0Chap.

Working conditions - temperature, humidity, ventilation, illumination and noise (unwanted sound)
Cause of accidents – Carelessness & Accident hazards
OSHA – emphasis the importance of safety considerations
Ethical issues - affect operations through work method, conditions and employee safety
Approaches in Compensation - time based system, output based system, knowledge based system
Time based system - Compensate for the time worked
Output based system (incentive) – compensate employee base of output an employee produced
Individual Incentive Plans – worker’s pay is direct linear function of his or her output. – Workers are guaranteed a
minimum regardless of output.
Group incentive plans – stress sharing of productivity gains with employees.
Knowledge based system – reward workers who undergo training that increases their skills.
3 dimensions – Horizontal skills (reflect the variety of task the worker is capable of)
- Vertical skills – (reflect managerial tasks the worker is capable of)
- Depth skills – (reflect quality and productivity results)
Job design - act of specifying the contents and methods of jobs. – 2 basic school of thought, Efficiency & behavioral
Efficiency - it emphasizes a systematic, logical approach to job design (by Frederick Winslow taylor)
Behavioral - it emphasizes satisfaction of wants and needs
Specialization - concentrates on some aspect of a product or service, describes jobs that have a very narrow scope
Job enlargement (approach to job design) - Giving a worker a larger portion of the total task, by horizontal loading
Job rotation (approach to job design) - Workers periodically exchange jobs.
Job enrichment (approach to job design) - Increase responsibility for planning and coordination tasks, by vertical loading.
*factor that influences motivation, productivity, and employee–management relations is trust
Self directed teams (long term) - designed to achieve a higher level of teamwork and employee involvement.
- they are typically empowered to make changes in the work processes under their control.
Ergonomics - Incorporation of human factors in the design of the workplace.
 Frederick Winslow Taylor, known as the father of scientific management
Method analysis - Analyzing how a job is done. * methods analysis is done for both existing jobs and new jobs
Flow process charts - used to review and critically examine the overall sequence of an operation by focusing on the
movements of the operator or the flow of materials.
Worker machine chart - used to determine portions of a work cycle during which an operator and equipment are busy or
idle.
Motion study - the systematic study of the human motions used to perform an operation. By Frank Gilbreth
Search implies hunting for an item with the hands and/or the eyes. Select means to choose from a group of objects.
Grasp means to take hold of an object. Hold refers to retention of an object after it has been grasped. Transport
load means movement of an object after hold. Release load means to deposit the object.
Motion study principles - guidelines for designing motion-efficient work procedures.
*Categories – Principle of body, arrangement of the work place, design of tools & equip.
Therbligs – Basic elemental motions.
Micromotion study - Use of motion pictures and slow motion to study motions
Work measurement - Determining how long it should take to do a job.
Standard time - The amount of time it should take a qualified worker to complete a specified task.
*methods - (1) stopwatch time study, (2) historical times, (3) predetermined data, and (4) work sampling.
Stopwatch time study - time standard based on observations of one worker taken over a number of cycles.
Standard elemental times - derived from a firm’s own historical time study data
Predetermined time standards - published data based on extensive research to determine standard elemental times.
Work Sampling - is 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, nor does it even involve continuous observation of the
activity.
*work sampling primary sources 1.) Ratio delay studies 2.) analysis of nonrepetitive jobs
Random number table - which consists of unordered sequences of numbers used to determine random observation
schedules.
Chap. 8
* location criteria can depend on where a business is in the supply chain
Location Options - Expand an existing facility, Add new locations while retaining existing ones, Shut down at one
location and move to another, Do nothing (status quo)
Factors to enter globalization – 1.) Trade agreements 2.) Technology
Location of Raw materials (3 primary reasons) 1.) necessity 2.) Perishability 3.) Transportation costs
*Location of Markets. Profit-oriented firms frequently locate near the markets they intend to serve as part of their
competitive strategy, whereas nonprofit organizations choose locations relative to the needs of the users of their
services.
Microfactory - Small factory with a narrow product focus, located near major markets. Small factory with a narrow
product focus, located near major markets.
 The primary considerations related to sites are land, transportation, and zoning or other restrictions.
 When companies have multiple manufacturing facilities, they can organize operations in several ways.
1. Product plant strategy (With this strategy, entire products or product lines are produced in separate plants,
and each plant usually supplies the entire domestic market. This is essentially a decentralized approach,).
2. Market Area Plant strategy ( Market Area Plant Strategy. W ith this strategy, plants are designed to serve a
particular geographic segment of a market (e.g., the West Coast, the Northeast).).
3. Process plant strategy (With this strategy, different plants concentrate on different aspects of a process.).
4. General purpose plant strategy – (With this strategy, plants are flexible and capable of handling a range of
products)
Geographic Information system - computer-based tool for collecting, storing, retrieving, and displaying demographic
data on maps.
Clustering - Similar types of businesses locate near each other.
Locational cost profit volume analysis - Technique for evaluating location choices in economic terms.
Factor rating - a general approach that is useful for evaluating a given alternative and comparing alternatives.
Center gravity method - Method for locating a distribution center that minimizes distribution cost
* A common approach to narrowing the range of location alternatives is to first identify a country or region that seems
to satisfy overall needs and then identify a number of community-site alternatives for more in-depth analysis. A variety
of methods are used to evaluate location alternatives. Those described in the chapter include locational cost-profit-
volume analysis, factor rating, and the center of gravity method.
Chap 9
Quality The ability of a product or service to consistently meet or exceed customer expectations.
8 dimensions of quality – Performance (main characteristics), Aesthetics (Apperance), Special Features (Extra charac.),
Conformance (Correspond to specifications), reliability (dependable), Durability (to perform O.T.), Perceived quality
(reputation), Serviceability (Handling repairs or complaints)
Service quality dimensions – Convenience (the availability and accessibility of the service), Reliability (perform a service
dependably, consistently, and accurately), Responsiveness (willingness of service providers to help customers), time (the
speed with which service is delivered), Assurance (ability to convey trust and confidence), Courtesy (the way customers
are treated by employees), Tangibles (the physical appearance of facilities), Consistency (provide the same level of good
quality repeatedly)
SERVQUAL - an instrument designed to obtain feedback on an organization’s ability to provide quality service to
customers
Quality of design Intention of designers to include or exclude features in a product or service.
Quality of conformance The degree to which goods or services conform to the intent of the designers.
* Top management has the ultimate responsibility for quality
* Design Quality products and services begin with design. This includes features of the product or service; processes
* The procurement department has responsibility for obtaining goods
* Production/operations has responsibility to ensure that processes yield products and services that conform to design
specifications.
* Packaging and shipping. This department must ensure that goods are not damaged in transit
* Marketing and sales. This department has the responsibility to determine customer needs and to communicate them
* Customer service responsibility to communicate that information to appropriate departments
Appraisal costs Costs of activities designed to ensure quality or uncover defects. Inspection to uncover defects.
Prevention costs Costs of preventing defects from occurring.
Failure costs Costs caused by defective parts or products or by faulty services.
Internal failures Failures discovered during production. (e.g. rework cost, investigation cost)
External failures Failures discovered after delivery to the customer. (warranty, replacement, complaints)
* Walter Shewart – father of statistical quality control
*Edwards Deming - His message was that the cause of inefficiency and poor quality is the system, not the employees
*Joseph M. Juran - described quality management in terms of a trilogy consisting of quality planning, quality control,
and quality improvement
*Armand Feigenbaum – “cost of nonconformance”. it is the customer who defines quality
*Philip B. Crosby - zero defects, “Do it right the first time.”, Quality is free – book.
*Kaoru Ishikawa – Fishbone diagram
*Genichi Taguchi – “Taguchi loss function” (formula for the cost of poor quality)
*Taiichi Ohno & Shigeo Shingo – KAIZEN (continuous improvement)
Return on quality An approach that evaluates the financial return of investments in quality.
Deming Prize Prize established by the Japanese and awarded annually to firms that distinguish themselves with quality
management programs. W. Edwards Deming
Baldrige Award award given by the U.S. government to recognize quality achievements of U.S. companies. Malcolm
European Quality Award European award for organizational excellence.
ISO 9000 A set of international standards on quality management and quality assurance, critical to international
business.
International Organization for Standardization (ISO) - promotes worldwide standards
ISO 14000 A set of international standards for assessing a company’s environmental performance
ISO 24700 A set of international standards that pertains to the quality and performance of office equipment that
contains reused components.
Total quality management (TQM) A philosophy that involves everyone in an organization in a continual effort to improve
quality and achieve customer satisfaction. 3 approaches ( continuous improvement, involvement of everyone, customer
satisfaction)
Fail-safing Incorporating design elements that prevent incorrect procedures.
Continuous improvement Philosophy that seeks to make never-ending improvements to the process of converting
inputs into outputs.
Kaizen Japanese term for continuous improvement.
Quality at the source The philosophy of making each worker responsible for the quality of his or her work
Six sigma A business process for improving quality, reducing costs, and increasing customer satisfaction.
DMAIC A six-sigma process: define, measure, analyze, improve, and control.
Lean/six sigma An approach to continuous improvement that integrates lean operation principles and six-sigma
techniques.
Plan-do-study-act (PDSA) cycle/ Shewhart cycle/deming - A framework for problem solving and improvement activities.
Process improvement A systematic approach to improving a process
Flowchart A diagram of the steps in a process.
Check sheet A tool for recording and organizing data to identify a problem.
Histogram A chart of an empirical frequency distribution. Useful in getting the distribution observed values
Pareto analysis Technique for classifying problem areas according to degree of importance, and focusing on the most
important. Focusing on the most important problem
Scatter diagram A graph that shows the degree and direction of relationship between two variables.
Control chart A statistical chart of time-ordered values of a sample statistic. Used to moniter is the process output is
random
Cause-and-effect diagram A diagram used to search for the cause(s) of a problem; also called fishbone diagram.
Run Chart Tool for tracking results over a period of time.
Brainstorming Technique for generating a free flow of ideas in a group of people.
Quality circles Groups of workers who meet to discuss ways of improving products or processes
Benchmarking Process of measuring performance against the best in the same or another industry.
Chap 10
Quality control A process that evaluates output relative to a standard and takes corrective action when output doesn’t
meet standards.
Inspection Appraisal of goods or services.
*low cost, high volume items – less inspection
*High cost, low volume items – more inspection
Quality of conformance A product or service conforms to specifications.
Statistical process control (SPC) Statistical evaluation of the output of a process.
Random variation Natural variation in the output of a process, created by countless minor factors.
Assignable variation In process output, a variation whose cause can be identified. A nonrandom variation.
Sampling distribution A theoretical distribution of sample statistics.
Central limit theorem The distribution of sample averages tends to be normal regardless of the shape of the process
distribution.
Control chart A time-ordered plot of sample statistics, used to distinguish between random and nonrandom variability.
(Walter Shewhart)
Control limits The dividing lines between random and nonrandom deviations from the mean of the distribution.
Type I error Concluding a process is not in control when it actually is.
Type II error Concluding a process is in control when it is not.
Variables Generate data that are measured.
Attributes Generate data that are counted.
Mean control chart (variable) Control chart used to monitor the central tendency of a process.
p – chart (attribute) Control chart for attributes, used to monitor the proportion of defective items in a process.
c - chart () Control chart for attributes, used to monitor the number of defects per unit.
Run test A test for patterns in a sequence. Run test A test for patterns in a sequence.
Run Sequence of observations with a certain characteristic
Specifications A range of acceptable values established by engineering design or customer requirements.
Process variability Natural or inherent variability in a process.
Process capability The inherent variability of process output relative to the variation allowed by the design
specification.
capability index Used to assess the ability of a process to meet specifications.

Supplement:
Acceptance sampling A form of inspection applied to lots or batches of items before or after a process, to judge
conformance with predetermined standards.
Sampling plans Plans that specify lot size, sample size, number of samples, and acceptance/rejection criteria.
Operating characteristic (OC) curve Probability curve that shows the probabilities of accepting lots with various
fractions defective.
Acceptable quality level (AQL) The percentage level of defects at which consumers are willing to accept lots as “good.
Lot tolerance percent defective (LTPD) The upper limit on the percentage of defects that a consumer is willing to accept.
Consumer’s risk The probability that a lot containing defects exceeding the LTPD will be accepted.
Producer’s risk The probability that a lot containing the acceptable quality level will be rejected.
Average outgoing quality (AOQ) Average of rejected lots (100 percent inspection) and accepted lots (a sample of items
inspected)
Chapter 11
Aggregate planning Intermediate-range capacity planning, usually covering 2 to 12 months.
* aggregate plans are updated periodically, often monthly, to take into account updated forecasts and other changes.
This results in a rolling planning horizon
* Proactive – involve demand options
* Reactive – Capacity options
*Mixed – element of the 2
Demand Options - Pricing, Promotion, Back orders (orders are taken in one period and deliveries promised for a later
period.), New demand
Supply Options – Hire and Lay off workers, Overtime/slack time, Part time workers, Inventories, subcontracting
Sales and operations planning Intermediate-range decisions to balance supply and demand, integrating financial and
operations planning.
Level capacity strategy Maintaining a steady rate of regular-time output while meeting variations in demand by a
combination of options. Capacities are kept constant
Chase demand strategy Matching capacity to demand; the planned output for a period is set at the expected demand
for that period. Capacities are adjusted
Simulation models Computerized models that can be tested under different scenarios to identify acceptable solutions
to problems.
Yield management The application of pricing strategies to allocate capacity among various categories of demand.
Master production schedule (MPS) This schedule indicates the quantity and timing of planned completed production.
Result of disaggregating the aggregate plan. Shows delivery quantity & times but not show planned production
Rough-cut capacity planning (RCCP) Approximate balancing of capacity and demand to test the feasibility of a master
schedule. Validation of Master Schedule
Time fences Points in time that separate phases of a master schedule planning horizon.
 Frozen – Near term phase (delivery of new order is impossible)
 Slushy – Few periods beyond the Frozen Phase (Necessitates trade-offs)
 Liquid – farthest out on the horizon (New orders or cancellation can be made with ease)
Available-to-promise (ATP) inventory Uncommitted inventory.
Chapter 12
Dependent demand Demand for items that are subassemblies or component parts to be used in the production of
finished goods.
Material requirements planning (MRP) A computer-based information system that translates master schedule
requirements for end items into time-phased requirements for subassemblies, components, and raw materials.
Master schedule One of three primary inputs in MRP; states which end items are to be produced, when these are
needed, and in what quantities.
Cumulative lead time The sum of the lead times that sequential phases of a process require, from ordering of parts or
raw materials to completion of final assembly.
Bill of materials (BOM) One of the three primary inputs of MRP; a listing of all of the raw materials, parts,
subassemblies, and assemblies needed to produce one unit of a product.
Product structure tree A visual depiction of the requirements in a bill of materials, where all components are listed by
levels.
Low-level coding Restructuring the bill of materials so that multiple occurrences of a component all coincide with the
lowest level at which the component occurs.
Inventory records One of the three primary inputs in MRP; includes information on the status of each item by time
period.
Gross requirements Total expected demand for an item or raw material in a time period.
Scheduled receipts Open orders scheduled to arrive from vendors or elsewhere in the pipeline. Projected on hand
Expected amount of inventory that will be on hand at the beginning of each time period.
Net requirements The actual amount needed in each time period.
Planned-order receipts Quantity expected to be received by the beginning of the period in which it is shown.
Planned-order releases Planned amount to order in each time period; planned-order receipts offset by lead time.
Pegging The process of identifying the parent items that have generated a given set of material requirements for an
item.
Regenerative system Approach that updates MRP records periodically.
Net-change system Approach that updates MRP records continuously.
Planned orders Schedule indicating the amount and timing of future orders.
Order releases Authorization for the execution of planned orders.
Changes Revisions of due dates or order quantities, or cancellations of orders.
Performance-control reports Evaluation of system operation, including deviations from plans and cost information.
Planning reports Data useful for assessing future material requirements.
Exception reports Data on any major discrepancies encountered.
Lot sizing Choosing a lot size for ordering or production.
Backflushing Exploding an end item’s BOM to determine the quantities of the components that were used to make the
item.
Manufacturing resources planning (MRP II) Expanded approach to production resource planning, involving other areas
of a firm in the planning process and enabling capacity requirements planning
Capacity requirements planning The process of determining short-range capacity requirements.
Time fences Series of time intervals during which order changes are allowed or restricted; the nearest fence is most
restrictive to change, the farthest is least restrictive.
Load reports Department or work center reports that compare known and expected future capacity requirements with
projected capacity availability.
Distribution resource planning (DRP) A method used for planning orders in a supply chain.
Enterprise resource planning (ERP) Integration of financial, manufacturing, and human resources on a single computer
system