Embed Size (px)
Citation preview
SOU School of Business
BA 380: Operations Management
OVERVIEW
SOU School of Business
TOPICS RELEVANT TO BA 499
• Forecasting• Decision Making• Location Planning• Cost Volume Analysis
(a.k.a Breakeven Analysis)
• Reliability • Inventory Management• Scheduling• Project Management• Waiting Lines• Quality Control• and more...
SOU School of Business
Forecasting
System Design
Cost Volume Analysis
Inventory Management
Location and Capacity Planning
Process Selection
Scheduling
Material ResourcePlanning
FinancialPlanning
SOU School of Business
Important Recurring Themes
Decision Making involves• Recognizing and Identifying Problems • Responding to Opportunities• Weighing COST versus BENEFIT of Service• The Use of analytical (quantitative and
qualitative) tools– Accounting principles (e.g. cost/benefit analysis)
Classification of COSTS as variable or fixed– Statistical concepts (e.g. probabilities and probability
distributions)– Computer software (Excel skill)– Formulas – in English please!– Graphs – worth a thousand words (says who?)– Interactive simulations
SOU School of Business
Cost/Benefit Examples
COST BENEFIT
InventoryManagement
Carry More Inventory •Higher customer service level•Lesser interruption of process
Queuing More servers (larger facility)
•Higher customer service level•Lesser interruption of process
Reliability Better inspection (QC)Improve process
•Improved product quality•Higher customer satisfaction•Higher productivity
SOU School of Business
Cost Classification
VARIABLE FIXED
Cost of Quality •Cost of inspection •Cost of passing defectives
Cost Volume Analysis(Breakeven Analysis)
•Direct materials and direct labor
• Depreciation expense, staff salary, insurance, rent, lease, etc.
Inventory Management •Holding cost, Purchase cost
•Ordering cost•Setup cost
SOU School of Business
Total Cost GraphQuality Control
Total Cost of Quality
Cost ofInspection
Cost of Passing Defectives
Optimum Amount to
Inspect
Amount to Inspect
$
SOU School of Business
Total Cost GraphInventory Management
Total Cost of Inventory
Annual HoldingCost
Annual Ordering(Setup) Cost
EOQ Q
$
SOU School of Business
Total Cost GraphQueuing (Servers)
Total Cost of Service
Capacity
Cost ofService Capacity
Cost of CustomersWaiting
Optimum Service Capacity
Number of Servers
$
SOU School of Business
FormulasIn English please!
pDSQ
DH
QTC
2
Annual Ordering (setup) Cost
Annual Purchasing Cost
Annual Holding Cost
SOU School of Business
FormulasIn English please!
pDSQ
DH
QTC
2
Number of orders (setups)
Average inventory
SOU School of Business
GraphsWorth a thousand words (English)
Time
Maximum run size
Maximum inventory
to t1Run time
t2‘Idle’ time
Inventory buildup
Inventory consumption
CumulativeProduction
SOU School of Business
Excel SkillAutomating tedious, repetitive computation
Important Excel Functions• Absolute vs. relative cell
address• Use of Named cells/ranges• Vlookup function• If function• Graphing• Active worksheets
SOU School of Business
Excel SkillAutomating tedious, repetitive computation
Important Excel Functions• Absolute vs. relative cell
address• Use of Named cells/ranges• Vlookup function• If function• Graphing• Active worksheets
SOU School of Business
www.sou.edu/business
