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True or False: Cycle stock can occur at more than one point in a supply chain.
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True or False: The safety stock level increases as the service level falls.
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BA 302 - Exam 2
Stack #94513
| Question | Answer |
|---|---|
| True or False: Cycle stock can occur at more than one point in a supply chain. | TRUE |
| True or False: The safety stock level increases as the service level falls. | FALSE |
| True or false: Inspecting for quality does not add any value to the product and is a waste | TRUE |
| True or False: Material requirements planning is performed over a shorter time frame and greater level of detail than master scheduling. | TRUE |
| True or False: The just-in-time philosophy applies only to the production floor of a manufacturing company. | FALSE |
| inventory | those stocks or items used to support production supporting activities and customer service |
| Cycle Stock | components or products that are received in bulk by a downstream partner gradually used up and then replenished again in bulk by the upsteream partner |
| Safety Stock | extra inventory that companies hold to protect themselves against uncertainties in either demand or replenishment time |
| Anticipation inventory | inventory that is held in anticipation of customer demand |
| Hedge Inventory | a form of inventory buildup to buffer against some event that may not happen |
| Transportation inventory | inventory that is moving from one link in the supply chain to another |
| smoothing inventories | inventories used to smooth out differences between upstream production levels and downstream demand |
| Inventory Drives | business conditiions that force companies to hold inventory |
| Uncertainty Driver | Impacts safety stock and hedge inventory |
| Mismatch: downstream partner's demand and most effecient production | impact: cycle stock |
| Mismatch Driver: downstream demand and upstream porudction capacity | Impact: smoothing inventory |
| Mismatch Driver: Timing of cust. demand and supply chain lead times | Impact: anticipation inventory and transportation inventory |
| supply uncertainty | the risk of interuptions in the flow of components from upstream suppliers |
| demand uncertainty | the risk of significant and unpredictable fluctuations in downstream demand |
| independent demand inventory | Inventory items with demand levels that are beyond an organizations complete control |
| dependent demand inventory | inventory items whose demand levels are tied directly to the production of another item |
| Periodic Review System | inventory system used to manage independent demand inventory. the inventory leve for an item is checked at regular intervals and restocked to some predetermined level |
| Service Level | term used to indicate the amount of demand to be met under conditions of demand and supply uncertainty |
| continuous review system | an inventory system used to manage independent demand inventory. the inventory level for an item is constantly monitored and when the reorder point is reached an order is released. |
| Economic Order Quantity (EOQ) | the order quantity that minimizes annual holding and ordering costs for an item |
| Single period inventory system | a system used when demand occurs in only a single point in time |
| target service level | for a single period inventory system, the service level at which the expected cost of a shortage equals the expected cost of having excess units |
| target stocking point | for a single period inventory system, the stocking point at which the expected cost of a shortage equals the expected cost of having excess units |
| bullwhip effect | an extreme change in the supply position upstream in a supply chain generated by a small change in demand downstream in the supply chain. |
| inventory policy | a policy that indicates how much and when to order for an independent demand item |
| planning and control | a set of tactical and execution-level business activities that includes master scheduling material requirements planning and some form of production activity control and vendor order management |
| master scheduling` | a detailed planning process that tracks production output and matches this output to actual customer needs |
| forecasted demand | in the context of master scheduling, the company's best estimate of the demand in any period |
| booked orders | in the contect of master scheduling, confirmed demand for products. |
| master production schedule | the amount of product that will be finished and available for sale at the beginning of each week. The MPS drives more detailed planning activities, such as material requirements planning |
| Available to Promise (ATP) | a field in the master schedule record that indicates the number of units that are available for sale each week, given those that have already been promised to customers. |
| Planning Horizon | the amount of time the master schedule record or MRP record extends into the future. in general, the longer the production and supplier lead times are, the longer the planning horizon must be. |
| Rough-Cut Capacity Planning | a capacity planning technique that uses the master production schedule to monitor key resource requirements |
| Material Requirements Planning (MRP) | A planning process that translates the master production schedule into planned orders for the actual parts and components needed to produce the master schedule items |
| Dependent Demand Inventory | Inventory items whose demand levels are tied directly to the production of another item |
| Bill of material (BOM) | a listing of all subassemblies intermediates parts and raw materials that go into a parent assembly showing the quantity of each required to make an assembly |
| Product Structure Tree | A record or graphical rendering that shows how the components in the BOM are put together to make the level 0 item |
| Planning lead time | Within the context of MRP, the time from when a component is ordered until it arrives and is ready to use |
| Exploding the BOM | the process by which one works backwards from the master production schedule for a Level 0 item to determine the quantity and timing of orders for the various subassemblies and components. Exploding the BOM is the underlying logic used by MRP |
| Scheduled Receipts | Items already on order |
| Planned receipts | New Orders |
| Parent/ Child relationship | refers to the logical linkage between higher and lower level items in the BOM |
| MRP Nervousness | A term used to refer to the observation that any change, even a small one, in the requirements for items at the top of the bill of material can have drastic effects on items futher down the bill of material. |
| job sequencing rules | rules used to determine the order in which jobs should be processed when resources are limited and multiple jobs are waiting to be done. |
| Distribution Requrirements Planning (DRP) | a time-phased planning approach similar to MRP that uses planned orders at the point of demand to determine forecasted demand at the source level. |
| Just-In-Time (JIT) or Lean Production | A philosophy of manufacturing based on planned elimination of all waste and on continuous improvement of productivity. In a broad sense, it applies to all forms of manufacturing and to many service industries as well. |
| Waste | according to the JIT perspective, any activity that does not add value to the good or dervice in the eyes of the consumer |
| Muda | A japanese term meaning waste |
| Kanban System | a production control appraoch that uses containers, cards, or visual cues to control the production and movement of goods through the supply chain |
| Two-card Kanban System | a special form of the kanban system that uses one card to control production and another card to control the movement of materials |
| Move Card | a kanban card that is used to indicate when a container of parts should be moved to the next process step |
| Production card | a kanban card that is used to indicate when another container of parts should be produced |
| Pull System | a production system in which actual downstream demand sets off a chain of events that pulls material through the various process steps |
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jmm5149