SCM 3070 Exam 2

Make or Buy

A choice between producing a component or service in house or purchasing it from an outside source

Repetitive Focus

A product-oriented production process that uses modules

Advantages and Disadvantages of a periodic inventory accuracy system

Advantages: Easy to implement, Cheap to implement, minimal experience required, simple record keeping, best for smaller businesses Disadvantages: Disrupts business hours or overtime, Inaccuracies and Labor intensive

Advantages and Disadvantages of a perpetual inventory accuracy system

Advantages: Proactive monitoring (can order as soon as inventory gets low), manage multiple locations with ease, more informed forecasting Disadvantages: High startup costs, system updates technical errors

When product demand fluctuates and yet you maintain a constant level of employment, some of your cost savings might include:

All of the above

Virtual Companies

Companies that rely on a variety of supplier relationships to provide services on demand. Also known as hollow corporations or network companies.

The concern with improving productivity and safety by designing workplaces, equipment, instruments, computers, workstations and so on that take into account the physical capabilities of people is called

Ergonomics

T or F: A blanket order provides authorization to ship to cover any order

False

T or F: Automatic Identification Systems, RFID, robots and automated guided vehicles are improvements that are put in place for the sole purpose of eliminating jobs.

False

T or F: Cross docking adds costs to the placement of materials and supplies in storage because product is never put away in a secure location.

False

T or F: DFM means designated for machines

False

T or F: Forecasting is the process of reporting the values of one or more variable from the past.

False

T or F: Intangible costs are readily identifiable costs that can be measured with some precision.

False

What did the Hawthorne studies in the 1920's find about the psychological components of job design?

Initial purpose was to find the impact of lighting on productivity. However during the process of the experiment they discovered social system and employee roles are much more important. They also found that expectations of what they should receive from the job, as well as their level of contribution differ between people. These insights help in making job design decisions.

The work environment includes these factors:

Lighting, noise, temperature, and air quality

The use of data to make a business decision instead of your "gut feeling" is known as a

Quantitative Decision

Describe the four types of inventory and the function of each in business.

Raw Material Inventory: can be used to separate suppliers for the production process. Work-in-Process Inventory: has undergone some change but is waiting to be finished processed. Maintenance/repair/operating Inventory: are necessary to make machinery and process productive. Finished-goods inventory: finished products available to be shipped to customers.

What is the major difference in focus between location decisions in the service sector and the manufacturing sector?

The focus in service is revenue maximization while the focus in manufacturing is cost minimization

T or F: A bottleneck is the work activity that effectively limits throughput of the entire process.

True

T or F: An hour lost at a bottleneck resource is an hour lost forever.

True

T or F: Build to Order (BTO) produces to a customer order rather than a forecast.

True

T or F: Design capacity is the theoretical maximum output of a system in a given period under ideal conditions.

True

T or F: EOQ is an inventory control technique that minimizes the total of ordering and holding costs.

True

T or F: Extra Units in inventory to help reduce stockout are called Safety Stock

True

T or F: Herbie is a bottle neck

True

T or F: Quality is defined by the customer

True

T or F: VMI is a system in which a supplier maintains material for the buyer, often delivering directly to the buyer's using department.

True

Product Focus

a facility organized around products; a product-oriented, high-volume, low-variety process

Cycle counting

a process by which inventory records are periodically verified

Process Focus

a production facility organized around processes to facilitate low-volume, high-variety production

ABC analysis divides on-hand inventory into three classes based on:

annual dollar values

Setup Costs

cost to prepare a machine or process for production

Vertical Integration

developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor

Supplier selection requires

negotiations, supplier evaluation, supplier development, and contracts

Mass Customization Focus

rapid, low-cost production that caters to constantly changing unique customer desires

Effective Capacity is:

the capacity a firm expects to achieve given current operating constraints

Ordering Costs

the cost of the ordering process

Holding Costs

the cost to keep or carry inventory in stock

Customer feedback in process design is lower as:

the degree of customization is lowered

Setup Time

the time required to prepare a machine or process for production

Outsourcing

transferring a firm's activities that have traditionally been internal to external suppliers

Cross-sourcing

using one supplier for a component and a second supplier for another component, where each supplier acts as a backup for the other