School
University of WaterlooDepartment
Management SciencesCourse Code
MSCI432Professor
Binyamin MantinStudy Guide
MidtermThis preview shows half of the first page. to view the full 1 pages of the document.
MSCI 432 cheat sheet
Competitive
Dimensions
Operational Capabilities
Price
Low cost process
Product quality
and reliability
High quality process
;
Consistent quality
Time
Delivery speed
;
On

time
delivery; Development speed
Flexibility
Customization
;
Variety
;
Volume flexibility
Productivity: maximize output for a given amount of
input;
Efficiency: minimize cost
The product life cycle
ProductProcess Matrix
1
Very
low
Low,
many
High,
stand.
Very high,
commod.
Project
Job shop
Batch
Assembly
/flow
Continuous
Learning curve: Y(u)= time to produce the u
th
unit. Y(u)
= a u
b
.
Capacity additions: D = Annual Increase in Demand; x =
Time interval between additions; r = annual discount
rate (comp. continuously); f(y) = operating cost at
capacity y; Total discounted cost =
;
assuming
, then
, which is
minimized at x that solves
.
The OM triangle: Capacity, Variability reduction, and
Inventory
Forecasting
Qualitative methods: Executive judgment; Historical
analogy; Delphi method; Grass roots; Market research;
Panel consensus; Leader indicators;
Quantitative methods:
• Casual methods:
Linear regression: y = a+bx. Correlation:
, where:
,
.
, and
Alternatively,
• Time series analysis:
• Characteristics: Trend, level, seasonality, cycles,
randomness, autocorrelation
• Evaluation: MSE=
; MAD=
;
MAPE=
*100%
• Lastvalue: F
t
=D
t1
• Simple Moving Average F
t
=
• MA with trend:
,
,
and the forecast is:
.
• Weighted moving average:
, with
.
• Exponential smoothing:
.
• Linear regression:
, where :
,
, and
.
• Double exponential smoothing using Holt’s method:
Intercept:
. Slope:
. The step ahead:
. Use linear regression find initial
intercept S
0
and slope G
0
.
• Seasonal series: Obtain the sample mean; Divide
each observation by the mean to obtain factors for
each period; Average the factors for corresponding
periods within each season; Forecast for period t is
given by C
t
x Sample Mean
• Winter’s method: The series:
. The trend:
. Seasonal factors:
. The step ahead:
.
Aggregate Planning
Chase strategy
Level strategy
Combination: max profit/min cost
(i.e., hiring+firing+holding+Prod.@regular time
+Prod.@overtime+idle+subcontracting), s.t.
• Conservation of workforce
• Conservation of units
• Relating production levels to workforce levels
• Nonnegativity
• More constraints
You're Reading a Preview
Unlock to view full version