Ch. 2 Planning and Sourcing

Question 1

4 categories

Answer 1

1. Plan
2. Source
3. Make
4. Deliver

Question 2

Plan (3)

Answer 2

1. demand forecasting
2. product pricing
3. inventory management

Question 3

Source (2)

Answer 3

1. obtaining materials and services

2. credit and collections

Question 4

Make (3)

Answer 4

1. product design
2. product scheduling
3. facility management

Question 5

Deliver (2)

Answer 5

1. order entry/fulfillment

2. product delivery

Question 6

Demand Forecasting deals with (4)

Answer 6

1. demand
2. supply
3. product characteristics
4. competitive environment

Question 7

forecasting methods (4)

Answer 7

1. qualitative
2. causal
3. time series
4. simulation

Question 8

causal methods of forecasting

Answer 8

assume that demand is strongly related to particular environmental or market factors

Question 9

sales & operations planning definition (S&OP)

Answer 9

setting the overall level of manufacturing output and other activities

Question 10

promotion pricing at peak or slow periods?

Answer 10

1. at peak if company is flexibly and can quickly vary size of workforce and productive capacity
2. at slow if company is not flexible

Question 11

cycle inventory

Answer 11

inventory required to meet needs between placing order periods

Question 12

EOQ

Answer 12

the most cost effective amount to purchase at a time

Question 13

inventory system defintion

Answer 13

monitor levels of inventory and determine what levels should be maintained, when stock should be replenished and how large orders should be

Question 14

inventory on hand

Answer 14

sum of the stock on hand plus in transit items

Question 15

why safety stock (3)

Answer 15

1. variation in product demand
2. variation in the lead time required to replenish the item
3. desired level of service that the company wants to provide its customers

Question 16

inventory control

Answer 16

is the supervision of supply, storage and accessibility of items in order to ensure an adequate supply without excessive oversupply

Question 17

procurement (source) (5)

Answer 17

1. purchasing
2. consumption management
3. vendor selection
4. contract negotiation
5. contract management

Question 18

purchasing (2)

Answer 18

1. direct materials (used in the products sold to customers)

2. indirect materials (used for daily operations (MRO)- maintenance, repair, and operations

Question 19

consumption management

Answer 19

understanding of how much of what kinds of products are bought from whom and at what prices

Question 20

contract management

Answer 20

vendor performance against these contracts must be measured and managed

Question 21

VMI - vendor managed inventory

Answer 21

calls for the vendor to monitor the inventory levels of its product within a customers business

Question 22

3 functions of credit and collections

Answer 22

1. set credit policy
2. implement credit and collection practices
3. manage credit risk