CMA Inter Paper 9: OMSM flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Operations Management Definition

The management of the transformation process that converts inputs such as materials, labour and information into goods and services, covering design, planning, control and improvement decisions.

Order Qualifier vs Winner

An order qualifier is the minimum standard a firm must meet to be considered by a buyer; an order winner is the criterion that actually secures the purchase.

Process Types by Volume

Job shop, batch, mass/line and continuous process. As volume rises, variety falls and the process becomes more standardised, capital intensive and efficient.

Service Characteristics

Services differ from goods through intangibility, inseparability of production and consumption, perishability, and customer participation in the delivery process.

Exponential Smoothing Formula

New forecast equals alpha times latest actual demand plus one minus alpha times previous forecast. A higher alpha makes the forecast more responsive to recent demand.

Economic Order Quantity Formula

EOQ equals the square root of two times annual demand times ordering cost, divided by annual holding cost per unit. It minimises total ordering plus holding cost.

Reorder Point

The inventory level at which a new order is placed: demand rate multiplied by lead time, plus safety stock held against demand or lead-time uncertainty.

MRP Net Requirement

Net requirement equals gross requirement plus safety stock minus projected on-hand inventory minus scheduled receipts. It drives planned order releases in MRP.

Aggregate Planning Strategies

Level capacity keeps output constant and absorbs demand variation through inventory or backlogs; chase demand varies output to match demand; mixed plans blend both.

SPT Scheduling Rule

Shortest Processing Time sequences jobs by ascending duration. It usually minimises average flow time and average waiting time but can delay long jobs.

Single vs Multifactor Productivity

Single-factor productivity divides output by one input such as labour hours; multifactor productivity divides output by a cost-weighted bundle of inputs.

Total Factor Productivity

Total output divided by total inputs, usually measured in value terms so that dissimilar inputs such as labour, materials and capital can be aggregated.

Productivity Change Formula

Percentage change in productivity equals new productivity minus old productivity, divided by old productivity, multiplied by one hundred.

Productivity vs Production

Production measures output volume only; productivity relates output to the inputs consumed, so output can rise while productivity falls if inputs rise faster.

Cost of Quality Categories

Prevention and appraisal costs are conformance costs; internal and external failure costs are non-conformance costs, with external failure usually the costliest.

Seven Wastes TIMWOOD

Transportation, inventory, motion, waiting, overproduction, overprocessing and defects. Overproduction is often considered the worst waste because it creates others.

Process Capability Cpk

Cpk measures how well a process fits within specification limits while accounting for centring; a value below one indicates the process produces defects.

Six Sigma DMAIC

Define, Measure, Analyse, Improve and Control: a structured methodology for improving existing processes toward a target of 3.4 defects per million opportunities.

Kaizen and 5S

Kaizen is continuous incremental improvement by the workforce; 5S (sort, set in order, shine, standardise, sustain) organises and standardises the workplace as its foundation.

PERT Expected Time

Expected activity time equals optimistic plus four times most likely plus pessimistic, divided by six; variance uses the pessimistic-optimistic range squared over thirty-six.

Critical Path Meaning

The longest sequence of dependent activities through a project network. It determines minimum project duration and its activities have zero total float.

Earned Value Variances

Cost variance equals earned value minus actual cost; schedule variance equals earned value minus planned value. Positive values indicate favourable performance.

Cost Performance Index

CPI equals earned value divided by actual cost. A CPI below one means cost overrun; estimate at completion equals budget at completion divided by CPI.

Bullwhip Effect

Upstream demand variability amplifies as orders move up the supply chain, caused by forecasting, batching, price promotions and shortage gaming, raising inventory costs.

Mintzberg 5 Ps

Strategy viewed as plan (intended course), ploy (competitive manoeuvre), pattern (consistent behaviour), position (place in environment) and perspective (shared mindset).

Vision Mission Objectives

Vision describes the desired future state; mission states present purpose and scope; objectives are measurable, time-bound targets that translate mission into action.

Porter Five Forces

Industry attractiveness depends on rivalry, buyer power, supplier power, threat of new entrants and threat of substitutes; strong forces compress industry profitability.

VRIO Framework

A resource yields sustained advantage only if it is valuable, rare, costly to imitate and supported by the organisation's structure and processes.

Porter Value Chain

Primary activities are inbound logistics, operations, outbound logistics, marketing and sales, and service; support activities include procurement, technology, HR and infrastructure.

Porter Generic Strategies

Cost leadership, differentiation and focus. Firms failing to achieve one clear generic strategy are stuck in the middle and earn below-average returns.

Ansoff Growth Matrix

Four growth options by product and market novelty: market penetration, market development, product development and diversification, with rising risk in that order.

Suitability Acceptability Feasibility

SAFe tests a strategy: suitability asks whether it addresses the strategic situation, acceptability covers risk and return, feasibility covers resources and competences.