P1D.4 Flashcards
Supply chain management (10 cards)
An appropriate technique for planning and controlling manufacturing inventories, such as raw materials, components, and subassemblies, whose demand depends on the level of production is
materials requirements planning. Materials requirements planning (MRP) is a planning and controlling technique for
managing dependent-demand manufacturing inventories.
Just-in-time (JIT) is defined as
An inventory management system based on having inventory available only when needed. Just-in-time (JIT) is an inventory management system based on having inventory available only when needed. Raw materials or component parts are delivered as they are needed instead of having stockpiles of raw materials or component parts in inventory.
What is not a typical characteristic of a just-in-time (JIT) production environment
Push-through systems. The just-in-time (JIT) production environment is characterized by production generated by need. This is a “demand-pull” system in which sales occur first and trigger the production of units.
Typical features of a JIT system include small lot sizes, low setup times/costs, and balanced workloads.
Traditional production systems, on the other hand, produce products based on expected rather than actual demand at each step of the production process. Products can be produced before they are needed. Production on a fixed schedule, whether needed or not, is a “push-through” mode.
What is not a correct comparison of a just-in-time system with a traditional system?
In a traditional system, lot size is based on immediate need; in a just-in-time system, lot size is based on formulas. In a just-in-time system, the goal is to minimize the amount of inventory at the plant.
Accordingly, lot size is based on the immediate need of the manufacturing units. In contrast, in a traditional system, raw material inventory purchase lot size is often determined on the basis of formulas, such as economic order quantity (EOQ).
What is the benefit of outsourcing to a firm that elects “outsourcing” strategy?
Outsourcing can allow a firm to gain access to new technologies and lower costs of services without the risk of obsolescence or day-to-day management. However, the firm may also lose direct control of a potentially critical component of the business and must rely on the outsource firm for performance of the service or production of the goods.
Three of the basic measurements used by the theory of constraints (TOC) are:
The theory of constraints uses three measurements: throughput contribution, investments, and operating costs.
What is the formula for throughput contribution margin?
(Sales - Direct Materials)/Total number of units produced
Units Sold formula
Beginning Inventory + Units Started and Completed - Ending Inventory
Contribution Margin
Selling Price - Variable costs = Contribution Margin
Break-even Point
Break-even Point = Fixed costs/Contribution Margin
