Operations Exam 1

Value Chain: Primary activities and costs
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Terms in this set (30)
ServicesIntangible, interaction with customer required, inherently heterogeneous, perishable/time dependent, considered as a package of featuresEfficiencyDoing something at the lowest possible costEffectivenessDoing the right things to create the most value for your customerValueThe attractiveness of a product relative to its costDevelop/refine the strategy (yearly)Define vision, mission, and objectives; conduct strategic analysis; define strategic initiativesTranslate the strategy (quarterly)Define/revise initiatives; define/revise budgets; define/revise measures and targetsTriple bottom linePeople, planet, profit; economic prosperity, social responsibility, environmental stewardshipTrade-offsManagement must decide which parameters of performance are critical and concentrate resources on those characteristicsOrder qualifiers (table stakes0Dimensions that are necessary for a firm's products to be considered for purchase; features the customer will not foregoOrder winners (delighters)Used by customers to make 'buy' decision for products and services; features that customers use to determine which product to ultimately purchaseProductivity MeasurementProductivity is a measure of how well resources are used; productivity = outputs/inputs; productivity is a relative measure, meaning it must be compared to something meaningfulTypes of forecastingQualitative, time series analysis, causal relationships, simulationTime series analysisBased on the idea that data relating to past demand can be used to predict future demand.Forecast errorThe difference between the forecast value and what actually occurred. All forecasts contain a level of error.Sources of errorBias: when a consistent mistake is made Random: errors that are not explained by the model being usedMeasures of errorMean absolute deviation (MAD) Mean absolute percent error (MAPE)MADSum of absolute deviation/number of periodsMAPEMAD/average demandLinear regressiony=m(x)+b where y is the dependent variable value, m is the slope and b is the interceptComponents of DemandAverage demand for a time period, trend, seasonal element, cyclical elements, random variation, autocorrelation