
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Percentage of idle time =
idle time per cycle / (actual # of ws x Cycle time)
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Efficiency =
100% - percent of idle time
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Time based system
compensation based on time an employee has worked during a pay period
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Out-put based system
compensation based on amount of output an employee produced during a pay period
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Ergonomics
incorporation of human factors in the design of the workplace
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Therblings
basic elemental motion that make up a job
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Stopwatch time study
Observed time
OT= Sum of recorded times / number of observations
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Normal Time
NT= Observed time x Performance rating
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Standard time =
ST = NT x AF
AF is allowance factor - all possible delays in workplace
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AF job time
AF= 1 + A (allowance percentage based on job time)
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AF work day
AF= 1 / (1-A)
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Location decision steps
- 1. decide on the criteria to use for evaluating location alternatives
- 2. identify important factors, such as location of markets or raw materials
- 3. develop location alternatives
- 4. Evaluate the alternatives and make a decision
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clustering
similar types of businesses locate near each other
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Product Quality: Performance
main characteristics of the product
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Product Quality: Aesthetics
appearance, feel, smell, taste
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Product Quality: conformance
how well a product corresponds to design specifications
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Product Quality: Perceived quality
indirect evaluation of quality
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Product Quality: serviceability
handling of complaints or repairs
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Deming Prize
prize established by the Japanese and awarded annually to firms that distinguish themselves with quality management programs
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Baldrige Award
given to recognize quality achievements of US companies
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Fail-safing
incorporating design elements that prevent incorrect procedures
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Kaizen
Japanese term for continuous improvement
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Six Sigma
a business process for improving quality, reducing costs, and increasing customer satisfaction
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Type I Error
Concluding a process is not in control when it actually is
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Type II Error
concluding a process is in control when it is not
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run
sequence of observations with a certain characteristic
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specifications
a range of acceptable values established by engineering design or customer requirements
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process variability
natural or inherent variability in a process
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Process capability
the inherent variability of process output relative to the variation allowed by the design specification
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gatekeeping
screening returned goods to prevent incorrect acceptance of goods
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RFID
a technology that uses radio waves to identify objects, such as goods in supply chains
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avoidance
finding ways to minimize the number of items that are returned
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closed-loop supply chain
a manufacturer controls both the forward and reverse shipment of product
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cross-docking
a technique whereby goods arriving at a warehouse from a supplier are unloaded from the supplier's truck and loaded onto outbound trucks, thereby avoiding warehouse storage
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Delayed differentiation
production of standard components and subassemblies, which are held until late in the process to add differentiating features
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Disintermediation
reducing one or more steps in a supply chain by cutting out one or more intermediaries
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Enumeration approach
substituting the coordinates of each corner point into the objective function to determine which corner point is optimal
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binding constraint
a constraint that forms the optimal corner point of the feasible solution space
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Surplus
When the values of decision variables are substituted into a > constraint the amount by which the left side exceeds the right-hand-side value.
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Slack
when the values of decision variables are substituted into a < constraint the amount by which the left side is less than the right side value
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