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SCM 303 Exam Review Chapter 14,9,10,11

SCM 303 Exam Review Chapter 14,9,10,11 - Chapter 14...

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Chapter 14 Independent Demand Inventory Planning Independent Demand- Demand that is unpredictable or random. Demand not linked to another scheduled product or event. Ex. Maintenance Supplies, Repair parts, Customer Demand. Dependent Demand- demand that is directly related to scheduled product or event. Requirements that can be predicted by knowing the schedule or demand for the related product or event. Ex. Component parts or sub assemblies needed to meet an established production schedule, Cartons and packaging materials for a similar established schedule. Total Acquistion cost- The sum of all relevant inventory costs incurred each year. Economic order quantity(EOQ)- The order quantity that minimizes the sum of annual inventory carrying cost and annual ordering cost. Reorder Point(ROP)- The minimum level of inventory that triggers the need to order more. EOQ price break procedure- 1. identify price breaks. 2. Calculate EOQs at each price break 3. Determine order quantity for each price break –EOQ if eoq > min q –min q if EOQ< min q. 4. Calculate total acquisition costs for each price break, including product cost. 5. Pick Q with lowest total cost. Production order quantity - POQ is the most economic quantity to order when units become available at the rate at which they are produced. Directly correlates with EOQ in calculations Demand during lead time - the amount of demand that occurs while awaiting receipt of an inventory replenishment order. Service level policy – Specification of the amount of risk of incurring stockout that a firm is willing to incur. Two bin item- inventory of an item is stored in two different locations Chapter 9 Customer Management Customer Management- The design and execution of the processes that provide customers with products and services they desire. Hierachy of commitment to customers - Bottom of the pyramid consists of customer service including, product availiability, lead time performance, and service reliability. The middle consists of Customer Satisfaction including , meeting or exceeding customer expectations. The smallest category at the top of the period is Customer Success including assisting customers in meeting objectives. Customer service- a suppliers ability to provide product availiability, lead time performance, and service reliability. Product Availibility- the capacity to have inventory present when and where it is desired by a customer. Fill rate- a measure of the impact of stockouts over time or over multiple orders from customers. Unit fill rate- the percentage of total quantity of units ordered by customers that are actually delivered. Line fill rate- a measure of service performance as the percentage of purchase order lines that are filled in total. Order fill rate- a measure of the percentage of orders that are shipped complete with all items ordered by a customer.
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