Transcript Review for Final - Texas Tech University
Review for Final in ISQS 3344
Final will take place: Tuesday, July 2, 2015, 7:30 am, this room
Format
100-150 multiple choice worth 100% • 30-50 of these are from previous segments of the course exam is closed notes/closed book Exam will be comprehensive
Bring
Pencils Calculator Orange Scantron sheet
This exam will emphasize:
What we have covered since the second exam: • • • • Forecasting, Chapter 12 Sales and Operations Planning, Chapter 14 JIT and Lean Production, Chapter 16 Project Management, Chapter 9
OVERALL Content
We have covered Chapters 1,2,3,4,5, 6,9,10,11,11s, 12,13,14,14s, 15 (ERP), and 16 3/4ths of the test material will come from the last third of the course—
Questions
Name five characteristics of a project Successful project management entails what exactly Name five phases of the project lifecycle • Show their sequence Why is project management important Name four core knowledge areas Name five facilitating knowledge areas
More questions
What is the tenth knowledge area and what is its purpose Name some things we do poorly in projects What device or construct is often used to initiate a project?
What is a lean production system? What is its purpose? Who originated lean concepts? Name 8 lean constructs.
PMBOK – PMI’s Body of Knowledge
Four core knowledge areas Scope, Time, Cost, Quality Five Facilitating knowledge areas Communications, Human Resources, Risk, Procurememnt, Stakeholder One Integrating knowledge area Integration knowledge management
Problems in Multiple Choice
A FORECASTING PROBLEM LIKE 12-10 An aggregate planning (S&OP) PROBLEM LIKE 14-6 AN INVENTORY PROBLEM LIKE 13-6 Construct an activity on node network chart from a table; Determine duration, ES, EF, LS, LF and mark the critical path
FORECASTING--Two basic categories of approaches What are they??
Smoothing Effects
150 – 125 – 100 – 5-month 75 – 50 – 3-month 25 – Actual 0 – | Jan | Feb | Mar | Apr | May Month | | June July | | Aug Sept | Oct | Nov
Weighted Moving Average Adjusts moving average method to more closely reflect data fluctuations
WMA n
=
i
= 1 W i D i
where
W i
= the weight for period
i
, between 0 and 100 percent
W i
= 1.00
Weighted Moving Average Example
MONTH WEIGHT DATA August September October
November Forecast 17% 33% 50%
WMA
3 130 110 90 =
i
3
= 1 W i D i
= (0.50)(90) + (0.33)(110) + (0.17)(130) = 103.4 orders
Exponential Smoothing Averaging method Weights most recent data more strongly Reacts more to recent changes Widely used, accurate method
Exponential Smoothing (cont.)
F t
+1 =
D t
+ (1 )
F t
where:
F t
+1 = forecast for next period
D t
= actual demand for present period
F t
= previously determined forecast for present period = weighting factor, smoothing constant
Effect of Smoothing Constant 0.0 1.0
If = 0.20, then
F t
+1 = 0.20
D t
+ 0.80
F t
If = 0, then
F t
+1 = 0
D t
+ 1
F t
0 =
Forecast does not reflect recent data F t
If = 1, then
F t
+1 = 1
D t
+ 0
F t
=
Forecast based only on most recent data D t
Exponential Smoothing (α=0.30)
PERIOD 9 10 11 12 1 2 3 4 5 6 7 8 MONTH Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec DEMAND 37 40 41 37 45 50 43 47 56 52 55 54
F
2 =
D
1 + (1 -
)F 1 = (0.30)(37) + (0.70)(37) = 37
F
3 =
D
2 + (1 -
)F 2 = (0.30)(40) + (0.70)(37) = 37.9
F
13 =
D
12 + (1 -
)F 12 = (0.30)(54) + (0.70)(50.84) = 51.79
Exponential Smoothing (cont.)
PERIOD 1 2 3 4 5 6 7 8 9 10 11 12 13 MONTH Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan DEMAND 37 40 41 37 45 50 43 47 56 52 55 54 – (
FORECAST, F
t
= 0.3) (
+ 1 = 0.5) – 37.00
37.90
38.83
38.28
40.29
43.20
43.14
44.30
47.81
49.06
50.84
51.79
– 37.00
38.50
39.75
38.37
41.68
45.84
44.42
45.71
50.85
51.42
53.21
53.61
70 – 60 – 50 – 40 – 30 – 20 – 10 – 0 – | 1
Exponential Smoothing (cont.)
| 2 | 3 Actual
= 0.50
| 4 | 5 | 6 Month | 7
= 0.30
| 8 | 9 | 10 | 11 | 12 | 13
70 – 60 – 50 – 40 – 30 – 20 – 10 – 0 – | 1
Adjusted Exponential Smoothing Forecasts
| 2 | 3 Adjusted forecast (
= 0.30) Actual Forecast (
= 0.50) | 4 | 5 | | 6 Period 7 | 8 | 9 | 10 | 11 | 12 | 13
Linear Trend Line
y
=
a
+
bx
where
a
= intercept
b
= slope of the line
x
= time period
y
= forecast for demand for period
x b
=
xy
x
2 -
nxy nx
2
a
=
y
-
b x
where
n
= number of periods
x x
= = mean of the
x n
y y
=
n
= mean of the
y
values values
Linear trend line
y
= 35.2 + 1.72
x
Forecast for period 13
y
= 35.2 + 1.72(13) = 57.56 units
70 – 60 – 50 – 40 – 30 – 20 – 10 – 0 – Actual Linear trend line | 1 | 2 | 3 | 4 | 5 | | 6 Period 7 | 8 | 9 | 10 | 11 | 12 | 13
Advantages of Linear Trend Line
Very easy to do calculations in MS Excel There is never any bias—consistently below or above the trend Can forecast any number of periods out into the future • Cannot do this with weighted moving averages or with exponential smoothing
Seasonal Adjustments Repetitive increase/ decrease in demand Use seasonal factor to adjust forecast Is equal to the period demand divided by the demand for the whole year Seasonal factor =
S i
=
D i
D
Seasonal Adjustment (cont.)
YEAR
1
DEMAND (1000’S PER QUARTER)
2 3 4 Total
2002 12.6
2003 14.1
2004 15.3
Total 42.0
8.6
10.3
10.6
29.5
6.3
7.5
8.1
21.9
17.5
18.2
19.6
55.3
45.0
50.1
53.6
148.7
S
1
S
2
D
1
D D
2
D
42.0
148.7
29.5
148.7
S
3
S
4
D
3
D D
4
D
21.9
148.7
55.3
148.7
Seasonal Adjustment (cont.)
For 2005
y
= 40.97 + 4.30
x
= 40.97 + 4.30(4) = 58.17
SF
1 = (
S
1 ) (
F
5 ) = (0.28)(58.17) = 16.28
SF
2 = (
S
2 ) (
F
5 ) = (0.20)(58.17) = 11.63
SF
3 = (
S
3 ) (
F
5 ) = (0.15)(58.17) = 8.73
SF
4 = (
S
4 ) (
F
5 ) = (0.37)(58.17) = 21.53
Forecast Accuracy
Forecast error • difference between forecast and actual demand • • • • MAD – mean absolute deviation MAPD – mean absolute percent deviation Cumulative error Average error or bias
Mean Absolute Deviation (MAD) MAD =
D t n
-
F t
where
t
= period number
D t F t n
= demand in period
t
= forecast for period
t
= total number of periods = absolute value
PERIOD 1 2 3 4 5 9 10 11 12 6 7 8 MAD Example DEMAND,
D t F t
( =0.3) 37 40 41 37 MAD = 50 43 47 56 52 55 54 = 37.00
37.00
D t
37.90
-
F t
40.29
53.39
44.30
= 4.85
47.81
49.06
50.84
557 (
D t
-
F t
) – 3.00
3.10
-1.83
6.72
9.69
-0.20
3.86
11.70
4.19
5.94
3.15
49.31
|
D t
-
F t
| – 3.00
3.10
1.83
6.72
9.69
0.20
3.86
11.70
4.19
5.94
3.15
53.39
Other Accuracy Measures
Mean absolute percent deviation (MAPD) MAPD =
|D t - F t |
D t Cumulative error E =
e t Average error E =
e t n
Comparison of Forecasts
FORECAST Exponential smoothing (
= 0.30) Exponential smoothing (
= 0.50) Adjusted exponential smoothing (
= 0.50,
= 0.30) Linear trend line MAD 4.85
4.04
3.81
MAPD 9.6% 8.5% 7.5%
E
49.31
33.21
21.14
2.29
4.9% – (E) 4.48
3.02
1.92
–
Inventory Costs
Carrying or holding costs Ordering costs Stockout (shortage) costs Back-ordering costs
Annual Carrying costs
Rent Lighting/heating Security Interest (on borrowed capital tied up in inventory) Taxes Shrink/obsolescence/theft Can also be expressed as a % of product cost A rule of thumb is 25%
Ordering costs—costs related to
Transportation Shipping Receiving Inspection
Shortage costs
This is an opportunity cost Is ignored in the simple inventory models, by assuming that there are no shortages Consideration is given to shortages when we add safety stock to a Reorder Point, R = d*L + safety stock
Back-order costs??
Will assume impatient customers who must have the product they wish to buy NOW .
So back-ordering is not considered in the simple models we looked at
Chapter 14 –S&OP
S&OP – Sales and Operations Planning
Sales and Operations Planning – Chapter 14
Determines the resource capacity needed to meet demand over an intermediate time horizon • Aggregate refers to sales and operations planning for product lines or families • Sales and Operations planning (S&OP) matches supply and demand Objectives • Establish a company wide game plan for allocating resources • Develop an economic strategy for meeting demand Copyright 2009 John Wiley & Sons, Inc.
14-38
Sales and Operations Planning Process Copyright 2009 John Wiley & Sons, Inc.
14-39
What are the inputs to the aggregate planning system??
Demand forecasts Capacity constraints Strategic objectives Company policies Financial constraints NOT… • Size of workforce • • • Inventory levels Units subcontracted Overtime scheduled
The Monthly S&OP Planning Process Copyright 2009 John Wiley & Sons, Inc.
14-41
Meeting Demand Strategies
Adjusting capacity • Resources necessary to meet demand are acquired and maintained over the time horizon of the plan • Minor variations in demand are handled with overtime or under-time Managing demand • Proactive demand management Copyright 2009 John Wiley & Sons, Inc.
14-42
Strategies for Adjusting Capacity Level production • Producing at a constant rate and using inventory to absorb fluctuations in demand Chase demand • Hiring and firing workers to match demand Peak demand • Maintaining resources for high demand levels Overtime and under-time • Increasing or decreasing working hours Subcontracting • Let outside companies complete the work Part-time workers • Hiring part time workers to complete the work Backordering • Providing the service or product at a later time period Copyright 2009 John Wiley & Sons, Inc.
14-43
Strategies for Adjusting Capacity Level production • Producing at a constant rate and using inventory to absorb fluctuations in demand Chase demand • Hiring and firing workers to match demand Peak demand • Maintaining resources for high demand levels Overtime and under-time • Increasing or decreasing working hours Subcontracting • Let outside companies complete the work Part-time workers • Hiring part time workers to complete the work Backordering • Providing the service or product at a later time period Copyright 2009 John Wiley & Sons, Inc.
14-44
Level Production
Demand Production
Copyright 2009 John Wiley & Sons, Inc.
Time
14-45
Chase Demand
Demand Production
Copyright 2009 John Wiley & Sons, Inc.
Time
14-46
Strategies for Managing Demand Shifting demand into other time periods • Incentives • • Sales promotions Advertising campaigns Offering products or services with counter cyclical demand patterns Partnering with suppliers to reduce information distortion along the supply chain Copyright 2009 John Wiley & Sons, Inc.
14-47
Quantitative Techniques For AP Pure Strategies Mixed Strategies Linear Programming Transportation Method Other Quantitative Techniques Copyright 2009 John Wiley & Sons, Inc.
14-48
Pure Strategies Example:
QUARTER Spring Summer Fall Winter SALES FORECAST (LB) 80,000 50,000 120,000 150,000 Hiring cost = $100 per worker Firing cost = $500 per worker Inventory carrying cost Regular production cost per pound = $0.50 pound per quarter = $2.00
Production per employee Beginning work force = 1,000 pounds per quarter = 100 workers
Copyright 2009 John Wiley & Sons, Inc.
14-49
Level Production Strategy
Level production (50,000 + 120,000 + 150,000 + 80,000) 4 = 100,000 pounds QUARTER SALES FORECAST PRODUCTION PLAN Spring Summer Fall Winter 80,000 50,000 120,000 150,000 100,000 100,000 100,000 100,000 400,000
Cost of Level Production Strategy (400,000 X $2.00) + (140,00 X $.50) = $870,000
INVENTORY 20,000 70,000 50,000 0 140,000 Copyright 2009 John Wiley & Sons, Inc.
14-50
Chase Demand Strategy
QUARTER Spring Summer Fall Winter SALES FORECAST PRODUCTION PLAN 80,000 50,000 120,000 150,000 80,000 50,000 120,000 150,000 WORKERS NEEDED 80 50 120 150 WORKERS WORKERS HIRED FIRED 0 0 70 30 100 20 30 0 0 50
Cost of Chase Demand Strategy (400,000 X $2.00) + (100 x $100) + (50 x $500) = $835,000 Copyright 2009 John Wiley & Sons, Inc.
14-51
Chapter 9 – Project Management
Why has Project Management become so in-vogue?
Diversity of new products and product markets Shorter life span of products Rapid technological changes
What are the major reasons for project failure?
Inadequate initiation, planning • Specifically, inadequate requirements Absence of a plan Estimates are not accurate Unavailable resources when needed Scope and hope creep Unresponsive contractors who deliver their product late
What are the four phases of the project lifecycle?
Initiating Planning Executing Closing One other: Monitoring and Control
In which of these phases is a WBS started?
Planning • First 3 levels
The main purpose of a project plan is ____
acquire resources guide project execution .
meet standards expectations.
reduce risk.
The most important output of project execution is
Work products
Not---change requests Not—the WBS
The Principle…
That work tends to fill up the time allotted to it is known as…..
An activity has probabilistic completion times of 20, 50 and 80 for the optimistic, most likely and pessimistic durations.
What is the average time (duration) assuming a beta distribution?
30 40 50 60 70
You should know
How to construct a NETWORK chart from a table How to construct a Gantt chart from a table How to perform NETWORK crashing How to do EVA
For each chapter….
Skim the chapter Examine the SUMMARY and the SUMMARY OF KEY TERMS SECTIONS at the end of each chapter
Chapter 2: Quality Management
Know the four operation types Know the three types of make-to Know the four dimensions of competition What does DMAIC stand for?
Chapter 3: Quality Management
Name three quality gurus Describe the relationship between TQM and continuous improvement Understand the costs of quality What is the relationship between quality and productivity?
• Remember the yield formula??
Chapter 4: Statistical Quality Control
Know p-charts, c-charts, xbar-charts, rbar charts Which of these are used for attributes, which for variables?
Will not test you on AOQ, LTPD • {old antiquated concepts}
Chapter 6: Processes and Technologies
Quality Function Deployment House of Quality
Chapter 6, Cont’d: Process Planning, Analysis…
Process analysis, flowcharts • SYMBOLS: Operation, Inspect, Transport, Delay, Storage Flexible Manufacturing Sys, Robotics IT: ExNETWORK Systems, Decision Support Systems CIM
Reengineering design principles
Eliminate handoffs Organize around outputs Capture information once at the source Eliminate multiple external contact points Simplify work
Chapter 10: Supply Chain Management
Logistics by any other name IT Integration The bane of SCM is ______?
Chapter 14: Sales & Operations Planning
Three planning horizons
Long-range planning Medium range planning—aggregate prod planning Short-range planning
Chapter 16: Just-in-time and Lean Production
Name five approaches to leanness… What does SMED mean?
How can small lots be made economically effective?
Chapter 15: Enterprise Resource Planning
ERP Implementation is _____
Chapter 9: Project Management
Probabilistic NETWORK—be able to find the mean and standard deviation when given an optimistic, most likely and pessimistic estimate BE able to calculate project duration, project variance for NETWORK project TASKS
Network diagrams, drawn by commercial software
Do they use • Activity-on-Node, or • Activity-on-Arrow representations?
That’s all folks
{I enjoyed having you as a class}