OPMT 303: FINAL EXAM
92 Cards in this Set
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What is operations
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-the part of a business organization that is responsible for producing goods or services
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Definition of productivity
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-a measure of the effective use of resources, usually expressed as the ratio of output to input.
-tracking an operating units performance over tme
-judging the performance of an entire industry or country
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Competitive priorities
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-how effectively an org meets the wants and needs of customers relative to others that offers that offer similar goods or services
-organizations compete through some combination of their marketing and operations function
-what do they want and how can they be satisfied
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Competitive Priorities
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-on time delivery
-location
-flexibility
-variety
-quality
-quick response
-design (product and service)
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Definition of capacity
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-the upper limit of ceiling on the load that an operating unit can handle. (equipment,space,employee)
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Importance of capacity deciisons
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-Impacts an organization's ability to meet future demands
-Affects operating costs
-Major determinant of initial costs
-Involves long-term commitment
-Affects competitiveness
-Affects ease of management
-Globalization adds complexity
-planning in advance due to their consumption of…
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Economies of scale
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if the output rate is less than the optimal level, increasing output rate results in decreasing average unit costs
-until reach equilibrium
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Diseconomies of scale
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if the output rate is more than the optimal level, increasing the output rate results in increasing average unit costs
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What is a process
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-a description of the input transformation output sequence.
-a series of goal oriented activities that state the purpose to accomplish a job or service
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Job shop (process layout)
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-layout that can handle varied processing requirements and is flexible
-produce a variety of product in small numbers
-high cost per unit, difficult cost estimation, low fixed cost, high variable costs, high skill, complex scheduling -GPe
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batch
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-producing things in large numbers, but not a line
-somewhat routine, moderate cost per unit moderate variable fixed and labor cost,
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line
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-layout that uses standardized processing operations to achieve smooth, rapid, high volume flow.
-lo unit cost, low flexibility, high output
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Cost of Quality
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-failure cost: costs incurred by defective parts/product or faulty services
-internal cost: cost incurred to fix problems that are detected before sale
-external cost: all cost incurred to fix problmes that are detected after the product/service is delivered
-prevention cost: all TQ Tr…
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Tools of quality management
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-check list
-cause and effect
-pareto analysis
-control and run chart
-5S and 5W2H
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P-chart
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-is used to monitor the proportion of defectives in a process. When observations can be placed into two categories.
-good, bad pass, fail
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aggregate planning
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-intermediate-rang capacity planning that typically covers a time horizon of 2 to 18 months
-useful for organizations that experience seasonal, other variations in demand
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Aggregate planning inputs
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-resources: work force, facilities
-Policy statements: subcontracting, OT, inventory levels, back orders
-Costs: inventory carrying, back orders, hiring/firing, ot, inventory changes, subcontracting
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Aggregate planning outputs
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-total cost of a plan
-projected levels of : inv,ouput, ot, employment, backordering
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Managerial importance of aggregate planning
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-demand , you schedule your production, then resources (materials, labor, OT, etc), output is a cost model (budget)
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Level capacity strategy
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-maintaining a steady rate of regular time output while meeting variations in demand by combination of options (line processing)
-Adv: stable output rates and workforce
-dis:greater inv cost, increase overtime, utilization vary
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chase strategy
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-matching capacity to demand period by period, the planned output for a period is set at the expected demand for that period
-Adv: investment in inv is low, labor is high
-Dis: the cost of adjusting output rates or workforce levels
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Master Production Scedule
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-the result of disaggregating an aggregate plan shows quantity and timing of specific end items for a scheduled horizon
-Inputs: beginning inv, forecast, customer orders
-Output: projected inv, mps, uncommitted inv
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Independent demand
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-the demand for final products
-has a demand pattern affected by trends, seasonal patters, and general market conditions
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dependent demand
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-describes the internal demand for parts based o the demand of the final product in which the parts are used
-sub-assemblies, components, and raw materials are examples of dependent demand items.
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Material Requirements Planning
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- a computer based system that develops a plan for ordering and producing dependent demand items
-2 principles : parent, offset lead time
-INPUT:master schedule, BOM, Inventory records
-OUTPUT; changes order release planned order, exception planning, performance, inventory transaction,…
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Lot-Sizing Rule (static)
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-Maintain same order quantity each time an order is issued
-Economic order quantity rule (EOQ) or fixed order quantity (FOQ)
-Quantity discounts, truckload capacity, or minimum purchase quantity
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Lot size Dynamic
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- Each order large enough to prevent shortages (falling below the desired safety stock)—but no larger—over a specified number of weeks
- Fixed-period ordering rule: Restores safety stock and exactly covers P weeks' worth of gross requirements
Lot for lot (L4L) rule: Special case of PO…
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Lot Size comparison
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-The EOQ (FOQ) rule generates high average inventory because it creates remnants.
-The Fixed-period ordering rule (FPO) reduces average on-hand inventory because it does a better job of matching order quantity to requirements.
-The L4L rule minimizes inventory investment but maximizes…
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Capacity Requirements planning
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the process of determining short range capacity requirements
-Load Reports: report form the department of work center that compares the known and expected future capacity requirements with projected capacity availability
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Manufacturing resource planning
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-a system that links the basic MRP system to other company systems, including finance, accounting, purchasing, and logistics
-MRPII expanded MRP with and emphasis placed on integration
(Financial planning
Marketing
Engineering
Purchasing
Manufacturing)
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Action Notice
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-indicates management by exception approach
-action notice indicates the need to release a new order or adjust the due date of a schedule receipts.
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Release new order
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if a planned order release is in the first week entry "action bucket"
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Arriving too early
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-when arriving to early and enough to cover safety stock
-LATE: not enough to cover safety stock
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rough cut capacity planning
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-validation process
-estimate how much capacity you need to produce a product. book. ---approximate balancing of capacity and demand to test the feasibility of a master schedule
-involves checking the capacities of production and warehouse facilities, labor, and vendors to ensure no gro…
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MRP in service
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example in book (hospital)
-knowing how much of something to order for the guest.BOM.
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Enterprise Resource Planning (ERP):
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a large, integrated information system that supports most enterprise processes and data storage needs across the entire organization
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Radio Frequency Identification (RFID):
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an automatic identification method that relies on storing and remotely retrieving data using devices such as RFID tags or transponders
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Vendor-managed inventory (VMI):
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vendors monitor sales at the retailer and replenish inventories when supplies are low
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Electronic data interchange (EDI):
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a technology that allows companies to exchange orders, forecasts, and invoices electronically without human intervention to enter data into the receiving system
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Economic order quantity
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the order quantity that min the total annual cost of ordering and holding inventory for a particular item
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Reasons to hold more inventory
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-setup/ordering cost
-gain quantity discount
-gain total truck load benefits
-increase labor and equipment utilization
-improve customer services
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Reasons to hold less inventory
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-reduce shrinkage and spoilage
-reduce taxes and insurance
-reduce storage and materials handling cost
-reduce opportunity cost
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ABC Analysis
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A: small volume expensive items (important)
B: in between
C: large volume not expensive
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How much should we order
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order Q(quantity)
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when should the order be placed
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when Q is zero
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EOQ list
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-only one product is involved
-annual demand requirements are known
-demand is even throughout the year
-each order is received in a single delivery
-there are no quantity discount
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Reorder point system
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when the quantity on hand of an item drops to the reorder point, the item is reordered
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fixed order interval
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-orders are placed at fixed time intervals
-order quantity for next interval
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Material requirements planning
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a computer based system that develops plans for ordering and producing demand items
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Joe Orlicky
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-wrote the first book on MRP
-developed MRP system at IBM
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What did Ollie Wright say about MRP
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MRP is critical because 70% of all stock carried is of the MRP demand type, which is not regular, continuous and independent
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Parent
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any product that is manufactured from one or more components
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Component
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an item that goes through one or more operations to be transformed into or become part of one or more parents
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MRP Inputs
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-Master schedule
-Bill of Materials
-Inventory records
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MRP Processing
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MRP computer programs
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Master schedule
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states which end item are to be produced, when these are needed, and in what quantities
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MRP Outputs
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-Changes (revision of dates, due or cancel)
-order releases (authorization for the execution of planned orders)
-planned order schedules
-exception reports(2)
-planning reports (2)
-performance control reports(2)
-Inventory tranaction
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Bill of Materials
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a listing of all of the raw material, parts, subassemblies, and assemblies needed to produce one unit of a product. Visual depiction of the requirements in a bill of materials, where all components are listed by levels.
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Inventory records
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on hand inventory, scheduled receipts, lot sizing rules.
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Inventory cost
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-holding: cost to carry an item in inventory for a length of time, usually a year
-Ordering cost: cost of ordering and receiving invt
total cost: total
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Other inventory control models
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News "boy" vendor problem: knowing how much to oder to know how much to sell. having enough on hand
two bin system : containers of inventory, reorder when the first is empty
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Pull systems
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-the item is pulled as needed fromwork station to workstation
-the manufactures don't do final assembly until order. waiting for customers to trigger production
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Push systme
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work is pushed to the next station as it is completed
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Block of JIT
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-workers as assets
-cross trained workers
-continuous improvements (kaizen)
-leadershi/project management
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Kamban systems
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-signal, "card" or visible record in japan. and refers to the cards used to control the flow of production through a factory
-p-need to produce parts
-c-needs to deliver parts
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JIT benefits
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-greater productivity
-higher quality
-less storage space
-product flexibility
-... slides
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small jit
JIT
JIT 2
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-a newer focus, schedule of materials and services (operational)
-HR, broader focus, technology, management, higher level (organizational level)
-Can be considered an excellent example of vendor management inventory, long customer-supplier relationship (inter organization... )
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supply chain
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the sequence of organization, their facilities, function and activities. that are involved in producing and delivering a product or service
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The Bullwhip Effect
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What is the causes of Bullwhip?
the artificial distortion of consumer demand figures as they are transmitted back to the suppliers from the retailer
What is the impact of Bullwhip?
overproduction, too much inventory at one time, or too little inventory at another time
What strategies …
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supply chain management
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is a set of synchronized decisions and activities utilized to efficiently integrate supplies, manufacturers, warehouse, transporters, retailers,and customers to the right location, price, condition...
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benefits of effective supply chain management
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-Lower inventories
-Higher productivity
-Greater agility
-Shorter lead times
-Higher profits
-Greater customer loyalty
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gatekeeping
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screening returned goods to prevent incorrect acceptance of goods
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avoidance
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finding ways to minimize the number of items that are returned
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collaborative planning , forecasting and replensihment
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-focuses on information sharing among trading partners
-forecasts can be frozen and then converted into shipping plan
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Purchasing
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-is responsible for obtaining the materials, parts, and supplies and services needed to produce a product or provide a service.
-The goal of purchasing is to develop and implement purchasing plans for products and services that support operations strategies.
-Increasing outsourcing
Inc…
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duties of purchasing
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-identifying sources of supply
-negotiation contracts
-maintaining a database of suppliers
-obtaining goods and services
-managing supplies
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Centralized vs. Decentralized Purchasing
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-Centralized purchasing
Purchasing is handled by one special department
-Decentralized purchasing
Individual departments or separate locations handle their own purchasing requirements
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Supplier Partnerships
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Reduce cost of making the purchase
Reduce transportation costs
Reduce production costs
Improve product quality
Improve product design
Reduce time to market
Improve customer satisfaction
Reduce inventory costs
Introduce new products or services
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purchasing cycle
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-requisition received, supplier selected, order is placed, monitor orders, receiveorders
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Supply chain Operations reference model (SCOR)
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Reliability: on time,order ful lead time, fill rate
flexibility: supply chain response, upside production flex
Expense: supply chain management cost, warranty cost, value added per employee
Assets: total inventory days of supply, cash to cash cycle, net assets turns
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scheduling
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-establishing the time of the use of equipment, facilities and human activities in an organization
-can yield cost saving, increase in productivity
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Priority rule
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-first come first served
-earliest due date
-shortest processing time
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Critical Ratio
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(formula)
due date - todays date / total time remaing
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johnsons rule
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a technique for minimizing completion time for a group of jobs to be processed on 2 machines or at 2 work centers
-min total idle time
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economic production quantity
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intermediate level...
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makespan
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total processing time needed to complete a group of jobs from the beginning of the first job to the completion of the last job.
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flow time
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- the length of time a job spends in a particular workstation.
-It begins when a job arrives at a shop and ends when it leaves the shop;
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service scheduling
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-Scheduling customers: Demand Management
-Appointment systems
Controls customer arrivals for service
-Reservation systems
Estimates demand for service
-Scheduling the workforce: Capacity Management
-Cyclical Scheduling
Employees are assigned to work shifts or time slots, and have d…
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theory of constraints
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-an approach to scheduling developed by Eli Goldratt
-schedule to min bottlenecking
-process batch: lot size of job
-transfer batch: The portion of the basic lot that could be used during production to facilitate utilization of bottleneck operations
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MM1 Model
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-A denote the probability distribution for the arrivals
-B denote the probability distribution for the service time
-k denote the number of channels
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Littles Law
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-For a stable system the average number of customers in line is equal to the average customer arrival rate multiplied by the average time in the line. (lq)
-For a stable system the average number of customers in the system is equal to the average customer arrival rate multiplied by the a…
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Scheduling job shop
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-Average flow time: cumulative flow time / number of jobs
-DL: total late /number of jobs
-Average total inventory: sum of time in the system/makespan
-Average days early: total days early / # jobs
Average days late: total days late / # job
54 6 = 9 days
-Average WIP inventory: cum…
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OPMT 303: Scheduling