Lecture 1: Operations and Productivity
Key Concepts
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Operations Management (OM): Activities creating value through transforming inputs into outputs.
Essential Functions: Marketing, Production/Operations, Finance/Accounting.
Important Formulas
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Single-Factor Productivity :
𝑢𝑛𝑖𝑡𝑠 𝑝𝑟𝑜𝑑𝑢𝑐𝑒𝑑(1000 𝑢𝑛𝑖𝑡𝑠)
(𝑙𝑎𝑏𝑜𝑢𝑟)𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦 =
= Labour hour/4 units
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Multi-Factor Productivity: Critical Variables for Enhancing Productivity
𝑜𝑢𝑡𝑝𝑢𝑡
𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦 =
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Variable for enhancing productivity
1.
2.
3.
Labour (10%)
Capital (38%)
Management (52%).
𝑖𝑛𝑝𝑢𝑡𝑠 𝑢𝑠𝑒𝑑(250 𝑙𝑎𝑏𝑜𝑢𝑟 ℎ𝑜𝑢𝑟)
𝑙𝑎𝑏𝑜𝑢𝑟+𝑚𝑎𝑡𝑒𝑟𝑖𝑎𝑙+𝑒𝑛𝑒𝑟𝑔𝑦+𝑐𝑎𝑝𝑖𝑡𝑎𝑙+𝑚𝑖𝑠𝑐𝑒𝑙𝑙𝑎𝑛𝑒𝑜𝑠
Lecture 2: Operations Strategy in a Global Environment
Key Concepts
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Mission and Strategy: Mission defines purpose; strategy outlines the action plan.
Three Strategic Approaches:
o Differentiation
o Cost Leadership
o Response
10 Strategic OM Decisions:
1. Design of goods and services
2. Quality
3. Process and capacity design
4. Location selection
5. Layout design
6. Human resources and job design
7. Supply-chain management
8. Inventory
9. Scheduling
10. Maintenance
Important Models
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Porter's Five Forces
Product Life Cycle Strategy .
Lecture 3: Forecasting
Key Concepts
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Types of Forecasts: Qualitative and Quantitative.
Quantitative Methods: Moving Average, Exponential Smoothing, Linear Regression.
Important Formulas
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Mean Absolute Deviation (MAD): 𝑀𝐴𝐷 =
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Tracking Signal: =
∑|𝐴𝑐𝑡𝑢𝑎𝑙−𝐹𝑜𝑟𝑒𝑐𝑎𝑠𝑡|
𝐶𝑢𝑚𝑢𝑙𝑎𝑡𝑖𝑣𝑒 𝑒𝑟𝑟𝑜𝑟|
𝑛
𝑀𝐴𝐷
Forecasting Techniques
1.
2.
Naive Approach
Moving Average:
∑|𝐷𝑒𝑚𝑎𝑛𝑑 𝑖𝑛 𝑃𝑟𝑒𝑣𝑖𝑜𝑢𝑠 𝑛 𝑝𝑒𝑟𝑖𝑜𝑑𝑠|
Forecast = =
𝑛
Exponential Smoothing:
New Forecast=Last Period’s Forecast+α(Last Period’s Actual Demand−Last Period’s Forecast)Where α\alphaα is the smoothing
constant.
Lecture 4: Design of Goods and Services -Key Concepts
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Product Life Cycle: Stages - Introduction, Growth, Maturity, Decline.
House of Quality: Relates customer desires to product/service characteristics.
Product Development Continuum: Time-based competition.
Important Techniques
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Quality Function Deployment (QFD)
Value Engineering
Decision Trees in Product Design
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Procedures:
1. Include all possible alternatives.
2. Enter payoffs at the end of branches.
3. Determine expected value of each branch and prune to find the best alternative.
Lecture 5: Process Strategy
Key Concepts
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Four Process Strategies:
1. Process Focus
2. Repetitive Focus
3. Product Focus
4. Mass Customization
Crossover Charts: Compare costs at different volumes.
Lean Production Techniques
Process Design Tools
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Process Flow Diagrams
Value-Stream Mapping
Service Blueprinting
Process Redesign -Re-evaluate business processes for significant performance improvements.