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68 Cards in this Set
- Front
- Back
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Supply Chain
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an integrating philosophy to manage the total flow of a distribution channel from suppler to ultimate customer
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Types of flows that exist in an integrated supply chain
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information
product cash |
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another word for materials management
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physical supply
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node
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warehouse (storage)
or plant (processing) |
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link
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transportation
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static analysis
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one level of output
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dynamic analysis
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multiple levels of output
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indifference point
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set equations = to one another
when each system costs the same for the same amount of output two lines intersect on a graph |
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utility 3 types
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place
time possession |
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transportation and inventory utility
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place and time
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order cycle
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time decided to place order until they actually receive it
as time goes up, more inventory to hold |
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wholesalers categories
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merchant
manufacturer's sales branches and offices agents, brokers, and commission merchants |
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what activities are included in material management
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purchasing
warehousing materials planning and control traffic receiving quality control salvage and scrap disposal |
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abc analysis
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ranking is based on some measure such as sales, profits, or usage
procedure: rank the product from highest to lowest calculate percentage of the measure calculate percentage of items categorize according to cutoffs |
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materials planning and control process
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customer demand (finish goods)
minus finished goods inventory production of finished goods raw material needed minus raw material inventory raw materials purchased |
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f.o.b. origin
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buyer takes care of transportation
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f.o.b. destination
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seller takes care of transportation
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Critical inventory analysis
4 priorities |
1 top priority - no stock outs - critical item
2 high priority - essential but limited stock outs permitted 3 medium priority - necessary but occasional stockouts permitted 4 desirable but stockouts allowes |
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what are characteristics of the fixed order quantity model
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EOQ
higher processing costs |
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carrying/holding costs
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handling
physical storage insurance tax depreciation obsolescence interest opportunity costs |
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how are inventory costs expressed
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as a percentage
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what is the largest cost associated with inventory
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opportunity costs
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what is the simple price break model?
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Uses TAC - total annual costs
Find lowest price and calculate EOQ check feasibility calculate all price breaks above |
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What are the basic assumptions of the EOQ model?
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continuous constant rate of demand
known lead time no stockouts constant price no in transit no interaction between inventory infinite horizon no limit on capital inventory holding cost based on average inventory no private carrier |
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EOQ
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square root (Annual demand)(order cost)/(Cost per unit)(holding cost)
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What are reasons for holding physical supply inventory
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purchase economics
transportation economics prevent production shutdown speculative purchases seasonal supply |
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average number of units in inventory
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1/2Q =
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What is the reorder point
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RP = dL
d = average daily demand L = lead time |
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AMERICAN system
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more inventory is safer
formula best trade off between costs multiple sources of vendors want more lead time |
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JIT works best with
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repetitive products
flexible workers cooperative vendors |
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when is it better to use a private warehouse?
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high volume throughput
stable volume throughput high market density high storage control needed |
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hat are the basic types of public warehouses?
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commodity
bulk cold house-hold goods general merchandise |
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uniform warehouse receipts act of 1912
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- reasonable care
- burden of proof with user |
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movement
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receiving
transfer selection loading |
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what factors are considered in determining the size of the warehouse?
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demand
develop forecast of demand figure eoq for each item (allow safety stock) convert units into cubic feet requirements growth aisle space |
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general area configuration
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pick through whole warehouse
order picking and preparation mixed with storage area access to all products |
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modified area configuration
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order picking racks
order picking and preparation separated from storage area get fastest turnover closest to outbound dock |
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materials handling
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short distance movement
usually takes place withing the confines of a building mechanical or manual labor |
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What are the basic objectives of materials handling?
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to increase the usable capacity of the warehouse
to improve operating efficiency to have effective working conditions to respond quickly and efficiently to customer's orders to minimize costs |
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trucks
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platform truck (push)
fork lift walkie low lift tow train straddle arm side loading lift truck |
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conveyors
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gravity feed
power feed wheel roller belt slat screw drag line chain ball |
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containers
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8x8x10
8x8x20 8x8x40 waterproof rail trucks ships aircraft |
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random locator
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routed to any available space
better use of space longer retrieval time need effective retrieval code automated systems |
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fixed locator
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routed to a given location
poor use of space short retrieval time do not need retrieval code labor intensive systems |
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zoning
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assigning of individual order pickers to serve only a limited number of stock items instead of routing them through the entire stock layout
only fills a portion balanced portions must be reassembled into a complete order |
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sequencing
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orders are filled in the sequence in which items appear on the order picking route
avoids backtracking must occur before pick is started |
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batching
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the selection of more than one order on a single pass
save time complicates reassembling orders increases order-filling time |
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what are the roles of packaging?
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to identify
to improve efficiency protect |
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simulation
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mathematical
not best solution |
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linear programming
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optimum solution based on constraints
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grid technique
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static approach
starting point |
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blanket rates
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rate does not increase with ditance and the rate is the same to all points in the blanket area
allows competition must be approved by agency |
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Pre 1950's
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no guiding philosophy
WWII military suggest use in business profits were good so inefficiency was tolerated |
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1950's to 1960's
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scholars point out businesses ignoring physical distribution
Harvard study: total cost concept poor economical conditions books written in universities |
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1970's and beyond
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physical supply and physical distribution
integration of logistics - across functional areas supply chain created |
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major activities included in logistics
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materials handling
procurement plant and warehouse site location |
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levels of optimality
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optimizing a system usually means having to suboptimize one ore more subsystems
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Channel of distribution
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any series of firms or individuals who participate in the flow of goods and services from producer to final user
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intensive
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as many wholesalers and retailers as possible
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exclusive
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limit number of intermediaries
better control over price and services |
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selective
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between intensive and exclusive
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family grouping
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grouping items that frequently appear on the same order together
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market area boundary
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ldc=p + tx
LDC = laid down or delivered costs/unit p = production costs t = transportation rate x = distance from origin |
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common carrier
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for hire serves public
liable for damages backbone of transportation |
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contract carriers
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for hire that does not have to serve the general public
1 -2 shippers exclusively specialized equipment |
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exempt carriers
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agricultural
for hire regulation regarding rates and services |
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private carriers
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firms own transportation
not for hire |
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order cycle
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transmitted
processing preparation shipment |
