Bmgt 372 Exam 1

Front 1

inbound activities

Back 1

revolve around materials mgmt:
anticipating mat reqs
sourcing and obtaining mat
intro mat into the org
monitoring status of mat as a current asset

Front 2

materials mgmt objectives:

Back 2

low costs
quality assurance
support of other enterprise functions
low lvl of tied-up capital
high lvl of service

Front 3

In most cases, materials make up over ___% of total costs

Back 3

50

Front 4

procurement

Back 4

activities assoc w/the acquisition of materials:
purchasing
quality mgmt
vendor relationships
coordination w/other depts

Front 5

receiving

Back 5

physical receipt of the purchased materials when they show up at your facility
data obtained is vital

Front 6

quality assurance

Back 6

checks all inbound deliveries and samples materials to det vendor compliance to specifications

Front 7

JIT inventory control - history

Back 7

found by: W. edwards deming and Taiichi Ohno

Ohno developed Toyota Production System (TPS) w/JIT as core concept

Front 8

JIT basics

Back 8

-materials are used until a pre-arranged order pt is reached (kanban)
-the req is com back to procurement which places a short lead time order (andon)
-freq, small shipments arrive just in time to fill depleted materials
no safety stock - every part counts

Front 9

Benefits of JIT

Back 9

productivity improvements
decreased inventories
reduced manuf cycle times
lower costs

Front 10

Challenges of JIT

Back 10

production scheduling
supplier capabilities
logistics networks
demand forecasting

Front 11

Reduce JIT risk

Back 11

create partnership w/suppliers and implement complex Materials Requirements Planning (MRP) systmes

Front 12

MRP

Back 12

materials requirements planning
analyze inbound logistics challenges:
productions scheduling
inventory control and tracking
demand analysis and forecasting
financial risks
general ledger reporting
work in process tracking

almost always connected/integrated into larger systems

Front 13

outbound logistics

Back 13

linked to customer service and mkting
form of non-price competition

Front 14

4 key dimensions of customer service

Back 14

time
dependability
communications
convenience

Front 15

customer satisfaction

Back 15

focuses on customer themselves; on indiv customer expectations and perceptions

Front 16

customer success

Back 16

suppliers/vendors use their perf capabilities to enhance the success of their customers

Front 17

channel of distribution

Back 17

used to create service efficiencies
network of intermed that include: wholesalers, distributors, retailers

Front 18

wholesaler

Back 18

selling and storing goods
extending credit
assembling sorting
make/break bulk

Front 19

distributor

Back 19

mkts/sells merchandise to retailers, gen in lg quantities

Front 20

retailers

Back 20

purchase products to re-sell to ultimate consumers

Front 21

Voluntary Inter-Industry Communications Standards Committee

Back 21

QR and ECR for textile industry

Front 22

QR

Back 22

Quick Response
partnership where the manuf/supplier commits to meet specific perf criteria
in return the retailer commits to providing solid demand data and pref treatment
min stockouts for retailers and boosts sale of products for vendors

Front 23

Successful QR depends on:

Back 23

shorter time horizons
real-time data transfers
integrated logistics networks
partnership creation and maintenance
higher inventory velocity
focus on quality

Front 24

ECR

Back 24

Efficient Consumer Response
extensively consumer driven and heavily dependant on info systems to transmit demand data, esp from POS

Front 25

DRP systems

Back 25

Distribution Requirments Planning
det product demand and use that info in supply chain
outbound version of MRP
effective at maintaining cust service lvl consistency

Front 26

Strategic use of adv warehousing

Back 26

virtually all outbound systems and strategies are trying for uninterrupted flow of product

Front 27

corporate leadership and philosophies

Back 27

outbound strategies are risky and complex

Front 28

use fo inventory segmentation

Back 28

knowing and categorizing your stock keeping units (SKUs) is essential to successful operations

Front 29

outbound logistics capabilities are eval by:

Back 29

selling capabilities
sales perf
avg lead time
inventory maintained
freq/order transmission
stockouts
response time from sales reps
fill rate
methods used to submit orders

Front 30

inventory costs

Back 30

admin
insurances
taxes
shrinkage
obsolescence
capital
storage and handling

Front 31

Cycle stock

Back 31

stock depleted during a normal order cycle

Front 32

In process stock

Back 32

incomplete/in transit inventory

Front 33

safety stock

Back 33

held in adv of a seasonal demand

Front 34

speculative stock

Back 34

held as a hedge against price fluctuations

Front 35

dead stock

Back 35

inventory w/no apparent value

Front 36

promotional stock

Back 36

covers demand/stock assoc w/mkting

Front 37

benefits of carrying inventory:
purchase economies

Back 37

receiving lots in larger sizes reduces overall materials costs

Front 38

transportation savings

Back 38

lg loads are cheaper

Front 39

speculative purchasing

Back 39

buying to hedge against upward price fluctuations

Front 40

seasonal supply/demand

Back 40

especially factored into products w/ag supply chains

Front 41

maintenance of supply sources

Back 41

maintain a lvl flow of materials when ramp up is are long/supplier is small/specialized

Front 42

customer service/goods for resale

Back 42

I can provide order and demand change flexibility

Front 43

production savings

Back 43

easy to have long, inexpensive, production runs when I is allowed to build up

Front 44

stable employment

Back 44

I can be used to provide short term labor stability

Front 45

safety/contingency coverage

Back 45

order flexibility, covers defects, emergencies, etc.

Front 46

I carrying costs:
Capital (investment) costs

Back 46

assoc w/having capital invested in I often the lgest cost

Front 47

storage cost

Back 47

I/O costs, heating, electric, staffing

Front 48

service costs

Back 48

I and tax costs are accounted for here

Front 49

risk cost

Back 49

risk of economic changes, obsolescence, spoilage

Front 50

order costs

Back 50

assoc w/acquiring or ordering I: reviewing stock lvls, preparing/processing paperwork, processing receiving reports, checking stock pre-order

Front 51

setup costs

Back 51

inherent in retooling the storage/production line to fit diff items/stock

Front 52

expected stockout costs

Back 52

assoc w/running out of an item

Front 53

in-transit carrying costs

Back 53

cost of literally carrying I throughout the supply chain
delivery time costs, insurance

Front 54

I mgmt benchmarks:

Back 54

customer satisfaction
need for backordering/expediting
I turnover/velocity
ratio of I held to sales (should decline as sales increase)

Front 55

Approaches to I mgmt

Back 55

systemwide v single facility
dependent v indep demand
push v pull
-QR, ECR = pull
-paperback books = push

Front 56

ABC Analysis

Back 56

Wilfredo Pareto; 80% of value is achieved from %20 effort

Front 57

Inventory control is driven by:

Back 57

carrying costs - increase w/increase in I
order costs - decrease w/increase in I

total cost curve - optimum low pt

Front 58

EOQ

Back 58

Economic Order Quantity
det what order quantity min annual I costs and when to place each order

Front 59

assumptions for EOQ

Back 59

demand constant
carry costs known
order costs constant and fixed
unit value known

Front 60

Formula

Back 60

Square root (2PD)/CV

Front 61

P
D
C
V

Back 61

Ordering cost ($)
annual demand (units)
annual I carry cost (%)-convert to DECIMAL
value of I item ($)/unit

ALWAYS ROUND UP TOTAL

Front 62

Other EOQ Assumptions

Back 62

constant transport costs
no I in transit
only a single product
infinite planning horizon

more effective when used on a single facility basis

Front 63

EOQ can be adjusted for:

Back 63

in excess rates
demand and lead time length
cost of I in transit
uncertainty of demand
private carriage
modal selection
vol transport rates
I at multiple locations

Front 64

Basic I control model: Reorder pt

Back 64

det reorder pt when:
demand known
know exact order lead time

Front 65

Reorder Point =

Back 65

Lead time x daily demand
= #units

Front 66

Improve I mgmt:

Back 66

improved forecasting
adv order processing/I systems (DRP, MRP)
implementation/improved use of I approaches (JIT, QR, ECR)

Front 67

P
D
C
V

Back 67

Ordering cost ($)
annual demand (units)
annual I carry cost (%)-convert to DECIMAL
value of I item ($)/unit

ALWAYS ROUND UP TOTAL

Front 68

Other EOQ Assumptions

Back 68

constant transport costs
no I in transit
only a single product
infinite planning horizon

more effective when used on a single facility basis

Front 69

EOQ can be adjusted for:

Back 69

in excess rates
demand and lead time length
cost of I in transit
uncertainty of demand
private carriage
modal selection
vol transport rates
I at multiple locations

Front 70

Basic I control model: Reorder pt

Back 70

det reorder pt when:
demand known
know exact order lead time

Front 71

Reorder Point =

Back 71

Lead time x daily demand
= #units

Front 72

Improve I mgmt:

Back 72

improved forecasting
adv order processing/I systems (DRP, MRP)
implementation/improved use of I approaches (JIT, QR, ECR)