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| The part of a business organization that is responsible for producing goods or services. |
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The management of systems or processes that create goods and/or services.
Operations Management is at the core of every business. |
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| A sequence of activities and organizations involved in producing and delivering a good or service. |
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The higher the variability, the more difficult it is to manage.
Reduced variability leads to improved efficiency. |
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| Products are typically neither purely service- or purely goods-based. |
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| Consists of all activities directly related to producing goods or providing services. |
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| Factors Leading to Decline in Manufacturing Employment: |
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Increased productivity
Outsourcing
Statistical Artifacts (Use of contract/temp. labor which doesn't show up in statistics) |
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An abstraction of reality; a simplification of something.
Prototype; blueprint |
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Physical (Look like real-life counterparts)
Schematic (Look less like their real-life counterparts than physical models)
Mathematic (Do not look at all like their real-life counterparts)
*The more mathematical a model is, the farther it is away from reality.* |
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| A few factors account for a high percentage of occurrences of some event(s). |
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| A set of interrelated parts that must work together. |
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| A system in which highly skilled workers use simple, flexible tools to produce small quantities of customized goods. |
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| Predicting timing and volume of customer demand. |
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| Deciding how to best move information and materials. |
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| A statement about the future value of a variable of interest. |
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| Elements of a Good Forecast |
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Definition
Timely
Accurate
Reliable
Expressed in meaningful units
In writing
Simple to understand and use
Cost Effective |
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| A long-term upward or downward movement in data. |
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| Short-term, fairly regular variations related toe the calendar or time or day. |
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| Wavelike variations lasting more than one year. |
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| Residual variation that remains after all other behaviors have been accounted for. |
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| Due to unusual circumstance that do not reflect typical behavior. |
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Definition
Uses a single previous value of a time series as the basis for a forecast.
The forecast for a time period is equal to the previous time period's value.
Can be used when:
-Time series is stable
-There is a trend
-There is seasonality |
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Definition
| Seasonality is expressed as a quantity that gets added or subtracted from the time-series average in order to incorporate seasonality. |
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| Seasonality Multiplicative |
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| Seasonality is expressed as a percentage of the average (or trend) amount which is then used to multiply the value of a series in order to incorporate seasonality. |
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| A technique for fitting a line to a set of data points. |
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| The measure of the strength and direction of relationship between two variables (between -1 and 1). |
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| A measure of the percentage of variability in the values of y that is "explained" by the independent variable (between 0 and 1). |
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| Important Aspects of Forecasts |
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Definition
Expected Level of Demand - The level of demand may be a function of some structural variation such as trend or seasonal variation.
Accuracy - Related to the potential size of forecast error. |
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Definition
Weights all errors evenly.
Sum of absolute values of errors, divided by n (the number of periods). |
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Definition
Weights errors according to their squared values.
Sum of all errors squared, divided by n-1 |
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Definition
Weights errors according to relative error.
Sum of the [|Error|/Actual]x100 for each period, divided by n (the number of periods). |
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Definition
A time-ordered sequence of observations taken at regular intervals.
Behaviors:
-Trend
-Seasonality
-Cycles
-Irregular variations
-Random variation |
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Definition
Technique that averages a number of the most recent actual values in generating a forecast.
F=MA=(Sum of Actual values in period t-1)/n |
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Definition
| The most recent values in a time series are given more weight in computing a forecast. |
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A weighted averaging method that is based on the previous forecast plus a percentage of the forecast error.
F=Ft-1 + α(At-1 - Ft-1) |
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Term
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Definition
Ft = a + bt
where
Ft = Forecast for period t
A = Value of F1 at t=0
b = Slope of the line
t = Specified number of time periods from t=0 |
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| Trend-Adjusted Exponential Smoothing |
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Definition
TAFt+1 = St + Tt
St = TAFt + α(At – TAFt)
Tt = Tt-1 + β(TAFt – TAFt-1 – Tt-1) |
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Term
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Definition
Measure of te scatter of points around a regression line. If small, the predictions using the linear equation will tend to be more accurate.
SE = √[(Sum of y-ye)^2 / (n-2)] |
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Definition
| The seasonal percentage used in the multiplicative seasonally adjusted forecasting model. |
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| Characteristics of Services |
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Definition
Simultaneity: personal selling
Perishability: cannot store
Intangibility: no physical product
Heterogeneity: customer involvement results in variability
Customer Perception in the Service Process |
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Term
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Definition
Supporting Facility: physical resources that must be in place before a service can be sold.
Facilitating Goods: material consumed by the buyer or items provided by the consumer.
Information: operations data or info. that is provided by the customer to enable efficient and customized service.
Explicit Services: benefits readily observable by the senses; the essential or intrinsic features.
Implicit Services: psychological benefits or extrinsic features which the consumer may sense only vaguely. |
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Definition
1. Target Market Segments
2. Kind of Service/Service Concept
3. Operating Strategy/Execution
4. Service Delivery System/Delivery Method |
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| Marketplace versus Marketspace |
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Definition
Marketplace - physical value chain
Marketspace - Information value chain |
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| Grades customers on how profitable their business is. |
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| Used by call centers to place customers in different queues based on customer code. |
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| Allows choice customers to have fees waived and get other hidden discounts. |
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| Sharing data about your transaction history with other firms as a source of revenue. |
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