What is the major advantage of Water transportation
cheap and bulk loads
What is the major advantage of air transportation
What is the major advantage of Railroad transportation
cheap and heavy loads
What is the major advantage of truck transportation
What are some types of trade restrictions
Tariffs -- fees for importing goods;
Subsidies -- government aid to make a particular country's goods cheaper in the market ;
What are the major types of time-series methods of forecasting
Moving average, weighted moving average, exponential smoothing, linear trend
line straight up or down
long term symmetric up-and-down
repeating pattern that may not be symmetrical when comparing upswings to downswings
MAD, MAPD, and bias
Ways of measuring forecast error
Once a forecaster finds a mathematical model to fit some data, what must be done next?
See how well the model fits the data by calculating error or other evaluation techniques; continuous monitoring for accuracy
What are some ways to handle variation in demand in order to match supply to demand?
Inventory, hiring/firing, part-time, temporary workers, backordering, subcontracting, high levels of resources, overtime/undertime
What does aggregate planning do?
Matches supply to demand by setting production rates, inventory strategy, and staffing strategy
building in anticipation of growth
waiting for documented growth before adding capacity
building somewhere between existing need and anticipated growth.
What are two pure aggregate planning strategies. List a way of following a mixed aggregate planning strategy.
Level workforce and chase demand. These can be mixed with subcontracting, for example.
high inventory change, but steady workforce
high workforce level change, but steady or no inventory.
How can companies change demand to minimize fluctuations?
Creating incentives through sales promotions, price differentials, etc.
Carrying costs examples
Finance charges, rent, taxes, utilities, etc.
Ordering costs examples
Purchasing administration, transportation, receiving, etc.
Order the same amount when the reorder point (number of units) falls to a low level.
Check inventory levels at a fixed time interval. Order an amount equal to the difference between the desired level and existing levels.
the number of units left in stock when a new order must be placed; equal to demand during lead time.
the amount of stock added to the reorder point to cover the fact that demand is not consistent every day of the lead time.
the probability that inventory on hand during the lead time is sufficient to meet expected demand.
For the optimal economic order quantity of inventory items, what is the relationship between ordering cost and carrying cost?
Ordering cost equals carrying cost. If they are not equal, the quantity should be adjusted to bring them closer together.
final products demanded by customers
component items determined by independent demand end-items
What is meant by the ABC inventory classification system? Which items are worth the most dollar value? Which items are the greatest amount by count?
In ABC inventory classifications, A items are a small number, but represent the largest dollar value. C items are the largest number of items by count, but represent a small dollar value.
How is safety stock calculated? Does it change the economic order quantity?
Safety stock is calculated from the desired service level during lead time. It is an amount added to the reorder point calculation. It does not affect the EOQ, only the point at which a new order is placed.
the amount of production an organization is capable of making
a measure of how well a worker performs relative to some standard
the actual amount of time available for work after accounting for breaks, maintenance, etc.
How can be overloading be relieved?
Eliminate unnecessary requirements, reroute jobs to alternative machines or work centers, split lots between two or more machines, increase normal capacity, subcontract, increase the efficiency of the operation, push work back to later time periods, revise master schedule
What drives the MRP system most immediately? What are some MRP outputs?
MRP is driven by the master production schedule, which is derived from the forecast and aggregate plan.
Outputs: work orders, purchase orders, and rescheduling notices