Chapter 1: Introduction

1. The pipeline-like movement of the materials and information needed to

produce a good or service. Supply Chain Network
2. A strategy that meets the needs of shareholders and employees and
that preserves the environment. Triple Bottom Line Strategy
3. The processes needed to determine the set of future actions required
to operate an existing supply chain. Planning
4. The selection of suppliers. Sourcing
5. A type of process where a major product is produced or a service
provided. Making
6. A type of process that moves products to warehouses or customers.
Delivery
7. Processes that involve the receiving of worn-out, defective, and excess
products back from customers and support for customers who have
problems. Returning
8. A type of business where the major product is intangible, meaning it
cannot be weighed or measured. Service
9. Refers to when a company builds service activities into its product
offerings. Product-service bundling
10.Means doing something at the lowest possible cost. Efficiency
11.Means doing the right things to create the most value for the company.
Effectiveness
12.Abstractly defined as quality divided by price. Value
13.A philosophy that aggressively seeks to eliminate causes of production
defects. Total Quality Management
14.An approach that seeks to make revolutionary changes as opposed to
evolutionary changes (which is advocated by total quality management).
Business process reengineering
15.An approach that combines TQM and JIT. Six Sigma Quality
16.Tools that are taught to managers in “Green and Black Belt Programs.”
Service Science Management and Engineering.
17.A program to apply the latest concepts in information technology to
improve service productivity. Service science management and engineering.
 Chapter 2: Strategy

1. A strategy that is designed to meet current needs without compromising

the ability of future generations to meet their needs. Sustainable
2. The three criteria included in a triple bottom line. Social, Economic &
Environmental
3. The seven operations and supply chain competitive dimensions. Cost,
Quality, Delivery Speed, Delivery Reliability, Coping with Changes in Demand,
Flexibility and Speed of New Product Introduction, Other Product-Specific
Criteria.
4. It is probably most difficult to compete on this major competitive
dimension. Cost
5. This occurs when a company seeks to match what a competitor is
doing while maintaining its existing competitive position. Straddling
6. A criterion that differentiates the products or services of one firm from
those of another. Order Winner
7. A screening criterion that permits a firm’s products to be considered as
possible candidates for purchase. Order Qualifier
8. A diagram showing the activities that support a company’s strategy.
Activity-System Map
9. A measure calculated by taking the ratio of output to input. Productivity

Chapter 3: Design Products and Services

1. An organization capable of manufacturing or purchasing all the

components needed to produce a finished product or device. Contract
Manufacture
2. The one thing that a company can do better than its competitors. Core
Competency
3. The six phases of the product development process. Planning, concept
development, system-level design, detail design, testing, production ramp-up.
4. A useful tool for the economic analysis of a product development project.
Net present value.
5. An approach that uses interfunctional teams to get input from the
customer in design specification. Quality function development
6. A matrix of information that helps a team translate customer requirements
 into operating or engineering goals. House of quality
7. The greatest improvements from this arise from simplification of the
product by reducing the number of separate parts. Design for
manufacturing and assembly.
8. The incorporation of environmental considerations into the design and
development of products or services. Eco-design

Chapter 4: Projects
1. A project structured where a self-contained team works full time on the
project. Pure project or skunkworks
2. Specific events that upon completion mark important progress toward
completing a project. Milestones
3. This defines the hierarchy of project tasks, subtasks, and work packages.
Work breakdown structure.
4. Pieces of work in a project that consume time to complete. Activities
5. A chart that shows both the time and sequence for completing the
activities in a project. Gantt chart
6. Activities that in sequence form the longest chain in a project. Critical
path(s)
7. The difference between the late and early start time for an activity.
Slack
8. When activities are scheduled with probabilistic task times. The Program
Evaluation and Review Technique (PERT)
9. The procedure used to reduce project completion time by trading off
time versus cost. Crashing
10. A key assumption related to the resources needed to complete activities
when using the critical path method. Resources are always available.

Chapter 5: Strategy Capacity Management

1. The level of capacity for which a process was designed and at which
it operates at minimum cost. Best operating level
2. A facility has a maximum capacity of 4,000 units per day using overtime
and skipping the daily maintenance routine. At 3,500 units per day, the
facility operates at a level where average cost per unit is mini mized.
Currently, the process is scheduled to operate at a level of 3,000 units
 per day. What is the capacity utilization rate? 85.7 percent
3. The concept that relates to gaining efficiency through the full utilization
of dedicated resources, such as people and equipment. Economies of
scale
4. A facility that limits its production to a single product or a set of very
similar products. Focused factory
5. When multiple (usually similar) products can be produced in a facility
less expensively than a single product. Economies of scope
6. The ability to serve more customers than expected. Capacity cushion
7. In considering a capacity expansion, we have two alternatives. The first
alternative is expected to cost $1,000,000 and has an expected profit
of $500,000 over the next three years. The second alternative has an
expected cost of $800,000 and an expected profit of $450,000 over the
next three years. Which alternative should we select, and what is the
expected value of the expansion? Assume a 10 percent interest rate.
Alternative 1 Present Value = 500,000 × (.909 + .826 + .751) - 1,000,000 =
$243,000 then we have Alternative 2 Present Value = 450,000 × (.909 + .826 +
.751) - 800,000 = $318,700 and in few words Alternative 2 is best.
8. In a service process such as the checkout counter in a discount store,
what is a good target percentage for capacity utilization? 70%.

Chapter 6: Learning Curves

1. The line that shows the relationship between the time to produce a
unit and the cumulative number of units produced. Learning curve
2. Improvement that derives from people repeating a process and gaining
skill or efficiency. Individual learning
3. Improvement that comes from changes in administration, equipment, and
product design. Organizational learning
4. Assuming an 80 percent learning rate, if the 4th unit takes 100 hours
to produce, the 16th unit should take how long to produce? 64 hours

5. The resulting plot of a learning curve when logarithmic scales are used.
A straight line
6. Systems that have this characteristic usually have near-zero learning.
Highly automated system
 Chapter 7: Manufacturing Process
1. A firm that makes predesigned products directly to fill customer orders
has this type of production environment. Make-to-order.
2. A point where inventory is positioned to allow the production process
to operate independently of the customer order delivery process.
Customer order decoupling point.
3. A firm that designs and builds products from scratch according to
customer specifications would have this type of production environment.
Engineer-to order.
4. If a production process makes a unit every two hours and it takes 42
hours for the unit to go through the entire process, what is the expected
work-in-process equal to? 42/2 = 21 units
5. A finished goods inventory, on average, contains 10,000 units. Demand
averages 1,500 units per week. Given that the process runs 50 weeks
a year, what is the expected inventory turn for the inventory? Assume
that each item held in inventory is valued at about the same amount.
(1,500 × 50)/10,000 = 7.5 turns
6. This is a production layout where similar products are made. Typically,
it is scheduled on an as-needed basis in response to current customer
demand. Manufacturing Cell
7. The relationship between how different layout structures are best suited
depending on volume and product variety characteristics is depicted on
this type of graph. Product-process matrix

Chapter 8: Facility Layout

1. Three terms commonly used to refer to a layout where similar equipment
or functions are grouped together. Work center, job-shops or functional.
2. A layout where the work to make an item is arranged in progressive
steps and work is moved between the steps at fixed intervals of time.
Assembly line.
3. A measure used to evaluate a work center layout. Number of annual
movements multiplied by the distance of each movement, and then multiplied
by the cost.
4. This is a way to shorten the cycle time for an assembly line that has
a task time that is longer than the desired cycle time. Assume that it
 is not possible to speed up the task, split the task, use overtime, or
redesign the task. Using parallel workstations.
5. This involves scheduling several different models of a product to be
produced over a given day or week on the same line in a cyclical
fashion. Mixed-model line balancing.
6. If you wanted to produce 20 percent of one product (A), 50 percent
of another (B), and 30 percent of a third product (C) in a cyclic
fashion, what schedule would you suggest? AABBBBBCCC then repeat
that.
7. A term used to refer to the physical surroundings in which a service
takes place and how these surroundings affect customers and employees.
Servicescape.
8. A firm is using an assembly line and needs to produce 500 units
during an eight- hour day. What is the required cycle time in seconds?
57.6 seconds = (8 × 60 × 60)/500 = (hours x 60 min. x 60 secs.)/units
9. What is the efficiency of an assembly line that has 25 workers and a
cycle time of 45 seconds? Each unit produced on the line has 16
minutes of work that needs to be completed based on a time study
completed by engineers at the factory. 85% = (16 × 60)/(25 × 45) =
(production time x seconds)/(workers x seconds worked)

Chapter 9: Service Process

1. Service systems can generally be categorized according to this
characteristic that relates to the customer. Customer Contact
2. A service triangle consists of these four features. Service strategy, support
systems, employees, customer.
3. This framework relates to the customer service system encounter. Service
system design matrix.
4. This is the key feature that distinguishes a service blueprint from a
normal flowchart. Line of visibility
5. Having your luggage arrive on time when you land at an airport is
what type of service in the service package? Implicit service
6. Second Life would be this type of virtual service. Pure virtual customer
contact
7. These procedures are done to make a system mistake-proof. Poka-
 yokes
8. These are the three steps of service at Nordstrom. Warm welcome,
Anticipation and Compliance, Fond Farewell
9. What are the four strategies for managing customer induced variability?
Classic Accommodation, Low-cost accommodation, Classic reduction,
Uncompromised reduction.
10. The front end and the back end of a service encounter are referred
to as what. Service bookends.

Chapter 10: Waiting Lines Analysis and Simulations

1. The queuing models assume that customers are served in what order?
First come, first served.
2. Consider two identical queuing systems except for the service time
distribution. In the first system, the service time is random and Poisson
distributed. The service time is constant in the second system. How
would the waiting time differ in the two systems? Waiting time in the first
system is two times the second.
3. What is the average utilization of the servers in a system that has
three servers? On average, 15 customers arrive every 15 minutes. It
takes a server exactly three minutes to wait on each customer. 100%
4. What is the expected waiting time for the system described in question
3? Infinite
5. Firms that desire high service levels where customers have short wait
times should target server utilization levels at no more than this
percentage. 70–80%
6. In most cases, if a firm increases its service capacity by 10 percent,
it would expect waiting times to be reduced by what percentage?
Assume customer arrivals and service times are random. Greater than
10%
7. An ice cream stand has a single window and one employee to serve
customers. During their busy season, 30 customers arrive each hour,
on average. It takes 1.5 minutes, on average, to serve a customer.
What is the utilization of the employee? 75%
8. How long would customers have to wait in line, on average, at the ice
cream shop discussed in question 7? 0.075 hours, or 4.5 minutes.
9. Random service times can be modeled by this. Exponential distribution
10. A bank teller takes 2.4 minutes, on average, to serve a customer. What
would be the hourly service rate used in the queuing formulas? 25
customers per hour
11. There are three teller windows in the bank described in the prior
question. On average, 60 customers per hour arrive at the bank. What
will be the average number of customers in line at the bank? 2.5888

Chapter 11: Process Design and Analysis

1. This is a part of an organization that takes inputs and transforms them
into outputs. A Process
2. This is the ratio of the time that a resource is activated relative to the
time it is available for use. Utilization
3. This is when one or more activities stop because of a lack of work.
Starving
4. This is when an activity stops because there is no place to put the
work that was just completed. Blocking
5. This is a step in a process that is the slowest compared to the other
steps. This step limits the capacity of the process. Bottleneck

6. What is the difference between McDonald’s old and current processes?

Make to stock vs Make to order.
7. This refers to the fixed timing of the movement of items through a
process. Pacing
8. This is when one company compares itself to another relative to
operations performance. Benchmarking
9. This is the time it takes a unit to travel through the process from
beginning to end. It includes time waiting in queues and buffers. Flow
time
10. The relationship between time and units in a process is called this.
Little’s law
11. What is the mathematical relationship between time and units in a
process? Inventory = Throughput rate × Flow Time
12. What is the major assumption about how a process is operating for
Little’s law to be valid? Process is operating in steady state.
13. What is the double-edged sword of job design? Specialization
14. This is when a job is increased vertically or horizontally. Job enrichment
and enlargement
15. What are the four basic work measurement techniques? Time study, work
sampling, predetermined motion - time data systems, elemental data

Chapter 12: Six Sigma Quality

1. This refers to the inherent value of the product in the marketplace and
is strategic decision for the firm. Design Quality
2. Relates to how well a product or service meets design specifications.
Conformance quality
3. Relates to how the customer views the ability of the product to meet
his or her objectives. Fitness for use
4. The series of international quality standards. ISO 9,000
5. What is the enemy of good quality? Variation
6. A Six Sigma process that is running at the center of its control limits
would expect this defect rates. 2 parts per billion units
7. The standard quality improvement methodology developed by General
Electric. DMAIC cycle