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51 Cards in this Set
- Front
- Back
Types of Resource Planning |
1. Materials Planning 2. Capacity Planning -Long-range planning: >1 yr -Intermediate-range planning: 6-18 months -Short-range planning: 1 day-6 months |
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Aggregate Planning |
-Specify the optimal combination of: Production rate Workforce level Inventory on hand -Product group or broad category (aggregation) -Long-range planning period (>1 yr) -Goals: meet demand, inventory policy, use capacity efficiently, minimize costs |
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Inputs |
-External: economy, market demand, raw material availability, competitors, external capacity -Internal: current physical capacity, current workforce, inventory levels, activities required for production |
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Key Demand Strategies |
-Chase: Match production to customer order rate by hiring/firing employees -Level: Stable workforce with constant output. Inventory and backlogs absorb fluctuation in demand. -Combination: stable workforce with variable hours (overtime/flexible schedules) |
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Costs Relevant to Aggregate Planning |
-Labor costs -Hiring, Firing, Training costs -Inventory holding costs -Backordering costs |
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Master Production Scheduling (MPS) |
Determine amounts and dates of each end item to be produced -Inputs: Beginning inventory, forecast, customer orders -Outputs: Projected inventory, MPS, uncommitted inventory -Driven by rough cut capacity planning and materials requirements planning |
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Rough Cut Capacity Planning |
Verifies equipment and labor availability |
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Materials Requirements Planning |
Breaks end product requirements into a materials plan for component parts. -Inputs: MPS, Inventory records, bill-of-material (product structure of components) |
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MRP Outputs |
-MRP Explosion: Process of converting planned production of parent item into component gross requirements. -Planned orders: order to be released in future -Rescheduling of production -Inventory status data |
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Manufacturing Resource Planning (MRP II) |
-Goal: Plan and monitor all resources of a manufacturing firm (closed loop): manufacturing, marketing, finance, engineering. -Simulate the manufacturing system |
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Enterprise Resource Planning Systems (ERP) |
Information system connecting all functional areas and operations of an organization and in some cases, suppliers and customers via common software infrastructure and database. -ERP provides means for supply chain members to share info so that scarce resources can be fully utilized to meet demand while minimizing supply chain inventories |
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Categories of Inventory |
1. Finished goods 2. Raw materials 3. Work-in-process (WIP) 4. Maintenance, repair, and operating supplies (MRO) |
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2 primary functions of inventory |
1. Buffer uncertainty in the marketplace 2. Decouple dependencies in the supply chain (Dependent demand) |
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Inventory related costs |
-Item cost -Ordering costs -Carrying/holding cost: risk, storage, insurance, taxes, capital or finance. -Stockout costs |
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Inventory Accuracy |
Refers to how well the inventory records agree with physical count |
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Cycle Counting |
Physical inventory taking technique done on a regular basis (not once or twice a year) to reconcile discrepancies between the physical inventory and inventory record |
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Inventory System |
Set of policies and controls that monitor levels of inventory and determines: 1. How much to order -Economic Order Quantity (EOQ) -Price Break Model 2. Inventory level to be maintained -Reorder Point -Safety Stock 3. When to order -ABC inventory analysis -Inventory turnover analysis |
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Economic Order Quantity |
Goal is to find order quantity (Q) that minimizes the total cost (TC) of managing inventory. -Simple model: known/constant |
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R |
Annual Demand |
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C |
Cost/Unit |
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Q |
units per order |
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S |
Ordering cost |
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k |
Holding rate |
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Continuous Review System (Q System) |
Always ordering same quantity, reorder point varies |
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Periodic Review (P) System |
P system requires that inventory be check after a fixed interval Order quantity varies to bring inventory to predetermined level |
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ABC Method of Inventory Analysis |
Determine annual $ usage Rank items according to annual $ usage |
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Average Inventory Turnover |
Higher average inventory turnover is better. Cost of goods sold/Avg aggregate inventory level (Raw/WOP/finished goods costs) |
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Warehouse |
Accumulating Allocating Assorting Sorting of inventory |
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Distribution Centers |
Emphasize rapid movement of products through the facility |
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Cross-Docking |
Practice of unloading an inbound vehicle and reloading the product onto an outbound vehicle |
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Private Warehousing |
High throughput volume, market density, customer service, security Stable demand Special physical control |
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Public Warehousing |
Low throughput volume, market density, customer service, security Fluctuating demand No special physical control |
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Centralized Warehousing |
Low customer service, substitutability, SS requirement, operating costs High product value Special warehousing requirements Large purchase size Diverse product line Longer lead times |
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Decentralized warehousing |
High customer service, substitutability, SS requirement, operating costs Low Product value Small Purchase size Limited product line Shorter lead times |
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Productivity Ratio |
(Lbs/Day)/(labor hours/day) |
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Trends in warehousing |
Expansion of services Third party providers Reduced labor intensity: increased automation Integration of warehouse and logistics information systems Flexibility |
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Time and place utility |
products delivered at right time and desired location |
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Common Carriers |
Offer transportation services to all shippers at published rates between designated locations without discrimination |
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Contract Carriers |
Not bound to serve general public. Serve specific customers under control. |
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Exempt Carriers |
Exempt from regulation of services & rates if transporting certain products (i.e. produce, livestock, coal, or newspapers) |
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Private Carrier |
Not subject to economic regulation. Typically transports goods for the company that owns it. (i.e. Hyvee) |
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Modes of Transportation |
Motor carriage, rail, air, water, pipeline Intermodal |
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Cost of Transportation Mode, low to high |
Pipeline, water, railroad, motor, air |
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Transit time, low to high |
Air, motor, railroad, water |
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Accessibility, low to high |
Water, air, railroad, motor |
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Carrier selection determinants |
Price, Transit time, reliability, capability, accessibility, security |
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Bill of Lading |
Legal document between the shipper and carrier detailing various aspects of the transportation |
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Freight Bill |
Carrier's invoice for charges for a given shipment Credit terms are stipulated by the carrier and can vary extensively Credit may be denied if the charges are worth more than the freight |
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Carrier Reduction Strategy |
Reducing # of carriers a shipper uses to help improve relationships, management, and costs has some risk |
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Transportation Regulation and Deregulation |
Deregulation of freight transportation in 80s let to market freedom in pricing, open markets, and long term contracts Major exceptions of deregulation: Pipeline, rail |
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Foreign Trade Zones |
Goods enter without customs, can be stored indefinitely or reexported. If the final product is exported out of the country, no domestic duty/tax need to be paid. If the final product is imported into the country, duties and taxes paid only with the goods leave the FTZ. |