TOM Study Guide for Midterm Exam #2

TOM Study Guide for Midterm Exam #2 -...

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Operations Strategy : developing processes resources, capacity/  Operational Capabilities : cost, quality, time, innovative, flexibility  Operations Planning and Inventory Management I o Different Types of Inventories     Raw Materials and Purchased Parts Partially Completed Goods (WIP) Safety Stock FGI Replacement Parts, Tools, and Supplies Goods-In-Transit to Warehouses or Customers Remanufactured Goods o Different Functions of Inventory     To meet anticipated demand; offer size selection To smooth production requirements Buffers against uncertainty in demand and supply To help hedge price increases To take advantage of quantity discounts To take advantage of order cycles o ABC Approach to Inventory Management     A Items: very valuable – directly managed B Items: mass produced, valuable in aggreg – manage using elec ordering C Items: consumables (nuts,bolts) – bulk purchases, visual controls o Inventory as a Balance between Supply and Demand     Independent Demand Demand for finished goods, directly influenced by cust demand Dependent Demand Components for other products, design and lead time o Inventory as a Measure of Success     Quality, Lot Sizes, Maintenance, Scrap, Process Design, Product Design o Inventory Management Models     Single Period  – newsvendor, demand variable/uncertain Optimal Stocking Level where Exp. Short = Exp. Excess Excess (Overage) Cost - Price at which the product was produced  Shortage (Underage) Cost - Contribution of product + any good will loss Multiple Period  – computer monitor Continuous Review – fixed order quant, high value items 
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  • Fall '13
  • Gomes
  • average demand, Dependent Demand

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