GMS401 CHAPTER 5: PROCESS STRATEGY AND SUSTAINABILITY
EXAM QUESTIONS AND ANSWERS WITH COMPLETE SOLUTIONS
Process (or transformation) Strategy
An organization's approach to transforming resources into goods and services
- the objective of a process strategy is to build a production process that meets
customer requirements and product specifications within cost and other managerial
constraints
- virtually every good or service is made by using some variation of one of four process
strategies
Process Focus
A production facility organized around processes to facilitate low-volume, high-variety
production
- the vast majority of global production is devoted to making low-volume, high-variety
products in process-focused facilities, also known as job shops or intermittent process
facilities
- process-focused facilities have high variable costs with extremely low utilization (5% to
25%) of facilities
Product Focus
, A facility organized around products; a product-oriented, high-volume, low-variety
process
- product-focused facilities are also called continuous processes, because they have
very long, continuous production runs
- the specialized nature of a product-focused facility requires high fixed cost; however,
low variable costs reward high facility utilization
Repetitive Process
A product-oriented production process that uses modules
Modules
Parts or components of a product previously prepared, often in a continuous process
Mass Customization
Rapid, low-cost production that caters to constantly changing unique customer desires
Build-To-Order (BTO)
Produce to customer order rather than to a forecast
- major challenges include: product design, process design, inventory management,
tight schedules, and responsive partners
Postponement
The delay of any modifications or customization to a product as long as possible in the
production process
Crossover Chart
A chart of costs at the possible volumes for more than one process
EXAM QUESTIONS AND ANSWERS WITH COMPLETE SOLUTIONS
Process (or transformation) Strategy
An organization's approach to transforming resources into goods and services
- the objective of a process strategy is to build a production process that meets
customer requirements and product specifications within cost and other managerial
constraints
- virtually every good or service is made by using some variation of one of four process
strategies
Process Focus
A production facility organized around processes to facilitate low-volume, high-variety
production
- the vast majority of global production is devoted to making low-volume, high-variety
products in process-focused facilities, also known as job shops or intermittent process
facilities
- process-focused facilities have high variable costs with extremely low utilization (5% to
25%) of facilities
Product Focus
, A facility organized around products; a product-oriented, high-volume, low-variety
process
- product-focused facilities are also called continuous processes, because they have
very long, continuous production runs
- the specialized nature of a product-focused facility requires high fixed cost; however,
low variable costs reward high facility utilization
Repetitive Process
A product-oriented production process that uses modules
Modules
Parts or components of a product previously prepared, often in a continuous process
Mass Customization
Rapid, low-cost production that caters to constantly changing unique customer desires
Build-To-Order (BTO)
Produce to customer order rather than to a forecast
- major challenges include: product design, process design, inventory management,
tight schedules, and responsive partners
Postponement
The delay of any modifications or customization to a product as long as possible in the
production process
Crossover Chart
A chart of costs at the possible volumes for more than one process
