opp and suply exam 3

Question 1

what are 6 reasons to globalize

Answer 1

• improve the supply chain
• reduce costs and exchange rate risks
• improve operations
• understand markets
  -improve products
• attract and retain global talent

Question 2

what is the WTO

Answer 2

world trade organization

Question 3

what is USMCA

Answer 3

NAFTA

Question 4

what is the EU

Answer 4

European union

Question 5

what are things companies want to consider when globalizing

Answer 5

• national literacy rate
  -rate of innovation
• rate of technological change
• number of skilled workers
• political stability
• product liability laws
• export restrictions
• variations in language
• work ethic
• tax rates
• inflation
• availability of raw materials
• interest rates
• population
• transportation infrastructure
  -communication system

Question 6

what are factors that affects location decision

Answer 6

-labor productivity
-exchange rates and currency risks
-costs
- political risk, values, and culture
-proximity to markets
-proximity to suppliers
-proximity to competitors

Question 7

how do you find cost per unit

Answer 7

labor cost per day/ productivity (units per day)

Question 8

why is the factor rating method popular?

Answer 8

a wide variety of factors can be included in the analysis

Question 9

what is the locational cost volume analysis

Answer 9

an economical comparison of location alternatives

Question 10

how do you find total cost in cost volume analysis

Answer 10

fixed cost + (variable cost X volume)

Question 11

what is the center of gravity method

Answer 11

it finds locatiion of distribution center that minimizes distribution costs
considers- location of markets, volume of goods shipped to those markets, and shipping costs

Question 12

what is the transportation model

Answer 12

• finds amount to be shipped from several points of supply to several points of demand
• solution minimizes total production and shipping costs

Question 13

what is the geographical information system

Answer 13

• important tool to help in location analysis
• enables more complex demographic analysis
• data base includes- census data, detailed maps, utilities, geographical features, locations of major services

Question 14

what is a long range plan

Answer 14

• over 1 year
• research and development, ne production plans, capital investments, facility location/expansion

Question 15

what is an intermediate range plan?

Answer 15

• 3 to 18 months
• sales and operation planning,production and budgeting, employment, inventory, operating plans

Question 16

what is a short range plan

Answer 16

• up to 3 months
• jolb assignments, ordering, job scheduling, dispatching, overtime, part time help

Question 17

what are sales and operations plannning

Answer 17

decisions tied to strategic planning and inegrated with all areas of the firm over all planning horizons

Question 18

what is aggregate planning

Answer 18

usually to meet forecast demand while minimizing cost over the planning period

Question 19

what are sales and operations planning aimed at

Answer 19

• the coordination and integration of the internal and external resources necessary for a successful aggregate plan
• communication of the plan to those charged with its execution

Question 20

what are the 3 aggregate planning strategies

Answer 20

demand- alter demand to match capacity
capacity- alter capacity to match demand
some of both

Question 21

in aggregate planning what are the demand options

Answer 21

-pricing
-promotion
-back orders
-new demand

Question 22

in aggregate planning what are the supply options

Answer 22

• hire and layoff workers
  -overtime/slacktime
  -part time workers
  -inventories
  -subcontracting

Question 23

what are the prominent aggregate planning strategies

Answer 23

• maintain a level workforce
• maintain a steady output rate
• match demand period by period
• use a combination of decision variables

Question 24

what is level capacity strategy

Answer 24

maintain a steady rate of output while meeting demand by
-inventories,overtime,partime, subcontracting, and back orders

Question 25

what is the chase demand strategy

Answer 25

match capacity to demand the planned output for any period must be equal to the expected demand for that period

Question 26

what are advantages and disadvantages of the chase approach

Answer 26

ad- investment in inventory is low
- labor utilization is kept high

dis- the cost of adjusting output rate and/or workforce levels

Question 27

what are advantages and disadvantages of the of the level apporach

Answer 27

ad- stable output rates and workforce levels
dis- greater inventory costs
- increased overtime and idle time
- resource utilization that vary over time

Question 28

what is revenue management

Answer 28

allocating resources to customers at prices that will maximize revenue

Question 29

what is the main objective of inventory management

Answer 29

to strike a balance between inventory investment and customer service

Question 30

what is the importance of inventory

Answer 30

• one of the most expensive assets of many companies representing as much as 50% of total invested capital
• managers must balance inventory investment and customer service

Question 31

what are types of inventory

Answer 31

• raw materials
• work in progress
• finished goods

Question 32

what are some inventory costs

Answer 32

-purchaase cost
- holding costs
-ordering costs
- setup costs
- shortage costs

Question 33

what is the ABC approach

Answer 33

calssifies inventory items according to importance and allocating control efforts accordingly
a- vert important- 10-20 %
b- moderately important
c- least important- 50-60%

Question 34

what is cycle counting

Answer 34

a physical count of items in inventory
- reduces discrepancies between the amounts indicated by inventory records and the actual quantities of inventory on hand

Question 35

what is the inventory counting system

Answer 35

a periodic system that physically counts items in inventory ade at periodix/fixed intervals

Question 36

what is reordering point ordering

Answer 36

when the quantity on hand of an item drops to a predetermined amount then the item is re ordered