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2010-06-17 00:07:36
Business Operations Management

Operations 606 Test 2
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  1. Statistical Process Control - The control process?
    • 1. Define
    • 2. Measure
    • 3. Compare to a standard
    • 4. Evaluate
    • 5. Take corrective action
    • 6. Evaluate corrective action
  2. Statistical Process Control Variations?
    • 1. Random Variation: Natural variations in the output of process, countless factors
    • 2. Assignable Variation: A variation whose source can be identified
  3. What is a Control Chart?
    a mechanism to detect the occurrence of assignable variation.
  4. Draw the Normal Distribution
    • Mean 95.44% +/- 2 Std Dev
    • Mean 99.74% +/- 3 Std Dev
  5. Draw Control Chart
    • Numbers that fall between the UCL & LCL reflect normal variation due to chance.
    • Numbers that fall outside the UCL & LCL "out of control" reflect abnormal variation due to assignable sources
  6. Mean & Range Charts
    • When Process Mean shifts upward, x-Chart detects shift, R-chart does not.
    • When Process variability increases (bells get larger) x-chart does not reveal increase, R-chart does.
  7. Sample Means Chart and Range Chart
    • Continuous Variable (X-bar and R-charts):
    • -diameter
    • -length
    • -weight
    • -time
  8. X-bar and R-chart formulas
  9. What are the two Control Charts for Attributes?
    • p-Chart - Control chart used to monitor the proportion of defectives in a process. (proportion)
    • c-Chart - Control chart used to monitor the number of defects per unit. (counting)

    (Sample size remains the same)
  10. When do you use p-Charts?
    • 1. When observations can be placed into two categories:
    • -good/bad
    • -pass/fail
    • 2. When the data consists of multiple samples of several observations each
  11. Fraction-Defective p-Charts formula
  12. When do you use c-Charts?
    • Use only when the number of occurrences per unit of measure can be counted; non-occurrences cannot be counted.
    • -Scratches, chips, dents etc
    • -Cracks or faults per unit of distance
    • -Breaks or tears per unit of area
    • -Bacteria per unit of volume
    • -Calls, complaints or failures per unit of time
  13. Number of Defects c-Charts Formula?
  14. Process Capability
    • Tolerance - specifications
    • Process variability - natural variability in a process
    • Process capability - process variability relative to specification
  15. Process Capability ranges
    • Target is 1.33 (33% more capable than the process requires)
    • Variability is well within specifications (not matching or exceeding)
    • 16.5% on Lower and Upper
    • Six Sigma shoots for 2x as capable
  16. Process Capability Ratio
  17. 3 Sigma and 6 Sigma Quality
  18. Quality Service Dimensions
    • 1. Reliability
    • 2. Responsiveness
    • 3. Assurance
    • 4. Empathy
    • 5. Tangibles
  19. Quality Service Dimension
    1. Service
    • -Ability to perform the promised service dependable and accurately
    • -Accomplished on time, in the same manner without errors every time
    • -Accuracy in billing and record keeping
    • Example: ZReceive mail at the same time each day
  20. Dimensions of Service Quality
    2. Responsiveness
    • -The willingness to help customers, to provide prompt service
    • -Ability to recover quickly, wiht professionalism
    • Example: avoid keeping customers waiting for no apparent reason
  21. Dimensions of Service Quality
    3. Assurance:
    • -The knowldege and courtesy of employees to convey trust and confidence
    • -Competence to perform
    • -Politeness and respect for the customer
    • -Effective communication to the customer
    • -General attitude
  22. Dimensions of Service Quality
    #4 Empathy
    • -Your problem is my problem
    • -THe provisionj of caring, individualized attention
    • -Approachability
    • -Sensitivity
    • -Effort to understand the customer's needs
  23. Dimensions of Service Quality
    #5 Tangibles
    • -The appearance of physical facilities, equipment, personnel and communication material
    • -Cleanliness
  24. Who developed the The Six Sigma concept, when & why?
    Bill Smith, Sr. Engineer at Motorola in 1986 as a way to standardize the way defects were tallied.
  25. Sigma is what?
    The Greek symbol used in statistics to refer to standard deviation which is a measure of variation.
  26. Adding six to sigma combines what?
    A measure of process performance (sigma) wiht the goal of nearly perfect quality (six)
  27. How is Six Sigma defined in the book "The Six Sigma Way"?
    a comprehensive and flexible system for achieving, sustaining and maximizing business success. SIx Sigma is uniquely driven by close understanding of customer needs, disciplined use of facts, data, and statistical analysis, and diligent attention to managing, improving and reinventing business processes.
  28. If there is too much variation in the process, use?
    If there is too much waste, use?

  29. Six Sigma projects generally follow a well defined process consisting of five phases?
    • 1. Define
    • 2. Measure
    • 3. Analyze
    • 4. Improve
    • 5. Control
  30. Define Phase of Six Sigma Improvement Process?
    • Define:
    • -goals for process improvement
    • -the customer
    • -project scope
    • -the problem/opportunity
  31. Measure phase of the Six Sigma DMAIC Improvement Process?
    • -Identify appropriate performance measures
    • -Collect data
    • -Evaluate current process performance
  32. Analyze phase of the DMAIC Improvement Process?
    • -Develop and test theories related to root causes of problems
    • -Identify cause and effect relationships
  33. Improve phase of the DMAIC Improvement Process?
    -Develop, evaluate, and implement solutions to reduce gap between desired process performance and current performance
  34. Control phase of DMAIC Improvement Process?
    • -Monitor process to sustain improved performance
    • -Ensure that problems do not resurface
  35. Six Sigma Tool used to manage an entire DMAIC project
    Gantt Chart
  36. Entire collection of tools/methodologies that can be used across all phases. (2)
    • 1. Design for Six Sigma
    • 2. Lean Tools
    • TOC (Theory of Constraints) is one of the Lean Tools.
  37. Explain the Define Phase in detail
    The define phase of a DMAIC project focuses on clearly specifying the problem or opportunity, what the goals are for the process improvement project, and what the scope of the project is. Identifying wo the customer is and their requirements is also critical given that the overarching goal for all Six Sigma projects is improving the organization's ability to meet the needs of its customers.
  38. Two tools of the Define Phase?
    • 1. Benchmarking
    • 2. Quality Function Deployment (QFD)
  39. What is Benchmarking?
    (Define Phase)
    • -Benchmarking involves comparing an organizations processes with the best practices to be found. Benchmarking is used for: 1. comparing an organizations processes with the best organizations processes
    • 2. comparing an organization's products and services with those of other organizations.
    • 3. Identifying the best practices to emulate
    • 4. Projecting trends in order to be able to respond proactively to future challenges and opportunities.
  40. What is QFD?
    (Define Phase)
    • Quality Function Deployment
    • Part of the Define Phase of DMAIC, QFD:
    • -Powerful tool for helping translate customer requirements into process capabilities that are customer desirable and fulfillable by the company.
  41. Four Houses of Quality?
    (QFD in the Define Phase)
    • 1. Customer Requirements
    • 2. Technical Requirements
    • 3. Component Requirements
    • 4. Process Deployment Requirements
  42. Two commonly used process performance measures used in the Measure Phase?
    • 1. Defects per Million Opportunities (DPMO) (3.4 DPMO)
    • Assumed the mean could shift +/- 1.5 std dev over time

    2. Process Sigma
  43. List three tools used in the Analyze Phase?
    1. Brainstorming

    2. Cause & Effect Diagrams

    3. Process Capability Analysis
  44. The Brainstorming Approach:
    (Analyze Phase)
    • 1. Do not criticize ideas druing the session
    • 2. Express all ideas no matter how radical or unconventional
    • 3. Generate as many ideas as possible
    • 4. Combine, extend and/or improve on on another's ideas
  45. Process Capability depends on?
    (Analyze Phase)
    • 1. Location of the process mean
    • 2. Natural variability inherent in the process
    • 3. Stability of the process
    • 4. Product's design requirements
  46. Six Sigma Training Levels
    • Master Black Belt
    • Black Belt
    • Green Belt
  47. Alternative Process Design Flow Chart
  48. What is forecasting?
    The art and science of predicting future events
  49. What is a forecast?
    • -An inference of what is likely to happen in the future
    • -Provides a basis for coordination of the plans of various functions (Finance: capital, Personnel:workforce, Purchasing: materials)
  50. Types of Forecasts?
    • 1. Technological
    • 2. Economic
    • 3. Demand
  51. When to use Qualitative Forecasting Methods?
    • 1. When data is not available
    • 2. When data is not representative of the future (new products/techology)
  52. Qualitative Forecasting Approaches?
    • 1. Jury of Executive opinion
    • 2. Sales Force
    • 3. Delphi Method
    • 4. Consumer Market Survey
  53. Describe Jury of Executivew Opinion
    • A small group of managers in various functions may meet and collectively develop a forecast
    • Advantage: Considerable knowledge & talent
    • Risk: Bandwagon effect
    • Ex: Bristol Myers Squibb/Cancer treatment
  54. Describe Delphi Method
    • Managers and staff complete a series of questionaires each developed from the previous one to achieve a consensus forecast.
    • Advantage: Anonymity encourages honest responses, useful for remote participants, avoids bandwagon effect.
    • Disadvantage: Lack of expertise, Ambiguity possible in questionaire, no accountability.
    • Ex: Rand Corp/Atomic Bomb impact
  55. Describe Sales Force Composite
    • Sales persons estimate sdales in their respective regions, aggregated at the district and national levels.
    • Advantage: Sales staff aware of customer plans, direct contact to customers
    • Risk: Hard to distinguish between customer intentions and actuality, overly influenced by recent experiences.
  56. Consumer Surveys
    • Solicit input directly from a sample of customers
    • Advantage: Tap information not available elsewhere
    • Risk: Requires considerable knowledge and skill to handle surveys, expensive and time consuming, low response rates possible
  57. Measures of Forecast Accuracy
    • 1. Mean Forecast Error (MFE)
    • 2. Mean Absolute Deviation (MAD)
    • 3. Mean Squared Error (MSE)
    • 4. Tracking Signal
  58. Mean Forecast Error
    MFE helps to determine if your method is biased or unbiased
  59. Mean Absolute Deviation
    MAD tells you the magnitude of how much you are off, the lower the better.
  60. Mean Squared Error
    The penalty exponentially increases for higher deviation.
  61. Tracking Signal
    Recalculates the cumulative errors, tracks bias AND magnitude