Module 3: Variety Flashcards
Fit-based variety
Horizontal differentiation - Consumers have different preferences (eg. shoe size)
Performance-based variety
Vertical differentiation - Everyone agrees what is good and what is not (ie. 32GB ipod vs 16GB ipod)
Taste-based variety
Complicated utility functions with multiple local maximums
Downside of large batches
More inventory in the process; must be balanced with need for capacity
Mixed model production (Heijunka)
Production switches back and forth between different products
Batch (specific definition)
Collection of flow units produced between two setups
Formula for batch size
Flow rate = B / (S + B * P) B = Batch size S = Setup time (total) P = Process time (per unit)
Variety impact on inventory
Greater variety leads to more setup time and more inventory
Coefficient of variation
std dev / mean (ie. σ / µ)
Demand pooling
Combining resources to reduce variation in demand
Idea behind SMED
Reduce setup so that you can change models as often as needed (Single Minute Exchange of Dies)
6-stage SMED approach
1) Measure total changeover time 2) Determine internal and external activities 3) Move external activities to before or after shutdown 4) Improve the internal activities 5) Improve the external activities 6) Standardize procedures
No flexibility production
Each plant can make only one product
Full flexibility production
All plants can make all products
Partial flexibility production
Each plant can make >1 product and each product can be made at >1 plant (but not full flexibility)
