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110 Multiple choice questions
- supplying materials and component parts whose demand depends on the demand for a specific end product
- High variable and low fixed cost
- Cost of placing order which may have both fixed and variable components
- Capital Cost = Carry Inventory
Storage space cost is not relevant
Insurance requires special analysis
Obsolescence is not as important - includes insurance and taxes
- many situations were dominated by a relatively few vital elements.
- Balancing supply and demand.
Protecting against uncertainty.
Allowing quantity purchase discounts.
Supporting production requirements.
Promoting transportation economies. - 1.2%
- A static approach, and the solution is optimum for only one point in time.
The technique assumes linear transportation rates, whereas actual transportation rates increase with distance but less than proportionally.
The technique does not consider the topographic conditions. - Short-term horizon
Too little or too much detail
Thinking in two dimensions
Using published costs
Inaccurate or incomplete costs
Use of erroneous analytical techniques
Lack of appropriate robustness analysis - Air, rail, and water
- Routing and scheduling
Load planning
Load tendering
Status tracking
Appointment scheduling - High variable and low fixed cost
- Master production schedule (MPS)
Bill of materials file (BOM)
Inventory status file (ISF)
MRP program
Outputs and reports - time associated with transportation and the inventory costs that are associated with it.
- Costs incurred by inventory at rest and waiting to be used.
- Most important
- Least Important
- The supplier and its customer agree on which products are to be managed using in the customer's distribution centers.
Also called "pull" data - Producing and acquiring goods.
- Finance
Marketing
Manufacturing - 4.6%
- Focus on available inventory.
- Inventory Status File
- bill of lading
- Goods flow from receiving to shipping with minimal interim sorting
- Positioning of inventories located at "market-facing" logistics facilities
Greater use of "customer direct" delivery
"Cross-docking"
Due diligence for location and site selection
Greater use of third-party-logistics services - Truck
Rail
Air
Water
Pipeline
Intermodal transportation - Air and motor carriage
- Inventory control
Safety, maintenance, and sanitation
Security
Performance analysis
Information technology - Procurement, Production, Transportation
- Logistics
Procurement
Marketing - reflects the possibility that inventory value might decline for reasons beyond firm's control
- refers to the expense of placing an order for additional inventory, not including product cost
- Simplicity and its ability to provide a starting point for location analysis.
Provides a starting point for making a location decision. - Water carriers and rail carriers
- Zero Inventories
Short, consistent lead times
small, frequent replenishment quantities
high quality, or zero deficits - U.S. population shifts
Service/cost requirements of JIT manufacturing
European Union
Continuing searches for lower-cost manufacturing
growing economic importance of China and the
Asia-Pacific
sourcing of raw materials from offshore suppliers - Air and motor carriage
- Minimum rate of return on new investments.
- Direct shipment of goods
Movement of goods through distribution facilities to customers - Can
occur in the supply of raw materials, in the demand for finished
product, or in both. There is a need to know the proper inventory level
to have. Can impact transportation.
- Change in Corporate Ownership
Cost Pressures
Competitive Capabilities
Corporate Organizational Change - originates the shipment
provides all the information the carrier needs
stipulates the contract terms, including carrier's liability for loss and damage
acts as a receipt for the goods the shipper tenders to the carrier
in some cases, shows certificate of title to the goods - a
geographic area into which importers can enter a product and hold it
without paying duties—and only paying duties or customs when is it
shipped into U.S. customs territory.
- Includes
handling costs associated with moving products into and out of
inventory, as well as such costs as rent, heat, and light
- Arises in Demand and obtaining materials from suppliers.
- Rail and water
- Cost of distribution centers and inventory vs. cost of transportation
Cost of additional facilities vs. level of customer service
Space vs. equipment
Equipment vs. people
People vs. space - Vendor-Managed Inventory
- associated with manufacturing; how long it takes to get from raw materials to finished goods, and the costs associated.
- carrier's invoice for carrier charges
- Back order, which has variable costs. Loss of sales. Loss of customers
- Air and motor carriage
- recoup monetary losses
- specific blanket area, the transportation definition of a particular city or town.
- software control system that improves product movement and storage operations
- Owner of product while it is in transit will incur resulting carrying costs.
- generate performance reports
support paperless processes
enable integration of materials handling equipment
picking systems
sorting systems
leverage wireless communication - Accumulation
Sortation
Allocation
Assortment - High fixed versus low variable.
Product moves through it in high volume - Assigns inventory items to one of three groups according to the relative impact or value of the items
- expenses incurred each time an organization modifies a production or assembly line to produce a different item for inventory
- Distribution cost efficiency
Aggregate cost efficiency
Asset utilization
Resource productivity
Resource efficiency - 4.7%
- relies on customer orders to move product through a logistics system
- cost efficiency
inventory accuracy
order fill rates
capacity utilization - delivered to the right place
at the right time
in defect-free condition
with the correct documentation, pricing, and invoicing - the exact products and quantities that they ordered
- -Supply chain complexity
-Competing goals among supply chain partners
-Changing customer requirements
-Limited information availability
-Synchronizing transportation
-Capacity constraints
-Rising transportation rates
-Governmental requirements
-Regulation - 80%
- Motor carriage
- 6.7%
- uses inventory replenishment techniques in anticipation of demand to move products.
- Reflects the direct debt service cost of having capital tied up in inventory.
- the
process of designing a model of a real system and conducting
experiments with this model for the purpose either of understanding the
behavior of the system or of evaluating various strategies within the
limits imposed by a criterion or set of criteria for the operation of
the system
- are able to accommodate broad problem definitions, but they do not provide an optimum solution.
help to reduce a problem to a manageable size and search automatically through various alternatives in an attempt to find a better solution. - Labor availability
Demand variation
Increasing customer requirements - Time, Place
- Air and motor carriage
- Materials requirement Planning
- Widely Used, Low fixed cost, high variable
- GDP increased at a higher rate than inventory costs. It created higher revenues with less assets.
- a firm's logistics/supply chain network and the locations of its key facilities are fixed.
- Rail, water, and pipeline
- involves the physical movement of goods between origin and destination points.
The transportation system links geographically separated partners and facilities in a company's supply chain. - High fixed, low variable
- Master Production Schedule
- Lesser Importance
- Transportation Management Systems
- Opportunity Cost. Cost of capital tied up in inventory.
- Product Handling Functions
Support Functions
Distribution Metrics
Customer Facing Measures
Internal Measures - likely products together. Bread and Jelly
- Transportation costs
Cost of lost sales
Warehousing costs
Inventory costs - when it is directly related, or derives from, the demand for another inventory item or product
- permits
the shipper to stop a shipment in transit and to perform some function
that physically changes the product's characteristic.
- when such demand is unrelated to the demand for other items
- When an organization anticipates that an unusual event might occur that will negatively impact its source of supply.
- Like product together.
- is to more accurately forecast demand and to explode that information back to develop production schedules
- Optimizing
Heuristic
Simulation - Bill of Materials
- varies greatly
- Product
characteristics must drive the design of the distribution process such
as product value, durability, temperature sensitivity, obsolescence,
volume, and other factors
- key performance indicators
- determine the size of each operation within the network
- Distribution Requirements Planning
- Site availability, leases, contracts, and investments make changing facility locations
- an asset on the balance sheet and a variable expense on the income statement.
- Precise mathematical procedures that are guaranteed to find the "best" solution