test #2

Question 1

8 types of waste that must be eliminated to implement lean systems

Answer 1

1. overproduction
2. inappropriate processing
3. waiting
4. transportation
5. motion
6. inventory
7. defects
8. underutilization of employees

Question 2

example of overproduction

Answer 2

making an item before it’s needed

Question 3

example of inappropriate processing

Answer 3

use simpler machines, etc.

Question 4

example of transportation

Answer 4

excessive movement

Question 5

example of inventory

Answer 5

JIT will decrease in safety stock and WIP inventory

Question 6

lean production

Answer 6

operations systems that try to maximize the value added by each of a company’s activities by removing waste delays from them

Question 7

what is the goal of lean production

Answer 7

to maximize the value added by each of a company’s activities by removing waste delays from them

Question 8

JIT

Answer 8

the belief is that waste can be eliminated by cutting unnecessary capacity or inventory and removing non value added activities in operations (only produced when needed)

Question 9

pull method

Answer 9

method in which customer demand activates the production = LEAN

Question 10

push method

Answer 10

method in which production of the item begins in advance of customer needs = NOT LEAN

Question 11

5 S Elements of Lean Production

Answer 11

1. sort
2. straighten
3. shine
4. standardize
5. sustain

Question 12

sort

Answer 12

separate needed items from unneeded items (including tools, parts, materials, and paperwork), and discard the unneeded

Question 13

straighten

Answer 13

• neatly arrange what’s left, with a place for everything and everything in its place
• organize the work area so that it’s easy to find what’s needed

Question 14

shine

Answer 14

clean and wash the work area to make it shine

Question 15

standardize

Answer 15

• establish schedules and methods of performing the cleaning and sorting
• formalize the cleanliness that results from regularly doing the first 3 S practices so that perpetual cleanliness and a state of readiness are maintained

Question 16

sustain

Answer 16

• create discipline to perform the first 4 S practices, whereby everyone understands, obeys, and practices the rules when in the plant
• implement mechanisms to sustain the gains by involving people and recognizing them through a performance measurement system

Question 17

boat

Answer 17

you/company/organization

Question 18

rocks

Answer 18

• unseen problems
  1. scrap
  2. unreliable suppliers: encourage local suppliers
  3. capacity imbalance

Question 19

water

Answer 19

inventory

Question 20

objective of “boat, rocks, and water”

Answer 20

• to periodically stress the system and focusing on problem areas
• adversity builds strength
• once you lower the levels of inventory (water), it exposes all of the problems (rocks)

Question 21

work breakdown structure

Answer 21

a statement of all work that has to be completed

Question 22

activity

Answer 22

the smallest unit of work effort consuming both time and resources that the project manager can schedule and control

Question 23

moving average

Answer 23

• average demands to forecast next period

- only used when there are no trends in the data

Question 24

weighted moving average

Answer 24

• each historical demand in the average can have its own weight
• this is best for trends
• if you want your weighted moving average to be more responsive, you change the weights

Question 25

exponential smoothing

Answer 25

- calculates the average of a time series by implicitly giving recent demands more weight than earlier demands - requires: last periods forecast, demand for this period, and smoothing parameter - larger "a" values result in more responsive changes - smaller "a" values result in more stable forecasts

Question 26

pressures to decrease inventories

Answer 26

-shrinkage

Question 27

shrinkage

Answer 27

- pilferage - obsolescence - deterioration

Question 28

pilferage

Answer 28

theft of inventory by customers or employees

Question 29

obsolescence

Answer 29

inventory cannot be sold or used at full value due to model changes, engineering modifications, or unexpectedly low demand

Question 30

deterioration

Answer 30

physical spoilage or damage

Question 31

pressures to increase inventories

Answer 31

1. customer service 2. ordering cost 3. setup cost 4. labor and equipment utilization 5. transportation cost 6. payment to suppliers

Question 32

customer service

Answer 32

prevents stockouts and backorder

Question 33

stockouts

Answer 33

an order that cannot be satisfied, resulting in loss of sale

Question 34

backorder

Answer 34

an order that cannot be filled when promised or demanded

Question 35

ordering cost

Answer 35

cost of preparing a purchase order for a supplier of a production order for manufacturing

Question 36

setup cost

Answer 36

cost involved in changing over a machine or workspace to produce a different item

Question 37

ABC analysis: Class A

Answer 37

20% of items account for 80% of value

Question 38

ABC analysis: Class B

Answer 38

about 30%

Question 39

ABC analysis: Class C

Answer 39

50% of items account for 5% or so of value

Question 40

5 assumptions of EOQ

Answer 40

1. demand rate is constant and known with certainty 2. no constraints are placed on the side of each lot 3. only two relevant costs are the inventory holding cost and the fixed cost per lot for ordering or setup 4. decisions for one item can be made independently of decisions for other items 5. the lead time is constant and known with certainty

Question 41

independent

Answer 41

uncertain

Question 42

when not to use the EOQ

Answer 42

- make to order strategy | - order size is constrained

Question 43

make to order strategy

Answer 43

customer says wants entire order delivered at once

Question 44

order size is constrained

Answer 44

don't have room or not enough trucks for delivery, etc.

Question 45

when to modify the EOQ

Answer 45

- quantity discounts | - replenishment not instantaneous

Question 46

quantity discounts

Answer 46

can get good discount for ordering large amounts

Question 47

when to use the EOQ

Answer 47

- make to stock strategy with relatively stable demand | - carrying and setup costs are known and relatively stable