Exam 2

Question 1

What is Capacity?

Answer 1

the maximum capability to produce

affecting:
-lead times
-customer responsiveness
-operating costs
-a firm’s ability to compete

Question 2

What are the three Capacity Strategies?

Answer 2

1. Lead Strategy: expanding in anticipation of demand growth (AGGRESSIVE)
2. Average Capacity Strategy: expanding to coincide with average expected demand (MODERATE)
3. Lag Strategy: increasing capacity after an increase in demand has been documented (CONSERVATIVE)

Question 3

What is Best Operating Level?

Answer 3

the percent of capacity utilization that MINIMIZES unit costs

Question 4

What is Capacity Cushion?

Answer 4

the percent of capacity HELD IN RESERVE for unexpected occurrences

Question 5

What is Economies of Scale?

Answer 5

when it costs LESS per unit to produce HIGH levels of output

Question 6

List a few objectives of effective layouts

Answer 6

1. Minimize movement and material handling costs
2. Utilize space and labor efficiently
3. Eliminate bottlenecks
4. Incorporate safety and security measures
5. Increase capacity

Question 7

M/C - which layout is best in a scenario

What are Process Layouts

Answer 7

group similar activities together according to the process or function they perform

e.g., drilling department, painting department

Question 8

M/C - which layout is best in a scenario

What are Product Layouts

Answer 8

arrange activities in a line according to the sequence of operations that need to be performed to assemble a particular product…each has its own “line”

e.g., think a car manufacturer

Question 9

What is Motivation, and what are a few motivations for an employee?

Answer 9

Motivation: a willingness to work hard because that effort satisfies an employee’s need

MOTIVATIONS:
1. Financial compensation
2. Achievement and Accomplishment
3. Recognition
4. Relationships with coworkers
5. Job interest

Question 10

What is Project Management?

Answer 10

the management of the work to develop and implement an innovation or change in an existing operation

Question 11

What are a few of the Global Cultural and Diversity ISSUES in Project Management?

Answer 11

1. Cultural differences in priorities
2. Terminologies
3. Schedule - work days and holidays in different counties
4. Management style
5. Culture

Question 12

What are the components of Project Scheduling and Control?

Answer 12

1. DEFINE the activities
2. SEQUENCE the activities
3. ESTIMATE the time required to complete each activity
4. DEVELOP the schedule based on the sequencing and time estimates of the activities

Question 13

What is a tool used to develop a project schedule?

Answer 13

Gantt Chart

Question 14

What is Supply Chain?

Answer 14

the facilities, functions, and activities involved in PRODUCING and DELIVERING a product or service from suppliers to customers

-highly integrated group of business processes and activities with the same goal, providing customer satisfaction

Question 15

What is Supply Chain for Services?

Answer 15

focus more on the HUMAN RESOURCES and SUPPORT SERVICES necessary to provide its own service

Question 16

What is Supply Chain Management?

Answer 16

Focuses on INTEGRATING and MANAGING the flow of goods and services and information through the supply chain to make it RESPONSIVE to customer needs while LOWERING total costs

Question 17

When it comes to Supply Chain Uncertainty, what is the importance of Inventory?

Answer 17

Inventory is nothing more than INSURANCE against supply chain uncertainty

PROTECTS AGAINST:
-late arrivals (parts)
-maintain delivery schedules
-keep down order and transportation costs
-receive discounts or special prices from suppliers due to volume of purchase

Question 18

Describe the Bullwhip Effect

Answer 18

occurs when there is DISTORTED INFORMATION (or lack of information), such as INACCURATE DEMAND DATA OR FORECASTS…and it moves the operations back upstream

Question 19

What is Sustainability?

Answer 19

meeting present needs without compromising the ability of future generations to meet their needs

-for business, it also means sustaining HUMAN AND SOCIAL RESOURCES

Question 20

M/C

What are the 4 pillars in Supply Integration

Answer 20

1. Information Sharing
   -reduce bullwhip effect
   -early problem detection
   -faster response
   -builds trust and confidence
2. Collaborative Planning
   -reduce bullwhip effect
   -lower costs (material, logistics, operating)
   -higher capacity utilization
3. Workflow Coordination
   -production efficiencies
   -fast response
   -improved service
   -quicker to market
4. Adoption of New Models and Technologies
   -penetration of new markets
   -creation of new products
   -improved efficiency
   -mass customization

Question 21

What are Key Performance Indicators (KPI), and what are the three major ways used?

Answer 21

metrics used to measure supply chain performance

1. Inventory Turnover (or turns)
2. Inventory Days of Supply
3. Fill Rate: the fraction of orders filled by a distribution center within a specific time period

Question 22

What is the formula for Inventory Turnover?

Answer 22

Cost of Goods Sold / Average Aggregate Value of Inventory

Question 23

What is the formula for the Inventory Days of Supply?

Answer 23

Average Aggregate Value of Inventory / ((Cost of Goods Sold)/(365 days))

Question 24

What is SCOR and its level processes?

Answer 24

SUPPLY CHAIN OPERATIONS REFERENCE
SCOR: a supply chain tool, or model, that provides a cross-industry standard for supply chain management

1. Plan
2. Source
3. Make
4. Deliver
5. Return.
6. Enable

Question 25

What is Procurement?

Answer 25

the purchase of goods and services from suppliers

-On-demand
-Continuous replenishment

Question 26

What is E-Procurement, and its two categories?

Answer 26

part of the B2B commerce being conducted on the Internet…direct purchase from suppliers over the internet

TWO CATEGORIES:
1. Manufacturing Inputs (direct products) - raw materials, components, etc.

2. Operating Inputs (indirect products) - maintenance, repair, and operation goods and services; e.g., supplies, computers, airline tickets, etc.

Question 27

What are the Modes of Transportation? When would you use each?

Answer 27

1. Rail: low-value, high-density bulk products, raw materials, intermodal containers
   -not as economical for small loads; slower, less flexible than trucking
2. Trucking: main mode of freight transportation in the US; small loads, point-to-point service, flexible
   -more reliable, less damage than rails; more expensive than rails for long-distance
3. Air: most expensive and fastest mode of freight transport; lightweight small packages; high-value, perishable, and critical goods
   -less theft
4. Package Delivery: small packages; fast and reliable; increased with e-business
   -primary shipping mode for internet companies like Amazon, LL Bean, Dell Computers
5. Water: Low-cost shipping mode; primary means of international shipping
   -slowest shipping mode
6. Pipeline: transport oil and products in liquid form; high capital costs, economical use
   -long life and lower operating cost
7. Intermodal: combines serval modes of shipping - truck, water, and rail
   -key component is container

Question 28

List a few Obstacles to Global Supply Chain Management

Answer 28

1. Numerous security regulations and requirements
2. Different business practices as well as language barriers
3. Limited shipping modes and infrastructure
4. Trade groups, tariffs, duties, and landing costs
5. Differences in communication technology and availability