P370 Final Exam Questions With Complete Solutions.

P370 Final Exam Questions With Complete Solutions. Aggregate Production Planning A managerial statement of time-phased production rates, workforce level, and inventory investment which takes into account customer requirements and capacity limitations APP Aggregate Production Planning -(intermediate term usually 3-18 months) -Everything is turned into LABOR HOURS -High level plans DON'T make things happen... Detailed things do! Objectives of APP 1. Specify the optimal combination of production rate, workforce level, and inventory on hand 2. Minimize the cost of resources required to meet demand over that period MPS Master Production Scheduling Master Production Scheduling Characteristics -1st level of disaggregation of the aggregate plan (begin to break down the products into more real end items) -Horizon and buckets are no larger than APP and are often shorter (greater frequency of revision) -Rolling Horizons MRP Materials Requirements Planning: what materials to meet the MPS Materials Requirements Planning Characteristics -EXTREME detail, down to nut and bolt -No fictitious or theoretical units/products Shop Floor Scheduling Detailed, actual production schedule Time Horizon vs Time Bucket horizon (years) is usually the term of the plan and the buckets are divisions of the horizon (months) Aggregate -Classes of products -Labor or other inputs -Geographic location of production -Often fictitious Rolling Horizon of 5 months (example) Always 5 months out no matter where we are in plan 3 Production Planning Strategies -Chase -Level -Stable Workforce Chase Strategy Perfectly match demand by varying PRODUCTION and MANPOWER by hiring and firing Chase Strategy Characteristics Goal: hit forecast without waste (reduce stock outs and high inventory) -Workforce & hours need to change to meet forecast -Need EASILY trained employees -DOWNSIDE: hiring/firing costs; morale decreases Level Strategy Maintain a CONSTANT production/workforce level to buffer against the changes in demand Level Strategy Characteristics -EASIEST of the 3 to pursue -Goal: constant workforce & output production level but fluctuating inventory Stable Workforce Strategy Stable workforce working at a constant output rate, allowing variable working hours to buffer against variation Stable Workforce Characteristics -Shortages/Surpluses absorbed by fluctuating inventory levels, order backlogs, and lost sales -Try to keep inventory as low as possible -UPSIDE: size of workforce constant, hours fluctuates; limits hiring/firing costs -DOWNSIDE: Decreased customer service, increased inventory costs; possibility of inventory becoming obsolete. Balance Equation Ending Inventory= Beginning Inventory+Production-Demand 3 Types of Inventory -Raw Materials -Work in Process (WIP) -Finished Good 4 Reasons for Holding Inventory -Safety Stock -Cycle Stock -Pipeline Stock -Seasonal Stock