Production Systems Final Exam Vocab

Question 1

Materials required for production or processing.

Answer 1

Raw Materials

Question 2

Raw materials or subassemblies that will later be included into a final product.

Answer 2

Components

Question 3

Inventories that are in the plant waiting for processing.

Answer 3

Work-in-Process (WIP)

Question 4

Items that have completed the production process and are waiting to be shipped out.

Answer 4

Finished Goods

Question 5

Allows the company to gradually write off fixed setup costs over a large number of units.

Answer 5

Economies of Scale

Question 6

Inventory provides a buffer against the uncertainty of demand.

Answer 6

Uncertainties

Question 7

If the value of an item is expected to increase, it may be more economical to purchase large quantities at current price and store the items for future use.

Answer 7

Speculation

Question 8

Alleviate the disruptions caused by changing production rates and workforce by producing and storing inventory in anticipation of peak demand.

Answer 8

Smoothing

Question 9

Certain constraints can arise in the purchasing, production, or disruption of items that force the system to maintain inventory.

Answer 9

Logistics

Question 10

A system in which more inventory is carried does not require the same level of control as one in which inventory levels are kept to a bare minimum.

Answer 10

Control Costs

Question 11

Time that elapses from placement of order until its arrival.

Answer 11

Lead Times

Question 12

Costs proportional to the quantity of inventory held.

Answer 12

Holding Cost

Question 13

Cost that includes both fixed and variable components.

Answer 13

Order Cost

Question 14

All costs that accrue when insufficient stock is available to meet demand.

Answer 14

Penalty (Shortage / Stock-Out) Cost

Question 15

The discount is applied to all of the units in the order.

Answer 15

All-Units Discounts

Question 16

The discount is applied to only the number of units above the breakpoint.

Answer 16

Incremental Discounts

Question 17

The time required to setup for producing a product.

Answer 17

Setup Time

Question 18

Something quantifiable, the value of which will be determined, but which we do not yet know.

Answer 18

Random Variable

Question 19

If we add together a sufficient number of independent, identically distributed random variables, their sum tends to a normal distribution, regardless of the underlying distribution.

Answer 19

Central Limit Theorem

Question 20

The time between the arrival of successive orders of size Q.

Answer 20

Cycle Length

Question 21

The expected inventory level at the end of the lead time, just before the next order arrives.

Answer 21

Safety Stock

Question 22

Chooser R so that the probability of not stocking out in the lead time is equal to a specified value.

Answer 22

Type 1 Service (Cycle Service Level)

Question 23

Choose both Q and R so that the proportion of demands satisfied from stock equals a specified value.

Answer 23

Type 2 Service (Fill Rate)

Question 24

The number of units that the plant can produce in a given time.

Answer 24

Plant Capacity

Question 25

Assumes a facility can be located anywhere on the plane.

Answer 25

Center of Gravity (COG) Models

Question 26

Locating a number of facilities to serve demands at a minimum total cost.

Answer 26

Capacitated Plant Location

Question 27

A mathematical model for optimally scheduling the flow of goods from production facilities to distribution centers.

Answer 27

Transportation Problems

Question 28

Which customers will be served by a given vehicle and in what sequence.

Answer 28

Delivery Routing

Question 29

Something that cannot be perceived by the sense of touch.

Answer 29

Intagibility

Question 30

Something that cannot be inventoried in advance of consumption.

Answer 30

Time-Perishable

Question 31

The number of customers per hour that may be processed by a resource.

Answer 31

Capacity

Question 32

The resource group or stage in the process with the minimum capacity.

Answer 32

Bottleneck

Question 33

The fraction of time a set of resources is busy.

Answer 33

Utilization

Question 34

A discrete probability distribution applicable to events that occur one at a time, and which are completely independent from one another.

Answer 34

Poisson Distribution

Question 35

The basic process of translating a production schedule for an end product to a set of requirements for all of the subassemblies and parts needed to make that item.

Answer 35

Materials Requirements Planning (MRP)

Question 36

Seeks to deliver the right amount of product at a the right time and reduce work-in-process inventories to an absolute minimum.

Answer 36

Just In Time (JIT)

Question 37

Requirements for lower level items must be shifted backwards by the lead time required to produce the items.

Answer 37

Time Phasing

Question 38

A multiplicative factor must be applied when more than one subassembly is required for each higher level item.

Answer 38

Multiplication

Question 39

Breaks final product out into all assemblies, subassemblies, and components.

Answer 39

Bill of Materials

Question 40

Gives codes for each product, assembly, and component.

Answer 40

Level Coding

Question 41

Lot sizing problem where it orders in every period and holds no inventory.

Answer 41

L4L

Question 42

Lot sizing problem where EOQ is applied and batches are produced as needed to ensure no shortages.

Answer 42

The EOQ Lot Sizing

Question 43

Lot sizing problem where you compute the average cost for an order horizon of j periods and stopping at the first instance when the average cost function increases.

Answer 43

The Silver Meal Heuristic

Question 44

Lot sizing problem where one chooses the order horizon to most closely balance the total holding cost with the setup cost.

Answer 44

The Part Period Balancing Heuristic

Question 45

Lot sizing problem where one minimizes the average cost per unit of demand.

Answer 45

Least Unit Cost Heuristic