1. Pareto phenomenon (ABC analysis)
Classifying items, activities, or tasks according to some measure of importance and allocating efforts and resources accordingly
A vital few things are important for reaching an objective or solving a problem
80/20 rule – 80% of the problems are caused by 20% of the activities
How do we identify the vital few?

2. Pareto phenomenon, ABC analysis, & Recognition of Priorities
Acknowledging the fact that certain aspects of any management situation are more important than others is called Recognition of Priorities.

3. Models A model is an abstraction of reality Physical Schematic
Mathematical

4. Quantitative approach
Linear programming
Transportation model
Inventory models
Waiting line models
Statistical models

5. Recent Trends Global Competition Operations Strategy Flexibility
Cycle Time Reduction
Business Process Re-engineering
Supply Chain Management
Workers Involvement
Lean Manufacturing
Total Quality Management

6. Recent Trends Operations Strategy Flexibility Cycle Time Reduction
Global Competition
Global Market
Global Suppliers
Operations Strategy
Quality based
Time based
Flexibility
Variety of products
High Volume as well as Low Volume
Cycle Time Reduction
The less time RM (Raw Material), WIP (Work In Process), FG (Finished Goods) spend in the Manufacturing and Logistics process, the less opportunity they have to absorb costs.

7. Recent Trends Supply Chain Management Workers Involvement
Business Process Re-engineering
Value added and NVA activities
Supply Chain Management
NOT from RM storage to FG warehouse
From the original suppliers to final consumers
Workers Involvement
Workers are not costs, they are assets
Lean Manufacturing
Inventory is waste
Total Quality Management

8. Examples of Exam Questions
1. The following activities are all a part of system operations as opposed to system design
long term forecasting, product design, capacity planning, inventory management.
short term forecasting, product design, capacity planning, inventory management
short term forecasting, production planning, capacity planning, inventory management
short term forecasting, production planning, quality assurance, inventory management
none of the above
2. Pareto Phenomenon is the same as
ABC analysis
analysis of trade-off
systems analysis
quantitative approaches
none of the above

9. Review Questions (cont.)
3. In ABC analysis
25% of items form 25% of the measure of importance
10% of items form 10% of the measure of importance
90% of items form 90% of the measure of importance
50% of items form 50% of the measure of importance
15% of items form 75% of the measure of importance
4. Given
(I) Lean operations, (II) Operations strategy, (III) Business process re-engineering
(A) Inventory is waste, (B) Time based operations, (C) High Volume as well as Low Volume,
(D) Value-added and NVA activities
Which of the following selections is correct?
(I) matches with (D), (II) matches with (C), (III) matches with (B)
(I) matches with (A), (II) matches with (B), (III) matches with (C)
(I) matches with (A), (II) matches with (B), (III) matches with (D)
(I) matches with (A), (II) matches with (D), (III) matches with (C)
(I) matches with (C), (II) matches with (D), (III) matches with (B)

10. Review Questions (cont.)
5. Given
(I) supply chain management, (II) Flexibility, (III) Operations strategy
(A) Quality based operations, (B) Workers are asset, (C) Value added and NVA activities,
(D) from suppliers to consumers, (E) High Volume as well as low volume
Which of the following selections is correct?
(I) matches with (D), (II) matches with (E), (III) matches with (C)
(I) matches with (D), (II) matches with (E), (III) matches with (A)
(I) matches with (A), (II) matches with (E), (III) matches with (D)
(I) matches with (C), (II) matches with (D), (III) matches with (E)
(I) matches with (E), (II) matches with (B), (III) matches with (D)