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Buisness > 5.6 - Production Planning > Flashcards

5.6 - Production Planning Flashcards

(44 cards)

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1
Q

Define supply chain

A

A series of processes involved in production and distribution of goods to the end customer and consumer

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2
Q

Define supply chain management

A

Refers to dealing with the flow of goods in the supply chain in the most efficient way

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3
Q

What are the 2 types of supply chain

A
  • local supply chain
  • global supply chain
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4
Q

What is the scale of a local supply chain

A

Operates on a smaller level. The distance between supplier, producers and distributors is short. They cover a region

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5
Q

What is an example of a local supply chain

A

Farmer selling local produce

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6
Q

What are the advantages and disadvantages of a local supply chain

A

Ad - benefit from local community
Dis - whats available on local scale is limited compared to global scale

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7
Q

What is the scale of a global supply chain

A

Operates on a larger scale. The distance between suppliers, producers and distributors is long. These are transnational company’s

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8
Q

What is an example of a company which works on a global scale

A

Apple

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9
Q

What re the advantges and disadvantages of a global supply chain

A

Ad - costs are minimal as organisation are able to find location with the lowest wages and costs.
Dis - high risk, organisations have to rely on suppliers, manufactures and distributors from different countries with different legislations and cultures and with different levels of stability

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10
Q

Define stock/invatory

A

Raw materials, components, WIP and finished goods that are healed by a organisation

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11
Q

Define buffer stock

A

Inventory that is kept JIC for demand fluctuations or supply chain problems

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12
Q

Define JIC

A

Stock control system that holds buffer stock

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13
Q

Define JIT

A

Stock control system that aims for no buffer stock

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14
Q

What are the features of JIC

A
  • hold buffer stock
  • can use purchasing EOS (buy more get discount)
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15
Q

What are the positives and negatives of buffer stock

A

Dis - higher storage cost
Ad - demand fluctuations has minimal impact

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16
Q

What are the effects of JIC on working capital and BEQ

A
  • negative effect on working capital because cash is tied up in stock
  • higher BEQ becuase of higher costs
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17
Q

What are the features of JIT

A
  • no buffer stock
  • replys on developing close relationship with supplier
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18
Q

What are the advantages and disadvantages of JIT

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A
  • low storage costs
  • demand fluctuation has significant impact
19
Q

What are the effects of JIT on working capital and BEQ

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A
  • positive effects on working capital as cash is free for daily operations
  • low BEQ becuase lower costs
20
Q

What are the 7 aspects of a stock control chart

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A
  1. Max stock level
  2. Re order level
    3, min stock level
  3. Buffer stock
  4. Re order quantity (min-max)
  5. Lead time (point where you need to place order for more)
  6. Delivery of stock
21
Q

Define lead time

Study These Flashcards
A

Period between ordering new stock and receiving it

22
Q

Define buffer stock

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A

Min amount of stock

23
Q

Define re order level

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A

The level of stock at which the new order is placed

24
Q

Define re order quantity

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A

The amount of stock ordered

25
What are the 6 different rates
1. Capital utilisation rate 2. Defect rate 3. Productivity rate 4. Labour productivity rate 5. Capital productivity rate 6. Operating leverage
26
Define capital utilisation
Am measure of existing output relative to productive capacity
27
What is the formula for capital utilisation
= actual output / productive capacity x 100
28
Define defect rate
Problem that hinder usability
29
What is the formula for defect rate
= number of defect units / total output x 100
30
Define productivity rate
Measure of efficiency of production
31
What is the formula for productivity rate
= total output/total input General formula
32
Define labour productivity
Measure of workers efficacy
33
what is the formula for labour productivity
Total outputs / hours worked
34
Define capital productivity
Measure of efficiency of organisations capital, especially working capital
35
What is the formula for capital productivity
= current assets - current liabilities
36
Define operating leverage
Measure of effect of fixed costs on profit given different sales levels
37
What is the formula for operating leverage
- uses same data as break even Fixed costs, variable costs, contribution - unit contribution = P - AVC Total contribution = (P-AVC)xQ - operating leverage = total contribution/profit
38
After you have the operating leverage what do you have to do
Calculate change in profits - change in profits = change in sales% x operating leverage
39
What are the positives and negatives of high operating leverage
Pos - more sales = more profits Neg - high foxed costs, high risk is sales are low
40
What are the positives and negatives of low operating leverage
Pos - low fixed costs, low risk if sales are low Neg - more sales don’t have much effect on profit
41
Define make or buy desition
A choice between purchasing from supplier and manufacturing on its own
42
What are the 2 factors of make and buy desision
Qualitative factors : suppliers per and reliability, product quality, ethics Quantative factors : break even analysis, investment appraisal, budgets, costs, cost to buy and cost to make
43
Define cost to buy and give its formula
- cost of purchasing from supplier - CTB = PXQ
44
Define cost to make and give its formula
- cost of purchasing from supplier - CTB=(AVCxQ) + TFC

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