Chapter 1 Questions

Describe how the objectives of marketing, production, and finance are in conflict over customer service, disruption to production, and inventories.

LOOK AT PICTURE

Name and describe the inputs to a manufacturing planning and control system.

*Product description: shows how the product will appear at some stage of production. Methods of describing the product: 1. Bill of Materials (most important): Bill of Materials (1) describes the components used to make the product and (2) describes the subassemblies at various stages of manufacture. 2. Engineering drawings 3. Specifications *Process specifications: describe the steps necessary to make the end product. Recorded in a route sheet or in a routing *Time: the time needed to perform operations usually expressed in standard time. Standard time is needed to schedule work through the plant, load the plant, make delivery promises, and cost the product. Standard times are usually obtained from the routing information *Available facilities: manufacturing planning and control must know what plant, equipment, and labor will be available to process work. Info usually found in the work center information. *Quantities required: quantities required info comes from forecasts, customer orders, orders to replace finished goods inventory, and the material requirements plan

What are metrics? What are their uses?

-Metric: a verifiable measure stated in either quantitative or qualitative terms defined with respect to a reference point. -Without metrics, no firm can function effectively or efficiently -Metrics give us control by superiors, reporting of data to superiors and external groups, communication, learning, and improvement -Metrics communicate expectations, identify problems, direct a course of action, and motivate people.

Name and describe four major factors affecting operations management.

1. Government: regulates business (which applies to environment, safety, product liability, and taxation) 2. Economy: economic conditions influence demand and supply 3. Competition: competition is more severe now than ever 4. Customers: consumers and industrial customers have higher demands and suppliers responded to this by improving the range of characteristics offered. 5. Quality

Name and describe the three primary activities of manufacturing planning and control.

1. Production Planning: finding the best way for production = demand. Must establish priorities and capacity. It involves forecasting, master planning, material requirements planning, and capacity planning. 2. Implementation and Control: executing production plans achieved through production activity control (aka shop floor control) and purchasing 3. Inventory Management: provide differences between demand rates and production rates

Describe five important factors in supply chains.

1. The supply chain includes all activities and processes to supply a customer with a product/service 2. Any number of companies can be linked in the supply chain 3. A customer can be a supplier to another customer → so there can be a number of supplier-customer relationships 4. Although the distribution system can be direct, it can contain a number of intermediaries (distributors) such as wholesalers, warehouses, and retailers 5. Products/services usually flow from supplier to customer. Design, demand info, and cash usually flow from customer to supplier.

Give an example of postponement activity.

Computers that are sold globally have plugs put in after they know what country it was ordered from

Describe five primary manufacturing strategies. How does each affect delivery lead time?

Engineer-to-order: customer specifications require unique engineering design or significant customization. Customer is usually very involved in product design. Inventory is not purchased until needed. Delivery lead time is long because it includes design, purchase, manufacture, assemble, and ship. Make-to-order: manufacturer does not start to make the product until a customer's order is received. Usually standard inputs but sometimes custom. Because there is little design time required and inventory is held as raw material delivery lead time just includes manufacture, assemble, and ship. Configure-to-order: customer is allowed to configure ea product based on various features and options. Each configuration occurs at the beginning and can be very unique. Delivery lead time includes manufacture, assemble, and ship because there is no required design time and the different features/options may already be available. Assemble-to-order: the product is made from standard materials that the manufacturer can inventory and assemble according to a customer order. Delivery lead time includes assemble and ship Make-to-stock: the supplier manufactures the goods and sells from a finished goods inventory. Customer has little direct involvement in the product design. Delivery time just includes ship.

What must manufacturing management do to manage a process or operation? What is the major way in which management plans and controls?

Manufacturing management is responsible for the planning and control of the flow of materials through the manufacturing process. Production planning includes forecasting, master planning, materials requirements planning, and capacity planning. Control is accomplished though production activity control and purchasing. Major way in which management plans and controls operations is through the flow of materials which controls the performance of the process

What is the purpose of materials management?

Materials Management: the concept of having one department responsible for the flow of materials, from supplier through production to consumer, thereby minimizing total costs and providing a better level of customer service.

Why can materials management be considered a balancing act?

Must balance priority and capacity

What are the objectives of marketing? What three ways will help it achieve this objective?

Objective: Provide best customer service 1. Maintain high inventories 2. Interrupt production runs so that a non-inventoried item can be manufactured quickly 3. Create an extensive (costly) distribution system so goods can be rapidly shipped

What are the objectives of production? How can these objectives be met?

Objective: Provide lowest production costs 1. Make long production runs of relatively few products → fewer changeovers and fewer specialized equipment 2. Maintain high inventories of raw materials and WIP → production is not disrupted by shortages

What are the objectives of finance? How can these objectives be met?

Objectives: (1) Provide lowest inventory investment and (2) provide lowest distribution costs 1. Reduce inventory → inventory investment is kept low 2. Decrease the number of plants and warehouses 3. Produce large quantities using long production runs 4. Manufacture only to customer order

What are an order qualifier and an order winner?

Order qualifier: product characteristics that make customers consider buying Order winner: product characteristics that make customers buy

What are the four objectives of a firm wishing to maximize profits?

Provide best customer service (marketing concern) Provide lowest production costs (production concern) Provide lowest inventory investment (finance concern) Provide lowest distribution costs (finance concern)

What is supply chain?

Supply Chain: the sequence of processes involved in the production and distribution of a commodity.

What are the 6 activities involved in the physical supply/distribution system?

Transportation Distribution inventory Warehousing Packaging Material handling Order entry

What is wealth, and how is it created?

Wealth is measured by the amount of goods and services produced The more value that is added during the transformation process, the more value that is created