SCM exam 2

Identify the three general strategies involved while determining when to change capacity relative to demand. (Check all that apply.)

Capacity lag strategy Capacity lead strategy Adding or removing capacity

_____ is the level of capacity or output that a process can be expected to produce under normal conditions.

Effective capacity

Define a job shop.

It is a flexible process structure for products that require different inputs and have different flows through the process.

Define a product family.

It is a group of products that have similar processing requirements.

Define a repetitive process.

It is a process in which discrete products flow through the same sequence of activities.

Define seasonal stock.

It is the additional inventory produced in advance of seasonal peak demands.

define transit inventory

It is the inventory of items being transported from one location to another.

Define Pareto's law.

It is the rule that a small percentage of items account for a large percentage of sales, profit, or importance to a company.

Identify the formula used to calculate the total acquisition cost.

Order cost + Inventory carrying cost

_____ specifies the amount of risk of incurring a stockout that a firm is willing to incur.

Service level policy

______ cost is the cost incurred when inventory is not available to meet demand.

Stockout or Shortage

The _______ _________ __________ is the overall management system that strives to improve system performance by identifying, focusing, and managing constraints.

Theory of Constraints

The principles that every process must be managed as a system and that performance measures are crucial to a process's success are the basic principles of the _____.

Theory of Constraints

Define raw materials and component parts.

These are the items that are bought from suppliers to use in the production of a product.

Define setup costs.

They are the administrative expenses and the expenses of rearranging a work center to produce an item.

Define carrying costs.

They are the expenses that are incurred due to the fact that inventory is held.

_____ cost is the sum of all relevant inventory costs incurred each year.

Total acquisition

Sales and operations planning

_____ is used to develop tactical plans by integrating customer-focused marketing plans for new and existing products with the operational management of the supply chain.

In a level production strategy, _____.

a firm produces at a constant rate over the year

A(n) _____ specifies the production rates, inventory, employment levels, backlogs, possible subcontracting, and other resources needed to meet the sales plan.

aggregate production plan

A _____ is a type of process in which goods or services are produced in groups and not in a continuous stream.

batch process

The constraining activity in a process that limits the overall output is called a

bottleneck

Extra inventory held to guard against uncertainty of supply or demand is known as _________ stock.

buffer or safety

Process ____ refers to the limit on the amount of output per period of time that a process can generate or store given a level of inputs and resources.

capacity

The term _____ is also used to denote size or storage limits.

capacity

__________ __________is the production of products with similar process characteristics on small assembly lines called cells.

cellular manufacturing

A _____ is a single-flow process that is used for high-volume nondiscrete, standardized products.

continuous process

Identify the process type of a product-process matrix in which all products follow sequence, operations often run 24/7, line stoppages are very costly, and highly specialized equipment and low-skilled operators are used.

continuous process

One strategy for managers to increase capacity by creating flexibility involves the ____ _____of labor.

cross- training

________ ___________is the presence of the customer in a service process.

customer contact

____________time is the time a unit spends being processed at a given operation in the overall process.

cycle

True or false: A product-process matrix can be used to address the fact that customers often participate in service processes.

false

True or false: In a firm, the demand for inventory will come only from an external customer.

false

True or false: Sales and operations planning is considered as a one-time event.

false

A _____ layout is used when a product cannot be moved during production.

fixed- position

A manager is overseeing the assembly of a ship on a shop floor. All the parts and components of the ship are brought together to the location where the assembly takes place. This scenario is an illustration of a _____.

fixed-position layout

_____ is a combined automated machines, robots, and materials handling system that is controlled by a single computer.

flexible manufacturing

A _____ layout groups together similar resources.

functional

A(n) _________ is a supply of items held by a firm to meet demand.

inventory

_____ _____is the ratio between average inventory and the level of sales.

inventory turnover

is an empirically proven relationship that exists between flow time, inventory, and throughput.

littles laws

_____ uses advanced technologies to customize products quickly and at a low cost.

mass customization

____________ capacity is the highest level of output that a process can achieve under ideal conditions in the short term.

maximum

Economic Order Quantity (EOQ)

minimizes the sum of annual inventory carrying cost and annual ordering cost.

_____ are the expenses incurred in placing and receiving orders from suppliers.

order costs

An effective operations mangers has to maintain the balance between maintaining his capacity utilization while avoiding unsustainable ___________________

overutilization

_____ categorizes processes into structures based on output volumes and variety.

product-process matrix

A _________is a one-time or infrequently occurring set of activities that create outputs within prespecified time and cost schedules.

project

Identify the process type of a product-process matrix in which all products follow the same sequence, standard materials and methods are used, and low-skilled workers specialize in completing a limited number of activities.

repetitive process

A process structure where the activities occur one after the other in sequence is called a(n) _____.

serial structure

The category of inventory performance metrics that addresses effectiveness in terms of meeting demand requirements is referred to as _____.

service level

Identify the process activity that has floor space, racks, bins, stockrooms, and stockroom clerks as its associated resources that limit capacity.

storage

The manager of a manufacturing unit decides to outsource a certain part of the firms production as it is economical to do so. In this scenario, the manager's decision to outsource is an example of a(n) _____.

strategic capacity change

T OR F An trexoid inventory saw-tooth diagram is an illustration of the pattern of ordering and inventory levels.

true

True or false: 3D printing is also known as additive manufacturing.

true

True or false: All processes have variance.

true

True or false: Capacity requirements are determined by dividing the sum of the total time needed to make the products and the total time needed for setup by the operating time that is available.

true

True or false: In a capacity decision, if the limiting resource is low-skilled labor, a short-term capacity decision could be scheduling overtime, hiring temporary labor, or laying off people.

true

True or false: It is common to measure stockouts in terms of the number or percentage of inventory items for which there is no inventory on hand at the time of demand.

true

Items that are in a production process are classified as _____.

work in process inventory

_____ is the percentage of units successfully produced as a percentage of inputs.

yield rate

Identify the formula used to calculate the economic order quantity.

√2DCoUCi , where D is the annual demand, Co is the order cost, U is the unit cost, and Ci is the inventory carrying cost percentage