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49 Cards in this Set
- Front
- Back
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Capacity -
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The capability of a worker,machine, work center, plant or organization to produce output per time period
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Theoretical Capacity
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The maximum output capability, allowing for no adjustments for preventive maintenance or unplanned downtime
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Rated Capacity
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The long-term, expected output capability of a resource or system
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Lead Capacity Strategy
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A capacity strategy in which capacity is added in anticipation of (before) demand
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Plans for adequate capacity to meetdemand, even with high growth; Preemptcompetitors; can be cheaper and less disruptive |
Lead Capacity Strategy Advantages
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Demand is unpredictable (demand maynever materialize); technology is evolving rapidly (your product or service becomes obsolete soon after building the capacity) |
Lead Capacity Strategy Disadvantages
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Lag Capacity Strategy
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A capacity strategy in which capacity is added only after demand has materialized – typically a good strategy for mature, cost sensitive products and services
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Reduced risk of overbuilding; greater productivity due to higher utilization levels; ability to put off large investments |
Lag Capacity Strategy advantages
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Reduced availability of products or services during periods of high demand |
Lag Capacity Strategydisadvantages
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Fixed Cost
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Expenses an organization incurs regardless of the level of business activity. Examples: office building, equipment, monthly software costs for SAP or Oracle, etc.
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Variable Cost (VC)
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Expenses directly tied to the level of business activity. Examples: fabric cost for a pair of jeans, labor for assembling a computer, etc. cost
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Expected Value Definition:
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A calculation that summarizes the expected costs, revenues, or profits of a capacity alternative based on several demand levels, each of which has a different probability
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Theory of Constraints
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An approach to visualizing and managing capacity that recognizes that nearly all products and services are created through a series of linked processes, and in everycase, there is at least one process step that limits throughput for the entire chain.
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Waiting Line Theory
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A body of theory based on applied statistics that helps managersevaluate the relationship between capacity decisions and important performance issues as waiting times and line lengths.
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learning curves
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For every doubling of cumulative output, there is a set percentage reduction in the amount of inputs required
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Waiting time _______ value-added for the customer
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Decreases |
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On the other hand, adding capacity _______ costs for the operator
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INCREASES |
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Businesses must have a way to ___________________________ in environments where waiting occurs
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analyze the impact of capacity decisions |
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The lower the percentage,
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the steeper the learning curve |
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Forecast
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An estimate of the future level of some variable.
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Forecast Laws Law 1
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– Forecasts are almost always wrong
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Forecast Law 2 |
– Forecasts for the near term tend to be more accurate
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Forecast Law 3 – |
Forecasts for groups of products or services tend to be more accurate
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Forecast Law 4 |
- Forecasts are no substitute for calculated values
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Qualitative Methods
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Used when situtation is vague and little data exists
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Market Surveys –
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Structured questionnaires |
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Panel Consensus –
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Joint discussion by experts |
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Delphi –
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Experts working individually, then shared among group and repeated until consensus is reached |
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Life Cycle Analogy –
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Identify demand levels for 4 stages of life cycle – use demand of similar products to model new product demand |
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Build-up –
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Individual markets forecasts aggregated |
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Quantitative Methods
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used when situation is 'stable' and historical data exists
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Chronoligical Order, Randomness
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2 quantitative methods |
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insourcing Advantages
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High degree of control - Ability to oversee the entire program - economies of scales and or scope
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insourcing Disadvantages
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required strategic felxiblilty - required high investment - loss of access to superior products and services offered by potential suppliers
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outsourcing advantages
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high strategic flexibility- low investment risk- improved cash flow- access to state of the art products and services
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outsourcing Disadvantages
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possibility of choosing a bad supplier- loss of control over the process and core technologies - communication and coordination challenges - hollowing out of the coporation
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In general, the _____ the supply base, the ____ attractive outsourcing becomes
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stronger, more |
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In general, the better the ability to monitor the supply base, the more attractive outsourcing becomes
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In general, the ______ the potential for a competitive edge, the ____ attractive outsourcing becomes
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higher, less |
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PORTFOLIO ANALYSIS
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complexity
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Logistics
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Planning, implementing, and controlling the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customer’s requirements
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Major Transportation Modes
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Highway, Water, Rail, Air and Pipeline
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Cross docking
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Large economical shipments in - small shipments out (multiple shipments in)
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Break - bulk
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Like cross-docking, but usually refers to a single source
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Postponement
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ex: shpping coke as a syrup to maximize profit
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Spot Stock
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Time sensitive, seasonal items Often temporary, public storage
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Reverse logistics systems
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customer returns, repair and remanufacture process support, recycling
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Material Handling systems
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equipment and procedures to move goods within and between facilities and between transportaion modes
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packaging
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the way goods and materials are packed in order to facilitate physical, informational and monetary flows through the supply chain
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