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Chapter 1: Operations and Productivity

Single-Factor Productivity

SFP = Output / Input

Use when measuring output relative to one input type, such as labor hours or machine hours.

Multi-Factor Productivity

MFP = Output / (Labor + Material + Overhead)

Input categories should use the same basis, usually dollars or another consistent cost unit.

Chapter 2: Operations Strategy in a Global Environment

Make-or-Buy Cost Comparison

Make Cost = F + (V × Q); Buy Cost = P × Q

Use this as a first-pass financial comparison. Strategic fit, quality, risk, capacity, and supplier reliability still matter.

Make-or-Buy Crossover Quantity

Q = F / (P − V)

This applies when the buy cost per unit is higher than the internal variable cost. Above the crossover quantity, making internally may become cheaper.

Chapter 3: Project Management

PERT Expected Activity Time

tₑ = (a + 4m + b) / 6

a = optimistic time, m = most likely time, b = pessimistic time.

PERT Activity Variance

Variance = ((b − a) / 6)²

Crash Cost Slope

Crash Cost per Time Unit = (Crash Cost − Normal Cost) / (Normal Time − Crash Time)

Use this to compare which crashable activities are cheapest to shorten first, while still respecting the critical path.

Chapter 4: Forecasting Accuracy

Mean Absolute Deviation (MAD)

MAD = Σ|A − F| / n

Enter comma-separated values. Actual and forecast lists must have the same number of values.

Mean Squared Error (MSE)

MSE = Σ(A − F)² / n

Mean Absolute Percentage Error (MAPE)

MAPE = (Σ(|A − F| / A) / n) × 100%

MAPE requires every actual value to be greater than 0 because the formula divides by actual demand.

Chapter 5: Design of Goods and Services

Product-by-Value Contribution

Annual Contribution Value = Annual Demand × Unit Contribution

Use this to prioritize products or services that contribute the most annual value.

Design Break-Even Quantity

Q = Fixed Cost / (Selling Price − Variable Cost)

Useful for comparing design alternatives or deciding whether expected volume can cover fixed design/setup cost.

Weighted Design Score

Total Score = Σ(weight × score)

A simple helper for comparing design concepts against weighted criteria such as customer fit, manufacturability, cost, sustainability, and risk.

Chapter 6: Managing Quality

Process Capability Ratio (Cp)

Cp = (USL − LSL) / (6σ)

Cp measures potential capability assuming the process is centered between specification limits.

Process Capability Index (Cpk)

Cpk = min[(USL − μ) / (3σ), (μ − LSL) / (3σ)]

Cpk accounts for whether the process mean is off-center.

Chapter 7: Process Strategy

Total Cost

TC = F + (V × Q)

Crossover Point

Q = (F₂ − F₁) / (V₁ − V₂)

This finds the quantity where two cost alternatives are equal. Variable costs must be different.

Chapter 8: Location Strategies

Center of Gravity Method

x = Σ(xᵢ × wᵢ) / Σwᵢ; y = Σ(yᵢ × wᵢ) / Σwᵢ

Coordinate and weight lists must be the same length. Weights must not total zero.

Factor Rating Method

Total Score = Σ(weight × score)

Weights may be decimals that sum to 1.0 or whole-number percentages that sum to 100.

Chapter 9: Layout Strategies

Total Work Distance

Total Work Distance = Σ(distanceᵢⱼ × flowᵢⱼ)

Takt Time

Takt Time = Available Production Time / Customer Demand

Supplemental: Inventory Formulas

These inventory helpers are preserved from the earlier checked calculator set. Depending on your course sequence, these may appear outside Chapters 1–9.

Economic Order Quantity (EOQ)

EOQ = √((2 × D × S) / H)

D = annual demand, S = ordering cost per order, H = annual holding cost per unit.

Reorder Point (ROP)

Basic ROP = d × L; with safety stock: ROP = d × L + SS

Leave safety stock blank if you want the basic deterministic reorder point.