MGMT 339 FINAL EXAM - CSUF

Aggregate Planning

to give management an idea of what quantity of materials to be procured and when

Disaggregation

analytic disassembly which have been aggregated (lumped together)

Master Production Schedule (MPS)

a timetable that specifies what is to be made and when

Rough-cut Capacity Planning

verifies sufficient capacity available to meet requirements for MPS

time fences

points in time that separate phases of a master schedule planning horizon

Inputs

the resources—such as labor, money, materials, and energy—that are converted through a process

beginning inventory, forecast, customer orders

Outputs

projected inventory, MPS, uncommitted inventory

Available to Promise (ATP)

planned production not already committed to a customer

inventory available for request product

uncommitted inventory

customer service feature

Dependent Demand

demand for items that are subassemblies or component parts to be used in the production of finished goods

Material Requirements Planning (MRP)

a planning system that schedules the precise quantity of materials needed to make the product

Master Schedule

determines supply quantity required to meet demand.

cumulative lead time

The sum of the lead times that sequential phases of a process require, from ordering of parts or raw materials to completion of final assembly.

Bill of Materials (BOM)

One of the three primary inputs of MRP; a listing of all of the raw materials, parts, subassemblies, and assemblies needed to produce one unit of a product.

Inventory Records

identify the type and number of products on hand for sale

lot sizing

the determination of how frequently and in what quantity to order inventory

Backflushing

a technique that automatically records the goods issue when the order is confirmed

ERP (Enterprise Resource Planning)

Integration of financial, manufacturing, and human resources in a single database.

8 functions of inventory

1. Anticipate customer demand

2. Smooth seasonal requirements

3. Decouple operations with buffers

4. Protect against stock-outs

5. Cycle stock - lot sizing

6. Hedge against price increases

7. Permit operations - pipeline

8. Quantity discounts

Inventory Turnover

cost of goods sold/average inventory

Periodic System

Physical count of items in inventory made at periodic intervals

Perpetual System

Check accuracy of inventory records.

Determine amount of inventory lost due to wasted raw materials, shoplifting, or employee theft

two-bin system

two containers of inventory; reorder when the first is empty

lead time

The amount of time between the recognition that an order needs to be placed and the arrival of the needed merchandise at the seller's store, ready for sale.

purchase cost

The cost to actually purchase the inventory items. This cost is relevant in determining the order quantity only when the purchase cost is variable

holding costs

the costs of holding or "carrying" inventory over time

ordering costs

costs of ordering and receiving inventory

setup cost

the cost to prepare a machine or process for production and administrative expenses

shortage costs

Costs resulting when demand exceeds the supply of inventory; often unrealized profit per unit

A-B-C Approach

Classifying inventory according to some measure of importance, and allocating control efforts accordingly

cycle counting

a physical count of items in inventory

Reorder Point (ROP)

when the quantity on hand of an item drops to this amount, the item is reordered

Safety Stock

quantity held in excess of expected demand to cover variability in demand

Economic Order Quantity (EOQ)

the optimal order size to minimize the sum of ordering, carrying, and stockout costs

Kanban

a ticket-based JIT system that indicates when to reorder inventory (signal)

Kaizen

continuous improvement

Ultimate goal

balanced and rapid flow

Supporting goals

1. Eliminate disruptions

2. Make the system flexible

3. Eliminate waste, especially excess inventory

Seven Wastes

1. Unnecessary Inventory

2. Over-production

3. Waiting time

4. Unnecessary transporting

5. Processing waste

6. Inefficient work methods

7. Product defects, rework

small lot sizes (benefits)

1. reduces inventory

2. Less rework

3. Less storage space

4. Problems are more apparent

5. Increases product variability

6. easier to balance operations

Single-minute exchange of die (SMED)

The concept of setup times of less than 10 minutes, developed by Shigeo Shingo in 1970 at Toyota.

internal setup

Takt Time

cycle time needed to match the rate of production to the rate of sales or consumption

Push System

work is pushed to the next station as it is completed

Pull System

a workstation pulls output from the preceding station as it is needed

Supplier Tiers

multi level suppliers, one company will make a part, that goes into production at another company, which then sends a larger part out to another company to add to it

housekeeping

Maintaining a workplace that is clean and free of unnecessary materials

5 S's

1. Sort

2. Straighten

3. Sweep

4. Standardize

5. Self-discipline

Value stream Mapping

method for analyzing the current state and designing a future state

Supply Chain Management

(value chain)

involves the movement and storage of raw materials, of work-in-process inventory, and of finished goods from point of origin to point of consumption.

Logistics

the management of the details of an operation

Purchasing Cycle

Steps that begin with request to buy

End with notification of shipment received

in satisfactory condition

1.Receive requisition

2.Select supplier

3.Place order

4.Monitor orders

5.Receive orders

centralized purchasing

purchasing department located at the firm's corporate office makes all the purchasing decisions

Decentralized Purchasing

individual departments or separate locations handle their own purchasing requirements

vendor analysis

a formal rating of suppliers on all relevant areas of performance

certification

relationship

partnership

strategic partnering

Two or more organizations agree to collaborate so that each may realize a strategic benefit

inventory velocity

the speed at which goods move through a supply chain

bullwhip effect

occurs when distorted product-demand information ripples from one partner to the next throughout the supply chain

(Inventory oscillations become progressively

larger looking backward through the supply chain)

vendor managed inventory

an approach for improving supply chain efficiency in which the manufacturer is responsible for maintaining the retailer's inventory levels in each of its stores

order fullfillment

the steps involved in receiving, processing and delivering orders to end customers

Traffic Management

overseeing the shipment of incoming and outgoing goods

Radio Frequency Identification (RFID)

uses electronic tags and labels to identify objects wirelessly over short distances

Third Party Logistics (3PL)

an independent logistics provider that performs any or all of the functions required to get a client's product to market

Strategic Sourcing

managing the firm's external resources to support firm's long term goals

Information velocity

The rate at which information is

communicated in both directions

supply chain visibility

the ability to view all areas up and down the supply chain in real time

Fill rate

the percentage of demand (back orders) filled by the stock on hand

Cross-docking

avoiding the placement of materials or supplies in storage by processing them as they are received for shipment

Projects

Unique, one-time operations designed to accomplish

a specific set of objectives in a limited time frame

Work Breakdown Structure

defines the hierarchy of project tasks, subtasks, and work packages

PERT network

a flowchart diagram showing the sequence of activities needed to complete a project and the time or cost associated with each

CPM

Critical path method, for planning and coordinating large projects.

Network (precedence) diagram

diagram of project activities that shows sequential relationships by use of arrows and nodes

critical path

in a PERT network, the sequence of tasks that takes the longest time to complete

Critical Activity

Any activity on the critical path

slack

the amount of time that a task in a project network can be delayed without causing a delay

crash

technique to use when fast tracking has not saved enough time on the schedule.

resources are added to the project for the least cost possible

Risk Management

All efforts designed to preserve assets and earning power associated with a business.