WGU C720 Operations and Supply Chain Management. Western Governors University Business Admin Class Vocab & Study Guide for HCO1 supply chain

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WGU C720 Operations and Supply Chain Management. Western Governors University Business Admin Class Vocab & Study Guide for HCO1 supply chain encompasses all activities associated with the flow a... nd transfer of goods and services, from raw material extraction through use by the final consumer. Logistics refers to the movement of supplies and materials through the supply chain. 00:3001:36 reverse logistics. When it is necessary to return defective products to the manufacturer for repair or replacement, the process is known as reuse and recycle materials. Reverse logistics includes efforts to backward vertical integration. One way to promote coordination is for a company to own its suppliers. This is called forward vertical integration. At the other end of the supply chain, a company can own the distribution systems and retail outlets that sell their products; this is Agile Members of such a supply chain are selected based upon their speed and flexibility, and their capacity to transmit information reliably, accurately, and quickly from the marketplace to supply chain members. assess in great detail the needs of its customers so it can provide customized products that better meet the customer's' expectations. An agile supply chain attempts to Lean Members are chosen based upon their ability to keep costs down and minimize inventory in the system. lean supply chain What type of supply chain would be used here: These products have long product life cycles, stable and predictable demand, and minimal innovation. They are also often characterized by low profit margins. For these products, the supply chain must focus on operating efficiently to minimize costs. Vendor Managed Inventory (VMI) The vendor, or supplier, can better coordinate its own production with the replenishment of supplier inventory, thus reducing costs and improving delivery performance between the supplier and the retailer. To make this work, the suppliers receive daily point-of-sale (POS) data from the retail stores, and they also have access to retailer's inventory files. market (demand), process (throughput), and product (supply). There are three primary constraints in a system: Constraint Any resource whose capacity is less than or equal to demand for that resource; a bottleneck is the most limiting constraint on the system. requires the longest time or has the slowest rate - a process bottleneck. A bottleneck (or constraint) in a supply chain occurs at the point in the process that regulatory labor technology decision-making physical process financial Types of bottlenecks: Strategic alliances form within first-tier and second-tier supplier networks. This occurs as a collaborative effort because all parties need to invest time, capital, and talent to become aligned. Safety Stock Company L has a difficult time keeping inventory on key items they use for production. Which strategy is most appropriate for Company L to keep inventory in stock? Vendor Managed Inventory What has been established between Walmart and Proctor & Gamble (P&G) to ensure that Walmart is consistently stocked with P&G products? Reverse logistics Tammy's dishwasher started making weird noises. She was concerned that it may have technical issues so she called the manufacture to see if it was still under warranty. She had 1 month left on the warranty so the manufacturer picked up the dishwasher the next day to service it. Which process best represents this scenario? competitive advantage a condition or circumstance that puts a company in a favorable or superior business position over its competitors. short delivery lead-time or high product quality that gives an organization an edge against its competition. A competitive advantage is also capabilities that customers value, such as Value to consumers; it should be Inimitable (not easily imitated), Rare, and an organization must have the Aptitude (capability) and Lifespan (sustainability) to earn appropriate returns on the advantage. VIRAL Decrease production time. Increase the speed of bringing new services and goods to market. Improve flexibility to meet rapidly changing customer needs. Enhance product quality. Improve customer service. Increase productivity. Reduce costs. Operations managers apply ideas and knowledge to: Sustainability the ethical issues an organization faces to balance financial performance while maintaining social responsibility standards and a responsible environmental profile. Peak Seasonal Unexpected Chase 4 types of Demand Peak demand occurs in response to planned events such as advertising, publicity or promotion. Seasonal demand as shoppers adjust their purchase velocity in line with holidays, especially Christmas. Unexpected demand occurs due to a usually-unexpected event. Chase demand occurs when a company has to adjust production by rates to match demand by varying the workforce and using overtime. Inventory the goods available for sale and raw materials used to produce goods available for sale. Raw Materials Work-in-process (WIP) Finished Goods Replacement parts inventory Supplies Transportation (pipeline) 6 different types of inventory: Raw Materials These parts and materials are obtained from suppliers and are used in the production process. Work-in-process (WIP) These are partly finished parts, components, sub-assemblies, or modules. Finished Goods Items are ready to ship to the customer. No more work is required. Replacement parts inventory These are maintained to replace other parts in machinery or equipment as those parts wear out. Supplies Parts or materials are used to support the production process but not usually a component of the product. These items, such as lubricant and cutting tools, are consumed in the production process. Transportation (pipeline) The portion of inventory that is in the process of being shipped through the distribution system. perpetual inventory system continuously monitors inventory levels and is also called continuous review system. periodic inventory system randomly monitors inventory levels and is also called the fixed order interval system. Used for inventory that requires an exact inventory balance at all times Most suitable for big businesses, large retail stores and/or Banks Most appropriate for high value and high volume items Best for accurate financial statements Expensive to implement and maintain Perpetual Inventory System: Requires a physical count to know exact inventory balances Used when a supplier will only deliver at specific time intervals (during open window) Most appropriate for low value and low volume items Most appropriate for small businesses Inexpensive to implement and maintain Periodic Inventory System: help companies control the cost of ordering, receiving, and holding inventory. The EOQ (Economic Order Quantity) and EPQ (Economic Production Quantity) are two models used to minimize the total annual costs of ordering and holding inventory by varying the order quantity. The goal of firms using the EOQ & EPQ model is to Quantity discount model A discount offered in price for ordering above a specified amount. The more you buy, the more you save. Transportation discounts A discount offered on shipping cost for ordering above a specified amount . Revenue Sharing When two or more companies partner and divides the profits received based on an agreement between all parties involved. Reserve Capacity When a company stores, or pays another company to store, excess inventory to be used for unexpected demand. Relative advantage The difference between the lowest cost producer of a good and the next-lowest cost producer of the same good is known as a(n) ________. Quantity Discount Model Eric needs to order 50 plates for his new restaurant. Fifty plates will cost him $100. The supplier tells Eric that he can purchase 100 plates for $75. Eric decides to purchase 100 plates. What inventory strategy did Eric use? Material Requirements Planning. The production planning process leads from an aggregate plan to a master schedule to a more detailed version of the aggregate plan that includes production for individual end products and the specific week in which the production will take place. The master schedule is Determine the objectives of the forecast Develop and test model Applying the model - Consider real-world constraints on the model's application Revising and evaluating the forecast Stages of forecasting include: Buildup method Survey method Test markets Panel of experts (Delphi Technique) Qualitative methods of forecasting appropriate when past data are not available. most suitable for new products or products without historical data. When should qualitative methods of forecasting be used? Buildup method Starting at the bottom of the organization and working to the top to solicit info to determine forecast Survey method using questionnaires, phone interviews, or the internet to solicit info to determine forecast Test markets Conducting a trial run with the product in a market region to determine forecast Panel of experts (Delphi Technique) soliciting info from people who are knowledgeable about the subject being considered to determine the forecast appropriate to use when past numerical data is available and when it is reasonable to assume that some of the patterns in the data are expected to continue into the future. When should quantitative methods (time series) of forecasting be used? Simple moving average Weighted moving average Quantitative methods (time series) of forecasting Simple moving average applying a simple average based on a specific time period Weighted moving average applying a simple average with based on a specific time period with assigned weights to each The master schedule—or master production schedule (MPS) "dis-aggregates the aggregate plan" because it is a specific statement of exactly what will be produced and a specific date for production. based on the "aggregated" plan. usually states individual end items or product models. is usually between 12 and 16 weeks. The (MPS) is the cumulative lead time of the product or product with the longest lead time. The master schedule planning horizon is as long as Medium-range forecasts (operations planning) forecasts and operations planning that typically extend 6 to 18 months into the future. Long-range operations planning planning for facility location, technologies, and capacity that typically extends 5 to 10 years. Aggregate planning the combining of individual end items into groups or families of parts for planning purposes. Time fences boundaries between periods in the planning horizon. Time-bucket a period of time, usually one week, in which demand and requirements are grouped for master scheduling and material requirements planning. Lead time the amount of time it takes to plan, produce, and deliver a product Independent demand demand that is not controlled directly by the company, such as demand from customers. Dependent demand usually demand for an item that is generated by a company's production process. MRP ia computerized information system used for planning and managing inventory for dependent demand items. Master schedule file Bill of materials file Inventory file MRP inputs include: Deals with getting the right amount of raw material to the right place at the right time to support production. Systematically designed to plan for production and deliver product Includes Master Schedule, Bill of Materials, and Inventory files MRP is widely considered to stop when materials are received MRP often called manufacturing resource planning, builds on the foundation of MRP Also includes production planning, machine capacity scheduling, demand forecasting and analysis and quality tracking tools into the mix Also features tools for tracking employee attendance, labor contribution and productivity, project management, inventory management, service and maintenance, and transportation MRP II More robust data driven system that stems from MRP II Used when all corporate data needs to be accessible to all employees ERP (Enterprise Resources Planning)- Panel of experts Test market A company has developed a new product that links a smartphone app to a doorbell and home security monitoring system. There is nothing else like it on the market and no prior sales history from which to develop a forecast. A sales manager is trying to determine the best price point for introduction, while also trying to estimate what first-year sales volumes might be. What are two possible means for determining the price point and first-year sales forecast? Which product should be produced next? When scheduling a batch process, run-out time answers what question? 0 ATP inventory is the amount that a company can promise to other customers after they consider all current customer orders. In this case, Nike has no inventory after receiving the order for 1000. Therefore, zero will be the ATP amount until more are produced and put in stock. Nike has 200 pairs of shoes on-hand. They receive an order for 1000 pairs of shoes. The lead time to produce the shoes is 2 months. If no other customer orders are received, what amount of available to promise inventory will the MPS generate as an output? ATP inventory the amount that a company can promise to other customers after they consider all current customer orders. Internal orientation of quality directly measure characteristics of the product or service, such as the number of packages delivered on time or the thickness of an engine part based on manufactures specification. External orientation of quality Fitness for use for the customer or the capacity to satisfy customer's needs. Quality function deployment (QFD) taking customer expectations and transforming them into specific actions designed to meet those expectations Reliability—ability to perform the promised service dependably and accurately. Responsiveness—willingness to help customers and provide prompt service. Assurance—knowledge and courtesy of employees and their ability to convey trust and confidence. Empathy—provision of caring, individualized attention to customers. Tangibles—appearance of physical facilities, equipment, personnel, and communication materials, including access and effectiveness of Internet-based information. Service Qualities Performance—primary operating characteristics of a product. Features—secondary characteristics that supplement the product's basic functioning. Reliability—length of time a product will function before it fails, or the probability it will function for a stated period of time. Conformance—degree to which a product's design and operating characteristics match preestablished standards. Durability—ability of a product to function when subjected to hard and frequent use. Serviceability—speed, courtesy, and competence of repair. Aesthetics—how a product looks, feels, sounds, tastes, or smells. Perceived Quality—image, advertising, or brand name of a product. Qualities of Goods Failure Appraisal Prevention 3 Costs of Quality Failure costs can be internal to the organization or external involving the customer. Appraisal costs investment in measuring quality and assessing customer satisfaction. Prevention costs result from activities designed to prevent defects from occurring. Internal Failure Failure within the organization before product or service reaches or affects the customer External Failure Failure outside of the organization that reaches or directly affects the customer Used the phrase "Do it right the first time." Wrote a book in 1979 entitled "Quality is Free" and concept of zero defects as a measurable object Emphasized the importance of considering all costs of quality Crosby Focus was on the customer's perception of quality Quality must be built on 3 elements: quality planning, quality control, and quality improvement. Focused on Fitness for use and Pareto Principl [Show More]

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