supply chain mangement

"Single-Period" Inventory Model

"Single-Period" Inventory Model - a type of inventory system in which inventory is only ordered for a one-time stocking.

eoq

2 x Order Cost x Annual V olume Carrying Cost % x Unit Cos

Master Production Schedule (MPS)

A detailed disaggregation of the aggregate production plan (APP), listing the exact end items to be produced by a specific period.

abc

An ABC system classifies inventory based the degree of importance:

bull whip effect

An overreaction due to uncertainty occurs throughout the entire supply chain.

Base Stock Level System

Base Stock Level System - a type of inventory system that issues an order whenever a withdrawal is made from inventory.

Bill of Materials (BOM)

Bill of Materials (BOM) - document that shows an inclusive listing of all component parts and assemblies making up the final product.

Chase Production Strategy

Chase Production Strategy - Adjusts capacity to match demand. Firm hires and lays off workers to match finished output to demand. Finished goods inventory remains constant. Works well for make-to-order firms

erp

ERP provides a means for supply chain members to share information so that scarce resources can be fully utilized to meet demand, while minimizing supply chain inventories

Time Fencing

Firm Time Fence is established at the outer limit of this period to signify when changes can no longer be made automatically by the planning system- planned is ok

Mixed Production Strategy

Mixed Production Strategy - Maintains stable core workforce while using other short-term means, such as overtime, subcontracting and part time helpers to manage short-term demand.

Push or Make-to-Stock

Producing stock on the basis of anticipated demand. Demand forecasting can be done via a variety of sophisticated techniques.

Running Sum of Forecast Errors (RSFE)

Running Sum of Forecast Errors (RSFE) provides a measure of forecast bias. RSFE indicates the tendency of a forecast to be consistently higher or lower than actual demand. postive means forecast too low

Supply Chain Planning

Supply Chain Planning is the element of supply chain management responsible for determining how best to satisfy the requirements created by the Demand Plan. Its objective is to balance supply and demand in a way that realizes the financial and service objectives of the company.

The EOQ model seeks to determine an optimal order quantity

Where the sum of the annual order costs & the annual inventory carrying costs is minimized.

forecast error

a-f/a

mean squared area

a-f^2/n

mape

absolue value- A-f/a /3n n is time period

mad

absolue value- A-f/n n is time period

business plan

focus for 2 to ten years

Qualitative

forecasting which is based on opinion and intuition.

Quantitative

forecasting which uses mathematical models and historical data to make forecasts.

Goal of supply chain mangement

increase customer service while reducing inventory

Collaborative Planning, Forecasting, and Replenishment (CPFR)

is a business practice that combines the intelligence of multiple trading partners who share their plans, forecasts, and delivery schedules with one another in an effort to ensure a smooth flow of goods and services across a supply chain. reduces bullwhip effect

Total Quality Management

is a management approach to long- term success through customer satisfaction based on the participation of all members of an organization in improving processes, goods, services, and the culture in which they work. Everyone in the organization has to take ownership for quality.

Just-in-Time

is a philosophy of manufacturing based on the planned elimination of all waste and continuous productivity improvement.

Business Process Reengineering

is a procedure that involves the fundamental rethinking and radical redesign of business processes to achieve dramatic organizational improvements in such critical measures of performance as cost, quality, service, and speed.

Aggregate Production Plan (APP)

long term ie over yr Primary purpose is to establish production rates that will achieve management's objective of satisfying customer demand by maintaining, raising, or lowering inventories, while attempting to keep the workforce relatively stable.

four flundaitons

operations, supplt, logistics, intergration- osll

tracking signal

over the limit of bias

Pull or Make-to-Order:

High levels of customer service through responsiveness and flexibility to meet uncertain customer demand.

bin

Inventory system that uses either one or two bins to hold a quantity of the item being inventoried.

Level Production Strategy

Level Production Strategy - Relies on a constant output rate while varying inventory and backlog according to fluctuating demand. Firm relies on fluctuating finished goods and backlogs to meet demand. Works well for make-to-stock firms

Material Requirements Planning (MRP)

MRP - A computer-based materials management system that calculates the exact quantities, need dates, and planned order releases for subassemblies, component parts and materials required to manufacture a final product.