June 1st Project Management - temporaly, collaborative group to make it Project Characteristics: Single unit Many related activities

Difficult production planning and inventory control General purpose equipment High labor skills EX: Building construction, research center PM Breakdown: Work breakdown structure Sequencing of the tasks Resources needed Contingency plan Critical path means no leway and is the longest path to get to results only to manage critical path can be projects be on time and minimize problems majority of projects not made on time can be multiple critical paths critical path manager (cpm) - commonly used method to find critical path and be finished on time Project - temporaily endeavor with specific goals project vs processes work break structure - tree like structure that splits your tasks into manageable tasks; enables to plan ahea; lets understand the critical paths task sequence table QUALITY MANAGEMENT

EX: What we are looking for is litumium battery, the battery life of 4 to 6 hours, if the battery overheats quickly, the best price for the quantity purchase, weighs less than 3 oz quality is highly subjective - different types of quality that can be defined differently 2 types of quality: manufacture base - conform to specifications, needs consistency EX: if you said you are going to make 3 oz batteries but change some to less than 3 oz, that will cause problems due to being inconsist a.k.a conformity quality user base- meeting or exceeding customer expectations a.k.a performance quality setting time lower to make self look good; higher gives you amable amount of time a. customer expectation - satisfying their needs b. delivery - consistency in time and good service Why is Quality important? - differentiation

- retain customer A. Top Line: - sales revenue - Marketing share B. Bottom Line: - Cost of poor Quality: about 20-30% of quality percent small defect rate like 1% can inflict 25% to 30% in sales revenue

cost of poor quality (copq) components: - prevention - spend money to prevent defects (smallest cost) - appraisal - evaluation of the product - internal - produced a defective product but did not ship to customers - external - defects discovered after delivery (highest cost) once produce, more money to spend on fixing quality is free => improve quality = reduce cost if you can improve quality, you can save more and might be able to spend nothing GM for example improves quality and over a couple of years they save billions of $$$

- Inspection does not insure quality, in most cases co. wants to get rid of inspection because it encourages defects. Inspection happens in the Input side or earlier. workers rely on inspectors to catch the defects; unmotivates them to put in quality

if rely on inspector to check incoming inventory, they will miss some

Tools of Total Quality Management (TQM)

- flowcharts - exposes problems - scatter plots - plotting of variables x and y because they are related or dependent on each other - cause and effect diagram - identifies process elements that might effect an outcome; unlikely to miss any major factor with the 4 M's but can miss a smaller one within them 4M's: manpower

method material machinery EX: cause = materials + methods + manpower + machinery => effect

- pareto chart - sorted bar chart that helps identify the data (20-80 rule: look at the top factors which are the vital fuel (or 80% of the problem) and the 20% are trivial maintance; what is the 20% cause that contributes to the 80% of the problem)

- statistical process control - a monitoring tool that detects if there are any patterns or "something" going on that may be caused by a special cause variation. plot output of processes against time EX: a malfunction on a machine

stable vs. capable

if find a pattern, there is something wrong or out of control (not stable) stable means no pattern and in control manufacturing: internal factors... Upper Control Limit (UCL) [mean + standard deviation] Lower COntrol Limit (LUL) [mean - standard deviation] monitoring device, only tells you there is something wrng w/o specifics if variation is smaller means more consistency customers set the standards of products customers give specifications: external factors... Upper Specification Limit (USL): customer specification range for upper quarter Lower Specification Limit (LSL): " " lower " wider variation: incapable closer variation: capable - control limits are smaller than that specification limits (meeting spcifications) can be unstable and be capable but ethically no

being stable can help lead to specifications; does not tell you if you are capable jus stable a process that's unstable is not likely to be a good one

SUPPLY CHAIN MANAGEMENT 6/3 supply-demand network management - true supply chain theory use price as a tool to shift demand ex. airline price high during vacation season and price low during winter to compensate that can be a loss for them when customers reserve early. revenue management - using price as a tool to shift demand over to a desired area *key thing for all distributors is to be fast Efficient vs. Response (functional product) Efficient - things are delivered efficiently so it can compensate for that 5% margin. lower variety. (fashionable product) Response - delivery is immediately for things in demand (ex. dress at store). fashionable products have more distribution centers because you want to have more sold. has a more centralized distribution center and is closer to its market. higher variety economy of scale - the saving in cost of production that is due to mass production or the relationship that occurs when increased efficiency lower manufacturing costs as more of a product is made. big volume = low cost Postponment vs. information share Postponement production processess is if there is order or demand then it is produced. outweighs information solutions. use of information systems to do information share. ex. PNG provides drugs to walmart or promise to replenish walmart shelves with their product for the information/data of how much the product is getting sold.

postponement gets more benefits than information systems postponement is the most common Countering Bullwhip effect: Causes demand signaling processing Counter

order batching

price fluctuations

FORECASTING Qualitative method vs. Quantitative method Quantitative method: - Time Series - demand/time Naive Approach - assumes demand in the next period is the same as demand in most recent period. Can be good starting point Moving Average - taking the average of a certain number of periods, take the average of those periods to forecast the upcoming period Exponential Smoothing - weighted moving average (ma), requires smoothing constant (alpha), which range from 0-1, don't need historical data requires historical record keeping

*series of arithmetic means, used if little or no trend

use weighted average is better than moving avg form of weighted moving average: weights decline exponentially most recent data weighted mist new forecast = last period's forecast + alpha (Last period's actual demand - last period's forecast) alpha = smoothing (or weighting) constant (greater than 0 less than 1) exponential smoothing does not require huge record keeping forecast time series (alpha) should be close to actual forecast

mean absolute deviation (MAD) - the smaller the deviation the better *don't want to be mad so want small mad

choosing different alpha for smoothing will give you different MAD if sales is experiencing rapid change. choose a high alpha assumptions in order to make forecasting: assuming underlying stability - "tomorrow will look like today" Moving average have periods and assigns equal weight choose smallest MAD

Associative method: Regression - how the price change could affect y