Production Planning Flashcards
production planning
refers to the management process
of ensuring sufficient resources are available for use to create
finished products in a timely manner to
meet the needs of customers
supply chain
different stages of activities from the production of a good or service to it being distributed to the end customer
supply chain management
the art of managing
and controlling these activities, which must be efficient and cost effective for a business to be profitable
global supply chain
the networks that span multiple countries and regions for the purpose of sourcing and supplying goods and services
functions of SCM
stock control, quality control, supplier networks, transportation networks
just in case (JIC)
the traditional stock control system that
maintains large amounts of stock in case there are supply or demand fluctuations
buffer/reserve stock
extra inventory kept on hand in case of manufacturing delays or an unexpected increase in demand
stock
materials, components and products used in a production process
raw materials
primary resources used for production
work-in-progress
semi-finished goods (components used in production process)
finished goods
complete units of output ready for sale
stockpiling
when a business over-produces and holds too much stock, so it is detrimental to the firm’s cash flow position
stock out
if a business does not hold enough stocks to
meet orders for production
reorder level
level of stock when a new order is placed
reorder quantity
amount of new stock ordered (max stock - min stock)
productivity rate
degree of efficiency in the use of resources during the production process
labour productivity
measure of the efficiency of a firm’s
workers by calculating the output per worker
lead time
measures the duration between placing an order and receiving it
operating leverage
measures a firm’s fixed costs as a percentage
of variable costs (fixed costs / variable costs x 100)
productivity
how well resources, such as labour or
capital, are used in the production process
productive capacity
a firm’s maximum (potential) output if all its resources are used fully and efficiently
capacity untilisation
measures a firm’s existing level of output
as a proportion of its potential output
capital productivity
measures how well a firm uses its capital in order to produce goods and services
cost to buy
the expenses or expenditure to
purchase a product from a third-party or outsourced supplier
cost to make
the expenses or expenditure
required to manufacture a good or service in-house
defect rate
measures the proportion of output, per time
period, that is substandard.
operating leverage formula
total contribution / profit x 100
capital productivity formula
total output / number of capital hours
productivity rate formula
total output / total input
labour productivity formula
total output / number of workers
defect rate
- defect output / total output x 100
- defected units / number of units tested x 100
