3230 Exam 2 Notes

Match industry examples with typical capacity expansion strategies and their associated risks. Charmin Toilet Paper (Functional Product) (1) small, frequent increases (2) larger, infrequent increases

(1) small, frequent increases

Match industry examples with typical capacity expansion strategies and their associated risks. Apple iPhone (Innovative Product) (1) small, frequent increases (2) larger, infrequent increases

(2) larger, infrequent increases

What are supply chain designs for mass customization

- Assemble to order strategy - Modular design - Postponement

How much and when to add to capacity?

- Large increases of capacity should happen infrequently - Small increases of capacity should happen frequently

Diseconomies of scale volume consideration $cost/unit

- Lower fixed costs - Easier to focus on expertise - Going smaller - Increase complexity

Competitive advantages to mass customization in supply chains

- Managing customer relationships - Eliminating finished goods inventory - Increasing perceived value of services or products

Factors of consideration for supply chain

- Nature of demand - Business requirements

Functions of supply chain

- Physical supply - Market mediation - (demand doesn't usually equal supply)

Economies of scale volume considerations $cost/unit

- Spread fixed costs - Diversity of products - Synergies (get the best of the best to make one department more efficient

What are the demand uncertainty considerations for capacity

- Utilization - capacity cushion

Result of infrequent and large increases in capacity change for demand forecasting (how much and when)

- Very risky - High volume risk - High capital investment (risk)

What are project costs

- direct costs - indirect costs - penalty costs

What are the demand volume considerations for capacity

- economies of scale (large businesses) - Diseconomies of scale (smaller businesses)

Result of frequent and small increases in capacity change for demand forecasting (how much and when)

- more incremental - Risk of losing market shares

Examples of inventory in the supply chain

- raw materials - Work in progress - Finished goods

What are the steps in determining the critical path

- work breakdown - network diagram - critical path - activity slack

What makes a project unique

- you have to have a specific objective/there is a purpose - it is a temporary activity that always has a beginning and an end

What are the two product classifications?

-Innovative -Functional

What are 2 qualities in research that makes the best performing teams based off of psychological safety and its importance on a team?

1. Conversational turn taking 2. Ostentatious listening

What are two questions for determining capacity?

1. How many/much 2. When

In supply chains, inventory may be held further "upstream" before value is fully created to lower inventory costs. On the other hand, it is sometimes moved forward "downstream" toward the customer in order to: 1. Improve speed of customer delivery 2. Increase return on assets 3. Reduce inventory costs 4. Reduce risk of bullwhip effect

1. Improve speed of customer delivery

Each project must meet three goals of...

1. Scope (objectives) 2. Cost of resources 3. Time schedule

In a recent post, it was indicated that Tesla currently has capacity to build 90k Model S/X and 400k Model 3/Y in Fremont, California, with an additional 150k capacity for Model 3s in Shanghai. Which of the following are true? (select all that are correct) 1. These are output measures 2. They indicate the maximum number of cars that can be produced per year 3. These are input measures 4. They indicate the maximum utilization rate 5. These are productivity measures 6. They indicate the number of cars needed to break-even

1. These are output measures 2. They indicate the maximum number of cars that can be produced per year

Why was it so challenging for the supply of toilet paper to keep up with sudden increases in demand during the pandemic? 1. all of these 2. Manufacturers had very little idle capacity (low capacity cushions) 3. It is costly to change from commercial to consumer production 4. Additional links in the supply chain increased the risk of a "bullwhip" effect

1. all of these

Made-to-Stock (MTS) strategies implement EOQ because 1. the focus is on cost efficiency and speed of delivery.. 2. the focus is on customization and variety. 3. the focus is on responsiveness and development speed.. 4. the focus is on minimizing time between orders

1. the focus is on cost efficiency and speed of delivery..

When lead-time > 0 and demand is NOT constant, WHEN do I order? 1. R = SS 2. R = dL + SS 3. R = dL

2. R = dL + SS

When is Q optimal? 1. annual holding cost < annual ordering cost 2. annual holding cost = annual ordering cost 3. annual holding cost > annual ordering cost

2. annual holding cost = annual ordering cost

What is project crashing

expediting (shortening) the duration of the project to reduce overall project completion time and/or project costs

____ products typically have a life cycle of just a few months (innovative or functional)

Innovative

How productive calculation for supply chain performance matrix?

Inventory turnover

What is conversational turn taking and why is it important for a team to function for a project?

It is equal time talking in the group, shows that everyone in the group has value and helps avoid group think

What is ostentatious listening and why is it important for a team to function for a project?

It is making eye contact, repeating what the person says, and just showing that you are active listening to what your peers have to say. It is important because it gives people within the group a sense of value that they are there

What is market mediation for function of supply chain?

It's to avoid opportunity cost of lost sale

What is physical supply for function of supply chain?

It's to minimize cost of providing goods or service capacity

Disadvantage of outsourcing

Lose control to the company you are outsourcing to. Need to make sure wherever you outsource to has the same values as the company

Higher or lower capital intensity and expected capacity cushion for rusty bucket restaurant (service industry)

Lower capacity, higher capacity cushion

Typically speaking, how are lower capital intensity, fixed costs, and economies of scale related?

Lower capital intensity means lower fixed cost, and less opportunity for economies of scale

Higher or lower variability and capacity cushion for ford pickup trucks (automative industry)

Lower variability, lower capacity cushion

Is it important to be smart or have a good IQ as a leader or team member in order for a team to function properly for a project?

No, it's more important that the team feels value and being smart does not help a team in any way

Why do capacity cushions vary between industries depending on the context?

Not every industry has the same type of demand, for example service industries have a higher capacity cushion because they have to plan for more variability

What are responsive supply chains not focused on?

Not focused on efficient, cost, or volume

Recent example of a bullwhip effect in supply chain

Toilet paper industry during Covid

Nature of demand is the same as saying _____ of demand

Uncertainty

What process choice do function products usually use?

Uses line, continuous, and high volume batch

What are responsive supply chains?

Utilize strategies aimed at being responsive and flexible for change

What are efficient supply chains?

Utilize strategies aimed at creating the highest cost efficiency (high volume low cost)

What is postponement for supply chain designs of mass customization?

Waiting to finish the product for the customer Ex. Companies wait to mix paint until the customer asks for the color

How long calculation for supply chain performance matrix?

Weeks of supply

How is capacity measured?

With outputs and inputs

What is inventory?

a stock of materials used to satisfy customer demand or to support the production of services or goods

What are indirect costs in projects

overhead

Project crashing using minimum-cost scheduling

process where you only crash if you save more than you spend

Input measures of capacity are more commonly used with _____.

service

____ industries will have higher capacity cushions because of variability

service

What are direct costs in projects

the normal cost of the project

What are penalty costs in a project

the penalty a customer has to pay every X amount of time that a project is late

A project is a ______, temporary endeavor with a _____ _____ to be met within prescribed ____, ____ and ____ limitations made up of an interrelated set of activities that have a definite ____ and ____ point.

unique, specific objective, time, budget, resource, starting, ending

_____ can vary considerably across industries, firms and within firms

utilization

____ products can generate higher profit margins (innovative or functional)

Innovative

Which of the following are true about the importance of supply chain management? 1. Supply chains can be independently controlled by a single firm 2. Good supply chain management eliminates forecast errors 3. Supply chain management directly impacts cost, quality, and availability of raw materials 4. Supply chain management directly impacts inventory turnover and return on assets

3. Supply chain management directly impacts cost, quality, and availability of raw materials 4. Supply chain management directly impacts inventory turnover and return on assets

Typically speaking, how is higher capital intensity, fixed costs, and economies of scale related?

Higher capital intensity means higher fixed cost and greater possible economies of scale

Higher or lower variability and capacity cushion for the rusty bucket restaurant (service industry)

Higher variability, higher capacity cushion

Example of frequent and small increases in capacity change for demand forecasting for Tesla

Adding new robotics for manufacturing

Example of infrequent and large increases in capacity change for demand forecasting for Tesla

Announcing making a new manufacturing plant

What process choice do innovative products usually use?

Assembly, job, low volume batch, and batch

Utilization formula

Average output rate/maximum capacity * 100% (Actual/planned)

Vertical integration in supply chain

Buying more upstream or downstream to have more control over the process

Newness of ____ products makes demand for them unpredictable (innovative or functional)

Innovative

The short life cycles and great variety typical of ____ products further increases the inflexibility (innovative or functional)

Innovative

Capacity cushion equation

CC= 100% - average utilization rate(%)

High ____ _____ is needed more when there is less certainty in demand

Capacity cushion

What are examples of "business requirements" for supply chain factors of consideration?

Competitive priorities, service or lead time standards

_ products lead time for make-to-order products of six months to one year (longer) (innovative or functional)

Functional

____ products are staples that people buy with certainty and predictability (innovative or functional)

Functional

____ products have a life cycle of more than 2 years (innovative or functional)

Functional

____ products have fewer product variation (innovative or functional)

Functional

_____ products have lower profit margins, contribution margins of 5-20% (innovative or functional)

Functional

Higher or lower capital intensity and expected capacity cushion for ford pickup trucks (auto industry)

Higher capacity, lower, Capacity cushion

What is outsourcing?

Deciding to produce out of house, usually more for the manufacturing process

What kind of supply chain do functional products use? (Efficient or responsive supply chain?)

Efficient supply chain

What is an example of input measures of capacity?

Ex. Hospital has 600 beds

True or false: Agreement in a group = success

False Agreement in a group doesn't = success, it is important to disagree and have different opinions in order to create diversity within a project to perform at the highest level that it can

What are examples of "nature of demand" for supply chain factors of consideration?

Predictability, lifecycle, variety

What kind of supply chain do innovative products use? (Efficient or responsive supply chain?)

Responsive supply chain

_____ businesses use diseconomies of scale for volume consideration

Service (ex. Hospitals)

What's a good way to start determining scope (objectives) for a project?

Start thinking about what you are NOT working on

Some industries sectors spend more than 50% of sales revenue on purchased services and materials from their _____ _____

Supply chains

What is an example of output measures of capacity?

The max number 9 cars that can be produced each year

Critical path method

an algorithm for scheduling activities within a project for the fastest and most efficient execution

How much $ value calculation for supply chain performance matrix?

average aggregate inventory value

____ businesses use economies of scale for volume consideration

bigger