Chapter 8 Operations Management with
LEAN and Six Sigma with correct answers
100% 2024
Operations Management - Correct Answer Operations Management refers to the design, execution, and
control of the operations that convert resources into desired goods and services, aligned with the
company's business strategy.
Goal of Operations Management - Correct Answer The goal is to convert materials and labor into goods
and services as efficiently and effectively as possible, while also controlling costs to maximize profits.
This entails managing the process of creating the goods and services.
NAture of Operations Management - Correct Answer The nature of how Operations Management is
carried out varies by company and depends on the nature of the products and/or services in the
portfolio.
Manufacturing Strategies - Correct Answer Companies develop a manufacturing strategy aligned to
their production strategy (Chapter 3). The strategy is to satisfy customer demand while balancing
manufacturing costs and inventory levels.
Manufacturing Strategies Objectives - Correct Answer Objectives:
Satisfy demand
Manage capacity efficiently
Manage inventory levels
Minimize cost:
Labor
Materials
Plant and Equipment
The manufacturing strategies include: - Correct Answer Make-to-Stock (MTS)
Assemble-to-Order (ATO)
Make-to-Order (MTO)
,Engineer-to-Order (ETO)
Make-to-Stock (MTS) - - Correct Answer manufacture products for inventory based on demand
forecasts... a push supply chain.
Forecast accuracy is key to satisfying customer demand, managing inventory levels and controlling costs.
Most equipment intensive manufacturing (automobiles), commodities (processed foods, sundries) and
low value products are MTS.
MTS Companies focus - Correct Answer MTS Companies focus on balancing supply and demand,
developing accurate forecasting models and taking action to reduce excess inventory or increase supply.
Assemble-to-Order (ATO) "Postponement" Strategy - Correct Answer is a manufacturing strategy where
final products are produced quickly as ordered by customers. This enables products to be customized to
a certain extent.
The ATO strategy requires - Correct Answer that the main sub assemblies for the product be completed
and inventoried along with the final assembly parts.
Assemble-to-Order (ATO) "Postponement" Strategy Part 2 - Correct Answer Once an order is received,
the product is assembled quickly and shipped to the customer.
This is called "Postponement" Strategy
Assemble-to-Order (ATO) "Postponement" Strategy Part 3 - Correct Answer Similar to MTS, demand
forecasting and inventory management are key processes to a successful ATO process. The main sub
assemblies and final configuration parts must be forecasted and inventoried.
Assemble-to-Order (ATO) "Postponement" Strategy Part 4 - Correct Answer Most high tech products
with customization available (computers, audio systems), Quick serve restaurants, and individualized
products are ATO.
Make-to-Order (MTO) - Correct Answer is a manufacturing strategy that allows customers to purchase
custom products to their specifications.
, Make-to-Order (MTO) PArt 2 - Correct Answer The MTO strategy only manufactures the end product
once the customer places the order. Lead time for customer delivery is longer and customers pay for the
ability to customize
Raw materials are carried in inventory with a few common sub assemblies.
Make-to-Order (MTO) Part 3 - Correct Answer Highly configured products such as computer servers,
aircraft, ocean vessels, houses, bridges, custom furniture and custom tooling are MTO.
Often includes services with the product (architect, designer, technology expert)
Engineer-to-Order (ETO) - Correct Answer is a manufacturing process in which the component is
designed, engineered, and built to customer specifications only after the order has been received.
Engineer-to-Order (ETO) Part 2 - Correct Answer The essence of ETO is building a unique product every
time.
Project Management is a key skill for profitable success
In ETO, reputation for quality and innovation are key to success.
Complicated technology solutions such as operations centers, stadiums, amusement rides are ETO.
Make to Stock (MTS) features - Correct Answer economies of scale, large volumes, long production
runs, low variety, and multiple distribution channels
Assemble to Order (ATO) is - Correct Answer when sub assemblies are made, stocked to forecast, but
products are not assembled until customer order is received
Make to Order (MTO) - Correct Answer products are not produced until customer order is received
Engineer to Order (ETO) - Correct Answer is used when products are unique and extensively customized
for the specific needs of individual customers
Job Shop - - Correct Answer creates a custom product for each customer. (artist, craftsman)
ETO/MTO
LEAN and Six Sigma with correct answers
100% 2024
Operations Management - Correct Answer Operations Management refers to the design, execution, and
control of the operations that convert resources into desired goods and services, aligned with the
company's business strategy.
Goal of Operations Management - Correct Answer The goal is to convert materials and labor into goods
and services as efficiently and effectively as possible, while also controlling costs to maximize profits.
This entails managing the process of creating the goods and services.
NAture of Operations Management - Correct Answer The nature of how Operations Management is
carried out varies by company and depends on the nature of the products and/or services in the
portfolio.
Manufacturing Strategies - Correct Answer Companies develop a manufacturing strategy aligned to
their production strategy (Chapter 3). The strategy is to satisfy customer demand while balancing
manufacturing costs and inventory levels.
Manufacturing Strategies Objectives - Correct Answer Objectives:
Satisfy demand
Manage capacity efficiently
Manage inventory levels
Minimize cost:
Labor
Materials
Plant and Equipment
The manufacturing strategies include: - Correct Answer Make-to-Stock (MTS)
Assemble-to-Order (ATO)
Make-to-Order (MTO)
,Engineer-to-Order (ETO)
Make-to-Stock (MTS) - - Correct Answer manufacture products for inventory based on demand
forecasts... a push supply chain.
Forecast accuracy is key to satisfying customer demand, managing inventory levels and controlling costs.
Most equipment intensive manufacturing (automobiles), commodities (processed foods, sundries) and
low value products are MTS.
MTS Companies focus - Correct Answer MTS Companies focus on balancing supply and demand,
developing accurate forecasting models and taking action to reduce excess inventory or increase supply.
Assemble-to-Order (ATO) "Postponement" Strategy - Correct Answer is a manufacturing strategy where
final products are produced quickly as ordered by customers. This enables products to be customized to
a certain extent.
The ATO strategy requires - Correct Answer that the main sub assemblies for the product be completed
and inventoried along with the final assembly parts.
Assemble-to-Order (ATO) "Postponement" Strategy Part 2 - Correct Answer Once an order is received,
the product is assembled quickly and shipped to the customer.
This is called "Postponement" Strategy
Assemble-to-Order (ATO) "Postponement" Strategy Part 3 - Correct Answer Similar to MTS, demand
forecasting and inventory management are key processes to a successful ATO process. The main sub
assemblies and final configuration parts must be forecasted and inventoried.
Assemble-to-Order (ATO) "Postponement" Strategy Part 4 - Correct Answer Most high tech products
with customization available (computers, audio systems), Quick serve restaurants, and individualized
products are ATO.
Make-to-Order (MTO) - Correct Answer is a manufacturing strategy that allows customers to purchase
custom products to their specifications.
, Make-to-Order (MTO) PArt 2 - Correct Answer The MTO strategy only manufactures the end product
once the customer places the order. Lead time for customer delivery is longer and customers pay for the
ability to customize
Raw materials are carried in inventory with a few common sub assemblies.
Make-to-Order (MTO) Part 3 - Correct Answer Highly configured products such as computer servers,
aircraft, ocean vessels, houses, bridges, custom furniture and custom tooling are MTO.
Often includes services with the product (architect, designer, technology expert)
Engineer-to-Order (ETO) - Correct Answer is a manufacturing process in which the component is
designed, engineered, and built to customer specifications only after the order has been received.
Engineer-to-Order (ETO) Part 2 - Correct Answer The essence of ETO is building a unique product every
time.
Project Management is a key skill for profitable success
In ETO, reputation for quality and innovation are key to success.
Complicated technology solutions such as operations centers, stadiums, amusement rides are ETO.
Make to Stock (MTS) features - Correct Answer economies of scale, large volumes, long production
runs, low variety, and multiple distribution channels
Assemble to Order (ATO) is - Correct Answer when sub assemblies are made, stocked to forecast, but
products are not assembled until customer order is received
Make to Order (MTO) - Correct Answer products are not produced until customer order is received
Engineer to Order (ETO) - Correct Answer is used when products are unique and extensively customized
for the specific needs of individual customers
Job Shop - - Correct Answer creates a custom product for each customer. (artist, craftsman)
ETO/MTO
