Operations Exam 1

Value Chain: Primary activities and costs
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Terms in this set (30)
Value Chain: Primary activities and costs
Supply chain management-->operations-->distribution-->sales and marketing-->service-->profit margin--->Customer
Value chain: support activities and costs
Product R&D, Technology, and Systems Development
Human Resource Management
General Administration
Value Chain: Key elements
Forecasting, capacity management, production/services, quality systems, inventory control
Operations and supply chain management involves
Product design, purchasing, manufacturing, service operations, logistics, distribution
Success depends upon
Strategy, process to deliver value products and services, and analytics to support the decisions needed to manage the firm
Operations and supply chain management
The design, operations, and improvement of the systems that create, make, and deliver the firm's primary products and services; the functional area of business management; line responsibilities
Create + make + deliver = customer value
Operations
Transformational; manufacturing and service process used to transform resources into products
Supply Chain
Logistics and support; process that move information and material to and from the firm
Spectrum of goods and services
Pure goods--core goods--core services--pure services
Goods
Tangible, less interaction with customers, often homogenous, not perishable--can be inventoried
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