Supply Chain Management - Chapter 03: Supply Chain Planning

These flashcards cover key concepts and terms related to Supply Chain Planning from the lecture notes.

Supply Chain Planning

The element of supply chain management responsible for determining how best to satisfy the requirements created by the Demand Plan.

Aggregate Production Planning (APP)

A process that translates annual business plans, marketing plans, and demand forecasts into a production plan for a product family in a plant or facility.

Sales & Operations Planning (S&OP)

A process to develop tactical plans that helps management strategically direct the business to achieve a competitive advantage.

Master Production Scheduling (MPS)

A plan that represents what the company plans to produce, expressed in specific product configurations, quantities, and dates.

Material Requirements Planning (MRP)

A computer-based materials management tool that calculates the exact quantities, need dates, and planned order releases for all parts and materials required to manufacture a product.

Long-Range Planning

Involves planning for actions such as the construction of facilities and major equipment purchase over a horizon of more than a year.

Intermediate-Range Planning

Shows the quantity and timing of end items, typically covering a period of 3 to 18 months.

Short-Range Planning

A detailed planning process for components and parts to support the master production schedule, usually covering up to 3 months.

Rough-Cut Capacity Planning (RCCP)

A medium-range capacity planning tool that checks the feasibility of the Master Production Schedule.

Demand Planning

The activity of forecasting customer demand to determine production levels and inventory needs.

Distribution Requirements Planning (DRP)

A time-phased inventory replenishment plan in a distribution network.

Enterprise Resource Planning (ERP)

An information system that connects various functional areas and operations of an organization via a common software infrastructure.

Hybrid Production Strategy

A production strategy that combines various options, such as adjusting the production rate and holding inventory, to meet demand.

Level Production Strategy

A strategy that maintains a constant production rate while allowing inventory and backlog to vary according to fluctuating demand.

Chase Production Strategy

A strategy that adjusts production rates and capacity to match demand precisely.

Safety Stock

An extra quantity of an item held in inventory to reduce the risk of stockouts caused by demand variability.

Bill of Materials (BOM)

A document that shows an inclusive listing of all raw materials, component parts, and assemblies making up the final product.

Independent Demand

The external demand for an item that is unrelated to the demand for other items.

Dependent Demand

The internal demand for items that are assembled or combined to make up a final product.

Time Fencing

A policy separating the planning horizon into a Firmed Time Period and a Planned Time Period to minimize changes.

Projected Available Inventory

The projected closing inventory at the end of a period calculated from inventory data and requirements.