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chapter 6 outline - PRODUCTION PROCESSES The production...

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PRODUCTION PROCESSES: The production process can be divided into three simple steps: 1. Source: Sourcing the parts we need 2. Make: actually making the item 3. Deliver: sending the item to the customer Lead time is the time needed to respond to the customer order Customer order decoupling point determines where the inventory is positioned to allow entities in the supply chain to operate independently Selection of decoupling points is a strategic decision that determines customer lead times and can greatly impact inventory investment. The closer the decoupling point is to the customer, the quicker the customer can be served *** trade off between quickness and expenses The positioning of the decoupling point depends on the production environment used: 1. Make to stock: customer lead time is short; decoupling point comes after the Make in the process – customer not very involved in process – essential issue in satisfying customers is to balance the level of
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