8-9 Flashcards
is the capability of a manufacturing or service resource such as a facility, process, workstation, or piece of equipment to be accomplished over a specified period.
Capacity
are achieved when the average unit cost of a good or service decreases as the capacity and or value of throughput increases
Economies of Scale
occur when the average unit cost of the good or service begins to increase as the capacity and/ or volume of throughput increase
Diseconomies of scale-
is a way to achieve economies of scale, without extensive investments in facilities and capacity, by focusing on a narrow range of goods or services, target market segments, and/or dedicated processes to maximize efficiency and effectiveness
Focused factory-
are used in many ways in long-term planning and short-term management activities
Capacity measures
defined as an amount of capacity reserved for unanticipated events such as demand surges, material shortages, and equipment breakdowns, is normally planed into a process or facility
Safety Capacity/ Capacity Cushion
is a specification of work to be performed for a customer or a client
A work order
which are goods and services that can be produced or delivered using the same resources available to the firm, but whose seasonal demand patterns are out of phase with each other.
Complementary goods and services
illustrates the strategy of matching capacity additions with demand as closely as possible
Capacity straddle strategy-(small capacity increases that match demand)
shows a capacity-expansion strategy to maintain sufficient capacity to minimize the chances of not meeting demand. Capacity expansion leads or is ahead of demand
Capacity lead strategy- (small capacity increases that lead demand)
that results in constant capacity shortages. Such a strategy waits until demand has increased to a point where additional capacity is necessary
Capacity lag strategy- (small capacity increases that lag demand)
is a promise to provide a good or service at some future time and place
Reservation
consists of dynamic methods to forecast demand, allocate perishable assets across market segments, decide when to overbook and by how much, and determine what price to charge different customer (price) classes.
Revenue Management System (RMS)
is a set of principles that focuses an increasing total process throughout by maximizing the utilization of all bottleneck work activities and workstations.
Theory of constraints (TOC)
is the amount of money generated per time period through actual sales.
Throughput
is anything in an organization that limits it from moving toward or achieving its goal.
Constraint
is associated with the capacity of a resource such as a machine, employee or workstation.
Physical constraint-
is one that effectively limits the capacity of the entire process bottlenecks, the input exceeds the capacity, restricting the total output that is capable of being produced.
Bottleneck (BN) work activity
is one in which idle capacity exists.
Nonbottleneck (BN) work activity
is environmental or organizational, such as low product demand or an inefficient management policy or procedure.
Nonphysical constraint
is any asset held for future use or sale.
Inventory
involves planning, coordinating and controlling the acquisition, storage, handling, movement, distribution, and possible sale of raw materials, component parts and subassemblies, supplies and tools, replacement part, and other assets that are needed to meet customer wants and needs
Inventory Management-
inputs to manufacturing and service-delivery processes.
Raw Materials, component parts, subassemblies, and supplies
consist of partially finished products in various stages of completion that are awaiting further processing
Work in Process (WIP) inventory
is completed products ready for distribution or sale to customers
Finished Goods Inventory
is an additional amount that is kept over and above the average amount required to meet demand
Safety stock inventory
is the price paid for purchased goods or the internal cost of producing them
Unit cost
is a single item or asset stored at a particular location
single keeping unit (SKU)
is demand for SKU that is unrelated to the demand for other or SKUs and needs to be forecasted
Independent Demand
if their demand is directly related to the demand of other SKUs can be calculated without needing to be forecasted
Dependent Demand
stable demand
Static Demand
varies over time
Dynamic Demand
is the time between placement of an order and its receipt
Lead time
is the inability to satisfy the demand for an item
Stockout
occurs when a customer is willing to wait for the item
Backorder
occurs when the customer is unwilling to wait and purchases the item elsewhere.
Lost of Sale
the order quantity or lot size is fixed, the same amount Q , is ordered every time
Fixed quantity system (FQS)
is defined as the on hand quantity plus any orders placed but which have not arrived (called scheduled receipts, SR,) minus any backorder (BO)
Inventory Position
is the value of the inventory position that triggers a new order
Reorder Point
model is a classic economic model developed in the early 1900s that minimizes the total cost, which is the sum of the inventory-holding cost and the ordering cost.
Economic Order Point
inventory that results from purchasing or producing in larger lots than are needed for immediate consumption or sale.
Cycle Inventory / order /lot size inventory
additional, planned
on-hand inventory that acts as a buffer to reduce the risk of a stockout.
Safety Stock
