LAyout strategies and inventory management

Comprehensive vocabulary flashcards covering layout strategies, servicescapes, warehousing, inventory management, and aggregate planning based on the Operations Management Practice Sheet.

Layout Strategy Objective

To develop an economic layout that meets the firm's competitive requirements.

Office Layout Distinction

The movement of information, involving the grouping of workers, equipment, and spaces to provide comfort, safety, and information flow.

Retail Layout Objective

To maximize profitability per square foot of floor space.

Retail Slotting

Manufacturers paying fees to retailers to display their product.

Ambient Conditions

Background characteristics in a servicescape such as lighting, sound, smell, and temperature.

Spatial Layout and Functionality

Servicescape elements involving customer circulation path planning, aisle characteristics, and product grouping.

Signs, Symbols, and Artifacts

Characteristics of building design that carry social significance.

Cross-docking

A logistics process where materials are moved directly from receiving to shipping without being placed in storage in the warehouse.

Random Stocking

An efficient use of space requiring automatic identification systems (AISs) and effective information systems to assign stocking locations.

Fixed-position Layout

A layout where the product remains in one place while workers and equipment come to the site, such as in shipbuilding or large construction.

Process-oriented Layout

A layout where machines and equipment are grouped together by similarity, such as having all like machines in one area.

Work Cells

The reorganization of people and machines into groups to focus on a single product or product groups.

Group Technology

A technology that identifies products with similar characteristics for particular work cells.

Product-oriented Layout (POL)

A layout organized around high-volume, low-variety products or product families, including fabrication and assembly lines.

Cycle Time

$$\frac{\text{production time available per day}}{\text{number of units per day}}$$

Decoupling

The function of inventory to separate various parts of the production process to prevent problems in one department from halting others.

Work-in-process (WIP)

Inventory that has undergone some change but is not yet completed.

MRO Inventory

Maintenance, Repair, and Operating items necessary to keep machinery and processes productive.

ABC Analysis Class A Items

High annual dollar volume items representing approximately $15\%$ of total inventory items and $70-80\%$ of total dollar usage.

ABC Analysis Class C Items

Low annual dollar volume items representing approximately $55\%$ of total inventory items and $5\%$ of total dollar usage.

Cycle Counting

A practice where items are counted and records updated on a periodic basis, often used to eliminate annual inventory shutdowns.

Economic Order Quantity (EOQ)

An inventory model used to determine "how much" to order while assuming demand and lead time are constant.

Production Order Quantity Model

An inventory model used when units are produced and sold simultaneously, and inventory builds up over time.

Reorder Point (ROP)

$$\text{Demand per day} \times \text{Lead time for a new order in days}$$

Holding Costs

The costs associated with holding or carrying inventory over time.

Aggregate Planning

Planning with the objective to minimize cost over the planning period by adjusting production rates, labor, inventory, and other variables.

Disaggregation

The process of breaking down an aggregate plan into greater detail to result in a master production schedule.

Chase Strategy

An aggregate planning strategy that matches output rates to demand forecasts for each period by varying workforce levels or production rates.

Level Strategy

An aggregate planning strategy where daily production is uniform and inventory or idle time is used as a buffer.