SCMN 3740 Strickland exam 1

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how do you develop a demand plan?

- consider existing contractual agreements to supply customers in upcoming periods - forecast future demand based on historical data - adjust the forecast to account for known changes in the future, such as: special promotions, product changes, advertising changes, new product launches

examples of intermediate-range plans

- demand planning and forecasting - sales and operations planning - production planning and budgeting - setting employment, inventory, subcontracting levels - analyzing operating plans

isolating both trend and seasonality

- first a regression analysis is used to identify the trend component - second, we'll isolate the impact of seasonality - the result will be the ability to forecast future demand considering both the trend and seasonality, improving our forecast accuracy

scheduling logic

- front schedule: schedule each step as early as possible - back schedule: schedule each step as late as possibles

examples of short-range plans

- job assignments - ordering - job scheduling - dispatching

time requires consideration of two factors ...

- lead times - precedent relationships: the order in which parts must be assembled

strategic planning is

- long term (2-10+ years) - updated annually

costs related to S&OP options

- overtime - undertime - hiring costs - training costs - cost of bad quality with new employees - layoff costs - inventory holding costs

3 primary techniques of time series forecasting

- simple moving average - weighted moving average - exponential smoothing

what are the 5 different planning levels

- strategic planning - sales and operations planning - master production scheduling - materials requirements planning - production activity control

a time series can consist of more than one component of demand

- trend: the long term growth (or decrease) of demand - seasonal: changes in demand associated with portions of the year - cyclical: repetitive patterns not associated with seasonal demand - autocorrelation: changes in demand associated with previous demand levels - random: changes in demand that can't be linked to a specific cause

production activity control is

- updated daily or weekly - typically covers next week-month, usually in daily buckets, but can be shown by shift

sales and operations planning is

- updated monthly - covers next 12-18+ months in monthly buckets

master production scheduling is

- updated weekly - covers next 1-6+ (typically 3) months

materials requirements planning is

- updated weekly - should match the MPS time horizon; next 1-6+ (typically 3) months

the MPS is a translation of the _______ plan into producible finished goods products with their _____ and ______ determined

SOP; timing; quantities

result of production activity control is

a detailed schedule for shop floor activities required to make components required by the MRP schedule (how many hoods for a Honda Pilot are scheduled to be made on the metal stamping press each day)

MPS

a part of the material requirements plan that details how many end items will be produces within specified periods of time

MRP explosion

a process that converts the requirements of various final products into a MRP that specifies the replenishment schedules of all the subassemblies, components, and raw materials needed to produce final products, considering existing inventories and scheduled receipts

what is a Bill of Materials

a record of all the components of an item, the parent-component relationships, and the usage quantities derived from engineering and process designs

regression identifies

a relationship between two or more correlated variables

what is the overall result of the S&OP process

a single operating plan is created that identifies the allocation of company resources, including time, money, and employees

chase strategy

a strategy that involves hiring and laying off employees to match the demand forecast monthly

level strategy

a strategy that keeps the workforce constant, but varies its utilization as well as inventory to match the demand forecast annually

what is demand

a want or a need for something

net requirements

account for existing inventory and/or scheduled receipts

S&OP is best performed at an _____ level

aggregate

SOP key questions

are materials available to support it? can current capacity support the changes? if an inventory build is called for, can we finance it?

you have to PLAN for all the processes involved in....

buying, making, delivering, returning

external methods of balancing supply and demand

change the manner in which the customer orders: price, lead time

S&OP strategies

chase, level, mixed

how many of each component are needed per FG item?

check BOM

how many finished goods items do we need to make each week?

check MPS

how many of each component are already in inventory?

check inventory records

what is the lead time for each component?

check lead time data on inventory records

S&OP provides the key _______ links for top ________ to coordinate the various ________ activities in a business

communication; management; planning

marketing ______ demand, while supply chain _______ demand

creates; fulfills

make to stock

customer demand is filled from finished goods inventory (cosmetics, grocery items)

independent demand

customer demand that is not directly influences by the actions of the firm (customer orders for cars, houses, cell phones)

make to order from stocked components

customer requirements are met by a combination of standard options (personal computers, fast food) primary task of demand management is to define the customer's order in terms of components and options

what is demand planning?

demand planning is a supply chain management process of forecasting, or predicting, the demand for products to ensure they can be delivered and satisfy customers

dependent demand

demand that is driven by the plans and activities of the firm (components that are needed to make cars, houses, cell phones)

most important SOP formula

ending inventory = beginning inventory + production - sales

the MPS is a statement of the specific _______ ______ _______ that make up manufacturing output

finished goods SKUs

make to order from designs

firm works with the customer to design the product, then produces the product, starting with raw materials. primary task of demand management is gathering information about customer needs and coordinating with engineering and manufacturing

forecast vs plan

forecasts are estimates of what might occur in the marketplace. plans specify how the firm will respond to these forecasts.

the source of demand determines its type: ______ vs ______

independent; dependent

make to order from stocked raw materials

items built to customer specifications, starting with raw materials (airplanes) primary task of demand management is gathering information about customer needs and coordinating with manufacturing

multiplicative seasonal variation

maintains a consistent relationship to the average demand

3 variants of make to order

make to order from stocked components, make to order from stocked raw materials, make to order from designs

most products we buy are ____-___-____, but others are ____-___-____

make to stock; make to order

internal methods of balancing supply and demand

manage gap using internal processes: inventory, production flexibility

MRP has the _______ objective of providing the "right ____ at the right ____" to meet the schedules for completed products

managerial; part; time

is it really possible to manage demand?

no. demand is more like an allusive cat - we're trying to anticipate/get ahead of it.

planned orders

only the current plan and can be changed more easily

what groups of people are responsible for short-range plans

operations managers and supervisors

parents vs components

parent - any product that is manufactured from one or more components component - an item that goes through one or more operations to be transformed into or become part of one or more parents

pegging

provides a link between demand and the gross requirements for parts. pegging records include the specific part numbers associated with a gross requirement

scheduled receipts

represent an actual commitment (purchase order, production order)

gross requirements

represent the total planned usage for the part

what kind of planning does the master scheduler use

rough cut capacity planning

what groups of people are responsible for intermediate-range plans

supply chain planners and operations managers

master scheduler

the person responsible for converting the SOP's monthly buckets of quantities of each family of products into a weekly production plan for each finished goods SKU

customer order decoupling point

the point at which demand changes from independent to dependent. it is the point at which the firm-as opposed to the customer-becomes responsible for determining the timing and quantity of material to be purchased, components made, or products finished

what is supply chain planning?

the process of optimizing the delivery of goods, services, and information from supplier to customer, which BALANCES SUPPLY AND DEMAND.

lead time

the time between placing an order and receiving the item in inventory

strategic planning is usually expressed in

total sales dollars and highly aggregated product units

sales and operations planning

used to develop an overall business plan to integrate the functional planning efforts within the company

the role of S&OP is to balance supply and demand at the ...

volume level

Available to promise

when immediate delivery is not expected, a promised delivery date must be established

the result of master production scheduling is

a detailed plan for quantities of each finished goods SKU (Odyssey, accord, pilot for Honda)

strategic planning answers the questions of

- How much capacity do we need to meet future demand? - Where will we locate production and distribution facilities? - What technological capabilities will we need? - What skills will our employees need? - What capabilities will our supply base need?

how do we measure forecast error?

- MAD (mean absolute deviation) - MAPE (mean absolute percentage error)

examples of long-range plans

- R&D - new product plans - capital expenses - facility location, expansion - capacity planning

S&OP supply options

- anticipation inventory - workforce adjustment - workforce utilization - vacation schedules - part time and/or temporary workers - subcontractors

quantitative forecast models

- causal - correlated but not causal - time series

MPS process and techniques

1. determine supply and demand relationships over time (time-phased record) 2. prepare production schedule according to strategy (chase, level, mixed) 3. calculate projected available balance (for ATP activities) 4. revise plans as time passes (rolling through time)

sales and operations planning process

1. run sales forecast reports 2. demand planning phase 3. supply planning phase 4. pre-SOP meeting 5. executive SOP meeting

T/F - the MPS shows when products will be available in the future

T

the result of sales and operations planning is

a combined plan for quantities of products by product family (vans, sedans, SUVs for an automobile manufacturer) to be made and sold in the months ahead

what is materials requirements planning

a computerized information system developed specifically to help manufacturers manage dependent demand inventory and schedule replenishment orders

result of materials requirements planning is

a detailed plan for quantities of each component/raw material item (hoods, engines, dashboard assemblies for a Honda Pilot) needed to meet the MPS in the weeks ahead


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