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38 Cards in this Set
- Front
- Back
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aggregate planning
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translates business plans into rough labor schedules and production plans
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production rates
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agg. units/worker/unit of time
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workforce level
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available workforce in terms of hours
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actual production
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production rate * workforce level
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invetory
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units carried over from previous periods
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costs
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of production, changing workforce, inventory
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what aggregate planning does
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given an aggregate demand forecast, determine production levels, inventory levels, and workforce levels, in order to maximize total relevant costs over the planning horizon
there is no single optimal solution given the amt. of variables!! |
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chase strategy
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match production rate to production reqs. by varying the workforce
no shortages or surplus allowed aka variable workforce |
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level strategy
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keep a constant workforce who work at max. capacity; inventory varies from period to period
workforce level is chosen so that total requirement can be exactly met |
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stable workforce
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keep constant workforce who work at max. capacity
outsource in order match production requirements choose workforce level so that they exactly satisfy the min. period of demand |
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sensitivity analysis
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what if??
plug data into agg. planning tables and recalculate the costs |
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master production schedule
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time phased plan specifying how many and when the firm plans to build each end item
next step after aggregate plan includes specific end times |
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independent demand
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demand for an item is independent of demand for other items
these demands are usually from customers and are end item demands |
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dependent demand
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demand for a component part (raw material, subassembly, etc.) is dependent on the end item into which the component goes
demand often occurs in batches |
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bill of materials
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shows all assemblies, subassemblies, components, and raw materials needed to create an item
show how finished product is put together of individual components parent item shown at highest level or at level zero parts that go into parent component are called level 1 and so on production planners explode BOM from level 0 item to determine number, due dates, and order dates of subcomponents |
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material requirements planning
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computer based info. system that schedules and orders dependent-demand inventory components
uses mater production schedule, bill of materials, and inventory records as inputs output recommendations: when to release new orders, when to schedule open orders units are pushed according to plan units are pulled forward only when needed (like JIT) |
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push/pull decoupling point
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units are pushed forward to a certain point
final configuration -- aka pull -- occurs only when consumer demand occurs |
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lot sizing in MRP systems
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generates materials orders
order lot sizes can be chosen according to: - L4L: produce enough to cover next period - EOQ: apply EOQ for yearly demand - least unit cost: minimize total cost (order+carry) per unit these are approximate -- non may be truly optimal |
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MRP evolution
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MRP -- closed loop MRP -- MRP II -- ERP
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closed loop MRP
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schedule materials
incorporate feedback |
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MRP II
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schedule and purchase materials
coordinate with mfg resources goal: plan and monitor all resources of a mfg firm (closed loop): mfg, marketing, finance, engineering simulate the mfg system |
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ERP systems
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enterprise resource planning systems
computer system that integrates application programs in accounting, sales, mfg, and other functions of the firm accomplished by a database shared by all application programs |
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reasons to use ERP
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standardize and improve processes
improve levels of system integration improve information quality |
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ERP drawbacks
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cost: $250M + for fortune 500 companies
transition plan: training, implementation, and resistance to change |
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supply chain management
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system of organizations, activities, people, info., and resources involved in moving a product or service from supplier to customer
can transform raw materials and components into finished products that are delivered to the end customer supplier -- manufacturer -- distributor -- retailer -- customer design and management of processes across org. boundaries with goal of matching supply and demand in the most cost effective way mission impossible: matching supply and demand |
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why is it hard to match supply and demand
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uncertainty
changing customer demands decreasing product life cycles fragmentation of supply chain ownership conflicting objectives within the supply chain or the firm |
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inventory turnover
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how often company replenishes inventory
high value of turnover means that inventory was not sitting around for long |
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weeks of supply
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how many weeks worth of inventory company has on hand
high value means that a lot of invenotry has been sitting around |
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inventory turns
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COG/inventory
common benchmark in inventory |
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inventory productivity
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little's law
inventory = flow rate * flow time how long it takes to transform a dollar invested in inventory into sales |
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efficient supply chain
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procurement
distribution product assortment pricing |
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outsourcing
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moving some of the firm's internal activities and decisions to outside suppliers
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why firms outsource
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operational: focus on service and core capabilities, transform company, increase flexibility
operational reasons: improve performance, obtain expertise, skills, knowledge, etc., risk mgt. financial reasons: transfer assets to outsourcing and free up resources for other investment purposes cost driven reasons: transforms fixed costs into variable costs, reduce costs through outsourcing partner efficiencies revenue driven reasons: expand and grow with help of another firm, obtain access to oursourcer's network |
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waste reduction pyramid
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from least to most preferred
dispose -- energy recovery -- recycle -- reuse -- reduce |
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recycling
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processing used materials and remaking them into some new material
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remanufacturing
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using used a new parts to make a new product
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e-waste
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consumer and business electronic equipment that near the end of useful life
one of the fastest growing waste streams can contain toxic chemicals such as lead, cadmium, and mercury 50% of computers being discarded are in working order 70% of metals in US landfills come from electronics 80% of recycled computer are deposited in 3rd world countries |
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business challenges to make good decisions environmentally
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cost, tech. feasibility, competition, customer prefs., org. culture
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