Ch 6 GLEIM Part 1 Notes
| GS6.1.6 |
|The basic EOQ model includes variable costs only|
| GS6.1.8 |
|Is a pull system|
| GS6.1.13 |
What is not eliminated in a JIT System
|Statistical method for quality assurance|
| GS6.1.16 |
JIT is AKA
| GS6.2.18 M|
aterial Requirement Planning (MRP) is what kind of system?
|Centralized Push System|
| GS6.2.20 |
What are the benefits of MRP
| Reduced idle time|
Lower Setup costs
Lower inventory carrying costs
Increased flexibility in responding to market change
| GS6.2.21 |
What is a Master Production Schedule
|The manufacturing concepts that relates demands forecasts to specific dates for completion|
| GS6.3.26 |
What is truly variable in a throughput costing?
| AKA supervariable costing|
Recognize Direct Materials as truly variable
| GS6.3.27 |
What is the immediate goal of a Theory Of Constraints (TOC) analysis?
|Maximization of contribution margin through the constraint|
| GS6.3.28 |
How do you calculate the relavant margin when beginning a theory of constraints (TOC) analysis?
The Throughput margin formula
| Take the selling price minus Direct Materials. Because until TOC analysis only direct materials are truly variable in the short run.|
Throughput Margin = Sales - Direct Materials
| GS6.3.29 |
In theory of constraint (TOC) analysis, what is the constraint?
|Constraint is usually the bottleneck, and is usually the slowest part of the process. It can usually be identified as the one where WIP backs up the most.|
What is the immediate goal of a (TOC)
|Maximize contribution margin though the constraint. Also called the throughput margin or throughput contribution.|
What are the three basic measurements used by TOC?
| Throughput (or throughput contribution)|
Inventory (or investments)
How do you maximize profit when demand far exceeding the company's ability to supply the marketplace.
|Management will want to maximize its profits per unit of scarce resource. If the scarce resource is raw materials, then concentrated on contribution margin per unit of raw material. If machine hours are the constraint, then concentrate contribution margin of machine hour.|
What is Value engineering
|A systematic approach to reaching targeted cost levels during value chain analysis.|
What are the categories of product quality costs
| External failure|