final Flashcards
(94 cards)
1
Q
inventory
A
stock of materials used to satisfy customer demand and support product of g/s
2
Q
independent demand inventory
A
items ready to be sold or used
3
Q
dependent demand items
A
unfinish goods such as RM or sub components
4
Q
what can inv. do to cash flow from operation
A
inv. ↑ cash flow ↓
5
Q
RM
(type of inv.)
A
materials use to produce goods
6
Q
WIP
(type of inv.)
A
partially completed goods
7
Q
finished goods
(type of inv.)
A
done and ready to be sold/ship
8
Q
tools and supplies
(type of inv.)
A
tools - equip to make product
supplies - consumable used by employees to support the process but not part of it
9
Q
maintenance and repairs
(type of inv.)
A
spare parts/back up machines
10
Q
goods in transit
A
- shipping cost/risk
- process where good is being delivered
11
Q
functions of inv
A
- meet customer demand
- smooth production requirements
- de-couple operation
(2 & 3 allows company to not worry about fluctuating demands) - protect against out of stocks (w out it, sale ↓)
- take adv. of order cycle (w inv space, you can buy RM at the “right” time)
- price hedging (buying supply when price ↑ )
12
Q
order cycles
A
right time to buy materials
- ex: sale
13
Q
justification for large inv.
A
- level of customer service ( ↑ bc u have sufficient Q to sell)
- ordering cost (ordering large inv usually ↓ cost)
- setup cost
(large inv = less time required to setup things [production run time]) - labor and equip utilization ( ↑ 90% of time ↑ inv)
- transportation cost (large inv = less trips = ↓ cost)
- payment to suppliers (cost per unit ↓ allow for delayed payments)
- minimizes shortage costs (shortage $ ↓ inv ↑ )
14
Q
ordering cost
A
cost that incurred to place an order
15
Q
justification for small inv
A
- cost of capital (minimize it)
- storage n handling cost ( ↓ inv = less space required = ↓ cost)
- taxes ( ↓ storage $ ↓ tax)
- insurance ( ↓ inv = ↓ required insurance)
- shrinkage
- theft ( ↓ w less inv)
- obsolescence (↓ )
- deterioration (↓ since you are more likely to use inv before it goes PSL)
16
Q
periodic system
(inv counting system)
A
inv reviewed at a fixed time frame
- ex: days or month
17
Q
perpetual inventory system
A
inv is updated constantly
- ex: updated after every sale
18
Q
one-bin system
A
monitor stock in a single bin and reorder when that bin is low
19
Q
UPC code
A
12 digit barcode used to identify and track inv
20
Q
demand forecast
A
reliable estimate of amount and timing of demand, predicting future demand
- timing and be week.. months.. ect
21
Q
lead time
A
time interval between customer ordering and receiving the order
22
Q
ABC Analysis
A
process that divides SKU into 3 class according to their dollar usage so items w highest dollar value can be focused
Class:
A - 20% of items 80% of value
B -
C - 50 of items 5-10 of value
23
Q
economic order quantity
A
“How much to order”
order Q that minimize total annual inv holding and ordering costs
24
Q
time between orders
A
calculate days between each orders
25
reorder point ordering
selecting the reorder point Q w constant D and LT
26
reorder point under uncertainty
selecting reorder point Q.w VARIABLE D and CONSTANT lead time
- include safety stock calculation
27
fixed order interval
selecting order Q.w periodic reorder point, variable D and constant LT
28
periodic review system
selecting time between reviews, choosing P and T
- T when D is variable and LT is constant
29
material requirements planning (MRP)
system used to help manufacturers manage dependent demand inv and schedule replenishment orders
30
what is MRP designed to answer?
1. what is needed
2. how much is needed
3. when is it needed
31
MRP explosion
Process that break down the final product requirement into specific materials needed at different level of bill of materials
32
dependent demand item
material used to make the unit
- directly tied to production
33
parent
item that is manufactured from 1 or more components
34
component
item that goes through 1 or more operations to be transformed into a parent
35
master production schedule
specifies how many end items will be made, what, and when is needed
36
bill of material
list of what is required to make 1 unit
- RM, subassemblies, materials
37
product structure tree
visual layout of BOM
38
inventory record
includes info about gross req, scheduled receipts, on hand inv, planned receipts, planned order releases, supplier info, LT, lot size
38
fixed order quantity
predetermined quantity
- generate high level of avg inv by creating inv remnant
39
lot for lot (L4L)
ability to order the exact Q desired
- minimize inv investment
- max number of orders placed
40
periodic order quantity (POQ)
orders r placed at fixed time frame but quantity ordered varies
(depends on how much was used or sold during that period)
- reduce onhand inv avg
41
safety stock
extra inv to handle demand uncertainties
42
action notices
notice for change in orders or new orders
43
capacity report
show cap requirement for production processes when items are manufactured, not purchased
- notify excess or insufficient materials
44
priority reports
generated when dispatch or supplier schedule is needed
- dispatch: direct workflow
- supplier schedules: supplier deliveries timelines
45
bill of resources
list of all materials, equipment, time, and staff needed for service
46
enterprise resource planning systems
permit info sharing among departments that is composed of integrated modules
47
supply chain
shows final product path of origin
48
external competitive pressures
pressure from outside of the company
- ex: competitors, market..
49
internal organizational pressure
pressure from inside the company
- labor, material shortage
50
how does supply chain affects total revenue
total income from sales
- on time/early delivery = customer satisfaction = ↑ rev
51
how does supply chain affects COGS
cost to make that good
- ex: transportation
large supply chain = less trip = ↓ transport cost
52
how does supply chain affects operating expense
affects labor cost, fuel, warehouses
Well managed chain = decrease
53
cash to cash
lag time between receiving payment from customers and payment to suppliers
- negative = good
(mean you are earning revenue faster than you are paying)
54
how does supply chain affects working capital
reducing suppliers LT can ↓ working capital
55
design to order
completely custom product
- g/s designed from scratch based on customer specification
56
make to order
partly customizable
- existing design (base) + customer's specification
57
assemble to order
some components are made in advance but final assembly occurs when order is received
58
make to stock
fully complete and ready to ship, no customization
59
responsive supply chain
- supply that can quickly adjust to demand change
Includes:
- design to order
- make to order'
- assemble to order
60
efficient supply chains
- delivery systems that delivers at the right time/place and lowest costs
include:
make to stock
61
efficient supply chain factors
demand = predictable
competitive prio = low $, consistent quality
new g/s = rare
CM = low
product variety = low
capacity cushion = low
inventory investment = low + high inv turnover
LT = shorten
supplier selection = low price + on time delivery
62
responsive supply chain factor
demand = unpredictable
competitive prio = customization, volume flexibility
new g/s = frequent
CM = high
product variety = high
capacity cushion = high
inventory investment = as needed
LT = shorten a lot
supplier selection = fast delivery, customization, flexibility
63
mass customization
modifying/adding to a base product to tailored to different ppl but can still do it as a large scale
64
channel assembly
postponement final assembly
- 3rd party finishes postponed operation at a separate location
65
modular assembly
products are builts using premade parts
- ex: furniture
66
mass customization advantage
customer relation
eliminate finish goods inv
increase value of services
67
outsourcing
pay suppliers to perform processes and provide needed services/materials
68
offshoring
moving processes to another country
69
next shoring
processing location is close to customer
70
outsourcing decision factors
1. comparative labor costs
2. rework n product return
3. logistics cost
4. tariffs and taxes
5. market effects
6. labor laws and unions
7. internet
8. energy costs
9. access to low cost capital
10. supply chain complexity
71
pitfal
risks of company
1. risk in deciding to outsource a process before fixing existing one
2. tech transfer (outsource partner become a competitor)
3. process integration
72
vertical integration
company controls multiple steps in supply chain
- more self-perform process = more vertical
73
backward integration
company controls it's supplier or RM
- instead of buying supplies, they decide to make it themselves
74
forward integration
company control distribution
- change from self producing to buying supply
75
supply chain
effective process coordination through flow of info up and down
76
supply chain external disruptions
1. environmental disruptions (natural disasters)
2. supply chain complexity ( 1 supply messing up = messing up the rest)
3. loss of major accounts (losing customers)
4. loss of supply
5. customer-induced volume changes
6. g/s mix change
7. late deliveries
8. underfilled shipments
77
supply chain internal disruptions
1. internally generated shortages (ex: limited cap / inexperienced workers)
2. quality failures
3. poor supply chain visibility
4. engineering changes
5. order batching
6. new g/s introductions (requires adjustments which cause changes and disruptions)
7. g/s promotion (causes spikes demand)
8. info error
78
bullwhip effect
phenomenon where small D change can increase orders patterns
-ex: small demand increase lead to bigger orders, then large inv surge
79
order fulfillment process
1. customer demand planning
2. supply planning
3. production
4. logistics
- ownership (owning logistics = more control)
- facility location (usually located near customers)
80
truck
(transport mode)
adv: move quickly over long distance + flexible
dis: expensive
81
rail
(transport mode)
adv: inexpensive for long distances
dis: slow
82
water (inland)
(transport mode)
adv: low costs with bulk + effective when linked to multimode
dis: proximity limit
83
water (ocean)
(transport mode)
adv: cost effective for long distance
dis: very slow
84
air
(transport mode)
adv: fast way + flexible w trucks
dis: very expensive
85
pipeline
(transport mode)
adv: move bulk commodities for long distance (gas/oil)
dis: expensive to install
86
multimodal transport
use multiple modes for transportation but with same carrier
87
intermodal transport
multiple modes for single shipment, various carriers
88
capacity level
max amount to produce at given time
89
cross docking
point where products are taken off incoming trucks and loaded on outgoing trucks w out storage
- incoming trucks: deliver good to storage
- outgoing - transport from storage to retail/customers
90
supply chain risk management
managing risks of factors that can disrupt supply chain
91
financial risks
threats to financial flows in supply chain
(prices/costs/profits))
92
hedging
(reduce risk)
production shifting to another country
93
