Exam 3 Flashcards
Stock Out Risk Formula
1- Service Level
Reorder Point( ROP) Formula
Mu DDLT+ Saftey Stock
acceptable quality level (AQL)
Proportion of defects a consumer considers acceptable.
acceptance sampling
Estimating the quality of conformance of large batches through inspection of smaller samples.
aggregate planning
Medium-term tactical capacity planning in response to changing demand.
aggregation
To combine the creation of many similar products into one relevant measure of activity for the organization.
andon
Japanese term for a signaling system announcing problems encountered and assistance requested, often implemented as sets of lights over workstations.
assemble-to-order (ATO)
A system that produces standard modules to be modified and/or combined into a customizable product.
assignable variation
Deviations with a specific cause or source.
average inventory
The average of the beginning and the ending inventory of a particular time period.
average outgoing quality (AOQ)
Estimate of the proportion of defects that pass an acceptance sampling plan.
backflushing
Determining the overall inventory requirements of a finished good by combining information on amount of the good produced with the requirements information in its bill of materials.
backward scheduling
Starting an activity so it will finish on its deadline.
beginning inventory
The level of inventory as measured at the beginning of a particular time period. This level is assumed to be the ending inventory of the previous time period.
bill of materials
A description of all raw materials and intermediate assemblies required to create a finished product.
bottleneck
The most heavily utilized resource within a system.
capacity cushion
Largely idle capacity maintained beyond the expected load level of a system, often to absorb unexpected demand.
c-chart
Control chart used in monitoring the count of some characteristic within a sample.
Central Limit Theorem
The observation that sample values approximate a normal distribution, regardless of the underlying distribution of the population being sampled.
chase demand strategy
Aggregate planning approach that relies on changing capacity to match demand.
child
An item required for immediate transformation into another item, known as its parent.
consumer’s risk
The likelihood of a type II error.
control chart
control chart
control limit
A control chart boundary, where values observed beyond this limit signal the process is not in control.
critical ratio
Time remaining until due date divided by work remaining to be done.
decision support system (DSS)
Software that assists human decision making in a particular setting.
defect
A single identifiable deviation from acceptable conformance.
dependent demand
Requirements for child items; also known as component demand.
deterministic
Fixed and known in advance, representing a high level of certainty when planning.
disaggregation
Translation of an aggregated value into smaller individual estimates corresponding to specific products.
dispatching
Assigning work in real-time, often in the context of mobile resources.
drum-buffer-rope (DBR)
Central principle of bottleneck scheduling, evoking the bottleneck (drum) ideally protected by a buffer of waiting work produced by upstream work centers whose activities are constrained to the bottleneck’s pace (rope).
dual card kanban
A kanban control arrangement consisting of two kanban loops. The first kanban loop signals and limits production of an item, while the second loop signals and limits withdrawals for consumption of the item.
dynamic
Actively and continuously changing.
economies of scale
Decreasing average unit cost by increasing volume.
EDD
Abbreviation for the priority rule of earliest due date, or scheduling the task with the most imminent deadline first.
efficiency
Percent of a resource in productive use.
electronic data interchange (EDI)
The linking of two information systems from two different organizations to transfer data and conduct transactions.
ending inventory
The level of inventory as measured at the conclusion of a particular time period. This level is assumed to be the beginning inventory of the next time period.
enterprise resource planning (ERP)
A strategic information system that integrates all functional areas of an organization.
FCFS
First-come, first-served sequencing rule.
finished goods
Inventory awaiting sale to consumers.
finite loading
A scheduling approach that recognizes capacity constraints.
flowtime
The length of time a job spends in the system.
forward scheduling
Starting an activity as soon as possible, regardless of its deadline.
freezing
In planning, a policy that does not allow changes to the MPS within a protected interval.
functional organizational structure
An organization of specialists grouped into distinct departments.
Gantt chart
A scheduling diagram that illustrates activities across a horizontal timeline.
gross requirements
The combined, overall demand for an item.
heuristic
A procedure to develop a good solution to a problem, but cannot guarantee identification of the best solution.
holding costs
Variable costs associated with having inventory.
incident
An unscheduled event requiring immediate resolution.
independent demand
Requirements for an item from outside the system, also known as customer demand.
infinite loading
A scheduling approach that ignores capacity constraints.
inventory
Tangible items awaiting sale or use.
iterative planning
Deliberately adjusting plans at short intervals to reflect new information.
JIT II
A phrase first popularized by the Bose Company, emphasizing vendor managed inventory and colocation of those vendors within a production facility.
job shop
A process layout.
just-in-time (JIT)
An earlier and alternate term for lean operation, in which a system implicitly operates with minimum of inventory and waste.
kaizen
Japanese term for a focus on continuous improvement.
kanban
In operations, a Japanese term for a signal, often a card. Kanban systems use these signals to regulate production.
kanban loop
The continuous path of travel of a set of kanbans, governing the production or consumption of some inventory item.
known unknown
A source of uncertainty known to a decision maker, usually evident in past experience or data.
lead time
Delay between requesting a product and receiving it.
lean
Operating without waste.
level demand strategy
Aggregate planning approach that relies on influencing demand to match capacity.
level production strategy
Aggregate planning approach that relies on fixed capacity despite changing demand.
Little’s law
The average number of some item in a system equals its average arrival rate multiplied by the average time each unit spends in the system.
loading
Assigning work to resources.
Loading gantt Chart
A Gantt chart in which the horizontal bars represent utilization of work centers or finite resources.
local optimization
Localized problem solving that ignores any larger problem of which the local decision is a component.
lot tolerance percent defective (LTPD)
Maximum proportion of defects that a consumer can tolerate.
lot-for-lot (LFL)
An ordering policy in which orders are sized to match individual demands exactly, theoretically accumulating no inventory.
makespan
The length of time required to complete a finished schedule.
make-to-order
A system that produces low volumes of customized product.
make-to-stock
A system that produces high volumes of standardized product.
manufacturing resource planning (MRP II)
A broader information system embedding MRP logic in a set of modules that integrate input from other areas of the organizations and enforce relevant capacity constraints on the development of schedules.
master production schedule (MPS)
A statement of independent demand for all inventory items in an MRP system.
material requirements planning (MRP)
A technique for scheduling the production of multiple items related by both independent and dependent demand.
Womack and Jones
Lean thinking, Ford, The Machine That changed the world
mean chart
Control chart used in monitoring the central tendency of some characteristic within a sample, also known as an x-bar chart in reference to the plotting of averages.
milestone
A point of significance in the time line of a project.
minimum constant production (MCP) rate
The lowest speed of perfectly level production that will not produce any shortages within a demand forecast.
mixed-model assembly
Production of a range of products with a single assembly line, primarily by varying features on an otherwise standardized product.
muda
Japanese term for waste, particularly anything a customer is not willing to pay for.
multitasking
Simultaneous completion of multiple tasks by a single processor.
natural planning horizon
A point of time within a forecast where aggregate demand dictates the minimum level production rate necessary to fulfill all demand specified by that forecast.
natural variation
The randomness inherent in a process; also known as random variation.
nervous
In management science, a condition in which a small change to input data can create major revisions to the conclusions suggested by a particular technique.
on-demand
Products provided with zero lead times.
operating characteristic (OC) curve
A graph of the likelihood of accepting a batch, given an increasing proportion of defects within that batch.
optimization
Identification of the best alternative.
outcome bias
A tendency to assume a process is acceptable if its output is acceptable.
parent
An item created from one or more other items, known as its children.
partnering
Long-term strategic alliances that benefit both parties.
p-chart
Control chart used in monitoring the proportion of some characteristic within a sample.
planned order receipts
A schedule of the arrival of a particular item within a planning horizon, to supply its gross requirements over that same time interval.
planned order releases
A schedule of the ordering of a particular item within a planning horizon, to supply its gross requirements over that same time interval.
planning horizon
The farthest point in the future considered in decision making.
of Kanban Formula
N= Demand *Leadtime(1+x) / Container Size
Poisson distribution
A discrete probability distribution describing the likelihood of a particular number of independent events within a particular interval.
poka yoke
Japanese term for process improvements striving to make the desired outcome of a process inevitable, largely by preventing mistakes.
precedence relationship
A dependency between two tasks, usually requiring that one task be completed before the other task is started.
priority rule
A rule determining the sequence in which requirements will be met.
probabilistic
Variable or not well known in advance; subject to randomness. This represents some uncertainty in planning.
process capability
The natural variation in an existing process, stated relative to the allowable variation specified in a product’s design.
producer’s risk
The likelihood of a type I error.
product structure diagram
A particularly visual format for a bill of materials, in which parent/child relationships among inventory items are illustrated as a network of connected shapes.
project scheduling Gantt chart
A Gantt chart in which the horizontal bars represent distinct tasks or activities.
pull system
A production system that reacts to signals of demand, relying on internal coordination instead of the implementation of explicit plans to achieve outcomes.
push system
A production system that calculates and anticipates demand, relying on the implementation of explicit plans instead of internal coordination to achieve outcomes.
quality circle
A group of employees that meets regularly to discuss and develop opportunities for continuous improvement of an operation.
quality of conformance
The degree to which the output of an operation meets the producer’s expectations.
queue
A waiting line.
queue discipline
A rule or rules determining the order in which waiting individuals will be served.
radio frequency identification (RFID)
The tagging of objects with devices that may be detected and interrogated for information by remote electronic readers, allowing identification and tracking without contact.
range
The difference between the largest observed value of some characteristic within a sample and the smallest observed value of that same characteristic.
raw materials
Inventory brought in from outside the system.
R-chart
Control chart used in monitoring the range of some characteristic within a sample.
real-time
The present point in time; now.
reorder point
An inventory level that triggers replenishment of an item.
run size
A batch size, or order size, associated with the production of an item.
run time
The time required to produce a batch of some item.
safety stock
Inventory held to protect against uncertain supply or demand.
sampling plan
Defined procedure for conducting acceptance sampling, including the criteria that determines rejection of the batch being sampled.
scheduling
To determine timing.
scientific management
A methodology stressing the use of data collection and analysis to redesign processes and improve efficiency.
sequencing
To determine the order in which requirements are met.
service level
The probability that demand for an item will be met during the lead time on replenishment of that same item.
single card kanban
A kanban control arrangement consisting of a single kanban loop, controlling production and limiting inventory levels of some item.
situational awareness
An individual or organization’s comprehension of the surrounding environment and its potential near-future states.
sole sourcing
Relying on a single supplier.
SPT
Abbreviation for the priority rule of shortest processing time, or scheduling the task that requires the least amount of processing time first.
standard normal distribution
A normal distribution with a mean of zero and a variance of 1.
statistical process control (SPC)
The monitoring of overall conformance through the ongoing evaluation of samples.
stockpiling
Producing or securing goods in advance of demand.
subcontract
To engage a third party in the provision of value to a customer.
Taguchi loss function
A proposed model of the cost of nonconformance that penalizes even small degrees of deviation from a target specification.
tardiness
The length of time a job is late. If a job is finished early or on time, its tardiness is zero.
Theory of Constraints (TOC)
A body of knowledge focused on managing the limitations on a system for continuous improvement.
time bucket
The smallest interval of time used in planning, such as hourly, daily, or weekly.
time fence
A point in time specified by a policy to protect an MPS from near-term changes, dividing the planning horizon into shorter intervals with varying levels of protection.
tolerance
Allowable variation from a standard.
total quality management (TQM)
Simultaneous and continuous pursuit of improvement in both the quality of design and conformance through the involvement of the entire organization.
triage
A priority rule creating sequences intended to yield the most value from distinctly limited resources.
type I error
In quality control, concluding the process is out of control when in fact it is not.
type II error
In quality control, concluding the process is in control when in fact it is not.
unknown unknown
Uncertainty omitted from planning because the decision maker is unaware of its presence.
utilization
Percent of design capacity in use.
value-added
The difference between the total value of the outputs and the total value of the inputs associated with an operation.
vendor-managed inventory (VMI)
Transferal of ownership and management of inventory within a system to its external provider, who will be compensated after its use by the system.
work in process (WIP)
Inventory resulting from transformation of raw materials, but not yet ready for sale to consumers.
