MGT 367 Final GVSU - Prof. Koste

Resource planning involves...

and is directly linked to...

involves long range capacity resource requirements and is directly linked to production planning

What are the inputs to Capacity Requirements Planning (CRP)?

- Open Orders

- Materials Requirements Plan

- Routings

- Work Centers

A work center is comprised of...

A work center is comprised of a number of machines or workers capable of doing the same work.

What is "move time?"

is the normally taken time to move material from one workstation to another

What is "wait time?"

is the time the job is at a work center after completion and before being moved

What is "queue time?"

is the time a job waits at a work center before being processed

Lead Time is the sum of...

is the sum of queue, setup, run, wait, and move times

What are some options for adjusting capacity?

- Schedule overtime or undertime.

- Adjust the level of the workforce by hiring or laying off employees.

- Shift workforce from underloaded to overloaded work centers.

- Use alternate routings to shift some load to another work center.

- Subcontract work when more capacity is needed or bring in previously subcontracted work to increase load.

Production activity control must make sure...

that the required materials, tooling, personnel, and information are available to manufacture the components when needed.

What four things does Production Activity Control do?

- Rank the shop orders in desired priority sequence by work center and establish a dispatch list based on this information.

- Track the actual performance or work orders and compare it to planned schedules.

- Monitor and control work-in-process, lead times, and work center queues.

- Report work center efficiency, operation times, order quantities, and scrap.

What is manufacturing lead time?

is the time normally required to produce an item in a typical lot quantity

Manufacturing lead time consists of what five things?

1) Queue time

2) Setup time

3) Run time

4) Wait time

5) Move time

What is "backward scheduling?"

This process starts with the due date and, using the lead times, to work back to find the start date for each operation

In "Backward Scheduling..."

The __________ on the routing is scheduled first and is scheduled for completion ____________. While previous operations are scheduled back from the last operation.

last operation; at the due date

In order to complete "backward scheduling," you will need information from what three sources?

1) Planned and opened orders - quantities and due dates

2) Routing - sequence of operations, work centers needed, setup time, and run time

3) Work center data - queue, move, and wait times and work center capacity

True/False

Finite loading assumes...

It does not consider the existence of other shop orders competing for capacity at these work centers. It assumes infinite capacity will be available.

False

True/False

Infinite loading assumes...

It does not consider the existence of other shop orders competing for capacity at these work centers. It assumes infinite capacity will be available.

True

True/False

Finite loading assumes...

Assumes there is a defined limit to available capacity at any workstation. If there is not enough capacity available at a workstation because of other shop orders, the order has to be scheduled in a different time period.

True

True/False

Infinite loading assumes...

Assumes there is a defined limit to available capacity at any workstation. If there is not enough capacity available at a workstation because of other shop orders, the order has to be scheduled in a different time period.

False

True/False

Using a non bottleneck resource 100% of the time does not produce 100% utilization

True

T/F

If a wheel assembly operation was utilized 100% of the time it would produce more wheels than needed and because of the build up of inventory this operation would have to stop

True

What five tactics can be used to manage bottlenecks?

1) Establish a time buffer before each bottleneck

2) Adjust loads

3) Control the rate of material feeding the bottlenecks

4) Do everything to provide the needed bottleneck capacity

5) Change the overall schedule

T/F

Production activity control must not always balance the flow of work to and from different work centers

FALSE

it must always balance the flow of work

What is "cumulative variance?"

is the difference between the total planned output for a given period and the actual total output for that period

The ranking of jobs for the dispatch list is created through the application of ________________________.

Dispatch Rules

What are the eight dispatching methods?

1) First Come First Served (FCFS)

2) Earliest Due Date (EDD)

3) Earliest Operation Due Date (ODD)

4) Shortest Processing Time (SPT)

5) Critical Ratio

6) Slack Per Operations

7) Order Slack

8)Shortest Operation Next

What five pieces of information are critical for creating an Input/Output Report?

- Order Status

- Weekly input/output by department or work center

- Exception reports on such things as scrap, rework, and late shop orders.

- Inventory Status

- Performance summaries on order status, work center and department efficiencies, and so on.

What are the four "principles" of forecasting to keep in mind when creating one in the real world?

- Forecasts are usually wrong.

- Every forecast should include an estimate of error.

- Forecast are more accurate for families or groups .

- Forecasts are more accurate for nearer time periods.

What are the four different forecasting techniques?

1) Qualitative

2) Quantitative

3) Extrinsic

4 )Intrinsic

Qualitative forecasting is used when ... projections are based on ... and it is used to forecast...?

- Used when no data is available

- Projections based on judgment, intuition, and informed opinions.

- Used to forecast general business trends and the potential demand for large families of products over an extended period of time.

Quantitative forecasts are based on...?

based on historical or numerical data, whether it be from inside or outside the organization

Extrinsic forecasts project ...? These projections are based on? Examples?

- Project growth rates, data outside organization

- Projections based on external indicators that relate to the demand for a company's products.

Examples: birth rates, and disposable income.

Uses economic indicators

Intrinsic forecasts use what data to forecast? Useful because? This technique is based on the assumption that...?

- Use historical company data to forecast

- Useful because historical company data is easy to come by

- Based on the assumption that what happened in the past will happen in the future.

What are the three main objectives of inventory management?

- Maximize Customer Service

- Low-cost plant operation

- Minimum inventory investment

What are the four types of inventories?

1) Raw materials (RM)

2) Work in Process (WIP)

3) Operating Supplies

4) Finished Goods

What are the five main inventory costs?

- Item costs

- Carrying costs

- Ordering costs

- Stockout costs

- Capacity-associated costs

What is Economic Order Quantity (EOQ)?

Optimum quantity of goods to be purchased at one time in order to minimize the annual total costs of ordering and carrying or holding items in inventory

EOQ has four basic assumptions:

- Demand is relatively constant and is known.

- The item is produced or purchased in lots or batches and not continuously.

- Order preparation costs and inventory carrying costs are constant and known.

- Replacement occurs all at once.

What is a reorder point?

When the quantity of an item on hand in inventory falls to a predetermined level, then an order is placed.

An order must be placed when there is enough stock on hand to satisfy demand form the time the order is placed until the new stock arrives.

What is a periodic review system?

Using the periodic review system, the quantity on hand of a particular item is determined at specified, fixed-time intervals, and an order is place

When determining your inventory stock's location, what four types of groupings should be used?

1) Group functionally related items together

2) Group fast-moving items together

3) Group physically similar items together

4) Locate working stock and reserve stock separately.

What is Point-of-Use Storage?

Inventory is stored close to where it will be used.

What are some advantages of point-of-use storage?

- Materials are readily accessible to users.

- Material handling is reduced or eliminated

- Central storage costs are reduced

- Material is accessible at all times

T/F

The point-of-use storage method is useful as long as inventory is kept low and operating personnel can keep control of inventory records

True

What is "Central Storage?"

Contains all inventory in one central location

What are some advantages of central storage?

- Ease of control

- Inventory record accuracy is easier to maintain

- Specialized storage can be used

- Reduced safety stock, since users do not need to carry their own safety stock.

What is a "Fixed Location System?"

An SKU is assigned a permanent location or locations, and no other items are stored there.

This system makes it possible to store and retrieve items with a minimum of recordkeeping.

These systems usually have poor cube utilization.

Everything is nice and simple and easy to find.

What is a "Floating Location System?"

Goods are stored wherever there is appropriate space for them.

The same SKU may be stored in several locations at the same time and different locations at different times.

The advantage to this system is improved cube utilization.

However it requires accurate and up to date information on item location and the availability of empty storage space so items can be put away and retrieved efficiently.

Usually are computer based.

What is the function of anticipation inventory?

Are build up in anticipation of future demand.

They are built up to help level production and to reduce the costs of changing production rates.

What is the function of safety stock inventory?

Is held to cover random unpredictable fluctuations in supply and demand or lead time.

If demand or lead time is greater than forecast, a stock out will occur.

Its purpose is to prevent disruptions in manufacturing or deliveries to customers.

What is the function of lot-size inventory?

Items purchased or manufactured in quantities greater than needed immediately create lot-size inventories.

This is to take advantage of quantity discounts; to reduce shipping, clerical, and setup costs; and in cases where it is impossible to make or purchase items at the same rate that they will be used or sold.

What is the function of transportation inventory?

Exists because of the time needed to move goods from one location to another, such as from a plant to a distribution center or a customer.