opp and suply exam 3 Flashcards
what are 6 reasons to globalize
- improve the supply chain
- reduce costs and exchange rate risks
- improve operations
- understand markets
-improve products - attract and retain global talent
what is the WTO
world trade organization
what is USMCA
NAFTA
what is the EU
European union
what are things companies want to consider when globalizing
- 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
what are factors that affects location decision
-labor productivity
-exchange rates and currency risks
-costs
- political risk, values, and culture
-proximity to markets
-proximity to suppliers
-proximity to competitors
how do you find cost per unit
labor cost per day/ productivity (units per day)
why is the factor rating method popular?
a wide variety of factors can be included in the analysis
what is the locational cost volume analysis
an economical comparison of location alternatives
how do you find total cost in cost volume analysis
fixed cost + (variable cost X volume)
what is the center of gravity method
it finds locatiion of distribution center that minimizes distribution costs
considers- location of markets, volume of goods shipped to those markets, and shipping costs
what is the transportation model
- finds amount to be shipped from several points of supply to several points of demand
- solution minimizes total production and shipping costs
what is the geographical information system
- 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
what is a long range plan
- over 1 year
- research and development, ne production plans, capital investments, facility location/expansion
what is an intermediate range plan?
- 3 to 18 months
- sales and operation planning,production and budgeting, employment, inventory, operating plans
what is a short range plan
- up to 3 months
- jolb assignments, ordering, job scheduling, dispatching, overtime, part time help
what are sales and operations plannning
decisions tied to strategic planning and inegrated with all areas of the firm over all planning horizons
what is aggregate planning
usually to meet forecast demand while minimizing cost over the planning period
what are sales and operations planning aimed at
- 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
what are the 3 aggregate planning strategies
demand- alter demand to match capacity
capacity- alter capacity to match demand
some of both
in aggregate planning what are the demand options
-pricing
-promotion
-back orders
-new demand
in aggregate planning what are the supply options
- hire and layoff workers
-overtime/slacktime
-part time workers
-inventories
-subcontracting
what are the prominent aggregate planning strategies
- maintain a level workforce
- maintain a steady output rate
- match demand period by period
- use a combination of decision variables
what is level capacity strategy
maintain a steady rate of output while meeting demand by
-inventories,overtime,partime, subcontracting, and back orders
what is the chase demand strategy
match capacity to demand the planned output for any period must be equal to the expected demand for that period
what are advantages and disadvantages of the chase approach
ad- investment in inventory is low
- labor utilization is kept high
dis- the cost of adjusting output rate and/or workforce levels
what are advantages and disadvantages of the of the level apporach
ad- stable output rates and workforce levels
dis- greater inventory costs
- increased overtime and idle time
- resource utilization that vary over time
what is revenue management
allocating resources to customers at prices that will maximize revenue
what is the main objective of inventory management
to strike a balance between inventory investment and customer service
what is the importance of inventory
- 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
what are types of inventory
- raw materials
- work in progress
- finished goods
what are some inventory costs
-purchaase cost
- holding costs
-ordering costs
- setup costs
- shortage costs
what is the ABC approach
calssifies inventory items according to importance and allocating control efforts accordingly
a- vert important- 10-20 %
b- moderately important
c- least important- 50-60%
what is cycle counting
a physical count of items in inventory
- reduces discrepancies between the amounts indicated by inventory records and the actual quantities of inventory on hand
what is the inventory counting system
a periodic system that physically counts items in inventory ade at periodix/fixed intervals
what is reordering point ordering
when the quantity on hand of an item drops to a predetermined amount then the item is re ordered
