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96 Cards in this Set
- Front
- Back
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What are the 3 types of inventory? |
1) Raw Materials 2) Work-in-Process 3) Finished Goods |
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What are the 3 purposes of Inventory? |
1) Smoothing Production 2) Economies of Scale 3) Protection against Uncertainty |
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TC= D/Q x S + Q/2 xH What does each Stand for? |
TC= Total Costs H= holding costs D= Demand S= Set up cost Q= order size |
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TC= D/Q x S + Q/2 xH What does each D/Q x S equal? |
annual order costs |
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TC= D/Q x S + Q/2 xH What does Q/2 x H equal? |
annual holding costs |
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TC= D/Q x S + Q/2 xH What does Q/2 equal? |
average inventory level |
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How do you find the best order size for EOQ? |
Q= Square root of ( 2 x D x S/ H) |
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How do you find how many times a year you would order under EOQ? |
D/Q |
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How do you find the length of the order cycle for EOQ? |
Q/D x 250 Business days |
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How do you find the reordering point? |
= Daily Demand x Order time |
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What is the reordering point? |
an inventory level, not a point in time |
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Why are we concerned about the reordering point? |
at this point we should place an order; it allows us to have enough inventory to satisfy demand while considering the amount of lead time it takes for the next order to come in. |
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When is comes to the sawtooth diagram for EPQ, what are the teeth split into? |
Phase 1: Production and consumption phase Phase 2: Consumption Phase |
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TC= D/Q x S + Q/2 (P-d/P) xH What does each stand for? |
TC= Total Costs D= Demand Q= production size P= Production rate S= Set up costs H= Holding Costs d= daily demand |
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TC= D/Q x S + Q/2 (P-d/P) xH What does D/ Q equal? |
times to set up production |
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TC= D/Q x S + Q/2 (P-d/P) xH What does Q/2 (P-d/P) xH equal? |
annual holding costs |
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TC= D/Q x S + Q/2 (P-d/P) xH What does Q/2 (P-d/P) equal? |
average inventory level |
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How do you find the best production quantity for EPQ? |
Square Root of (2 x D x S/ H) x Square Root of (P/p-d) |
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How do you find how much time will pass between production set ups? |
Q/D x 250 business days |
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How do you find the most inventory you'd have in EPQ? |
Q x (P-d/P) |
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How do you find the run time of the ordering policy is EPQ? How do you find how long you spend producing a single order? |
Q/P |
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How do you find the portion of time you actually produce the SKU? |
run time/ ordering cycl |
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if P>d |
you are producing faster than daily demand |
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How do you find ROP for EPQ? |
daily demand x lead time |
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Service level |
probability you have enough inventory; probability that the demand will not exceed supply during the lead time |
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Safety stock |
extra units have for uncertainty; stock held in excess of expected demand; "blanket" is sawtooth diagram on top |
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When looking at the normal distribution curve, what is the service level? |
the left side, the shaded area that included probability |
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How do you find the service level? |
z= x- mean/ standard deviation look on z chart for probability |
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Aggregate Planning |
devising a strategy to meet changing demands on the system; medium-term capacity planning (less than 1 year); for companies that only produce 1 product |
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How do you find ending inventory in aggregate planning |
= Beginning Inventory + Production - Demand |
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What are the 3 inputs of MRP? |
1) Bill of Materials 2) Master Production Schedule 3) Current Inventory REcords |
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Bill of Materials |
how you build you materials; dependent demand |
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Finished Good? A) Has no parent B) Has no children |
A
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Raw Materials? A) Has no parent B) Has no children |
B |
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How is MPS different from the aggregate plan? |
MPS results from aggregate planning |
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Myopic |
not enough time to respond to problem; short planning horizon |
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Freezing |
MPS policy where there is no changes after finalized |
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Nervous |
a technique where you change and things change the entire plan; very sensitive |
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What are the advantages of MRP? |
versatility |
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What are the disadvantages of MRP? |
1) Nervous technique 2) Bling to capacity constraints |
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Kanban Card |
permission to produce; never leaves producing work center |
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If there are more kanban cards in a system what does that mean? |
1) more inventory 2) more holding costs |
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If there are less cards in kanban cards in a system what does that mean |
1) Less inventory 2) high risk of stock out |
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How do you find the number of Kanban cards in a system? |
N= D x T x (1+X)/ C |
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N= D x T x (1+X)/ C What does everything stand for? |
D= usage rate of consuming center T= lead time C= Container size X= policy variable (always between 0 and 1) |
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N= D x T x (1+X)/ C What is the safety stock? |
1+ X |
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N= D x T x (1-X)/ C Which part tells you how many cards you need in your system? |
D x T/ C |
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How do you make your system leaner? |
if you can reduce ordering costs |
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Allegory of Lake: What does the boat symbolize? |
production system |
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Allegory of Lake: What does water level symbolize? |
inventory level |
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Allegory of Lake: What do the rocks symbolize? |
source of uncertainty in system; problems |
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What are some things that you should do in the allegory of the lake? |
1) reduce water level 2) hit big rocks 1st which are biggest problem, deal with right away to solve |
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What does JIT run well with? |
level production |
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What does JIT deal with? |
only WIP and raw materials |
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What are the 5 general principals of JIT? |
1) Reduce lot size and ordering costs 2) No more safety stock 3) Smooth production 4) Improve material handling and facility layout 5) Reduce the number of outside vendors you deal with |
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When is planning called scheduling and scheduling called planning? |
when you have a longer-term planning you call it planning, when you have shorter-term planning you call it scheduling |
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Flowtime |
length of time job stays in the system |
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How do you find the flow time? |
add up the duration of each job |
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Tardiness |
due date - flow time of job |
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What does the rule of shortest processing time do? |
tends to minimize flow time |
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Critical ratio |
= time remaining/ work remaining = due date/ duration |
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When the critical ratio is greater than 1 what does that mean? |
you have enough time |
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When the critical ratio is between 0 and 1 what does that mean? |
it is not late yet, but will be when finished |
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When the critical ratio is less than 0 what does that mean? |
the job is already late |
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What does the rule of earliest due date do? |
tends to minimize tadiness |
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What does Johnson's Rule do? |
minimize makespan |
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Makespan |
how long it takes you to finish every job |
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How do you apply Johnson's Rule? |
Select the job with the shortest time in any work center. If that time refers to the first work center, schedule that job first. If that job refers to the second work center schedule that job last. Repeat until all jobs are scheduled |
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Old definition of quality |
conformance to specification |
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Newer definition of quality |
ability of product or service to meet or exceed customer specification = customer perception - customer expectation |
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What are sources of lower customer perception? |
1) facility is messy 2) service is bad/rude 3) instruction is not clear |
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What are sources of higher customer expectation? |
1) previous experience 2) Price 3) advertising 4) New product |
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What is a tool that helps inspect raw materials and finished goods? |
acceptance sampling |
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what is a tool that helps inspect WIP? |
control chart |
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SPC |
statistical process control |
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If a company use traditional Approach what do they do? |
1) Heavily rely on inspection; hire full time inspectors 2) Believe there is an ideal amount of inspection (based on economies argument) |
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Type II error |
you think something is right but is wrong (customer risk) |
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Type I error |
think something is wrong but it is right |
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What are the 5 TQM elements? |
1) everyone is a quality control inspector 2) The customer defines quality 3) Fix problems at their source 4) Involve suppliers in quality control program 5) The commitment of top management |
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Poka Yoke |
mistak proofing; trying to make desired outcome inevitable in system |
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What is TQM?
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continuous improvement; never stop checking quality |
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What does a Fishbone diagram help with? |
fixing problems at their source |
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Random variation |
is natural variation from the process of manufacturing; cannot be avoided, based on normal distribution |
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Assignable Variation |
a variation which can be traced back to a specific source |
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Where does natural variation lie on a control chart? |
between the upper a lower control limit |
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Where does assignable variation lie on a control chart? |
outside |
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If something is truly random what should you see? |
you should not see a pattern. |
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What is type 1 error related to? |
producers eros |
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What is type 2 error related to |
customer risk |
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When should you use a smaller z value for control charts? |
when you are picky, creates a smaller control area |
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When should you use a larger z value for control charts? |
if you are not picky; larger control area |
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If you know the probability of what you want the control chart to be what do you do to find the upper and lower limits? |
take the probability and divide by 2. Then find on the Z chart |
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If you know the percentage of type 1 error you allow what do you do to find the upper and lower limits?
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Divide that percentage in half. Take the result and subtract from 0.5. Then find on z chart |
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How do you find the probability of a type 1 error with a control chart? |
1- prob. of within control limits |
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What is sample range? |
difference between smallest one and largest one in sample |
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When using P charts how do you find the proportion? |
take the number of the sample/ sample size |
