OM 300 Exam 2 Cheat Sheet

13. Which of the following characteristics makes it EASIER to measure the quality of a service, relative to that of a product or facilitating good?

Chapter 2: The classical approaches (scientific management, administrative principles, and bureaucratic organization) share a common assumption: people at work act in a rational manner that is primarily driven by economic concerns. Scientific Management: in 1911, Fredrick W. Taylor published The Principles of Scientific Management, in which he made the following statement: “The principle object of management should be to secure maximum prosperity for the employer, coupled with the maximum prosperity for the employee. He noticed that many workers did their jobs their own ways and without clear and uniform specifications. He believed this caused them to lose efficiency and underperform. He believed the problem would be fixed by scientific

This type of chart is used when one wants to identify the total number of defects that have occurred during a sampling period. The number of samples that occur during the period are essentially the same. This chart has the number of defects on the vertical axis and the number of samples (weeks) on the horizontal axis. The sample size for this problem is over a period of 20 weeks, where a new process was implemented at week 11. Since a new plan was implemented, it caused the two different graphs to appear. The first graph, which occurs before week 11, has a UCL of 28.4 and an average of 16.3. A UCL stands for an upper control limit, which is generally 3 standard errors from the median, and is always the top line of the graph. The median is used as the centerline of the graph. An LCL is apparent in the graph (bottom line), but no exact value is given. The points that are shown on the graph are the “statistical measurement samples taken from the process at different times” (Control Charts PPT., 25, 2016). The second graph, which occurs after week 11, has a UCL of 7.4 and an average of 2.6. This subgroup is also complete with an upper UCL line and a median centerline. After week 11, a new plan was implemented into the hospital to reduce the number of defects. The plan that they used decreased the total number of defects, decreased the UCL, average, and LCL. A strategy that may have been able to reduce the amount of defects was Six Sigma. Six Sigma would work for this type of scenario because it measures how many defects exist in a process and you can figure out how to eliminate them all

It is quite challenging to discuss about procurement management without stating the importance of its strategies. There are four main basic procurement strategies that serve different functions within a procurement management. To begin with, a “Partnership” strategy focuses mainly on constructing mutual commitment in long term relationship with suppliers. While a “Secure Supply” strategy aims to secure short and long term supply while reducing risk from suppliers. In addition, a “Category Management and E-Procurement solutions” serves as a tool to reduce logistic complexity, improve operational efficiency, and attempts to reduce the number of suppliers. Lastly, a “Competive Bidding” strategy emphasizes on obtaining the “Best Deal” for short term transactions with suppliers.(van weele) Each of these four strategies involves a unique purchasing methodology, which implies that the complexity is embedded in an individual strategic implication. Therefore, it requires different tools to accomplish the specific strategical characteristics. A business entity may need to support and execute procurement decisions with other strategic apparatus with analytical methods, including market analysis, uncertainty analysis, price forecasting, supplier relationship and along with others.(Harvard)

What is developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor?

Quantitative Methods: used when situation it “stable” and historical data exists; existing products and current technology are key; involves mathematical techniques; ex: forecasting sales of color televisions

Procurement is one of supply management’s most challenging responsibilities (Burt, 2010). Therefore relationship management is the key to procurement success (Zhang, 2011). The purchasing of services has the potential to turn into relationships with suppliers that tend to focus on trust instead of the transaction (Burt, 2010). With that in mind, procurement should focus on long-term supply sustainability rather than short-term cost-saving (Zhang, 2011). To nurture an organization’s supply base into a fully committed and fully supported external entity requires time, effort and a highly collaborated working relationship (Zhang, 2011). Effective communication within the relationship is indispensable for any procurement outsourcing strategy to prosper (Simchi, Kaminski, Simchi, 2008). Failing to establish and manage good relationships could cause irreversible and catastrophic damage to a procurement outsourcing strategy. One of the most common outsourcing relationship problems is that organizations tend to sit at opposite sides of the work-group table instead of next to each other (Vitasek, 2010). The application is that the two organizations are working against one another instead of work with each other to solve an

Ch.1 financial intermediation results from economies of scale and the specialization of financial transactions. (banks, inv. companies [mutual & pension funds], insurance companies, credit unions, brokerage firms, investment banks). Inv. banks assist firms in raising capital, create the market for innovative new securities that meet the risk and return demand (CMOs, collateralized mortgage obligations – derivative security that separates the cash flows of a mortgage pool into different classes with different maturities and risks). risk and return are the most important characteristics of financial assets. Another is tax. (high tax-bracket investors would, other things equal, would prefer tax-exempt securities [municipal bonds]).

26.   A control chart is used to monitor the fraction of defectives generated by a process is the:

Control charts are used to study the process variation with respect to time. Typically, control chart has a center line, upper control limit and lower control limit, which are abbreviated as CL, UCL and LCL respectively. If the plotted data point is above or below the control limits (UCL or LCL) then the process is considered as an out of control process. Also, out of control point is also an indication of special cause variation. Special cause variation can easily be detected by using control charts and hence control charts are used to detect special cause variation in any aspect of the enterprise system.

Abstract Supplier selection, which is the first step of the activities in the product realization process starting from the purchasing of material till to the end of delivering the products, is evaluated as a critical factor for the companies desiring to be successful in nowadays competition

The supply – chain and logistics industry includes companies that move raw materials, finished goods, packages, and documents across the globe. It is one of the main phases in value chain concept in international business. The massive increase in the international trade has increased has increased the complexity of company supply chains. MNEs and other internationalizing firms require speed and efficiency in moving goods via supply chains around the world. To fulfil this need, competent logistic service providers

Firstly, define what the organization buys and needs on a recurring basis. Then, the organization should take a current evaluation of its sourcing needs (a snapshot if you will) and then forecast future state sourcing needs for say where the firm would like to go in 3-5 years; 5-10 years and so for forth. Then arrive at a good understanding of total cost and the distinction of supplier price. Total cost could entail transportation, poor or premium quality of materials, salaries of premium employees, etc. Then you do a market scan or market research to evaluate competitiveness, similarities and the like to ensure you under the marketplace for a particular supply or service group. Before selecting a supplier, a firm can survey the capabilities by issuing a request for information (RFI) or a request for proposal (RFP), followed by negotiations and finally you evaluate vendor performance management for the supplier that has been chosen. So how is strategic sourcing different from traditional procurement?

1. What control charts should be used to determine whether the process is in control or out of control?

Diversified supplier partnership- strong relationship with supplier such as domestic airlines including LCCs,international airlines,local transports,hotels