OM Book Final Flashcards
The Planning Process
Long-range plans
Develop policies and strategies related to location, capacity, products and processes, supply chain, research, and capital investment.
Intermediate Planning
Develops plans that match production to demand.
Short-Run Planning
intermediate plans into weekly, daily, and hourly schedules
Sales and operation planning (S&OP)
Balances demand
Aligns the Organization’s Competing Demand
Linking Strategic planning with operation overall planning horizons
Aggregate planning
An approach to determine the quantity and timing of production for the intermediate future
How far into the future is Aggregate Planning?
3 to 18 months ahead
4 things needed for Aggregate planning
- Logical unit for measuring sales and output
- A forecast of demand for a reasonable intermediate planning period
- A method for determining the relevant costs
- A model that combines forecast and costs
Disaggregation
The process of breaking an aggregate plan into greater detail
Master Production Schedule
A timetable that specifies what is to be made and when.
What are the basic aggregate planning capacity (production) options are:
Changing inventory levels
Varying workforce size by hiring or layoffs
Varying production rates through overtime or idle time
Subcontracting
Using part-time workers
The basic aggregate planning demand options are:
Influencing demand
Back ordering during high-demand periods
Counterseasonal product and service mixing
Chase Strategy
A planning strategy that sets production equal to forecast demand
Level Scheduling
Maintaining a constant output rate, production rate, or workforce level over the planning horizon.
When does Level Schedule work?
When demand is reasonably stable.
Mixed strategy
A planning strategy that uses two or more controllable variables to set a feasible production plan.
Graphical techniques
trial-and-error approaches that do not guarantee an
optimal production plan, but they require only limited computations.
Transportation Method of Linear Programming
A way of solving for the optimal solution to an aggregate planning problem
What does the Transportation Problem require?
Supply equals demand
Revenue (or yield ) management
Capacity decisions that determine the allocation of resources to maximize revenue
Material requirements planning (MRP)
A dependent demand technique that uses a bill-of-material, inventory, expected receipts, and a master production schedule to determine material requirements
What does the Dependent Inventory Model Require
Master Productoin Scheule
Specification or Bill of Materials
Inventory Availability
Purchase order Outstanding
Leadtimes
Master production schedule (MPS)
A timetable that specifies what is to be made and when.
Bill of material (BOM)
A listing of the components, their description, and the
quantity of each required to make one unit of a product.
Parents
Items above any level in a BOM
Children
Items below any level
What is the top level in a BOM
0 Level
Modular bills
Bills of material are organized by major subassemblies or by product options.
Planning bills (or kits)
Material groupings created in order to assign an artificial parent to a bill of material; also called “pseudo” bills.
Phantom bills of material
Bills of material for components, usually subassemblies, exist only temporarily; they are never inventoried.
Low-level coding
A number that identifies items at the lowest level at which they occur.
