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ISU SCM 301 - Exam 2 Study Guide
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SCM 301 1st Edition Exam # 2 Study GuideI. Operations Planninga. Firms determine how much product to produce or service will be used in a given time period.b. Operations managers continuously involved in balancing output and capacityc. Two types of planning: materials plans & capacity plansII. Capacity Planninga. Resource Requirements Planning (RRP), Long range (1+ year), product groupsb. Rough Cut Capacity Planning (RCCP), medium range (6-28 months), end itemsc. Capacity requirements Planning (CRP), short range (weeks), components/subassembliesIII. Materials Planninga. Aggregate Production Planning (APP), long range, connected to RRP and forecasting and demand managementb. Master Production Scheduling (MPS), medium range, connected to rough-cut capacity planningc. Material Requirements Planning (MRP), short range, connected to capacity requirements planning, bill of material and inventory status, production activity control (daily), and purchase planning and controlIV. Aggregate Planninga. Goal: Specify optimal combination of production rate, workforce level, and inventory on handb. Product group/broad category= family (aggregation)V. Aggregate Scheduling Goalsa. Meet demandb. Use capacity efficientlyc. Meet inventory policyd. Minimize cost (labor, inventory, etc.)VI. Required inputs to production planning systema. External:i. Competitor behaviorii. External capacityiii. Raw material availabilityiv. Market demandv. Economic conditionsb. Internali. Current physical capacityii. Current workforceiii. Inventory levelsiv. Activities required for productionThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.VII. Strategies to meet demanda. Chase: match production to customer order rate by hiring/firing employees, works well for made to order manufacturing firmsb. Level: stable workforce and constant output with inventory backlogs, suited for firms who require highly skilled laborc. Combination: stable workforce with variable hours, vary output through overtime or flexible schedules, most widely usedVIII. Reportsa. Primary= planned order schedules for inventory and production controlb. Secondary= exception reports, planning reports, performance control reportsIX. Material Requirements Planninga. MRP= logic for determining the number or parts, components, and materials needed for a productb. Provides time scheduling info detailing when the parts should be producedc. Drived by dependent demandX. Inputs for MRPa. Master Production Scheduleb. Inventory Recordsc. Bill of material (list of components and quantities)d. Creates structure treesXI. Manufacturing Resource Planning (MRP II)a. Goal: plan and monitor all resources of a manufacturing firm (closed loop)XII. ERP Systemsa. Enterprise Resource Planningb. Advantages:i. Added visibility to reduce inventoryii. Helps standardize manufacturing processesiii. Measures performance c. Disadvantages: i. Substantial time and capital invenstmentii. Complexityiii. Firms adapt processes to meet ERP systemXIII. Inventorya. Stock of any item or resource used in an organizationb. Four broad categoriesi. Finished goods,ii. Raw materialsiii. Work in progressiv. Maintenance, repair and operatingc. Functionsi. Buffer uncertainty in marketplace, satisfy demand (independent)ii. Decouple dependencies in supply chain, meet dependent demandXIV. Inventory accuracy: how well inventory records agree with physical countXV. Cycle counting: physical inventory taking technique where inventory is counted on frequent basisXVI. Managing inventorya. How much to order= EOQ and price break modelb. What inventory level to maintain= reorder point and safety stockc. When orders should be placed= periodic review and continuous reviewd. How much effort into planning= ABC inventory analysis, inventory turnover analysisXVII. EOQa. Used for independent demand, how much to orderb. Objective is to find Q (quantity) that minimizes total cost of inventoryc. Calculated separately for each SKUd. Widely used and works welle. Assumptions:i. Demand known and constantii. Order lead time “ “iii. Full replenishmentiv. Price constantv. Order cost constantvi. No stockoutsvii. No limits on capital availabilityXVIII. Reorder Pointa. Average daily demand x lead timeXIX. Uncertaintya. Normal conditionb. Lead times often varyc. Re-order point becomes average demand plus safety stockXX. Safety Stocka. On average not consumedb. Average inventory= Q/2 + safety stockc. Affects TAICXXI. Review systems of order placementa. Continuous (Q)i. Fixed order quantity modelii. Event triggerediii. Allows for random demandiv. Stock position monitored continuouslyb. Periodic (P)i. Fixed time period modelii. Time triggerediii. Assume demand is randomiv. Order to target level and specified timeXXII. ABC Inventory Analysisa. Determine annual $ usageb. Rank items according to annual $ usageXXIII. Inventory Investmenta. Firms should diligently measure inventory investment to make sure it does not adverselyaffect competitivenessb. Use inventory turnover ratio (cost of revenue/average


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ISU SCM 301 - Exam 2 Study Guide

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