Supply Chain and Operations Management Concepts

These flashcards cover key vocabulary and concepts related to supply chain and operations management, aiding in exam preparation.

Ordering Costs

Costs incurred as a result of placing orders, including the work involved in configuring tools, equipment, and machines.

Static Demand

Stable demand that does not vary over time.

Lead Time

The time between the placement of an order and its receipt.

Stockouts

The inability to satisfy customer demand for an item.

Backorder

An arrangement where a customer is willing to wait for the item after it is out of stock.

ABC Inventory Analysis

Classification method where items account for a large dollar value but a small percentage of total items.

EOQ (Economic Order Quantity)

A formula used to minimize the total cost of inventory.

Cycle Inventory

Inventory that results from purchasing or producing in larger quantities than needed for immediate consumption or sale.

Little's Law

A formula that explains the relationship among flow time, throughput, and work-in-process.

Work-in-Process (WIP)

The items that are in various stages of production but are not yet completed.

Bottleneck

The stage in a process that limits the overall capacity or throughput.

Non-Bottleneck Work Activity

Work activities where idle capacity exists.

Sequential Resource Planning

The process of selecting jobs for processing and authorizing work.

Utilization

The fraction of time a resource is busy over a defined period.

Aggregate Planning

The development of long-term plans for output and resources.

Disaggregation

The process of translating aggregate plans into short-term operational plans.

ERP (Enterprise Resource Planning)

An integrated information system that unifies all business aspects.

Poka-yoke

An approach aimed at mistake-proofing processes to avoid human error.

Economies of Scale

The reduction in average unit cost as production volume increases.

Demand Forecasting Techniques

Methods for predicting future demand, including time-series methods and regression analysis.

Service Rate

The speed at which a service can be rendered per time unit.

Job Enlargement

Increasing the variety of tasks for a worker without increasing responsibility.

Job Enrichment

Increasing responsibilities and decision-making power for a worker.

Lead Time Variability

The inconsistency in the time taken from order placement to receipt.

Make-to-Order

Producing goods only after receiving customer orders.

Backward Integration

Acquiring capabilities toward suppliers.

Customer Contact

The presence of customers in the service delivery system.

Quality in Supply Chain

Quality as the most important factor in supply chain design.

Flow Blocking Delay

A delay that occurs when a work center completes a unit but cannot release it.

Capacity Requirements

The necessary resources needed to meet the anticipated demand.

Forecast Error

The difference between the actual and forecasted values.

• Strategic Workforce Planning:

• Aligns recruiting investments with long-term workforce requirements, including:

  • Analyzing current employee census

  • Projecting workforce growth

  • Calculating number of hires needed.

• Revenue Management System

• Uses dynamic methods to forecast demand and manage perishable assets across market segments.

  • Decides when to allocate inventory and overbook, and establishes pricing for different customer classes.

• Safety Capacity

• Defined as effective capacity minus average demand.

Multiple Linear Regression Model

A statistical model that utilizes more than one independent variable to predict a dependent variable.

Grassroots Forecasting

A forecasting method that involves asking personnel close to the end consumer about purchasing plans.

Forecasting

A process that should be conducted monthly to influence staffing, inventory, capacity, and scheduling decisions.

Job Design

The process of determining specific tasks, responsibilities, work environments, and methods to achieve operational goals.

Standard Time

Normal time adjusted for allowances, such as labor fatigue, personal needs, and equipment breakdowns.