Operations Management Concepts & Terminologies

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Concepts & Terminologies

Concept or Terminology Summary Subject
Basic Production Theory Basic Production Theory and Production Function: the output from the combinations of inputs. Cost and Profit
Bill of Material (BOM) BOM represents relationships between a finished product and its constituent parts. General
Bullwhip Effect Forecasting errors and variations are amplified as one moves upstream in the supply chain from customers to distributors and to manufactures. Forecasting
Cycle Time (CT) Average time from release of a job at the beginning of the routing until it reaches an inventory point at the end of the routing. General
First law of forecasting Forecasts are always wrong. General
Forecasting causal models Predict a future parameter (e.g. demand for a product) as a function of other parameters (e.g. interest rates) Forecasting
Forecasting time series models Predict a future parameter (e.g. demand for a product) as a function of past values of that parameter (e.g. historical demand) Forecasting
Lean Management 5 Principles Five Lean Principles: 1. Identify value 2. Map the value stream 3. Create a continuous workflow 4. Establish an upstream pulling system 5. Seek continuous improvements General
Makespan The time it takes to finish a fixed number of jobs General
Manufacturing Environments Manufacturing environments by process structure: 1) Projects 2) Job shops 3) Disconnected flow lines 4) Connected flow lines 5) Continuous flow processes. General
Quantitative forecasting methods Predict the future by using numerical measures of the past in some kinds of mathematical model. Forecasting
Second law of forecasting Detailed forecasts are worse than aggregate forecasts. General
Third law of forecasting The further into the future, the less reliable the forecast will be. General
Throughput (TH) Average output per unit time. General
Waste In lean manufacturing, costs are reduced by reducing waste within a system. General
Work In Process (WIP) Unfinished parts or products between the start and end points of a product routing. Inventory Management
Work In Process 2 (WIP) The Working In Progress items between the start and end points of a product routing. Inventory Management