Operations Management Midterm
Study Guide
Chapter 4: Forecasting
Key Topics:
- Exponential Smoothing: Calculation with given demand, forecast, and alpha value.
- Weighted Moving Average: Forecast calculation using different weights for previous
periods.
- Trend Projection: Understanding slope interpretation in trend projections.
- Forecasting Time Horizons: Short, medium, and long-range forecasts for different
planning needs.
- Mean Absolute Deviation (MAD), Mean Squared Error (MSE), Mean Absolute Percent
Error (MAPE): Calculations and applications for measuring forecast accuracy.
- Tracking Signal: Used to monitor forecasting errors and detect bias in predictions.
Formula for Exponential Smoothing:
Ft = Ft-1 + α(At-1 - Ft-1)
Where Ft = new forecast, Ft-1 = previous forecast, α = smoothing constant, At-1 = previous
actual demand
Practice Questions from Chapter 4:
1. Given an actual demand this period of 103, a forecast value for this period of 99, and an
alpha of .6, what is the exponential smoothing forecast for next period?
2. John's House of Pancakes uses a weighted moving average method to forecast pancake
sales...
3. A trend projection equation with a slope of 0.78 means that there is a 0.78 unit rise in Y
per period.
4. Forecasts used for new product planning, capital expenditures, facility location or
expansion, and R&D typically utilize a:
Chapter 5: Product Design
Key Topics:
- Product Life Cycle (PLC): Introduction, Growth, Maturity, and Decline stages with
associated strategy focuses.
- Product Strategy Elements: Selection, definition, and design as core components of
product decision.
- Factors Influencing Product Opportunities: Economic and sociological changes,
technology, etc.
- Product Design Documentation: Engineering drawings, Bill of Materials (BOM),
Assembly Charts, and Route Sheets.
- Sustainability in Product Design: Concepts like Life Cycle Assessment (LCA) for
sustainable design.
Example Product Life Cycle Diagram (Introduction, Growth, Maturity, Decline)
Practice Questions from Chapter 5:
5. In which stage of the product life cycle should product strategy focus on process
modifications as the product is being 'fine-tuned' for the market?
6. When should product strategy focus on forecasting capacity requirements?
7. The three major elements of the product decision are:
8. Which of the following would likely cause a change in market opportunities based upon
levels of income and wealth?
Chapter 11: Supply Chain Management
Key Topics:
- Supply Chain Strategies: Matching inventory strategies with corporate strategies (e.g.,
low cost, differentiation).
- Supply Chain Risks and Mitigation Tactics: Supplier failures, logistics delays, and related
mitigation strategies.
- Bullwhip Effect: Causes and methods for mitigation to improve supply chain stability.
- Logistics and Distribution Management: Ensuring effective flow of goods from origin to
destination.
- Make-or-Buy Decision: Determining whether to produce goods in-house or outsource.
Practice Questions from Chapter 11:
9. Operations managers must be able to anticipate changes in which of the following?
10. For which corporate strategy(ies) should supply chain inventory be minimized?