The amount of variety in the products an operation produces, which determines whether the products are produced continuously, repetitively, in batches, or individually in different volumes (amounts) and varieties (types).
Continuous process operations (CPO)
Produce outputs that are not in discrete units.
Repetitive process operations (RPO)
Produce outputs in an assembly-line structure.
Batch process operations (BPO)
Produce different outputs with the same resources.
Exhibit 14 –6 ● Gantt Chart (Orders by Week) * Indicates today’s date—the first day of the third week of May. Ends of bars indicate scheduled starting and ending dates of project. The shaded part of the bar indicates the part of the project completed to date, while the blank space to the end of the bar indicates work still to be completed. The GE project is done. The IBM project is right on schedule and should be completed this week. The GM project is behind schedule and should be completed during the fourth week in May. The AT&T project is ahead of schedule and should be completed during the first week of June.
Developing a PERT Network 1. List all the activities/events that must be completed to reach the specific objective. 2. Determine the time it will take to complete each activity/event. 3. Arrange the tasks on the diagram in the sequence in which they must be completed. 4. Determine the critical path.
A process control method that uses statistical tests of probability in determining if product quality is within an acceptable standard range.
Statistical Quality Control Steps 1. Set a range that includes the highest and lowest levels of acceptable quality, with the desired standard in the middle. 2. Determine the sampling technique and the frequency of measuring performance. 3. Measure performance and plot it on an SPC chart. 4. Use the exception principle and do nothing if performance is within range, but take corrective action if it is out of control limits.
Exhibit 14 – 10 ● Statistical Process Control Chart for 16-Ounce Bags of Lay’s Potato Chips Trend
It is possible to increase production but decrease productivity.
It is important to calculate productivity rather than just production output. If you measure only output production and it increases, you can be fooled into thinking you are doing a better job when in reality you are doing a worse job.
Exhibit 14 – 12 ● The Balanced Scorecard Source: Based on Robert Kaplan and David Norton, “Using the Balanced Scorecard as a Strategic Management System,” Harvard Business Review, January-February 1996, pp. 75–85.