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© Prentice Hall, Modern Management 9 th edition.
© Prentice Hall, Objectives Definitions of production, productivity, and quality An understanding of the importance of operations and production strategies, systems, and processes Insights into the role of operations management concepts in the workplace An understanding of how operations control procedures can be used to control production Insights into operations control tools and how they evolve into a continual improvement approach to production management and control.
© Prentice Hall, P RODUCTION Defining Production Productivity productivity = outputs inputs Traditional strategies for increasing productivity: 1. Improving effectiveness of organizational workforce through training 2. Improving production process through automation 3. Improving product design to make products easier to assemble 4. Improving production facility by purchasing more modern equipment 5. Improving quality of workers hired to fill open positions.
© Prentice Hall, P RODUCTION Quality and Productivity Focus on Continual Improvement Focus on Quality and Integrated Operations Quality Assurance Statistical Quality Control "No Rejects" Philosophy Quality Circles Automation Strategies, Systems, and Processes.
© Prentice Hall, P RODUCTION Figure 20.1 Deming’s flow diagram for improving product quality.
© Prentice Hall, P RODUCTION Figure 20.2 The quality circle problem-solving process.
© Prentice Hall, O PERATIONS M ANAGEMENT Defining Operations Management Operations Management Considerations Key notions: Involves managers Takes place within context of objectives and policies Criteria are standards for effectiveness and efficiency Operations strategies.
© Prentice Hall, O PERATIONS M ANAGEMENT Figure 20.3 Major activities performed to manage production.
© Prentice Hall, O PERATIONS M ANAGEMENT Operations Management Considerations (con’t) Capacity Strategy Capacity flexibility Steps in Capacity Decisions: 1. Measure capacity of currently available facilities 2. Estimate future capacity needs on basis of demand forecasts 3. Compare future capacity needs and available capacity 4. Identify ways to accommodate long-range capacity changes 5. Select best alternative based on quantitative and qualitative evaluation.
© Prentice Hall, O PERATIONS M ANAGEMENT Operations Management Considerations (con’t) Location Strategy Factors in a Good Location Nearness to market and distribution centers Nearness to vendors and resources Requirements of federal, state, and local governments The character of direct competition The degree of interaction with the rest of the corporation The quality and quantity of labor pools The environmental attractiveness of the area Taxes and financing requirements Existing and potential transportation The quality of utilities and services.
© Prentice Hall, O PERATIONS M ANAGEMENT Operations Management Considerations (con’t) Product Strategy Process Strategy Types of Processes Continuous process Repetitive process Job-shop process Layout Strategy Basic types for manufacturing facilities: 1. Product 2. Process (functional) 3. Fixed-position.
© Prentice Hall, O PERATIONS M ANAGEMENT Figure 20.4 The three basic layout patterns.
© Prentice Hall, O PERATIONS M ANAGEMENT Operations Management Considerations (con’t) Human Resources Strategy Human resource imperatives: 1. Optimize individual, group, and organizational effectiveness 2. Enhance quality of organizational life Operational Tools in Human Resources Strategy Manpower planning Job design Work methods analysis Motion-study techniques Work measurement methods Operational tools to establish labor standards.
© Prentice Hall, O PERATIONS C ONTROL Just-in-Time Inventory Control Best Conditions for JIT Advantages of JIT Characteristics of JIT 1. Closeness of suppliers 2. High quality of materials purchased from suppliers 3. Well-organized receiving and handling of materials 4. Strong management commitment Maintenance Control Pure-preventive maintenance policy Pure-breakdown policy.
© Prentice Hall, O PERATIONS C ONTROL Cost Control Stages in Cost Control 1. Establishing standard or planned cost amounts 2. Measuring actual costs incurred 3. Comparing planned costs to incurred costs 4. Making changes to reduce actual costs to planned costs Following above stages: Establish planned costs for labor, materials, and overhead Measure or calculate costs incurred for these activities Compare actual operations costs to planned operations costs Take steps to reduce actual operations costs to planned levels.
© Prentice Hall, O PERATIONS C ONTROL Budgetary Control Potential Pitfalls of Budgets 1.Placing too much emphasis on insignificant expenses 2.Increasing expenses without adequate information Zero-base budgeting 3.Ignoring fact that budgets must be changed periodically Variable budget Human Relations Considerations in Using Budgets Reducing Human Relations Problems.
© Prentice Hall, O PERATIONS C ONTROL Ratio Analysis 1. Liquidity ratios 2. Leverage ratios 3. Activity ratios 4. Profitability ratios Using Ratios to Control Organizations Evaluate all ratios simultaneously Compare computed values with industry averages Incorporate trend analysis.
© Prentice Hall, O PERATIONS C ONTROL Table 20.1 Four Categories of Ratios TypeExampleCalculationInterpretation ProfitabilityReturn on investment (ROI) Profit after taxesProductivity of assets Total assets LiquidityCurrent ratioCurrent assetsShort-term solvency Current liabilities ActivityInventory turnoverSalesEfficiency of inventory Inventorymanagement LeverageDebt ratioTotal debtHow a company finances itself Total assets.
© Prentice Hall, O PERATIONS C ONTROL Materials Control Procurement of Materials Receiving, Shipping, and Trafficking Receiving activities include: Unloading Identifying Inspecting Reporting Storing inbound shipments Shipping and distribution activities include: Preparing documents Packaging Labeling Loading Directing out shipments Shipping and receiving are organized as one unit Traffic manager’s main responsibilities are: Selection of the transportation mode Coordination of the arrival and departure of shipments Auditing freight bills.
© Prentice Hall, O PERATIONS C ONTROL Materials Control (con’t) Inventory and Shop-Floor Control Inventory control subsystems: Work-in-process Finished-goods inventory Inventory control specifies: What When How much to buy Shop-floor control activities include: Input/output controlRouting SchedulingDispatching SequencingExpediting.
© Prentice Hall, S ELECTED O PERATIONS C ONTROL T OOLS Using Control Tools to Control Organizations Inspection To Inspect or Not to Inspect Management by Exception Establishing Rules Examples of rules based on exception principle: A department manger must immediately inform the plant manager if actual: 1. Weekly labor costs exceed estimated weekly labor costs by more than 15% 2. Dollars spent on a special project exceed funds approved by more than 10%.
© Prentice Hall, S ELECTED O PERATIONS C ONTROL T OOLS Management by Objectives Break-Even Analysis Basic Ingredients of Break-Even Analysis Break-even analysis typically involves: Reflection Discussion Reasoning Decision making Relative to major aspects of production: 1. Fixed costs3. Total costs5. Profits7. Breakeven 2. Variable costs4. Total revenue6. Losspoint Types of Break-Even Analysis Algebraic Break-even Analysis BE = FC (P – VC) Graphic Break-even Analysis Advantages of Using the Algebraic and Graphic Break-even Methods Control and Break-even Analysis.
© Prentice Hall, S ELECTED O PERATIONS C ONTROL T OOLS Table 20.2 Fixed costs and Variable Costs for a Book Publisher Fixed Costs (Yearly Basis)Variable Costs per Book Sold 1. Real estate taxes on property$1,0001. Printing$ Interest on loan to purchase equipment5,0002. Artwork Building maintenance2,0003. Sales commission Insurance8004. Author royalties Salaried labor80,0005. Binding1.00 Total fixed costs$88,800Total variable costs per book$6.00.
© Prentice Hall, S ELECTED O PERATIONS C ONTROL T OOLS Figure 20.5 Break-even analysis for a book publisher.
© Prentice Hall, S ELECTED O PERATIONS C ONTROL T OOLS Other Broad Operations Control Tools Decision Tree Analysis Process Control Value Analysis Computer-Aided Design (CAD) Computer Graphics Computer-aided engineering (CAE) Computer-Aided Manufacturing (CAM).
© Prentice Hall, Chapter Twenty Questions
C h a p t e r 20 GLOSSARYGLOSSARY EXIT Glossary Modern Management, 9 th edition Click on terms for definitions Break-even analysis Break-even point Budget.
Copyright ©2009 Pearson Education, Inc. Publishing as Prentice Hall 22-1 Operations Management 10.
McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. 5 Capacity Planning For Products and Services.
Chapter 13 Preparing The Systems Proposal Systems Analysis and Design Kendall and Kendall Fifth Edition.
CHAPTER 4 Product and Service Design. -2 Major factors in design strategy Cost Quality Time-to-market Customer satisfaction Competitive advantage Product.
F O U R T H E D I T I O N Aggregate Planning © The McGraw-Hill Companies, Inc., 2003 chapter 15 DAVIS AQUILANO CHASE PowerPoint Presentation by Charlie.
12-1 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall Operations Management: Financial Dimensions RETAIL MANAGEMENT: A STRATEGIC.
McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter Strategic Capacity Planning 5 Slides prepared by Laurel Donaldson Douglas.
Strategic Capacity Planning for Products and Services.
Adeyl Khan, Faculty, BBA, NSU Ceiling on the amount of load Capacity at NSU.
Stevenson and Ozgur First Edition Introduction to Management Science with Spreadsheets Part 1 Introduction to Management Science and Forecasting McGraw-Hill/Irwin.
5-1Capacity Planning William J. Stevenson Operations Management 8 th edition.
1 Chapter 5 Capacity Planning. 2 Capacity is the upper limit or ceiling on the load that an operating unit can handle. The basic questions in capacity.
Chapter 14: Network Design and Facility Location.
Facility Design – Week 2 Product, Process and Equipment Design and Analysis By Anastasia Lidya Maukar.
Operations Management For Competitive Advantage © The McGraw-Hill Companies, Inc., 2001 C HASE A QUILANO J ACOBS ninth edition 1 Strategic Capacity Management.
Figures in Chapter 1. Learning objectives After studying this chapter, you should be able to; Define logistics and supply chain management. Describe logistics.
Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved Production and Operations Management Management: Empowering.
© 2006 Prentice Hall, Inc.1 – 1 Operations Management Chapter 1 – Operations and Productivity Chapter 1 – Operations and Productivity © 2006 Prentice Hall,
Capacity Planning. How much long-range capacity is needed When more capacity is needed Where facilities should be located (location) How facilities should.
Chapter foundations of Chapter M A R K E T I N G Understanding Pricing 13.
S7 - 1© 2011 Pearson Education, Inc. publishing as Prentice Hall S7 Capacity and Constraint Management PowerPoint presentation to accompany Heizer and.
Foundations of Chapter M A R K E T I N G Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Understanding Pricing 13.
Prentice Hall, Inc. © STRATEGIC MANAGEMENT & BUSINESS POLICY 10 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 1 Basic Concepts of Strategic.
CPS ® and CAP ® Examination Review MANAGEMENT, Fifth Edition By Haney and Mazzola ©2005 Pearson Education, Inc. Pearson Prentice Hall Upper Saddle River,
Copyright © 2002 Pearson Education, Inc. Slide 1.
CHAPTER FIVE PROCESS SELECTION AND CAPACITY PLANNING Chapter 5 Process Selection and Capacity Planning.
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Management Accounting: A Business Partner Chapter 16.
16-1 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall Financial Merchandise Management RETAIL MANAGEMENT: A STRATEGIC APPROACH.
1 Internal Analysis. 2 Lecture Topics Purpose of Internal Analysis Competitive Advantage and Core Competence Value Chain Financial Analysis Combining.
5-1 McGraw-Hill/Irwin Operations Management, Seventh Edition, by William J. Stevenson Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
1-1 Purchasing and Supply Chain Management by W.C. Benton Chapter One Purchasing and Supply Management Copyright © 2010 by The McGraw-Hill Companies, Inc.
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10-1 McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
© 2008 Prentice Hall, Inc.14 – 1 Operations Management Chapter 14 – Material Requirements Planning (MRP) and ERP PowerPoint presentation to accompany Heizer/Render.
Chapter 20 CONTROLLING FOR ORGANIZATIONAL PERFORMANCE © Prentice Hall,
1 Inventory Control Models. 2 Chapter Learning Objectives Students will be able to: –Use the economic order quantity (EOQ) to determine how much to order.
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved. 1.
INDUSTRIAL & SYSTEMS ENGINEERING. 2 Industrial & Systems Engineering Design of systems – principal activity that distinguishes engineers from other professionals.
Capacity Planning Capacity Planning Pertemuan 04 Mata kuliah: J Manajemen Operasional Tahun: 2010.
25 seconds left….. 24 seconds left….. 23 seconds left…..
30-1. Cost-Revenue Analysis for Decision Making Section 1: The Decision Process Chapter 30 Section Objectives 1.Explain the basic steps in the decision-making.
1 CHAPTER 5 ESSENTIALS OF FINANCIAL STATEMENT ANALYSIS.
Chapter 13 Research and Metrics McGraw-Hill/Irwin Purchasing and Supply Management, 13/e © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.
Chapter 22. Prepare a flexible budget for the income statement.
CAPACITY LOAD OUTPUT. Learning Objectives Explain the importance of capacity planning. Discuss ways of defining and measuring capacity. Describe.
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