Final Exam MGSC 395 Timothy Fry Advanced Questions And Answers Detailed Answers.

constraint - correct answers Any factor that limits the performance of a system and restricts its output Bottle Neck - correct answers A capacity constraint resource (CCR) whose available capacity limits the organization's ability to meet the product volume, product mix, or demand fluctuations required by the marketplace Theory of Constraint - correct answers The Theory of Constraints (TOC) A systematic management approach that focuses on actively managing those constraints that impede a firm's progress toward its goal Theory of constraints view of Inventory - correct answers All the money invested in a system in purchasing things that it intends to sale. -Decrease in (I) leads to increase in net profit, ROI, and Cash flows Theory of constraints view of Throughput - correct answers Rate at which a system generates money through sales -An increase in (T) leads to an increase in net profit, ROI, and cashs Theory of constraints view of Operating Expense - correct answers All the money a system spends to turn inventory into throughput -A decrease in (OE) leads to an increase in net profit, ROI, and cash flows Theory of constraints view of Utilization - correct answers The degree to which equipment, space, or workforce is currently being used; it is measured as the ratio of average output rate to maximum capacity, expressed as a percentage -An increase in U at the bottle neck leads to an increase in net profit, ROI, and cash flows Key principals of TOCs - correct answers1. The focus should be on balancing flow, not on balancing capacity. 2. Maximizing the output and efficiency of every resource may not maximize the throughput of the entire system. 3. An hour lost at a bottleneck or constrained resource is an hour lost for the whole system. 4. An hour saved at a nonbottleneck resource does not make the system more productive. 5. Inventory is needed only in front of bottlenecks and in front of assembly and shipping points. 6. Work should be released into the system only as frequently as needed by the bottlenecks. -Bottleneck flows = market demand 7. Activating a nonbottleneck resource is not the same as utilizing a bottleneck resource. -It doesn't increase throughput or promote better performance. 8. Every capital investment must be viewed from the perspective of the global impact on overall throughput, inventory, and operating expense. steps of TOC - correct answers1. Identify the System Bottleneck(s) 2. Exploit the Bottleneck(s) 3. Subordinate All Other Decisions to Step 2 4. Elevate the Bottleneck(s) 5. Do Not Let Inertia Set In Throughput time - correct answersTotal elapsed time from the start to the finish of a job or a customer being processed at one or more work centers Drum-Buffer-Rope - correct answersA planning and control system that regulates the flow of work-in-process materials at the bottleneck or the capacity constrained resource (CCR) in a productive system Drum - correct answersThe bottleneck schedule is the drum because it sets the beat or the production rate for the entire plant and is linked to market demand Buffer - correct answersThe buffer is the time buffer that plans early flows into the bottleneck and thus protects it from disruption Rope - correct answersThe rope represents the tying of material release to the drum beat, which is the rate at which the bottleneck controls the throughput of the entire plant. Contribution margin - correct answersThe amount each product contributes to profits and overhead; no fixed costs are considered when making the product mix decision Identifying external and internal pressures - correct answers-Dynamic sales volumes -Customer service and quality expectations -Service/product proliferation -Emerging markets Creating an Effective Supply Chain - correct answersLink together -service/product - processes -supply chain Average aggregate inventory value - correct answers(number of units of item A typically on hand)*(value of each unit A)+(number of units of item B typically on hand)*(value of each item B) Weeks of suppy - correct answers(Average aggregate inventory value)/(Weekly Inventory value) Inventory turn over - correct answers(annual sales at cost)/(average aggregate inventory value) Efficient supply chains - correct answersMTS: make to stock Responsive Supply chaines - correct answers-make to order -assemble to order -design to order Qualities of Efficient Supply Chains - correct answers-Demand: predictable, low forecast errors -Competitive priorities: low cost, consistent, quality, on-time delivery -New-service/product introduction: infrequent -Contribution margins: low Product variety: low capacity cushion: low Qualities of Responsive Supply Chains - correct answers-Demand: Unpredictable, high forecast errors -Competitive priorities: development speed, fast delivery time, customization, volume flexibility, variety, top quality -New-service/product introduction: frequent -Contribution margins: high Product variety: high - capacity cushion: high Assemble to order - correct answers-order based on forecast -standardized component inventory - supply as needed -fabrication, to assembly, to customer Mass customization - correct answersA strategy whereby a firm's highly divergent processes generate a wide variety of customized services or products at reasonably low costs. Competitive advantages - correct answers-Managing customer relationships -Eliminating finished goods inventory -Increasing perceived value of services or products Supply chain design for mass customization - correct answers-Assemble-to-order strategy -Modular design -Postponement ........Channel Assembly Outsourcing - correct answersPaying suppliers and distributors to perform processes and provide needed services and materials Offshoring - correct answersA supply chain strategy that involves moving processes to another country Next-Shoring - correct answersA supply chain strategy that involves locating processes in close proximity to customer demand or product R&D outsourcing decision factors - correct answers-Comparative Labor Costs -Rework and Product Returns -Logistics Costs -Tariffs and Taxes -Market Effects -Labor Laws and Unions -Internet -Energy Costs -Access to Low Cost Capital -Supply Chain Complexity Outsourcing Potential Pitfalls - correct answers-pulling the plug to quickly -technology transfer -process intergration outsourcing process - correct answers-Vertical integration -Backward integration -Forward integration -Make-or-buy decision Supply Chain Integration - correct answers The effective coordination of supply chain processes though the seamless flow of information up and down the supply chain External Causes for Supply Chain Distruptions - correct answers Environmental Disruptions Supply Chain Complexity:(dependence) Loss of Major Accounts:(large buyers) Loss of Supply Customer-Induced Volume Changes Service and Product Mix Changes: customers start ordering less or more of one product vs the other Late Deliveries Underfilled Shipments: suppliers send partial shipments due to something in their own plant Internal Causes for Supply Chain Disruptions - correct answers Internally Generated Shortages: Quality Failures Poor Supply Chain Visibility: unable to see capabilities of supplier, lack of knowledge of their inventories, ect. Engineering Changes Order Batching: large order discounts New Service or Production Introductions Service or Product Promotions: Price discounting Information Errors Bullwhip Effect - correct answers The phenomenon in supply chains whereby ordering patterns experience increasing variance as you proceed upstream in the chain. Cycle inventory = - correct answers Q/2 Pipeline inventory = - correct answers