Final Flashcards
Levels Scheduling
Maintaining a constant output rate, production rate, or workforce level over the planning horizon
Chase Scheduling
A planning strategy that sets production equal to
forecast demand.
Many service organizations favor the chase strategy
because the inventory option is difficult or impossible to adopt.
Hiring
Firing
MPR
Materials, Requiste, Plan
Independent Demand
The demand for one item is not related to the
demand for another item
Dependent Demand
The demand for one item is related to the
demand for another item
BOMs
Bill of Materials
Time Phasing
Planned amount to order in each time period
Net Requests
Leadtimes
The time required to purchase, produce, or assemble an item
Net Requirements
Actual Amount needed in each time period
Gross Request
Total expected demand
Scheduled Receipts
Open Orders scheduled to arrive
Projected on Hand
Expected inventory on hand at the beginning of each time period
Setup Costs
Technician Costs
Startup Costs
QA samples
Utilitiues/Operator Costs
Lot-for-Lots Techniques
Order just what is required
When should the Lot-for-Lot Technique be used
When low-cost setups can be achieved
Inventory
Goods
Importance of Inventory
Sever Import for Working Capital
ABC Analysis
Divide inventory into three classes based on annual dollar volume (Class A, B, & C
Class A
High Annual Dollar Volume
Class B
Medium Annual Dollar Volume
Class C
Low Annual Dollar Volume
When is ABC Analysis used?
Establish policies that focus on the few critical parts and not the many trivial ones
What are the Pressures for Small Inventories?
Inventory Holding Cost
Cost of Capital
Taxes
Insurance
Storage/Handling Cost
Warehouse Space
Shrinkage
What are the Pressures for Large Inventories?
Ordering Cost
Setup Cost
Transportation Cost
Don’t Stock Out the Production Line
Customer Service/ Fill Rates
Labor and Equipment Utilization
Holding Cost
building rent or depreciation operating cost, taxes, insurance
Material Handling Costs
Equipment lease or depreciation, power, operating cost
Labor Costs
Receiving, Warehousing, Security
Investment Costs
Borrowing Costs, Taxes, and Insurance on Inventory
Pilferage, Space, and Obsolscence
Much higher in industries undergoing rapid changes like PCs and Cell Phones
Order Cost
Buyer Time
Supplies
Forms
Order Processing
Clerical Support
Administrative Time to P{Lace Order
Assumptions for EOQ
Known & Constant Demand/Lead Time
Instantaneous Receipt of Material
No Quantity Discount
No stockout
EOQ
Economic Order Quantity
Quantity Discount Models
Reduced prices when larger quantities are
purchased
Tradeoffs in the Quantity Discount Models
reduced product cost and increased holding cost
Clustering
Proximity to competitors
3 steps of Locational Cost-Volume Analysis
- Determine fixed and variable costs for each location
- Plot the cost of each location
- Select location with LOWEST TOTAL COST for expected production volume
Center of Gravity
Finds location of distribution center that minimizes distribution costs
Considerations for Center-of-Gravity Method
Location of markets
Volume of goods shipped to those markets
Shipping cost (or distance)
Locational Cost-Volume
An economic comparison of location alternatives
Quality
An operations manager’s objective is to build a total quality management system that identifies and satisfies customer needs
5 Whys for Root Cause Analysis
What caused A, What caused B, What caused C, What caused D, and What caused E?
Fishbone
6 Categories and list their causes that combined equal the effect
4 Ms
Facor Rating
Location Cost-Volume
Center of Gravity
Transportation Model
Transportation Model
Finds amount to be shipped from several points of supply to several points of demand
6 Sigma
Originally developed by Motorola, adopted and
enhanced by Honeywell and GE
Fixed Costs
The set amount to begin production
Variable Costs
constant amount per unit produced
