Managing capacity and Inventory

Question 1

Overcapacity vs undercapacity

Answer 1

Over - resources are being being fully utilised

Under - more production is being demanded than is able to be produced

Question 2

What is Dependent demand?

Answer 2

Demand that an organisation can predict. eg. school meals as the number of pupils is already known

Question 3

What are the four planning and control activities?

Answer 3

Loading (amount of work allocated to an operating unit)
Sequencing (Sequence the operations)
Scheduling (Prepare an operation schedule)
Monitoring and controlling (Monitor)

Question 4

What methods can be used to forecast demand?

Answer 4

Expert opinion polls (info based on views of product experts)
Delphi Technique (kept providing questions to product experts until there is a pattern)
Customer surveys
Statistical analysis (using past data)

Question 5

What are the four different ways of planning for capacity?

Answer 5

A level capacity plan (maintain activity at a constant level)
A chase demand plan (match capacity to forecast fluctuations)
A demand management plan (stabalise demand eg. off peak prices)
A mix of the above

Question 6

What is MRP?

Answer 6

Materials requirement planning - The technique for deciding the volume and timing of materials

Question 7

What is MRP II?

Answer 7

Material Resource Planning - The plan for planning and monitoring all the resources (all departments)

Question 8

What is OPT?

Answer 8

Optimised production technology - computer based method for scheduling production that focuses of known bottlenecks of the operation

Question 9

What is ERP and EPR software?

Answer 9

Enterprise resource planning. Similar to MRP II but on a wider basis. Uses all databases of the organisation. ERP software is the software used

Question 10

Brown (2001) - Reason for holding inventory.

Answer 10

Meet unexpected increases
Improve delivery times
Allow bulk purchase
Provide buffer for quality problems
Improve reliability
To smooth production

Question 11

What is Continuous or Perpetual Inventory?

Answer 11

System which records every receipt and issue

Question 12

What is an ABC System

Answer 12

Where materials are classified A, B or C according to their value

Question 13

What is Obsolescence or wastage?

Answer 13

Inventories which have become out of date and no longer needed.

Question 14

What are the three inventory control levels?

Answer 14

Minimum level
Reorder Level
Maximum level

Question 15

What is EOQ?

Answer 15

Economic Order Quantity - Its the order quantity which minimises inventory costs

Question 16

What are the characteristics of JIT?

Answer 16

High Quality (no errors)
Speed (Quick operations)
Reliability (no hold ups)
Flexibility (Respond immediately to orders)
Lower Costs (all above if done correctly)

Question 17

What types of layouts might a business adopt?

Answer 17

Fixed Layout (Product never moves)
Process Layout (Product moves to different places)
Cell Layout (smaller machines)
Product Layout

Question 18

Where process technologies are there?

Answer 18

CNC - Computer Numerical Control (software for machines)
Robots
AGVs - Automated Guided Vehicles
FMS
CIM - Computer Integrated Manufacturing
DSS 
ES

Question 19

What is a Kanban system?

Answer 19

Cards used to signal that more items are required for the next stage