5.6 - HL ONLY - Production Planning and Supply Chain Management

These flashcards cover key concepts in production planning and supply chain management, highlighting differences in stock control methods, the function of supply chain management, and productivity measures.

What is the difference between Just-In-Time (JIT) and Just-In-Case (JIC) stock control methods?

JIT focuses on minimizing stock levels and receiving goods as needed, while JIC maintains larger inventories to safeguard against supply and demand fluctuations.

What does SCM stand for and what does it refer to?

Supply Chain Management; it refers to managing the sequence of activities from production to delivery of goods to customers.

What are two advantages of Just-In-Time (JIT) stock control?

Reduces costs of holding stock and improves cash flow.

What is the main purpose of stock control charts?

To graphically illustrate a system of stock control, showing maximum stock level, reorder level, buffer stock, reorder quantity, and lead time.

What does the capacity utilization rate measure?

The output level of a firm as a percentage of its potential output, indicating productive efficiency.

What are the drawbacks of high capacity utilization?

It can lead to minimal maintenance time, increased stress on the workforce, and limit suitability for growth.

What is the defect rate in production?

The proportion of substandard output relative to overall production, indicating waste and inefficiency.

How does the cost to make (CTM) differ from the cost to buy (CTB)?

CTM includes fixed and variable costs associated with manufacturing, while CTB is the price paid to an external supplier.

What are some influences on the amount of stock held by a firm?

Factors include product type, forecast level of demand, lead time, and cost of holding stock.

What is the critical path in project management?

The sequence of stages determining the minimum time needed for an operation, such as baking bread in a bakery.