Lecture 5 Flashcards
What are bulk materials?
Materials that are stored by weight or volume
What are discrete or component materials?
Materials that are stored by a number of units
What are stock keeping units
The number of different types of products kept in stock
How are services stock measured?
in terms of transactions or tickets
What is a Pareto chart
A chart to show counts or summed values of an indicator Y by category. This helps gain insight and focus
When does the Pareto technique not work? (4)
→ When demand is random e.g. spare parts
→ When goods must be handled FIFO e.g. fresh food
→ When there is a high seasonal peak demand e.g. company holiday packages
→ In an ‘I’ form warehouse
Name some forms of Warehouse Transport equipment (there are 6)
- Reach truck
- Pallet truck (PT)
- Electric pallet truck (EPT)
- Gantry
- Forklift
- Automated Guidance Vehicle (AGV)
Name the types of specialist distribution center forms (3)
- Consolidation Warehousing
- Postponement Warehousing
- Bonded Warehouse
What is Consolidation Warehousing?
the practice of economical warehousing, it works by sourcing shipments from suppliers within a nearby geographical area that can be put together to create larger more economical shipments for delivery
What is Postponement Warehousing?
goods are sorted for a longer time so that the company is able to exploit the volatile business environment
What is a Bonded Warehouse?
secure warehouse in which goods are stored until customs duty is paid or the goods are cleared for export.
How are the products placed in a Process Layout
Similar resources are placed together
How are products placed in a Group Layout
Resources to produce similar products placed together , the products are place in clusters or cells
What does CAD stand for?
Computer-Aided Design
What does CAM stand for?
Computer Aided Manufacturing
What are possible future supply chain developments? (3)
Robotics→ machines used to manipulate materials
Artificial Intelligence → gives systems the skills to replace humans
Augmented Reality → gives diagnostic systems the skills to show faults.
What are possible future developments? (3)
Cleaner Systems → driverless trucks, cleaner power trains, platooning (driving a group of vehicles together)
3D Printing → customization at the point of use (no complex supply chains anymore)
Block Chains → Tracking trans-border shipments with better security and reliability
What is Inventory Management?
= those stocks or items used to support production (raw materials and work-in-process items) supporting activities (maintenance, repair, and operating supplies), and customer service (finished goods & spare parts.
What types of inventory are there? (8)
- Traditional
- Purpose
- Cycle Stock
- Safety Stock
- Anticipation Stock
- Hedge Inventory
- Transportation Inventory
- Smoothing Inventory
What is Cycle Stock?
components or products that are received in bulk by a downstream partner are gradually used up and then replenished again in bulk by an upstream partner
What is Safety Stock?
extra inventory that companies hold to protect themselves against uncertainties in either demand or replenishment time
What is Anticipation Stock?
is held in anticipation of customer’s demand
What is Hedge Inventory?
form of inventory build-up to buffer against some events that may not happen (speculation against rare events)
What is Transportation Inventory?
form of inventory that is moving from one link in the supply chain to another
What is Smoothing Inventory?
used to smooth out differences between upstream production levels and downstream demand.
How do you calculate the closing stock?
Opening stock - sales + production
TRUE OR FALSE
Having a lot of inventory costs a lot of money?
TRUE
What are inventory drivers (3)
Business Conditions
Supply Uncertainty
Demand Uncertainty
What does the inventory driver Business Conditions mean?
things that force the company to hold inventory
What does the inventory driver Supply Uncertainty mean?
The risk of interruptions in the flow of components from upstream suppliers
What does the inventory driver Demand Uncertainty mean?
The risk of significant and unpredictable fluctuations in downstream demand
What is Independent Demand?
Items whose demand levels are beyond a company’s complete control
What is Dependent Demand?
Items whose demand levels are tied directly to the company’s planned production of another item. The required quantities and timing of dependent demand inventory items can be predicted with great accuracy.
What does the inventory turnover ratio mean?
the number of times a business sells and replaces its stock of goods during a given period
What are inventory valuation methods? (4)
- Specific Indication Method
- FIFO
- LIFO
- Weighted average method
What does the Inventory Valuation method Specific Indication Method mean?
Here you track the specific cost of individual items of inventory
What does the Inventory Valuation method FIFO mean?
You assume the first items to enter the inventory are the first ones to be used
What does the Inventory Valuation method LIFO mean?
The last item added to inventory is the first one to be used
What does the Inventory Valuation method Weighted average mean?
The average of the costs in the inventory is used in the cost of goods sold.
What is the formula for Period Stock Turn
Stock / Average Period Sales
What is the formula for Average Period Sales?
Stock / Sales days in the period
What is the formula for Stock Days?
Stock / Average Sales Day Rate
