Final Exam Flashcards
(201 cards)
1
Q
Process for integrating marketing and operations plan to develop a tactical plan
A
Sales and Operations Planning (S&OP)
2
Q
S&OP attempts to balance ____ and ____
A
Supply and demand
3
Q
S&OP balancing objectives Finance (3):
A
- High ROI
- Maximize return
- Minimize risk
4
Q
S&OP balancing objectives Marketing/Sales (3):
A
- Many product variations
- Fast response, high service
- Maximize revenue
5
Q
Balancing objectives Operations (4):
A
- Fewer products
- Long, stable production runs
- Maximize output, minimize cost
- Reduce variance, maintain ‘up-time’
6
Q
Quantitative benefits of S&OP (4):
A
- Improved forecast accuracy
- Higher customer service
- More stable supply
- Better new product information
7
Q
Qualitative benefits of S&OP (4):
A
- Better organizational teamwork
- Faster and better aligned decision making
- Better business visibility
8
Q
Operations planning costs: People costs (6):
A
- Regular Production
- Overtime
- Hiring
- Fire/Layoff
- Weekend (1.5x or 2x on Sundays)
- Holidays (2x or 3x)
9
Q
Operations Planning Costs: Material Costs (3):
Also must consider:
A
- Holding inventory
- Shortage
- Subcontracting
Must also consider require resource investment
10
Q
S&OP Strategies (3):
A
- Level
- Hybrid
- Chase
11
Q
Produce at the same rate every period
A
Level
12
Q
Produce any combination of level or chase
A
Hybrid
13
Q
Produce exactly what is needed each period
A
Chase
14
Q
Most common S&OP strategy
A
Hybrid
15
Q
S&OP strategy ideal for supply chain
A
Level
16
Q
S&OP strategy ideal for marketing
A
Chase
17
Q
Multiple Objectives to what S&OP strategy is best (4):
A
- Costs
- Employee considerations
- Customer expectations
- Difficulty or ease of adjusting capacity
18
Q
The ability to product, hold, receive, store, or accommodate
A
Capacity
19
Q
An approach for determining the overall capacity level of capital intensive resources, including facilities, equipment, and size of overall labor force
A
Capacity planning
20
Q
Capacity ratings (3):
A
- Design capacity
- Available capacity
- Actual capacity
21
Q
Design capacity is capacity that you ___ and should be ____
A
Paid for
Achievable
22
Q
Available capacity is ____ capacity minus ____
A
Design
Lost units
Quality issues: scrap and rework
23
Q
Actual capacity is ____ capacity minus _____
A
Available
Inefficiencies
Ex. Breakdowns, late starts/Early quits, shortages of input materials
24
Q
Proportion of design capacity being used
A
Capacity utilization
25
Capacity utilization % = [___/___] x ___
[Actual output/Design capacity] x 100
26
Accounts for issues with design capacity
Efficiency Percentage
27
Efficiency % = [____/____] x ____
[Actual output/Actual capacity] x 100
28
Determining capacity requirements (3):
1. Forecast sales for each individual product or service
2. Calculate equipment and labor requirements to meet the forecasts
3. Develop and Evaluate capacity alternatives (internal and external)
29
Capacity alternatives: Internal sources (4):
Investment and Risk low to high:
- Efficiency
- Flexibility
- Expansion/Addition
- New facilities
30
Capacity alternatives: External sources (5):
Investment and Risk low to high:
- Outsourcing
- Subcontracting
- Sharing capacity
- Joint ventures
- Acquisitions
31
Computer-based information system that schedules and orders dependent-demand inventory components (internally focused)
Material Requirements Planning (MRP)
32
Material Requirements Planning (MRP) uses 3 primary inputs:
- Master Production Schedule (MPS)
- Bill of Materials (BOM)
- Inventory records
33
Material Requirements Planning (MRP) outputs recommendations (2):
- When to release new orders
| - When to reschedule open orders
34
Expansion of MRP that also considers labor, MRO, equipment, etc. in addition to materials (internally focused to organization)
Manufacturing Resource Planning (MRP II)
35
Expansion of MRP/MRP II that also considers all of the external/outside factors from needed suppliers outside of the organization in addition to internal needs or inputs from other departments
Enterprise Resource Planning (ERP)
36
Demand for an item is independent of the demand for other items. These demands are typically determined by outside customers
Independent demands
37
Demand for a component is dependent on the demand for the end-item into which the component goes
Dependent Demand
38
Independent demand involves ____
Forecasting
39
Dependent demand involves ____
MRP, MRP II and ERP
40
Logistics is _____, _____, and _____, the efficient, effective flow and storage of __________ from point of origin to point of consumption
Planning, implementing, and controlling
Goods, services, and related information
41
Logistics includes ___ and ___ flows
Forward and reverse
42
Logistics are typically focused ____ firms but flow ____ firms is also logistics
Between
Within
43
Inbound logistics =
External upstream (suppliers)
44
Material flow =
Internal firm or company (OEM facility or network)
45
Outbound logistics =
External downstream (Customers)
46
Logistics military roots (2):
Conquest through _____
- Alexander the Great
- Romans
Conquest through better logistics
47
Logistics transportation (2):
- Steam power (Ships and Railroads) (1800s)
| - Internal combustion engines (Trucks and Planes) (1900s)
48
Logistics communication (2):
- Electrical (mid 1800s)
| - Digital (1990s)
49
Logistics is ___ to the _____
Key
Global economy
50
Logistics accounts for approximately ___% of the US GDP
10%
51
Over $___ per year spent on logistics
$1 trillion
52
Logistics accounts for approximately ____ jobs and ___% of the total labor force
15 million jobs
14%
53
Logistics can be ___ of economic ____
Basis
Activity
54
Some industries could obtain productivity improvements of ___-___% by focusing on logistics
20-35%
55
Top global logistics hubs for freight (seaport) (5):
1. Shanghai
2. Singapore
3. Tianjin
4. Guangzhou
5. Qingdao
56
Top global logistics hubs for freight (airports) (5):
1. Hong Kong
2. Memphis
3. Shanghai
4. Anchorage
5. Incheon
57
Logistics costs:
Motor carriers __%
Other carriers __%
Motor carriers 49%
Other carriers 13%
58
Logistics costs:
Warehousing __%
Inventory carrying cost __%
Other costs __%
Warehousing 11%
Inventory carrying cost 22%
Other costs 4%
59
Logistics cost total = $___
$1095 billion
60
The 7 "Rights" of Logistics (In perfect order)
Right..
1. Product
2. Customer
3. Time
4. Place
5. Condition
6. Quantity
7. Cost
61
Logistics value add (3):
- Availability
- Final transformation
- Costs
62
Availability value (3):
Time, place, quantity
63
Final transformation value (2):
Packing/Presentation and postponement
64
Costs value (3):
Production costs, distribution costs, reduced risks
65
Logistics value = [____/____]
Quality or Utility / Cost or Price
66
Current logistics challenges:
- Outsourcing
- Just-in-time (JIT)
- Security
- Transportation infrastructure
- Fuel price volatility
- Pressure on margins
- Globalization
- Talent management
- Sustainable practices
67
Current outsourcing challenge =
Logistics growth
68
All the activities from the time of a sales inquiry until the order is delivered to the customer
Order fulfillment
69
Order fulfillment includes ____, ____, and _____ with all associated information flows
Processing, preparing, and shipping customer orders
70
Items are available when and where desired by the customer
Product Availability
71
Items are unavailable when and where desired by the customer
Stockouts
72
Typical stockout frequencies:
Brick and mortar retailers:
Non-advertised items ___%
Advertised items ___%
Online retailers __%
Non-advertised items 7-10%
Advertised items 16%
Online retailers <5%
73
% of ordered items delivered
Item fill rate
74
% of order lines filled in total
Line fill rate
75
Orders shipped complete
Order fill rate
76
Customer Expectations (5):
- Speed
- Consistency
- Flexibility
- Transparency
- Recovery
77
Speed = ____
Order-to-delivery (OTD)
78
Consistency = (2)
On-time delivery, promised lead times are met
79
Flexibility =
Agility (react to short-term changes)
80
Transparency = (3)
- Real-time information
- No surprises
- Bad news does not improve with age
81
Recovery = (2)
- Contingency planning
| - Improve customer satisfaction?
82
Contingency planning lifecycle (6):
```
Disruption planning->
Risk Assessment->
Recovery plan->
Enact/Execute->
Evaluate->
Improve
```
83
The time between recognition of need until the product is delivered and ready for use
Order Cycle
84
Stocked Product =
Make-to-stock (MTS)
85
Make-to-stock similar processes exist for (3):
- Assemble-to-order (ATO)
- Make-to-order (MTO)
- Engineer-to-order (ETO)
86
Handle orders (Steps 1-3)
```
___ = fast and accurate
___ = no errors
___ = available to deliver, available to promise
```
Inquiries
Order entry
Promise date
87
Available to Deliver (ATD) =
Available to Promise (ATP) =
In stock
Reliably on the way
88
Partial fill =
Drop-ship =
Partially in-stock
Direct from factory
89
One large shipment made of many smaller shipments
Consolidation
90
Consolidation can happen by (3):
- Market Area (Combine small shipments from one shipper going to the same area)
- Pooled delivery (Combine small shipments from different shippers going to the same area)
- Schedule delivery (delivery at specific times)
91
Shipping Plan (Steps 5-7)
5. ___ = where is it going, who will move it
6. ___ = what route to follow, transportation management system (TMS)
7. ___ = Size/weight of order, delivery timing
5. Build loads
6. Route
7. Choose carrier
92
Gather items (Steps 8-12)
8. ____ = (if from external source)
9.
10.
11. ____ = shipping documents - shipper, packing list, manifest
12.
8. Receive product
9. Pick order
10. Pack order
11. Load order
12. Ship order
93
Delivery at customer (Steps 13-15)
13. ____ = customer checks for perfect order, match shipper with receipt
14. ____ = If needed
15. ____ = Customer matches this, receipt, and PO - mistakes/delays are costly
13. Customer receipt
14. Install/prep
15. Invoice
94
Why is fulfillment important? (3 part triangle)
Top to bottom:
- Customer success (Assist customers in meeting objectives)
- Customer satisfaction (meet or exceed customer expectations)
- Basic service (product availability, lead time performance, service reliability)
95
Its more than just technology/system. But technology is useful in data gathering about customers to develop strategic relationships (often captured in this software such as: salesforce, oracle CRM, MS dynamics)
Customer Relationship Management (CRM)
96
Revenue low, profit low
Review reason for doing business
97
Revenue high, profit low
High basic service or customer satisfaction
98
Revenue high, profit high
Commitment to customer success
99
Revenue low, profit high
High basic service or customer satisfaction
100
Commitment to customer success typical percentage of # of customers:
20-30%
101
5 major modes of transportation:
- Air
- Truck
- Pipeline
- Rail
- Water
102
The durable physical assets required to facilitate transportation
Transportation infrastructure
103
Truck (Motor carrier) carries ___% of US domestic freight
70%
104
Truck normal US load limits ____ pounds
80,000
105
Truck infrastructure paid for by ____ and shared with ____
Governments
Public
106
LTL =
TL =
Less-than-truckload
Truckload
107
LTL is too big to be handled ___, too small to ____
___ to ___ pounds
Manually
Fill a truck
150 to 10,000 pounds
108
Truck carriers:
Terminals used to ____
Line-haul is from ____
Smaller trucks transport between _____
Consolidate loads
Terminal-to-terminal
Shippers and terminals
109
Examples of LTL carriers:
- Fedex freight
- XPO logistics
- YRC freight
- Old Dominion Freight line
- UPS freight
110
Shipments move directly from the shipper location to the consignee location
Truckload (TL or FTL)
111
Truckloads focus on _____ (usually ____ lbs
Full trailers
Greater than 10,000 lbs
112
Truckload rates are less than LTL rates because (4):
- Shipper loads goods and consignee unloads goods
- One stop
- No terminals
- Administrative costs for 25,000lb shipment about the same as for 250lb shipment
113
Truckload US carriers (3):
- Swift
- Schneider
- J.B. Hunt
114
Trucks cost:
Trucks speed:
Trucks reliability:
Trucks capability:
Trucks capacity:
Trucks flexibility:
Cost - moderate-to-high
Speed - fast
Reliability - weather, congestion
Capability - 80,000 lbs per truck (michigan is 164,000 lbs total)
Capacity - Available for hire
Flexibility - Very flexible
115
____ is generally the fastest mode for shipments exceeding ___ miles
Air
600
116
Air carrier
____ services adds cost and time
_____ used for rates
"Accessorial"
"Dimensional weight"
117
Air carriers best suited for ____, ____, ____, _____, or ____ deliveries; examples:
High-value, lower-volume, urgent, perishable, or time-specific deliveries
Examples: electronics, cut flowers, spare parts
118
Air carriers is used for ____ of US domestic freight
Less than 1%
119
Air carriers:
Cost =
Speed =
Reliability =
Capability =
Capacity =
Flexibility =
Cost = expensive
Speed = Fastest
Reliability = Weather; congestion; intermingling with passengers
Capability = tight weight and size restrictions
Capacity = limited
Flexibility = Runways > 10k ft
120
Pipeline carrier is only mode without ______ and is ____ transportation
vehicles/vehicle operators
One-way
121
Pipeline tends to be the ____
Slowest mode
122
Pipeline products must be ___, ____, or ____
Liquid, liquefiable, or gaseous
123
Pipeline is capable of transporting _______ but has high ______, but very low ______ due to large product volume
Large product volumes
Fixed costs
Cost per unit
124
Pipeline carriers:
Cost =
Speed =
Reliability =
Capability =
Capacity =
Flexibility =
Hugh investment but cheap to operate
Slowest speed
Extremely reliable
Liquids and gasses
Large
Very limited
125
Rail carrier is wide _____ and large ____
Variety of cargo
Capacities
126
Rail capacity is ___ per railcar and up to ____ per train
100+ tons per railcar
15,000 tons per train
127
Rail carriers (4):
- CSX
- Norfolk Southern
- Burlington Northern
- Union Pacific
128
Rail carriers dominated by ____ carriers, domination limits ___ and ___ options
Four
Service and pricing
129
Rail carriers:
Cost =
Speed =
Reliability =
Capability =
Capacity =
Flexibility =
Moderate cost
Moderate speed
Congestion
Few restrictions
Large
Rail access
130
Water carriers move about ___% of global trade and has a ____ of cargo
80%
Wide variety
131
Water carriers:
Cost =
Speed =
Reliability =
Capability =
Capacity =
Flexibility =
Cheap cost
Slow speed
Arrival time variance
Very few restrictions
Hugh capacity
Water access
132
Mode summary:
Best mode for:
```
Cost:
Speed:
Reliability:
Capability:
Capacity:
Flexibility:
```
```
Cost - Pipeline
Speed - Air
Reliability - Pipeline
Capability - Water
Capacity - Water
Flexibility - Truck
```
133
Mode summary:
Worst mode for:
```
Cost:
Speed:
Reliability:
Capability:
Capacity:
Flexibility:
```
```
Cost: Air
Speed: Pipeline
Reliability: --
Capability: Pipeline
Capacity: Air
Flexibility: Pipeline
```
134
Using a container or other equipment that can be transferred from the vehicle of one mode to the vehicle of another mode without the contents being reloaded or disturbed
Intermodal transportation
135
Intermodal transportation is usually interchangeable among ___, ___, and ___ carriers and provides significant reduction in ____ costs
Rail, truck, and water
Freight handling
136
Intermodal containers are large reusable ____ boxes used for intermodal shipments
Steel
137
Prior to intermodal containers: $___/ton to load a ship
With containers: $___/ton to load a ship
$6.00/ton
$0.15/ton
138
One TEU (twenty-foot equivalent) =
8' x 8' x 20' long
139
Parcels are packages weighing up to ___ pounds
150
140
Offer service to shippers to consolidate small shipments into bulk shipments for better rates
Freight forwarders
141
Freight forwarders splits shipment at ___ and can arrange ____
Destination
Local delivery
142
Freight forwarders companies:
- DHL
- DB Schenker
- Kuehne + Nagel
- Sinotrans
143
Shipper's associations are similar to air and freight forwarders but are ____ organizations and primarily focus on achieving the ____ for members
Not-for-profit
Lowest rates
144
Provide transportation to clients and often operate their own equipment
Third party logistics companies (3PLs)
145
Third party logistic companies examples:
FedEx 3PL, UPS 3PL, CH Robinson
146
Common carriers are legally obligated to offer _____ at nondiscriminatory prices to the general public
Transportation service
147
Contract carriers offer ____ service to customers on a ____ basis
No obligation to service the ____ or to treat customers on an ___ basis
Specialized service
Contractual
General public
Equal
148
Companies whose primary business is other than transpiration and provide their own transportation services (ex. Wal-Mart)
Private carriers
149
Commercial terms established by the ______
International Chamber of Commerce (ICC)
150
ICC defines the __, __, __, and __ associated with the transportation and delivery of goods from seller to buyer
Tasks, obligations, costs, and risks
151
ICC is widely used in ____ and ____ and is generally accepted _____
International logistics and procurement
Worldwide
152
Delivery is the point in the transaction where the _____ to the goods is transferred from the seller to the buyer
Risk of loss or damage
153
The point named in the incoterm to which carriage has been paid
Arrival
154
Seller has an obligation to deliver the goods to a named place for transfer to a carrier
Free
155
To file shipper's export declaration and get export permit
To clear for export
156
Storing products at or between point of origin and point of consumption
Warehousing
157
Bringing together similar stocks from different sources, consolidating
Accumulating (bulk making)
158
Breaking larger quantities into smaller quantities
Allocating (bulk breaking)
159
Building up a variety of different products for resale to particular customers
Assorting
160
Receiving product and shipping it out the same day or overnight without putting it into storage
Cross-docking facility
161
Warehouse design considerations:
___ over ___
____ and ____ to be handled
____
Function over form
Quantity and character of goods to be handled
Purpose
162
Efficient and effective warehousing management can be an ___ task - requires constant ____
Exacting
Diligence
163
Packaging 3 general functions:
- Promote
- Protect
- Identify (label) the contents
164
Packing decisions involve a number of departments within an organization:
Engineering, manufacturing, marketing, warehousing, transportation, quality
165
Regulations govern labeling (3):
- Weight
- Specific contents
- Instructions for use
166
The short-distance movement that usually takes place within a building such as a plant or DC and the load/unload to a transportation service provider
Material handling
167
Material handling
Value =
Quality or Utility / Price or cost
168
Consolidation of several units into larger units to improve efficiency in handling and to reduce shipping costs
Unit loads
169
Most common unit load platforms (2)
Pallets and skids
170
Network design:
Design implies ____ vs. organic/evolutionary growth over time
Intentional action
171
Intentional network design (3):
1. Customer
2. Look for patterns and clusters
3. Balance economics of supply, manufacturing, storage, and transportation
172
Cost per unit of weight decreases as shipment size increases
Economy of scale
173
Cost per unit traveled decreases as distance moved increases
Economy of distance
174
Network dimensions (4):
- Vertical integration
- Flexibility
- Cooperation
- Geographical dispersion
175
Facility location factors (4)
- Cost
- Customer service expectations
- Accessibility
- Availability
176
A network design used when a consistent set of cities are targeted for delivery
Hub and spoke
177
Integrated logistics is management of _______ as a _____, instead of separate management of _____ functions
Entire logistics chain
Single entity
Individual logistics
178
Shift cost from one logistics function to another to achieve better total system cost
Cost-to-Cost trade-offs
179
Increased service levels -> increased costs
Cost-to-service trade-offs
Ex. Zappos overnight shipping
180
Sum of all product and logistics related costs
Total landed costs
181
Planning, evaluating, implementing, and improving sourcing decisions, both routine and strategic, for all goods and services
Procurement
182
Purchased goods and services account for ___-to___% of every dollar of revenue
50%-90%
183
Direct labor costs typically account for only about __% of the sales dollar
10%
184
Categories of goods (3):
Direct
Indirect
Strategic
185
Raw materials, parts, pieces, components
Direct goods
186
Maintenance, repair, and operating supplies
Indirect goods
187
Facilities and major machinery and equipment
Strategic Investment goods
188
Procurement is usually the ___ authorized agent
Sole
189
Buyer has no firm commitment/timeline for spending, determine supplier capabilities and interest
Request for information (RFI)
190
Suppliers suggest solutions with corresponding quotes, often use with complex specs, permits supplier input/creativity/innovation, increases difficulty of evaluation
Request for Proposal (RFP)
191
Suppliers quote to specs, Almost always used for simple specs, but can be used for complex specs if no deviations allowed
Request for Quote (RFQ)
192
Using one supply source for a justifiable reason
Single or Sole-source
193
Multiple sources (usually 3-12 suppliers) bid on RFQs or RFPs
Competitive bidding
194
Multiple suppliers (often >10) are invited to bid on a single RFQ
Reverse auction
195
Supplier trade off between ____ and _____
Competition and complexity
196
Evaluate potential suppliers (3):
- Financial health
- Track record
- Ethics
197
Two steps to evaluating quotes/bids:
1. Develop criteria (before bids are received)
| 2. Compare and analyze
198
Quotes/Bids criteria (5):
- Price
- Quality
- Delivery
- Capability
- Risk
199
Quote/Bid total cost (3):
Acquisition cost
Ownership cost
Post-ownership cost
200
Quote/Bid quality (4)
- Conformance
- Performance
- Durability
- Warranty
201
Quote/Bid delivery (2):
Timing
| Mode
