Chapter 6 FACILITY AND WORK DESIGN  Its concept was developed at the Toyota

Motor Company.
Facility - layout refers to the specific arrangement of  Facilitates the processing of families of parts
physical facilities. with similar processing requirements called
Facility layout studies are necessary whenever: Group technology
1. A new facility is constructed 4.Fixed-Position Layout
2. There is a significant change in demand and  Consolidates the resources necessary to
throughput volume manufacture a good or deliver a service
3. A new good or service is introduced to the (people, materials, equipment) in one
customer package physical location.
4. Different processes, equipment and/or  Synonymous with the “project” classification
technology are installed. of processes.
Four Major Layout Patterns  Work-in-process remains stationary
1. Product Layout  Usually require a high level of planning and
2. Process Layout control compared with other types of
3. Cellular Layout layouts.
4. Fixed-position Layout  Used for the production of large items and
1. Product Layout by service-providing firms.
 Is an arrangement based on the sequence of FACILITY LAYOUT IN SERVICE ORGANIZATION
operations that is performed during the  Service organization use products, process,
manufacturing of a good or a delivery of a cellular, and fixed position layouts to
service. organize different types of works.
 Support a smooth and logical flow where all  In service organizations, the basic trade-off
goods or services move in a continuous path between product and process layouts
using the same sequence of work tasks and concerns the degree of specialization versus
activities. flexibility. Services must consider the
Advantages of Product Layouts volume of demand, range of the types of
 Higher output rates services offered, degree of personalization
 Lower work-in-process inventories of the service, skills of employees, and cost.
 Less materials handling Designing Product Layouts
 Higher labor and equipment utilization  Product Layouts in flow shops generally
 Simple planning and control systems consist of a fixed sequence of workstations.
Disadvantages of Product Layouts  Workstations are generally separated by
 A breakdown of one piece of equipment can buffers to store work waiting for processing
cause entire process to shutdown. and often linked by gravity conveyors to
 Less flexible and expensive to change allow easy transfer of work.
 Usually require more costly, specialized Two Sources of delay:
equipment.  Flow-blocking delay
 May provide little job satisfaction  Lack-of-work delay
2. Process Layout Flow-blocking delay or (Blocking Delay) - Occurs when
 Consists of a functional grouping of a work center completes a unit but cannot release it
equipment or activities that do similar work. because the in-process storage at the next stage is
 Provide more flexibility and generally full. The worker must remain idle until storage space
require a lower investment compared to becomes available.
product layouts. Lack-of-work delay - Occurs whenever one stage
Examples: completes work and no units from the previous stage
1. Job shops are awaiting processing. Lack-of-work delay is often
2. Legal offices described as “starving” the immediate successor
3. Shoe manufacturing workstation
4. Jet turbine blades Assembly-line balancing
5. Hospitals Assembly Line
ADVANTAGES:  an important type of product layout
 If a piece of equipment fails, it generally  dedicated to combining the components of
does not affect the entire system. a good or service that has been created
 Diversity of jobs can lead to increased previously.
worker satisfaction.  pioneered by Henry Ford
 vital to economic prosperity
DISADVANTAGES:  Backbone of many industries (automobiles,
 Low equipment utilization appliances)
 High materials-handling costs  lower costs and affordable to mass markets
 More complicated planning and control Assembly-line balancing - is a technique to group
systems tasks among workstation so that each workstation
 Higher worker skill requirements has in the deal case the same amount of work.
3. Cellular Layout Assembly-line balancing focuses on organizing work
 Design is not according to the functional efficiently in flow shops.
characteristics of equipment but rather is Cycle Time (CT)
based on self-contained group of equipment  An important concept in assembly-line
called Cells. balancing
Cells - needed for producing a particular set of goods  Is the interval between successive outputs
or service coming off the assembly line.
  Cannot be smaller than the largest also need to facilitate service management
operation time nor can it be larger than the skills, particularly in high-contact, front-
sum of all operation times office environments.
CT = A/R
Workplace Design
CT= Cycle Time
A= Available time to produce output
Key questions that must be addressed in designing the
R= the demand forecast
workplace:
Cycle Time = Available time to produce output / the
demand forecast 1. Who will use the workplace? Will the
Minimum number of workstations required workstation be shared? How much space is
= Sum of task times/Cycle Time required?
Total time available 2. How will the work be performed? What
= (Number of workstations)(Cycle time) tasks are required? How much time does
= (N)(CT) each task take? How much time is required
Total idle time = (N)(CT) – elements of t to setup for the workday or for a particular
Assembly-line efficiency job? How might the tasks be grouped into
= Elements of t/(N x CT) work activities most effectively?
Balance delay = 1 – Assembly-line efficiency 3. What technology is needed?
4. What must the employee be able to see?
Line-Balancing Approaches 5. What must the employee be able to hear?
 With a large number of tasks, the number of 6. What environmental and safety issues need
possible workstation configurations can be to be addressed? What protective clothing
very large, making the balancing problem or gear should the employee wear? What is
very complex. Decision rules, or heuristics, an acceptable noise level? Are all employees
are used to assign tasks to Workstation trained on emergency evacuation
 For large line-balancing problems, decision procedures and plans?
rules are incorporated into computerized
algorithm and simulation models. Job Design

 The physical design of a facility and the

Designing Process Layouts
workplace can influence significantly how
 We are concerned with arrangement of
workers perform their jobs as well as their
departments or work centers relative to
psychological well-being.
each other.
Job – is the set of tasks an individual performs
Two major approaches:
1. Focuses on the cost associated with moving Job Design - involves determining the specific job
materials or the inconvenience that customers might tasks and responsibilities, the work environment and
experience in moving between physical locations. the methods by which the tasks will be carried out to
This approach is widely used in manufacturing as it meet the goals of operations.
usually starts with an initial layout & data on Two broad objectives to be satisfied:
historical or forecasted volume between departments
and materials-handling costs.  To meet firm’s competitive priorities.
 To make the job safe, satisfying and
2. Used when it is difficult to obtain data on costs or motivating for the worker.
volumes moved between departments.
Sociotechnical Approach
This approach is useful in many service applications
such as (offices, laboratories, retail stores) Rather 1. Sociotechnical Approach to Job design
than using materials-handling costs as the primary
The relationships between the technology of
criterion, the user constructs as preference table that
operations and the social/psychological aspects of
specifies how important it is for two department to be
work has been understood since 1950s.
close to one another.
Provides useful ideas for operations managers
An example of such “closeness ratings” follows:
2. Sociotechnical Approach to Work Design
A. Absolutely necessary
B. Especially important Provides opportunities for continual learning and
C. Important personal growth for all employees
D. Ordinary closeness is okay
E. Unimportant Job Enlargement
F. Undesirable
Is the horizontal expansion of the job to give the
Workplace and Job Design worker more variety although not necessarily more
responsibility
 Not only is it important to efficiently design
the overall facility layout, but it is equally Job Enrichment
important to focus on the design of
Vertical expansion of job duties to give the worker
individual workstations and the jobs
more responsibility.
performed by the workforce.
 A well-designed workplace must allow for Safety, Ergonomics and the Work Environment
maximum efficiency and effectiveness as the
Safety
work task or activity is performed and may
  one of the most important aspects of Chapter 8
workplace design, particularly in today’s
society. CAPACITY MANAGEMENT
 A function of the job, the person performing
CAPACITY
the job and the surrounding environment
 In a general sense, capacity is a measure
Ergonomics
of the capability of a manufacturing or
 concerned with improving productivity and service system to perform its intended
safety by designing workplaces, equipment, function.
instruments, computers, workstations, and  In practice, it is measured by the
so on that consider the physical capabilities
amount of output that can be produced
of people.
in a particular period.
 Objective is to reduce fatigue, cost of
trading, human errors, cost of doing the job UNDERSTANDING CAPACITY
and energy requirements while increasing
accuracy, speed, reliability and flexibility. Capacity is the capability of a manufacturing or
service resource such as a facility, process,
A Gallup study
workstation, or piece of equipment to
 showed that the less satisfied workers are accomplish its purpose over a specified time
with the physical aspects of their work period.
environment such as temperature, noise or
visual surrounding, the more likely they are Capacity can be viewed in one of two ways:
dissatisfied with their jobs.
 as the maximum rate of output per unit
Workforce Ethics and Global Supply Chains of time; or
 as units of resource availability
Global supply chains

 Bring a host of new issues related to design

of work

Ethical trade

 Means that retailers, brands and their

suppliers take responsibility for improving
the working conditions of the people who
make the products they sell
Economies of scale
Ethical Trading Initiative (ETI)
 are achieved when the average unit cost
 Leading alliance of companies, trade unions of a good or service decreases as the
and nongovernmental organizations that capacity and/or volume of throughput
promotes respect for worker’s rights around increases.
the globe.
Diseconomies of Scale
ETI seeks to ensure the following:
 occur when the average unit cost of the
 Employment is freely chosen.
good or service begins to increase as the
 Freedom of association and the right to
capacity and/or volume of throughput
collective bargaining are respected.
increases.
 Working conditions are safe and hygienic.
 Child labor shall not be used. Focused factory is a way to achieve economies
 Living wages are paid. of scale, without extensive investments in
 Working hours are not excessive. facilities and capacity, by focusing on a narrow
 No discrimination is practiced.
range of goods or services, target market
 Regular employment is provided.
segments, and/or dedicated processes to
 No harsh or inhumane treatment is allowed.
maximize efficiency and effectiveness.

The focused factory argues to "divide and

conquer" by adopting smaller, more focused
facilities dedicated to:

 a few key products

 a specific technology
 a certain process design and capability
 a specific competitive priority objective
such as next-day delivery
 particular market segments or
customers and associated volumes
CAPACITY MEASUREMENT IN OPERATIONS the firm, but whose seasonal demand patterns
are out of phase with each other.
 Capacity measures are used in many
ways in long-term planning and short- CAPACITY EXPANSION
term management activities.
 Capacity requirements are rarely static;
Safety capacity ( often called capacity changes in markets and product lines
cushion) and competition will eventually require
a firm to either plan to increase or
 defined as an amount of capacity
reduce long-term capacity. Such
reserved for unanticipated events such
capacities require determining the
as demand surges, materials shortages,
amount, timing and form of capacity
and equipment breakdowns, is normally
changes.
planned into a process or facility. In
general, average safety capacity is To illustrate capacity expansion decisions, let us
defined by make two assumptions:

Average safety capacity (%)= 100% - Average  capacity is added in "chunks, " or
resource utilization (%) discrete increments;
 demand is steadily increasing
CAPACITY MEASUREMENT
Four basic strategies for expanding capacity over
Work order is a specification of work to be
some fixed time horizon are:
performed for a customer or client.
 One large capacity increase
General expression for evaluating the
 Small capacity increases that match
capacity required to meet a given
demand
production volume for one work order, i.
 Small capacity increases that lead
Capacity required (Ci) = Setup time (Si) + demand
[Processing time (Pi) x Order size (Qi)]  Small capacity increases that lag
demand
where,
SHORT-TERM CAPACITY MANAGEMENT
 Ci = capacity requirements in units of
time for work order i  If short-term demand is stable and
 Si= setup or changeover time for work sufficient capacity is available, then
order i as a fixed amount that does not managing operations to ensure that
vary with volume demand is satisfied is generally easy.
 Pi= processing time for each unit of However, when demand fluctuates above and
work i Qi= size of order i in numbers of below average capacity levels, firms have two
units basic choices
If we sum the capacity requirements over all 1. They can adjust capacity to match the
work orders, we can compute the total changes in demand by changing internal
capacity required resources and capabilities.
⅀ Ci = ⅀ [ Si + (Pi x Qi) 2. Manage capacity by shifting and
stimulating demand.
USING CAPACITY MEASURES FOR OPERATINGS
PLANNING MANAGING CAPACITY BY ADJUSTING SHORT-
TERM CAPACITY LEVELS
 Capacity needs must be translated into
specific requirements for equipment Short-term adjustments to capacity can be done
and labor in a variety of ways and are summarized as
follows:
LONG-TERM CAPACITY STRATEGIES
 Add or share equipment: Capacity levels
Capacity costs include both the initial that are limited by machine and
investment in facilities and equipment and the equipment availability are more difficult
annual cost of operating and maintaining them, to change in the short run because of
much of which are fixed costs. high capital expense. However, leasing
Long-term capacity planning must be closely tied equipment as needed can accomplish
to the strategic direction of the organization- this in a cost-effective manner. Another
what products and services it offers. way is through innovative partnership
arrangements and capacity sharing.
Complementary goods and services, which are  Sell unused capacity: Some firms might
goods and services that can be produced or sell idle capacity, such as computer
delivered using the same resources available to storage space and computing capacity,
 to outside buyers and even to knowledge of when customer demand
competitors. will occur, operations managers can
 Change labor capacity and schedules: better plan their equipment and
Labor capacity can usually be managed workforce schedules and rely less on
easily through short-term changes in forecasts.
workforce levels and schedules.
Revenue Management Systems (RMS)
Overtime, extra shifts, temporary
consists of dynamic methods to forecasts
employees, and outsourcing are
demand, allocate perishable assets across
common ways of increasing capacity.
market segments, decide when to overbook
 Change labor skill mix: Hiring the right
and by how much, and determine what
people who can learn quickly and adjust
price to charge different customer (price)
to changing job requirements and cross-
classes.
training them to perform different tasks
provides the flexibility to meet These four components of RMS—
fluctuating demand.
 Shift work to slack periods: For example,  forecasting,
hotel clerks prepare bills and perform  allocation,
 overbooking, and
other paperwork at night, when check-
 pricing-- must work in unison if the
in and checkout activity is light. This
allows more time during the daytime objective is to maximize the revenue
hours to service customers. generated by a perishable asset.
Manufacturers often build up inventory The Theory of constraints (TOC)
during slack periods and hold the goods
for peak demand periods.  is a set of principles that focuses on
increasing total process throughput by
MANAGING CAPACITY BY SHIFTING AND maximizing the utilization of all
STIMULATING DEMAND bottleneck work activities and
Some general approaches to influence workstations.
 The TOC views throughput differently:
customers to shift demand from periods without
adequate capacity to periods with excess throughput is the amount of money
capacity, or to fill times with excess capacity, generated per time period through
include the following: actual sales.
 In the TOC, a constraint is anything in an
 Vary the price of goods or services: Price organization that limits it from moving
is the most powerful way to influence toward or achieving its goal. There are
demand. two basic types of constraints: physical
 Provide customers with information: and nonphysical.
Many call centers, for example, send
notes to customers on their bills or to Physical constraint
provide an automated voice message  is associated with capacity of a resource
recommending the best times to call. such as machine, employee or
 Advertising and promotion: After-holiday workstation. It results in process
sales are heavily advertised in an bottlenecks.
attempt to draw customers to periods
of traditionally low demand.  Bottleneck (BN) work activity is
 Add peripheral goods and/or services: one that effectively limits the
Movie theaters offer rentals of their capacity of the entire process.
auditoriums for business meetings and At a bottleneck, the input
special events at off-peak times. Fast- exceeds the capacity, restricting
food chains offer birthday party the total output that is capable
planning services to fill up slow demand of being produced.
periods between peak meal times.  Non bottleneck (NBN) work
Extended hours also represent a activity is one in which idle
peripheral service; many supermarkets capacity exists.
remain open 24/7 and encourage
customers to shop during late-night Nonphysical constraint is environmental or
hours to reduce demand during peak organizational, such as low product demand or
times. an inefficient management policy or procedure.
 Provide reservations: A reservation is a
promise to provide a good or service at
some future time and place.
Reservations reduce the uncertainty for
both the good or service provider and
the customer. With advanced
Chapter 7 Call Center Volume
Example of a time series with trend and seasonal
Forecast and Demand Planning
components:
Forecasting is the process of projecting the values of
one or more variables into the future.

Types of forecasts:

 Long-range forecasts in total sales dollars

(top management level)
 Aggregate forecasts of sales volume (middle
management level)
 Forecasts of individual units (operational
level)

The need for forecasts in a Value Chain

Chart of Call Volume

Planning Horizon is the length of time on which a

forecast is based.

- This spans from short-range forecasts with a

planning horizon of under 3 months to long-
range forecasts of 1 to 10 years.
Forecast error is the difference between the
Time Bucket is the unit of measure for the time observed value of the time series and the forecast, or
period used in a forecast. 𝐴 -𝐹.
Time Series is a set of observations measured at
successive points in time or over successive periods
of time.

A time series pattern may have one or more of the

following 5 characteristics:

- Trend
- Seasonal patterns
- Cyclical patterns
- Random variation (or noise)
- Irregular (one time) variation MSE is influenced much more by large forecasts
errors than by small errors (because the errors are
Trend is the underlying pattern of growth or decline squared).
in a time series.
- The measurement scale factor in MAPE is
Seasonal Patterns are characterized by repeatable eliminated by dividing the absolute error by
periods of ups and downs over short periods of time. the time-series data value, making it easier
to interpret.
Cyclical Patterns are regular patterns in a data series
- The selection of the best measure of
that take place over longer periods of time.
forecast accuracy is not a simple matter;
Random Variation (sometimes called noise) is the indeed, forecasting experts often disagree
unexplained deviation of a time series from a on which measure should be used.
predictable pattern, such as a trend, seasonal, or
Statistical Forecasting Models
cyclical pattern.
Statistical Forecasting is based on the assumption
Irregular Variation is a one-time variation that is
that the future will be an extrapolation of the past.
explainable.
Judgmental Forecasting relies upon opinions and
Seasonal pattern of home natural gas usage
expertise of people in developing forecasts.
Single Moving Average Summary of Single Exponential Smoothing Milk-Sales
Forecasts with a = 0.2
A Moving Average (MA) Forecast is an average of the
most recent “k” observations in a time series.

- MA methods work best for short planning

horizons when there is no major trend,
seasonal, or business cycle pattern.
- As the value “k” increases, the forecast
reacts slowly to recent changes in the time
series data.

Solved Problem Excel Moving Average Forecasting Template

Regression as a Forecasting Approach

Regression Analysis is a method for building a

statistical model that defines a relationship between
a single dependent variable and one or more
independent variables, all of which are numerical.

- Simple linear regression finds the best

values of a and b using the method of least
Summary of Three-Month Moving-Average Forecasts squares.
- Excel provides a very simple tool to find the
best fitting regression model for a time
series by selecting the Add Trendline option
from the Chart menu.

Causal Forecasting with Multiple Regression

A Linear Regression Model with more than one

independent variable is called a multiple linear
regression model.

- Multiple regression models can include

other independent variables such as
Milk-Sales Forecast Error Analysis economic indexes or demographic factors
that may influence the time series.

Judgmental Forecasting

Judgmental Forecasting relies upon opinions and

expertise of people in developing forecasts.

- Grass Roots Forecasting is simply asking

those who are close to the end consumer,
such as salespeople, about the customers’
purchasing plans.
- The Delphi Method consists of forecasting by
Single Exponential Smoothing
expert opinion by gathering judgments and
Single Exponential Smoothing (SES) is a forecasting opinions of key personnel based on their
technique that uses a weighted average of past time- experience and knowledge of the situation.
series values to forecast the value of the time series
in the next period.
Forecasting in Practice Raw materials, component parts, subassemblies, and
supplies inputs to manufacturing and service-delivery
 Managers use a variety of judgmental and processes.
quantitative forecasting techniques.
 Statistical methods alone cannot account for Work-in-process (WIP) inventory consists of partially
such factors as sales promotions, finished products in various stages of completion that
competitive strategies, unusual economic are awaiting further processing.
disturbances, new products, large one-time
also acts as a buffer between workstations in
orders, labor complications, etc.
flowshops or departments in job shops.
 Statistical forecasts are often adjusted to
account for qualitative factors. Finished-goods inventory completed products ready
for distribution or sale to customers.
Forecasting in Practice
- might be stored in a warehouse or at the
A tracking signal provides a method for monitoring a
point of sale in retail stores.
forecast by quantifying bias – the tendency of
- necessary to satisfy customers' demands
forecasts to consistently be larger or smaller than the
quickly without having to wait for a product
actual values of the time series.
to be made or ordered from the supplier.
- High levels of WIP and finished-goods
inventories can be undesirable.
- Customer demand is most often highly
Tracking signals between plus and minus 4 indicate variable and uncertain.
an adequate forecasting model.
Safety stock inventory an additional amount that
Chapter 9
is kept over and above the average amount
MANAGING INVENTORIES IN SUPPLY CHAINS required to meet demand.

Inventory Management involves planning, Managing Inventories in Global Supply Chains

coordinating, and controlling the acquisition, storage,  Purchasing, tracking, and managing such a
handling, movement, distribution, and possible sale variety of items in global supply chains
of raw materials, component parts and requires good technology, processes, and
subassemblies, supplies and tools, replacement parts, information technology (IT) support.
and other assets that are needed to meet customer  Technology such as radio-frequency
wants and needs. identification (RFID) chips can increase
 Inventory is any asset held for sale. inventory accuracy to better than 98
 Managing inventories must also be percent, much higher than the current
coordinated with other aspects of its industry average of 65 percent.
operations and supply chain.  With thousands of products and materials,
 Managers are faced with the dual challenges hundreds of suppliers, and numerous orders
of maintaining a sufficient inventories to and shippers, an accurate information
meet demand while at the same time system is essential. Enterprise resource
incurring the lowest possible cost. planning (ERP) systems, such as those sold
by SAP and Oracle, provide the
UNDERSTANDING INVENTORY infrastructure to effectively manage all of
this information.
INVENTORY are physical goods used in operations
 Using cloud computing simplifies data
and include raw materials, parts, subassemblies,
management, improves the availability and
supplies, tools, equipment or maintenance and repair
accessibility of data, and allows companies
items.
to share information among many suppliers.
 In some service organizations, inventories
Environmentally Preferable Purchasing (EPP) or green
are not physical goods that customers take
purchasing, which is the affirmative selection and
with them, but capacity available for serving
acquisition of products and services that most
customers.
effectively minimize negative environmental impacts
Marketing and operations prefer high inventory levels over their life cycle of manufacturing, transportation,
to provide the best possible customer service and use, and recycling or disposal.
process efficiency.

Financial Personnel seek to minimize inventory  The purchasing or procurement function is

investment and thus would prefer small inventories. responsible for acquiring raw materials,
component parts, tools, and other items
Key Definitions and Concept required from outside suppliers.
Many different types of inventories are maintained
through the value chain - before, during & after
production.
Inventory Management Decisions and Costs  single-period" inventory problems is
different from the approach needed for the
Inventory managers deal with two fundamental
"multiple-period" inventory situation.
decisions:
Lead Time The lead time is the time between
1. When to order items from a supplier or when to
placement of an order and its receipt. Lead time is
initiate production runs if the firm makes its own
affected by transportation carriers, buyer order
items.
frequency and size, and supplier production
2. How much to order or produce each time a schedules, and may be deterministic or stochastic (in
supplier or production order is placed. which case it may be described by some probability
distribution).
Inventory costs can be classified into four major
categories: Stockouts

 Ordering or setup costs A Stockout is the inability to satisfy the demand for
 Inventory-holding costs. an item.
 Shortage costs.
 Unit cost of the SKUs. A Backorder occurs when a customer is willing to wait
for the item; a lost sale occurs when the customer is
Ordering costs setup costs are incurred as a result of unwilling to wait and purchases the item elsewhere.
the work involved in placing orders with suppliers
- BACKORDERS result in additional costs for
Inventory-holding Inventory-carrying costs are the transportation, expediting, or perhaps
expenses associated with carrying Inventory. buying from another supplier at a higher
- Holding costs are typically defined as a price.
percentage of the dollar value of inventory - A lost sale has an associated opportunity
per unit of time (generally one year). cost, which may include loss of good. will
and potential future revenue.
Shortage stockout costs are costs associated with
inventory being unavailable when needed to meet ABC Inventory Analysis
demand. application of the Pareto princtple, named after an
Unit cost the price paid for purchased goods or the Italian economist who studied the distribution of
internal cost of producing them. In most situations, wealth in Milan during the 1800s. He found that a
the unit cost is a "sunk cost because the total Vital few controlled a high percentage of the wealth.
purchase cost is not affected by the order quantity.  ABC analysis consists of categorizing
Inventory Characteristics inventory items or SKUs into three groups
according to their total annual dollar usage:
One of the first steps in analyzing an inventory "A" "B" "C"
problem should be to describe the essential
characteristics of the environment and inventory "A" items account for a large dollar value but a
system that follow: relatively small percentage of total items.

Number of Items. "B" items that are between A and C

 Most firms maintain inventories for a large "C" items account for a small dollar value but a large
number of items, often at multiple locations. percentage of total items.
 stock-keeping unit, or SKU.A stock-keeping Managing Fixed-Quantity Inventory Systems
unit (SKU) is a single item or asset stored at
a particular location.
IP = OH + SR - BO
Nature of Demand

Demand can be classified as independent or Fixed-quantity System (FQS) Order quantity or lot size
dependent, constant or uncertain, and dynamic or is fixed; that is, the same amount, Q, order quantity,
static. is ordered every time.
INDEPENDENT DEMAND is demand for an SKU that Is  The "Q" could be any quantity of product,
unrelated to the demand for other SKUs and needs to such as box, pallet, or container, as
be forecasted. determined by the vendor by the vendor or
DEPENDENT DEMAND if their demand is directly shipping standards.
related to the demand of other SKUs and can be  Appropriate way to manage FQS is
calculated without needing to be forecasted. continuously monitoring the inventory level
and place orders when it reaches "critical"
STABLE DEMAND is usually called static demand, and value
demand that varies over time is referred to as  Process of triggering orders is based on the
dynamic demand. inventory position.
Number and Duration of Time Periods Inventory Position (IP) defined as the on-hand
quantity (OH) plus any orders placed but which have
 In some cases, the selling season is relatively
nor arrived (called scheduled receipts, SR), minus any
short, and any leftover items cannot be
backorders (BO).
physically or economically stored until the
next season.
Reorder Point - value of the inventory position that
triggers a new order.

 When inventory position falls at or below a

certain value, r, or the reorder point, new
order is placed.
 Question: Why not base the reordering
decision on the physical inventory level -
that is, just the on-hand quantity, instead of
a more complex calculation?
 Basically, when an order is placed but has Cycle Inventory - inventory that results from
not been received, the physical stock level purchasing or producing in larger lots than are
will continue to fall below the reorder point needed for immediate consumption or sale
before the order arrives. If the process or
ordering is automated, the computer logic  From the constant demand assumption, the
will continue to place many unnecessary average cycle inventory can be easily
orders simply because it will see the stock computed as the average of the maximum
level being less than r, even though the and minimum inventory levels
original order will soon arrive and replenish
the stock.

 If the average inventory during each cycle is

Q/2, then average inventory level over any
number of cycles is also Q/2.
 Inventory holding cost can be calculated by
multiplying the average inventory by the
cost of holding one item in inventory for the
stated period.
 The period of time selected for the model is
up to the user; it can be a day, week, month,
or year.
 However, inventory holding costs for many
industries and businesses are expressed as
an annual percentage or rate, most
inventory models are developed on an
annual cost basis.

I = annual inventory-holding change expressed as a

percent of unit cost.

C = unit cost of the inventory item or SKU

The EOQ Model

Economic Order Quantity (EOQ) Model - a classic

economic model developed in the early 1900s which
minimizes the total cost, which is the sum of the
inventory-holding cost and the ordering cost.
 Second component of total cost, annual
Several Key Assumptions underlie the quantitative ordering cost. The inventory-holding cost is
model we will develop: expressed on an annual basis, so the
ordering cost will be in annual terms also.
 Only a single item (SKU) is considered
 D denotes the annual demand for the
 The entire order quantity (Q) arrives in the
product, we know that by ordering Q items
inventory at one time.
each time we order, we have to place D/Q
 Only two types of costs are relevant-
orders per year. If Co is the cost of placing
order/setup and inventory-holding cost.
one order, the general expression for the
 No stockouts are allowed
annual ordering cost is shown.
 Demand for the item is constant and
continuous over time.
 Lead time is constant.
Total Annual Cost Formula  Replenishment level

-We can set the length of the review period

judgmentally based on the importance of the item or
the convenience of review.

-The EOQ model provides the best "economic time

Order Quantity Formula
interval" for establishing an optimal policy for an FPS
system under the model assumptions.

- The optimal replenishment level without any safety

stock is computed by:

Safety Stock and Uncertain Demand in a FQS

 Stockouts occur whenever lead time

demand exceeds the reorder point.
 When demand is uncertain, using EOQ
based on the average demand will result in
high probability stockout. One way to
address this is to set up a safety stock. -To add safety stock to the replenishment level (M) in
 To determine the appropriate reorder point, an FPS, we can use the same statistical principle as
we need to know the probability distribution with the FQS. Safety stock over the period T + L, so
of the lead time demand. the replenishment level must be computed as
follows:
Service Level - desired probability of not having a
stockout during a lead-time period.

Choosing a service level is a management policy

decision.

When demand is uncertain, the reorder point is the

average demand during the lead time plus the -The choice of which systems to use depends on
additional safety stock. variety of factors, such as how many total SKUs the
firm must monitor, whether computed or manual
systems are used, availability of technology and
human resources, nature of ABC profile, strategic
focus of the organization.

Single-Period Inventory Model

 Applies to inventory situations in which one

order is placed for a good in anticipation of a
future selling season where demand is
uncertain.
 During the end of the period, the product
has either sold out, or there is a surplus of
unsold items to sell for a salvage value.
 Single-period models are used in situations
Managing Fixed-Period Inventory Systems
involving seasonal or perishable items that
Alternative to FQS is Fixed-Period System (FPS) - in
cannot be carried in inventory and sold in
which the inventory position is checked only at fixed
future periods.
intervals of Time, rather than a continuous basis.
 In a single-period inventory situation, the
- During the time of review, order is placed only inventory decision is how much of the
for sufficient stock to bring inventory product to order at the start of the period.
position up to a predetermined minimum Example of this is newspaper sales, the
level, or replenishment level, or "order-up- single-period inventory problem is
to" level. sometimes referred to as the newsvendor
problem.
 Newsvendor problem can be solved using a
Two principal decisions in an FPS: technique and that is marginal economic
analysis, which compares the cost or loss of
 Time interval between reviews
 ordering one additional item with the cost THE SCOR MODEL
or loss of not ordering one additional item.
Supply Chain Operations Reference
Cost involved are defined as:
Framework for understanding the scope of
supply chain management (SCM) that is based
on five basic functions involved in managing a
supply chain, which are the key processes that
create value to customers.

1. Plan - Balances resources with

requirements and establishes and
This formula can be used for any probability communicates plans for the entire
distribution of demand, such as uniform or a normal supply chain.
distribution. 2. Source - Procuring goods and services
to meet planned or actual demand.
CHAPTER 10: SUPPLY CHAIN MANAGEMENT
3. Make - Transforming goods and services
AND LOGISTICS
to a finished state to meet demand.
PILLARS FOR THE COMPANY'S SUCCESS 4. Deliver - Managing orders,
transportation, and distribution to
 CREATING VALUEBASED PARTNERSHIPS provide the goods and services.
WITH SUPPLIERS BACKED BY FACTUAL 5. Return - Processing customer returns.
INFORMATION
 LEADERSHIP SOURCING AND PURCHASING
 FLEXIBILITY Suppliers - vital to supply chains. Provide the
 TRUST materials and components needed for
SUPPLY CHAIN MANAGEMENT (SCM) production to ultimately meet customer
demand.
 Is the management of all activities that
facilitate the fulfillment of a customer Purchasing(procurement) - is the function
order for a manufactured good to responsible for acquiring raw materials,
achieve customer satisfaction at a component parts, tools, services, and other
reasonable cost. items required from external suppliers.

MANAGING SUPPLY CHAINS MANAGING SUPPLIER RELATIONSHIPS

 Managing a supply chain requires THREE PRINCIPLES FOR WORKING WITH

numerous operational activities, SUPPLIERS
including working closely with suppliers,  Recognizing their strategic importance
purchasing, transportation, inventory in accomplishing business objectives
management, managing risks that may such as minimizing the total cost of
disrupt the supply chain, measuring ownership.
supply chain performance, and ensuring  Developing a win-win relationship
sustainability. through long-term partnerships rather
 An important component of supply than as adversaries.
chain management is called logistics.  Establishing trust through openness and
LOGISTICS honesty, therefore, leading to mutual
advantages.
 Is the management of transportation
activities and the flow of materials SUPPLY AND VALUE CHAIN INTEGRATION
within a supply chain to ensure Supply Chain Integration - is the process of
adequate customer service at a coordinating the physical flow of materials to
reasonable cost. It plays a key role both ensure that the right parts are available at
externally and internally. various stages of the supply chain, such as
Logistics function is responsible for: manufacturing and assembly parts.

 selecting transportation carriers Value Chain Integration - is the process of

managing information, physical goods, and
 managing company-owned fleets of
services to ensure their availability at the right
vehicles
place, at the right time, at the right cost, at the
 distribution centers
right quantity, and with the highest attention to
 warehouses
quality
 controlling efficient interplant
movement of materials and goods
within the supply chain.
Logistics Managers 3 Primary Responsibilities Ships and Barges

 Purchasing transportation services  Generally limited to transporting large

 Selecting appropriate modes of quantities of bulky items-historically,
shipment and a mix of specific carriers. raw materials and other manufactured
 Contracting with suppliers for domestic products from overseas
and global transportation services.
Pipelines
 Negotiating transportation rates, and
shipping, insurance, and liability  Carry water, petroleum, natural gas,
contracts and sometimes a slurry of minerals or
 Managing international trade commodities. Pipelines have limited use
agreements, custom laws, and and accessibility and are used primarily
import/export fees. for oils and natural gas.
 Using business analytics to evaluate
Critical Factors in selecting a transportation
different shipping options
mode:

 Managing the transportation of  SPEED

materials and goods through the  ACCESSIBILITY
supply chain  COST
 Tracing shipments in transit and  CAPABILITY
expedite them when necessary.
INVENTORY MANAGEMENT
 Coordinating shipments with
airports, rail yards, and seaport Inventories
docks.
 support the supply chain by providing
 Issuing and auditing freight bills.
materials and goods where and when
they are needed at every stage of the
 Managing inventories
supply chain for production and to
 Managing the flow of goods through
customers.
warehouses, and sometimes, shipping
directly to retail stores and customers. Vendor-managed inventory (VMI)
 Filing claims for damaged goods
 is where the vendor(supplier) monitors
TRANSPORTATION and manages inventory for the
customer. VMI essentially outsources
Transportation costs can add up to 10% to the
the inventory management function in
total cost of the product as it moves through
supply chains to suppliers.
the supply chain.
RISK MANAGEMENT IN SUPPLY CHAINS
Rail Transport
 Companies face a multitude of risks in
 Provides a good balance between costs,
managing supply chains. Risks in
delivery speed, tonnage capacity, and
domestic supply chains are often
environmental sustainability.
minimal, however, risks in global supply
Trucks chains are much greater. Good supply
chain managers must anticipate and
 The most flexible of all transportation
mitigate these risks to ensure that the
modes with the capability for door-to-
supply chain will be able to create and
door pickup delivery.
deliver its goods and services
Backhaul worldwide.

 When a truck delivers its load and also SUPPLY CHAINS IN E-COMMERCE
carries freight on the return journey.
 E-commerce has greatly influenced the
Without backhaul business, the capacity
design and management of supply
utilization of the truck is low and non-
chains. There are many types of supply
revenue producing.
chains other than business to customer
Transportation (B2C). Other major e-commerce
relationships and supply chains
Domestically, most consumer items are shipped
structures include B2B-business to
via rail, trucks, and air
business, C2C- customer to customer,
Air Shipments G2C- government to customer, GSG-
government to government, and
 Have the highest transportation cost, G2Bgovernment to business.
are very fast for long distances, but are
very limited in how much weight they
carry.
MEASURING SUPPLY CHAIN PERFORMANCE with a goal of improving the supplier
performance measurement process and
 Supply chain managers use numerous
its tools. Many companies segment
metrics to evaluate performance and
suppliers into categories based on their
identify improvements to the designs
importance to the business and manage
and operation of their supply chains.
them accordingly.
Business analytics is used to create a
visual dashboard for supply chain GREEN SUSTAINABLE SUPPLY CHAIN
managers to gain insights into the
 A green sustainable supply chain as one
relationships between these metrics.
that uses environmentally friendly
COMMON METRICS inputs and transform these inputs
through change agents-whose
1. DELIVERY - reliability often end by
byproducts can improve or be recycled
perfect order fulfillment.
within the existing environment. This
2. RESPONSIVENESS - is often measured
results in outputs that can be reclaimed
by order fulfillment level time or by
and reused at the end of their life cycle,
perfect delivery fulfillment.
thus creating a sustainable supply
3. CUSTOMER - RELATED - measures focus
chain. "
on the ability of the supply chain to
meet customer wants and needs. MANUFACTURED GOODS RECOVERY
4. SUPPLY CHAIN EFFICIENCY - measures
 Many companies are developing
include average inventory value and
options to recover manufactured goods
inventory turnover. Inventory turnover
that may be discarded or otherwise
(IT) = Cost of goods sold / Average
unusable.
Inventory Value
5. SUSTAINABILITY - measures show how
 REUSE OR RESELL
supply chain performance affects the
 REPAIR
environment.
 REFURBISH
6. FINANCIAL - measures show how
 REMANUFACTURE
supply chain performance affects the
 CANNIBALIZE
bottom line.
 RECYCLE GOODS
TOTAL SUPPLY CHAIN COSTS  INCINERATION OR LANDFILL
DISPOSAL
 Supply chain managers must consider
not only the direct cost of procurement, REVERSE LOGISTICS
but also costs of transportation, tariffs
 Reverse logistics refers to managing the
and fees, inventory, and management
flow of finished goods, materials or
oversight.
components that may be unusable or
 Total supply chain cost (TSCC) =
discarded through the supply chain
Procurement cost + Oversight cost +
from customers toward either
Transportation cost + Order cycle
suppliers, distributors or manufacturers
Inventory cost + Pipeline Inventory cost
for the purpose of reuse, resale or
THE CASH-TO-CASH CONVERSION CYCLE disposal.

 One of the more useful financial metrics

 LOGISTICS
for evaluating supply chains
 MARKETING/SALES
performance is the cash to cash
 ACCOUNTING/FINANCE
conversion cycle, which identifies cash
 CALL CENTER SERVICE
flows from the time costs are incurred
 LEGAL/REGULATORY
(such as material inventory) to when it
COMPLIANCE
is paid (accounts receivable). The cycle
is computed as inventory days' supply
(IDS) plus accounts receivable days’
supply (ARDS) minus accounts payable
days' supply (APDS)

SUPPLIER EVALUATION AND CERTIFICATION

 Evaluating and measuring supplier

performance plays an important role in
supply chain management. For
instance, Boeing created a forum in
which it meets with supplier
representatives every other month,
3/30/22, 3:12 PM Quiz: Final Exam 2nd Sem 1st Term 2022

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Economies of scale is a situation that occur when the average unit cost of the good or
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The actual utilization rates at most facilities are planned to be 100% of effective
capacity as there are absences of employees and breakdown of equipment to be
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A specification of work to be performed for a customer or a client is called job order.

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The cost of not having sufficient capacity is the opportunity loss incurred from lost
sales and reduced market share.

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Question 5 1 pts

On capacity management, one good strategy the hotels are doing when they are
overbooked is that they develop partnership arrangement with other hotels to
accommodate even competitor’s guest.

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Question 6 1 pts

Vary the price of goods or services means that price is the most powerful way to
influence demand that is why hotels offer cheaper rates on the weekend? Or airlines
might offer better prices for midweek flights.

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Under Advertising and Promotion, Movie theaters offer rentals of their auditorium for
business meetings and special events at off-peak times.

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Question 8 1 pts

It is a must for rank in files to understand the role that inventories play in a company’s
financial performance, operational efficiency and customer satisfaction, and strike the
proper balance in meeting strategic objectives.

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Question 9 1 pts

Different types of inventories are maintained through out the value chain, before,
during and after production and these are; raw materials, work-in-process and
finished goods.

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Question 10 1 pts

The time between placement of an order and its receipt is commonly known as led
time.

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The Theory of Constraints is a set of principles that focuses on increasing total

process throughput.

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Work in process inventory consist of finished products waiting for disposal.

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Question 13 1 pts

It is a must for rank in files to understand the role that inventories play in a company’s
financial performance, operational efficiency and customer satisfaction, and strike the
proper balance in meeting strategic objectives.

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Question 14 1 pts

Different types of inventories are maintained through out the value chain, before,
during and after production and these are; raw materials, work-in-process and
finished goods.

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Question 15 1 pts

The affirmative selection and acquisition of products and services that most
effectively minimize negative environment impacts over their life cycle of
manufacturing is called yellow purchasing.

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Question 16 1 pts

Provide customers with information means that price is the most powerful way to
influence demand that is why hotels offer cheaper rates on the weekend? Or airlines
might offer better prices for midweek flights.

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False

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Question 18 1 pts

It is a must for top management to understand the role that inventories play in a
company’s financial performance, operational efficiency and customer satisfaction,
and strike the proper balance in meeting strategic objectives.

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False

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Question 19 1 pts

Different types of operations are maintained through out the value chain, before,
during and after production and these are; raw materials, work-in-process and
finished goods.

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The inventory managers deal with two fundamental decisions and one of it is when to
order from a supplier.

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The base of Procter & Gamble the company founded by Procter is in New York,
USA.

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Question 22 1 pts

One common notion of quality used by consumers is that it is synonymous with

superiority or excellence called product perspective.

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Question 23 1 pts

Another definition of quality which focus on relationships of product benefits to price

is otherwise known as user perspective.

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The philosopher George Santayana once said that “Those who cannot remember the
past are to repeat it.”

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Question 25 1 pts

Modern quality assurance methods actually began millennia ago in China during the
Shou Dynasty where specific private companies were given responsibilities for
different roles such as in production and manufacturing.

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Question 26 1 pts

In the early Twentieth Century specifically in 1900s the work of Frederick Taylor often
called the “father of scientific management,” led to new philosophy in management.

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Question 27 1 pts

During the post World War II the U.S. consultants Juran and Deming introduced
statistical quality control focusing on the rank in file operations.

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Started: Mar 30 at 3:11pm

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Question 28 1 pts

In the U.S., the chairs and CEOs of nine major US Corporations in cooperation with
dean of business and engineering departments of major universities introduced a
TQM system.

True

False

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3/30/22, 3:53 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 29 1 pts

In quest to remain competitive, and after learning failures of TQM, a new approach to
quality improvement emerged in the late 1990 called Six Sigma.

True

False

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3/30/22, 3:54 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 30 1 pts

Customer focus might be the most important principle of quality management as they
are the judge of the products and services that we sell.

True

False

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3/30/22, 3:56 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

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Question 31 1 pts

Customer segmentation is an important approach customize products and services

as we respond to their needs.

True

False

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3/30/22, 3:57 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

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Question 32 1 pts

It was Deming who suggested that customers be classified into two groups which are
the vital few and the useful many.

True

False

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3/30/22, 4:00 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 33 1 pts

In chapter 17, according to Toyota, there is no secret Toyota Quality Machine out
there except for the workforce, suppliers and engineers.

True

False

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3/30/22, 4:01 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 34 1 pts

The art of creating conditions that allow everyone of us, warts and all, to get his work
done at his own peak level of efficiency is called motivation.

True

False

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3/30/22, 4:02 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

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Question 35 1 pts

Refers to how employees are organized in formal and informal units, such as
departments and teams is called job design.

True

False

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3/30/22, 4:03 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 36 1 pts

The inability to satisfy the demand for an item is called

stockout

backout

lost sale

backorder

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3/30/22, 4:03 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 37 1 pts

The classic economic model developed in the early 1900’s that minimizes the total
cost, which is the sum of inventory holding cost and the ordering cost.

OOQ

ESQ

EOQ

FOQ

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3/30/22, 4:04 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

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Question 38 1 pts

The important component of supply chain management is called

not in choices

capital

manpower

logistics

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3/30/22, 4:04 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

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Question 39 1 pts

One realization in supply chain management is that transportation cost can add up to

15%

8%

5%

10%

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3/30/22, 4:04 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 40 1 pts

When inventories exhibit wild swing up and down this phenomenon of effect is called

cow-whip

bull-whip

elephant-whip

dog-whip

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3/30/22, 4:05 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 41 1 pts

In the introduction of Chapter 7, the author emphasized that forecast is a must

specially in Walt Disney World Resort and he is pointing a forecast in

sales

weather

attendance

employees

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3/30/22, 4:06 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

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Question 42 1 pts

Statistical methods of forecasting are based on the analysis of historical data called

trend

time

bucket

quantitative

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3/30/22, 4:06 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 43 1 pts

Data pattern which are characterized by repeatable periods of ups and downs over
short period

seasonal

irrigular

cyclical

trend

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3/30/22, 4:06 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 43 1 pts

Data pattern which are characterized by repeatable periods of ups and downs over
short period

seasonal

irrigular

cyclical

trend

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3/30/22, 4:06 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 44 1 pts

A method for building a statistical model that defines relationship between a single
dependent variable and one or more independent variables all of which are
numerical

Moving average

Exponential Smoothing

Delphi method

Regression analysis

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3/30/22, 4:07 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 45 1 pts

A kind of forecasting when we rely upon opinions and expertise of people in

developing forecast

judgmental

research

Delphi

grassroots

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3/30/22, 4:07 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 46 1 pts

The capability of a manufacturing or service resource such as a facility, process

workstation, or piece of equipment to accomplish its purpose over a specified period
of time is called

not in choices

capacity

performance

output

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3/30/22, 4:08 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

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Question 47 1 pts

Achieved when the average of unit cost of a good or service decreases as the
capacity and volume of throughput increases

focused factory

diseconomies of scale

not in choices

economies of scale

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3/30/22, 4:09 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 48 1 pts

An amount of capacity reserved for unanticipated events is called

order

work

safety

focused

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3/30/22, 4:09 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

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Question 49 1 pts

A single item or asset stored at a particular location is called SKU or ___ Keeping
unit

self

shop

service

stock

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3/30/22, 4:09 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

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Question 50 1 pts

The value of the inventory position that triggers the new order is called

reorder point

inventory point

purchase point

order point

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3/30/22, 4:10 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

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Question 51 1 pts

Cycle Inventory is the inventory that results from purchasing or producing in larger
lots than are needed for immediate consumption or sale is otherwise known as

stock size

large size

small size

lot size

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3/30/22, 4:11 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 52 1 pts

A phenomenon that occurs when each member of a supply chain orders up to buffer
its own inventory

purchase amplification

reorder amplification

order amplification

all of choices

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3/30/22, 4:12 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

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Question 53 1 pts

A multitude of risk companies are facing in managing supply chain is basically bigger
in

national

domestic

regional

global

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3/30/22, 4:16 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 54 1 pts

Common metrics used to measure supply chain performance in delivery of supplies

not in choices

efficiency

responsiveness

reliability

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3/30/22, 4:17 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 55 1 pts

An inventory that has been ordered but is still in transit is called

pipeline inventory

finished inventory

warehouse inventory

transit inventory

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3/30/22, 4:19 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 56 1 pts

One of the three issues critical to managers in manufacturing and service

organizations where the amount of output is measured

efficiency

productivity

quality

cost

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3/30/22, 4:20 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 57 1 pts

A model of Toyota car sold in the US where the company recalled cars worth USD 2
billion due to floor mats and gas pedals

Corolla

not in choices

Lexus

Camry

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3/30/22, 4:21 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 58 1 pts

One of the six perspective definition of quality where it is based on the relationship of
product benefits to price

transcendent

User

value

product

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3/30/22, 4:22 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 59 1 pts

One of the six perspective definition of quality where it is based on the quantity of
some product attribute

Transcendent

Value

Product

User

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3/30/22, 4:23 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 60 1 pts

The Philosopher that said “Those who can not remember the past are condemned to
repeat it”

Santayana

Plato

Aristotle

Deming

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3/30/22, 4:23 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 61 1 pts

In the early 20th century this man is called the Father of scientific management and
led to a new scientific management

Joseph Juran

Frederick Taylor

George Edwards

James Taylor

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3/30/22, 4:23 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 62 1 pts

In the quest to remain competitive, a new approach to quality improvement emerged

in the late 1990 called

four sigma

seven sigma

five sigma

six sigma

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3/30/22, 4:24 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 63 1 pts

Its function is responsible for designing and maintaining the tools used in
manufacturing and inspection

industrial engineering

not in choices

reengineering

tool engineering

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3/30/22, 4:25 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 64 1 pts

Service organization is probably behind in terms of quality to manufacturing in

implementing quality approaches by

10 years

9 years

7 years

12 years

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3/30/22, 4:26 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 65 1 pts

The start of chapter 16 introduction, the author is saying that Without customers you
don’t have a business. Customer in Japanese means

kaizen

oykakusama

not in choices

okyakusama

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3/30/22, 4:26 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

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Question 66 1 pts

An economic indicator that measures customer satisfaction at the national level is

called

not in choices

ASQ

ACSI

AVIS

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3/30/22, 4:27 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 67 1 pts

For services, research has identified principal dimensions that contribute to

customers perception of quality on the degree of caring and individual attention
provided to customers called

empathy

responsiveness

tangibles

reliability

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3/30/22, 4:27 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 68 1 pts

For services, research has identified principal dimensions that contribute to

customers perception of quality on the willingness to help customers and provide
prompt service called

tangibles

responsiveness

empathy

reliability

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3/30/22, 4:28 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 69 1 pts

One useful tool for organizing large volumes of information efficiently and identifying
natural patterns or groupings in the information is called

video diagrams

voice diagram

recorded diagrams

affinity diagram

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3/30/22, 4:28 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 70 1 pts

An alternative to traditional customer satisfaction measurement that focuses more on

customer loyalty than on satisfaction is called CPV or

customer price value

character perceived value

customer perceived value

not in choices

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3/30/22, 4:33 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 71 6 pts

Authors of our textbook: 1-3 Family Name only: (ANSWERS IN All CAPS)

COLLIER, EVANS, LINDSAY

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3/30/22, 4:35 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 72 2 pts

the length of time which the forecast is based _____

PLANNING HORIZON

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3/30/22, 4:36 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

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Question 73 2 pts

regular patterns in a data series that take place over long period of times ____

CYCLICAL PATTERNS

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3/30/22, 4:37 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

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Question 74 2 pts

the underlying pattern of growth or decline in a time series ____

TREND

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3/30/22, 4:37 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

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Question 75 2 pts

the capability of a manufacturing or service to accomplish its purpose over a specified

time period._______

CAPACITY

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3/30/22, 4:38 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

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Question 76 2 pts

one definition of quality when consumers and organizations want consistency in

goods and services ______

MANUFACTURING PERSPECTIV

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3/30/22, 4:39 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

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Question 77 2 pts

the result of delivering a product or service that meets customer requirements is____

CUSTOMER SATISFACTION

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3/30/22, 4:43 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

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Question 78 2 pts

the company that was featured in chapter 17 because of its multiple plant quality
award. ____

TOYOTA

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3/30/22, 4:54 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 79 5 pts

If you are given a chance to put up a service company in this Pandemic what would
that be? Defend your answer.

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12pt Paragraph

As ci es ghtened their security perimeters in order to contain the spread of

COVID-19, residents resorted to delivery services for more than convenience. It
evolved into a technique of being secure and healthy at home without being
deprived of essen als such as food and hygiene items. I would choose delivery
service because during a pandemic, there are numerous restric ons that can
prevent businesses from opera ng or being stopped; as we all know, service
delivery has become more convenient for people to acquire their needs and wants
easily; addi onally, service delivery is the fastest growing homegrown delivery
service. People become jobless or unemployed during pandemics, but owing to
this concept of service delivery, they were given the opportunity to make money
via this service delivery company.

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3/30/22, 5:01 PM Quiz: Final Exam 2nd Sem 1st Term 2022

Final Exam 2nd Sem 1st Term 2022

Started: Mar 30 at 3:11pm

Quiz Instructions

Question 80 5 pts

What manufacturing product do you think would be in demand of today’s situation

aside from food products? Defend your answer?

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12pt Paragraph

Clearly, the most in-demand items during these challenging mes are those
associated with the medical or healthcare industries. Personal protec on
equipment (PPE) and other medical gadgets have seen a par cularly rapid
increase in demand.

Medical device manufacturing requires a variety of materials and procedures,

including plas c injec on molding. It is a manufacturing technique that involves
injec ng medical-grade molten plas c into a mold to create components for
medical devices, laboratory equipment, and healthcare facility equipment.

Manufacturers and suppliers in the medical business might profit from the
injec on molding produc on process because to its cost effec veness.
Addi onally, this method is very precise, durable, and contamina on resistant.

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