Operations Exam #3 Flashcards
Types of inventory
Raw Material: Purchased but not processed
Work In Progress (WIP): Some changes but not completed
Finished Goods: Completed product waiting for shipment
What is ABC?
Divides inventory into three classes based on annual dollar volume.
Class A: High volume
Class B: Medium volume
Class C: Low volume
What is cycle counting?
Items are counted and records updated on a periodic basis
What are holding costs?
The costs of holding or “carrying” inventory over time
What are ordering costs?
The costs of placing an order and receiving costs
What is EOQ?
Basic economic order quanity.
What is intermediate planning?
3 to 18 months. Sales and operations planning plus budgeting
What are sales & operations planning?
Determines which plans are feasible
What is aggregate planning?
Objective is to meet forecast demand while minimizing cost over the planning period
What is master production schedule?
Specifies what is to be made when. Must be in accordance with the aggregate production plan.
What is the chase strategy?
Match output rates to demand for each period. Vary workforce levels. Favored by many service organizations
What is the level strategy?
Daily production is uniform. Use inventory or idle time as buffer
What is “hybrid (mixed)”?
A combination of chase and level strategies
What are material requirements planning (MRP)?
Master production schedule, specifications or bill of material, inventory availability, purchase orders outstanding, and lead times
What is bill of material?
A list of components, ingredients, and materials needed to make the product
