Exam 2 Flashcards
1
Q
Types of Firms
A
Make-to-Stock
Assemble-to-Order
Make-to-Order
Engineer-to-Order
2
Q
Make-to-stock firm
A
firms that serve customers from finished goods inventory
3
Q
Assemble-to-order firms
A
firms that combine a number of preassembled modules to meet a customer’s specifications
4
Q
Make-to-order firms
A
firms that make the customer’s product from raw materials, parts, and components
5
Q
engineer-to-order firms
A
firms that will work with the customer to design and then make the product
6
Q
Examples of make-to-stock
A
Televisions
Clothing
Packaged food products
7
Q
Make to stock issue in satisfying customers:
A
to balance the level of inventory against the level of customer service. Trade-off between the costs of inventory and level of customer service must be made
8
Q
Assemble-to-order primary task
A
to define a customer’s order in terms of alternative components since these are carried in inventory
9
Q
Capability requirement of assemble to order
A
a design that enables as much as much flexibility as possible in combining components
10
Q
Make-to-order and engineer-to-order
A
Customer order decoupling point could be in either raw materials at the manufacturing site or the supplier inventory. Depending on how similar the products are it might not even be possible to pre-order parts.
11
Q
lead time
A
the time needed to respond to a customer order
12
Q
customer order decoupling point
A
where inventory is positioned to allow entities in the supply chain to operate independently
13
Q
Little’s Law
A
the flow of items through a production process can be described using Little’s Law:
Inventory=Throughput rate*flow time
14
Q
Throughput
A
long term average rate of flow through the process
15
Q
flow time
A
time for a single unit to traverse the entire process
16
Q
inventory
A
materials held by the firm for future use
17
Q
Inventory turns
A
the cost of goods sold divided by the average inventory value. Good measure of how the organization is using the inventory dollars
18
Q
The choice of manufacturing processes depends:
A
mostly on a firm’s target market. (sales volume, variety of products)
19
Q
Product process matrix. Strategies from Low product standardization to high
A
Project Workcenter Manufacturing cell Assembly line Continuous process
20
Q
Continuous Process
A
Non-individual items (liquid, gas)
Very few product types and high volume
Individual products can’t be distinguished until packaging
21
Q
Assembly Line
A
Single path through the process
All products follow the same path
Workflow is sometimes paced with a conveyor belt
22
Q
Workcenter Layout
A
Focused on a particular type of operation
Machines that perform the same type of operation are grouped together
23
Q
Manufacturing cells
A
Dissimilar machines are grouped together
Objective of this grouping is to produce products requiring similar production sequences and steps in the most efficient manner
24
Q
U-Shaped cell
A
gives better operator access to the equipment and may reduce need for operators
25
Project Layout
Product is usually stationary
| Material brought to the product
26
Workstation cycle time
a uniform time interval in which a moving conveyor passes a series of workstations. (the time between units coming off the line)
27
Assembly-line balancing
assigning tasks to a series of workstation so that the required cycle time is met and idle time is minimized
28
precedence relationship
the order in which tasks must be performed in an assembly process
29
Cycle time
the time to complete a task
30
Assembly line balancing
the method of assigning tasks to workstations so that the amount of idle time is minimized
31
Assembly line balancing steps
1. Specify the sequential relationships among tasks
2. Determine the required workstation cycle time
3. Determine the theoretical minimum number of workstations
4. Assign tasks, one a time, until the sum of the tasks is equal to the workstation cycle time
5. Evaluate the efficiency of the balance
6. Rebalance if needed
32
How to improve cycle time
```
Split the tasks into smaller tasks
Use parallel workstations
Use a more proficient worker
Work overtime in the affected workstation
Redesign the process
```
33
Customer contact
the physical presence of the customer in the system. Systems with high degree of customer contact are harder to control
34
Creation of the service
The work process involved in providing the service itself
35
Service Organization Design
- Services cannot be stored in inventory
- In services, capacity becomes the dominant issue
- Waiting line models provide a powerful mathematical tool for analyzing many common service situation
- Services can be physical or virtual
36
Service-System Design Matrix
```
Mail Contact
Internet and on-site tech
Phone contact
Face-to-face tight specs
Face-to-face loose specs
Face-to-face total customizaion
```
37
Service blueprint
A flowchart that's the standard tool for service process design. Distinction is made between the high customer contact aspects of the service and those activities that the customer does not see. "Line of visibility"
38
Fail-safing
Involves using the service blueprint to identify opportunities for failure and then establishing procedures to prevent mistakes from becoming defects (poka-yokes)
39
Poka-yokes
procedures that block the inevitable mistake from becoming a service defect. Common in factories
40
Applications of poka-yokes to services
Warning methods
| Physical or visual contact methods
41
Management of waiting time
Reducing time costs money, but raises customer satisfaction and throughput
42
Waiting line factors
- Number of arrivals over the hours that system is open
- Customers demand varying amounts of service, often exceeding normal capacity
- We can control arrivals
- We can affect service time by using faster or slower servers
43
Managing Queues
Segment the customers
Train your servers to be friendly
Inform your customers of what to expect
Try to divert the customer's attention when waiting
Encourage customers to come during slack periods
44
Arrival rate
the expected number of customers that arrive each period. RANDOM
45
Balking
Degree of impatience where the customer arrives, vies, and leaves
46
Reneging
Degree of impatience where the customer arrives, waits awhile, then leaves
47
Queuing system factors
```
Length
Number of lines
Queue discipline
Service time distribution
Line structure
```
48
Service rate
the number of customers a server can handle during a given time period
49
Line structures
Single channel, single phase (one person barber shop)
| Single channel multiphase (carwash)
50
Two possible exits
Low probability of reservice
| Return to source population
51
Computer simulation of waiting lines
Some waiting line problems are very complex.
Equations assume that waiting lines are independent.
Some problems have conditions that do not meet the requirements of the equations.
52
Objective of sales and operations planning
to reach consensus on a single operating plan that allocates the critical resources of people, capacity, materials, time, and money to most effectively meet the market place in a profitable way
53
Aggregate operations plan
a plan for labor and production for the intermediate term with the objective to minimize the cost of resources needed to meet demand
54
Tactical planning S&OP (months out)
- Workforce, inventory, subcontracting, and logistics decisions
- planning numbers somewhat "aggregated" (month by month)
- Moderate risk
55
S&OP intermediate plans
updated monthly
56
External inputs to production planning
```
Competitors' behavior
Raw material availability
Market demand
External capacity
Economic conditions
```
57
Internal inputs to production planning
Current physical capacity
Current workforce
Inventory levels
Activities required for production
58
Forecasting is more accurate for
groups or families. Or, if we aggregate the demand
59
Aggregate Operations plan
Specifies the optimal combination of production rate, workforce level, inventory on hand
60
Production rate
units completed per unit of time
61
Workforce level
number of workers needed in a period
62
Inventory on hand
inventory carried from previous period
63
Relevant S&OP costs
Basic production costs
Costs associated with changes in the production rate
Inventory holding costs
Backorder costs
64
Production planning strategies
the plans for meeting demand. Tradeoffs involved include workers employed, work hours, inventory and shortages
65
Types of production planning strategies
Chase
Stable Workforce
Level
66
Level strategy
Maintain a stable workforce working at a constant output rate to meet expected average demand
67
Chase strategy
Match the production rate by hiring and laying off employees. Must have a pool of easily trained applicants to draw on
68
Stable workforce
Vary the number of hours worked through flexible work schedules or overtime or subcontracting
69
Compatible competitive priorities for Peak demand strategy
DELIVERY SPEED
Conformance quality
Flexibility
70
Compatible competitive priorities for Level production strategy
LOW COST
Design quality
Delivery speed
71
Compatible competitive priorities for Chase demand strategy
FLEXIBILITY
Design quality
Delivery speed
72
Hard benefits of S&OP
```
Higher customer service
Lower finished goods inventories
More stable production/service rates
Faster and more controlled new product introductions
Reduced obsolescence
Shorter customer lead times
```
73
Yield management
the process of allocating the right type of capacity to the right type of customer at the right price and time to maximize revenue or yield. Began with American Airline's computerized reservation system (SABRE)
74
The essence of yield management:
The ability to manage demand
75
Enterprise Resource Planning
integrates internal and external management information across an entire organization, embracing finance/accounting, manufacturing, sales and service, customer relationship management, etc. ERP systems automate this activity with an integrated software application (SAP, Oracle, JDE)
76
Material Requirements Planning
the logic used in determining the number of parts, components, and materials needed to produce a product to the schedule provided (which is the production of the dependent demand)
77
Aggregate Production plan
The firm's strategy for meeting demand in the future, implemented through the master production schedule (MPS)
78
MRP involves:
What do we need to produce(MPS)?
Do we have all the parts (inventory status, on-order)?
What and when do we need to order/manufacture the parts not already available (MRP Schedule)?
How long will it take? (Lead time)
79
Types of businesses that benefit from MRP
Make-to-stock
Assemble-to-order
Manufacture-to-order
80
Master production schedule
a time-phased plan specifying how many and when the firm plans to build each end item. Deals with independent demand items
81
Frozen time fence
changes to production plan not allowed
82
MRP System inputs
```
Engineering design changes
Bill of materials
Forecasts of demand from customers
Aggregate production plan
Inventory transactions
Inventory records file
Firm orders from customers
Master production schedule
```
83
Bill of Materials
contains the complete product description, listing the materials, parts, and components along with the sequence in which the product is created. (product structure file, product tree)
84
Lot sizes
the part quantities issued in the planned order receipt and planned order release sections of an MRP schedule
85
Lot for lot
Sets planned orders to exactly match the net requirements.
Minimizes carrying costs.
Produces exactly what is needed each week with none carried over into future periods.
Does not take into account setup costs or capacity limitations.
86
Economic order quantity
Calculate reorder quantity based on EOQ. Was not designed for a system with discrete time periods such as MRP.
87
Inventory includes
raw materials, finished products, component parts, supplies, work in process
88
Inventory system
the set of policies and controls that manages and monitors the inventory investment
89
Positive aspects of inventory
- To maintain independence of operations
- To meet variation in demand
- to allow flexibility in production scheduling
- to provide a safeguard for variation in other parts of the system
- Take advantage of Economic order size/frequency
- Hedge against inflation, or perceived disruption in supply
90
Negative aspects of inventory
- Hide operational problems
- Lost opportunity to invest $ elsewhere
- Risk of deterioration (loss, pilferage, damage, etc.)
- Costs associated with managing and tracking
- Product obsolescence
- Hindrance to flexibility
91
Inventory costs
holding (carrying) costs
Setup costs
Ordering costs
Shortage costs
92
Independent demand
the demands for various items are not dependent upon other items in our control (customer orders, sales forecasts)
93
Dependent demand
the need for any one item is a direct result of the need for another item
94
Inventory control systems
Reorder point/equal order period
| Material requirements planning
95
Inventory models
Single period model
Fixed order quantity model
Fixed time period model
96
Single period inventory model
Calculate the probability of being able to satisfy the customer OR
calculate the costs associated with overstocking and understocking and select the best option
97
single period model applications
Overbooking of airline flights
Ordering of clothing and other fashion items
One-time order for events
98
fixed order quantity
- has a smaller average inventory
| - is more expensive to implement
99
fixed time period
- has a larger average inventory
| - is less expensive to implement
100
safety stock
amount of inventory carried in addition to expected demand
101
Establishing safety stock
- keep a certain # of weeks of supply
- Use probability: assume demand is normally distributed, assume we know mean and standard deviation, plot a normal distribution for expected demand and note where the amount we have lies on the curve
102
inventory accuracy
refers to how well the inventory records agree with physical count
103
cycle counting
a physical inventory management technique to more effectively control inventory accuracy
