Glossary of Intro to Business Chapter 9

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RQ9-1 Pg 249
List all the activities involved in operations management.
All activities managers engage in to produce goods and services.
• Product development
• Plan for production
• Research for production
• Operations control
RQ9-6 PG 258
What factors should be considered when selecting a site for a new manufacturing facility?
• Location of major customers
• Transportation cost to deliver finished products to customers
• Geographic locations of suppliers of parts and raw materials
• Availability and cost of skilled and unskilled labor
• Quality of life for employees and management in the proposed location
• The cost of both land and construction required to build a new production facility
• Local and state taxes, environmental regulations, and zoning laws that could affect a new production facility
• The amount of financial support, if any, offered by local and state governments
• Special requirements, such as great amounts of energy or water used in the production process
RQ9-7 Pg 260
What is the objective of operational planning? What four steps are used to accomplished this objective?
Decide on the amount of products or services that each facility will produce during a given time.
• Select a planning horizon
• Estimate market demand
• Comparing market demand with capacity
• Adjusting products or services to meet demand
RQ9-8 Pg 261
If you were an operations manager, what would you do if market demand exceeded the production capacity of your manufacturing facility? What action would you take if the production capacity of your manufacturing facility exceeded market
Market Demand Exceeded Production Production Exceeds Demand
(M)Making less than you need (P)Making more than you need
(M)Overtime, second or third shift (P)Lay off workers (M)Subcontract a portion of the work (P)Short work week (M)Expand or build new facility (P)Shut down part of facility (M)Ignore excess demand (P)Shift to other goods and services (P)Sell unused facilities
RQ9-9 Pg 262-263
Why is selecting a supplier so important?
Have to have a backup supplier because problems such as strikes, equipment breakdown or natural disaster may occur with primary suppliers.
• Price
• Quality
• Reliability
• Credit terms
• Shipping cost
RQ9-10 Pg 263
What cost must be balanced and minimized through inventory control?
Inventory control is the process of managing inventories in such a way as to minimize inventory costs, including both holding costs and potential stock our costs.
Holding and storage cost
Stock out cost

Stock out cost = the cost of running out of inventory
RQ9-12 Pg 264
How does the just in time inventory system help to reduce inventory cost?
Designed to ensure that materials or supplies arrive just in time, just when they are needed so that storage and holding cost are minimized.
Remington Products
1) Why could Remington choose to produce only blades in the United States rather than assembling entire shavers as well?
• Cost more to make the blades in the USA.
• Remington retains tighter control over quality
• The blade is a vital element in the shaver
2) Which plant layout would you suggest that Remington use when making blades in its Connecticut factory? Why?
Plant layout is a product layout. It is an assembly line layout
3) What is the focus of the conversion process in Remington’s Connecticut factory?
Focus refers to the resource or resources that comprise the major or most important input for the conversion (assembly of the product) process. Material resources such as steel and aluminum coil are the focus. Connecticut only makes the blades for the shavers.

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