Supply Chain Management- Quiz 3
order costs/ set-up costs
direct variable costs for making an order
1. economic order quantity model 2. economic manufacturing quantity model
fixed order quantity models:
independent demand
the demand for a firm's end products and has a demand pattern affected by trends, seasonal patterns, and general market conditions
service level
the in-stock probability is commonly referred to as the _____ _____
dependent demand
the internal demand for parts based on the demand of the final product in which the parts are used
reorder point (ROP)
the lowest inventory level at which a new order must be placed to avoid a stockout
seasonal inventory
when the companies choose to use spare capacity in a "slow season" in order to build up inventory for "busy season" and use it
normal distribution
when the lead time is constant while demand during the lead time is unknown, and can be specified using a ________ ________.
640; 670
demand for Fardo's private airplanes began on day _______ and stabilized by day ______
True
(True or False) RFID tags do not require direct line of sight to be read, and information on the tag is updateable
holding costs/ carrying costs components
1. cost of capital 2. handing charges 3. cost of warehousing 4. insurance 5. pilferage 6. natural shrinkage 7. taxes
order costs/ set-up costs
1. cost to prepare purchase requisition/ purchase order 2. cost of the labor required to inspect goods when they are received 3. cost to put away goods once they are received 4. costs to process the supplier invoice related to an order 5. cost to prepare and issue a payment to the supplier
1. raw materials 2. work-in-process 3. finished goods 4. maintenance, repair, and operating (MRO)
4 main categories of inventory
(s,S)
When current inventory reaches or falls below the reorder point, s, sufficient units are ordered to bring the inventory up to a pre-determined level, S.
case and pallet- level tagging
European countries use item-level tagging, whereas the U.S. uses what?
inventory is precisely known at every point in time
EOQ and ROP assume what?
(S, R)
If at the time of inventory review, a sufficient quantity is ordered to bring the inventory up to a predetermined maximum inventory level, S.
(nQ, s, R)
If at the time of inventory review, the physical inventory is equal to or less than the reorder point, s, the quantity, nQ, is ordered to bring the inventory up to the level between s and (s + Q)
(s, S, R)
If at the time of inventory review, the psychical inventory is equal to or less than the reorder point, s, a sufficient quantity is ordered to bring the inventory level up to the maximum inventory level, S.
Radio Frequency Identification
Successor to the barcode for tracking individual unit of goods.
economic order quantity model (EOQ)
a classic independent demand inventory system that provides many useful ordering decisions
inventory turnover ratio
a widely used measure to determine how efficiently a firm is using its inventory to generate revenue
1. the demand is known and constant 2. order lead time is known and constant 3. replenishment in instantaneous 4. price is constant 5. holding cost is known and constant 6. order cost is known and constant 7. stockouts are allowed
assumptions of the economic order quantity model
0; 50%
at the middle of the normal curve, where the reorder point equals the average demand, the required safety stock is ______ and the probability of a stock out is ______
Fardo and Tyran
average order quantity is about the same for Fardo's private airplanes as whose?
8 drums
average order size for Sorange's hardwood floor laminates
8 drums
average order size is about _____ for Entworpe's premium home appliances
Big Data
broadly refers to collections of data sets that are too large and complex to be processed by traditional database management tools or data processing software applications
640
demand began on day ______ for Tyran and Fardo's premium home appliances
RFID
can track returned goods through the supply chain and prevent counterfeiting
640; 670
demand for Entworpe's insulation products for commercial builders started on day ______ and was stable by day ______
1. tag 2. reader 3. communication network 4. RFID software
components of RFID
Tag
computer chip and an antenna for wireless communication
communication network
connects the readers to transmit inventory information to the enterprise information system
active tags
contain a power source (batter) to source their power
(s,Q)
continuous review policy that orders the same quantity, Q, when physical inventory reaches the reorder point, s
$100,000
cost of a new warehouse
$500,000
cost of building a factory
$50,000
cost of capacity for one drum per day
cost of goods sold
cost of revenue is the same as what?
$20,000
cost per truckload between different regions on continent
$15,000
cost per truckload within the same region
$150
cost to mail one drum within the same region
direct costs
costs directly traceable to unit produced (e.g., labor, materials)
fixed costs
costs independent of the output quantity
indirect costs
costs that cannot be traced directly to the unit produced
variable costs
costs that vary with output level
safety stock
demand and lead time are never certain and require ______ ______.
1. subassemblies 2. components 3. raw materials
examples of dependent demand items
private airplanes
fardo
(annual demand/#days in the year) * the lead time Or (daily demand * lead time
formula for ROP
(cost of revenue/ average inventory)
formula for inventory turnover ratio
ZSL*s * √𝐿
formula for safety stock
d*t + ZSL*s * √𝐿
formula for statistical reorder point
SQRT ([2DS]/H) OR SQRT ([2DS]/kC)
formula for the EOQ model
reader
handheld or fixed-position RFID devide that reads the tags
good
high inventories are _______
NORM.S.INV(desired service level)
how can the z-score be found using excel?
60 days
how many days does it take to build a warehouse
90 days
how many days does it take to construct a new factory or to add capacity
continuous review system
implies that physical inventory is known at all times
holding costs/ carrying costs
incurred for holding inventory in storage
aggregate level focusing
instead of placing RFID tags on every item, the focus is more on what?
continuous review system
inventory review system that is costly
A items
items given the highest priority with larger safety stocks. A items account for approximately 20% of the total items & about 80% of the total inventory cost
B item s
items that account for the other about 40% of total items & 15% of total inventory cost.
C items
items that have the lowest value and hence lowest priority. They account for the remaining 40% of total items & 5% of total inventory cost.
linearly from day 640 until day 1430
long run average demand for Sorange's hardwood floor laminates will grow _____ from day ______ until day _____
RFID Software
manages the collection, synchronization, and communication of the data with systems, and stores the information in a database
640
marketing campaigns for the new target customers began on day ______
maintenance, repair, and operating (MRO)
materials used in production
periodic review system
more safety stock is required for what kind of inventory review system?
80% of objectives can be achieved by doing 20% of the tasks.
pareto principle
work-in-process
partially processed materials not yet ready for sales
service level
percentage of inventory cycles which end without stock-outs
periodic review system
physical inventory is reviewed at regular intervals
1. buffer uncertainty 2. decouple the dependencies between stages in supply chain
primary functions of inventory
finished goods
products ready for shipment
EOQ
seeks to find the optimal order size that minimizes the sum of the annual order costs and annual holding costs
independent demand
service parts are generally considered what kind of demand?
1. materials management 2. manufacturing 3. distribution center 4. retail store
steps by which RFID can automate the supply chain
continuous review
stock records and actual quantity require _____ _____
RFID
synchronize information and physical flow of goods across the supply chain from manufactures to retail outlets and to the consumers at the right place at the right time
passive tags
tags that use the energy generated from the wave and do not store power on the tags
a month later
when does the demand for Tyran and Fardo's premium home appliances grow to its long-tun average?
1. electronic product code (EPC) 2. international standards organization (ISO)
two major RFID standards
raw materials
unprocessed purchase inputs
fixed order quantity models
use fixed parameters to derive the optimum order quantity to minimize total inventory cost
pareto principle
used to determine which inventories should be counted and managed more closely than others
640
what day will Jacobs begin tracking demand in four new markets?
air conditioner retrofit kits
what is calopeia responsible for
insulation products for commercial builders
what is entworpe responsible for
hardwood floor laminates
what is sorange responsible for
not seasonal
what is the demand like for Tyran and Fardo's premium home appliances
250 units are purchased whenever its inventory drops to a predetermined level
what is the reorder point policy for Entworpe's insulation products for commercial builders
premium home appliance
what is tyran and fardo responsible for
the average of the twelve monthly ending inventories
what is used for the average inventory component
s=order point S= maximum inventory level Q= order quantity R= periodic review n= 1, 2, 3...
when analyzing continuous and periodic review systems, what do the following symbols stand for? s= S= Q= R= n=
when construction begins
when are costs incurred for building a new warehouse
cycle counting
z
