OMIS 338- EXAM 2 QUESTIONS WITH VERIFIED ANSWERS LATEST VERSION ()

OMIS 338- EXAM 2 QUESTIONS WITH VERIFIED ANSWERS LATEST VERSION () Inventory Management - Answers Objective of inventory management is to strike a balance between inventory investment and customer service Importance of inventory - Answers most expensive assets less inventory= lower costs but greater chance of running out more inventory raises costs but always keeps customers happy Functions of inventory - Answers Provide a selection of goods for anticipated demands separate various parts of the production process advantage of quantity discounts hedge against inflation Inventory Example - Answers Department store stockroom/warehouse grocery store auto work-in-process Types of inventory - Answers Raw material work-in-process finished goods maintenance/repair/oeprating (MRO) Raw material - Answers purchased but not processed work in process - Answers undergone some changes but not completed finished goods - Answers completed product awaiting shipment maintenance/repair/operating (MRO) - Answers necessary to keep machinery and processes productive material flow cycle - Answers input -- wait for inspection -- wait to be moved -- move time -- wait in queue for operator -- setup time -- run time -- output managing inventory - Answers using ABC analysis keeping records maintained ABC analysis - Answers divides inventory into three classes based on annual dollar volume, delivery problems, quality problems, high shortage or holding cost, anticipated engineering changes policies that focus on the few critical parts and not the many trivial ones Record accuracy with the periodic systems - Answers regular checks of inventory record accuracy with the perpetual inventory - Answers tracks receipts and subtractions on a continuing basis Independent - Answers demand for item is free from outside control of the demand for any other item in inventory basic economic order quantity model production order quantity model quantity discount model Dependent - Answers demand for item is determined by a demand for some other item in the inventory Cycle counting advantages - Answers eliminates shutdowns and interruptions eliminates annual inventory adjustment trained personnel audit inventory accuracy allows causes of errors to be identified and corrected maintains accurate inventory records holding costs - Answers costs of carrying inventory over time varies on business, location, and interest rates ordering cost - Answers the costs of placing an order and receiving goods setup cost - Answers cost to prepare a machine or process for manufacturing an order, may be highly correlated with time Quality Definition - Answers Ability of a product or service to meet and exceed customer expectations Quality Dimensions - Answers Customer view operations society Customer view - Answers features, performance, reliability Operations - Answers Cycle time, repair cost and scrap, design, overhead, logistics Society - Answers Recycling of batteries and scrapped computers Costs of quality - Answers prevention appraisal internal failure external failure Improve quality - Answers customer satisfaction reduce defects lower costs saves time prevention - Answers reducing the potential for defects appraisal costs - Answers evaluating products, parts, and services internal failure costs - Answers producing defective parts or service before delivery external failure costs - Answers defects discovered after delivery continuous improvement - Answers improvement of people, equipment, suppliers, materials, procedures Unending improvement Also known as zero defects six sigma apart of TQM - Answers comprehensive system for achieving and sustaining business success employee empowerment - Answers Employees involved in product and process improvements build communication networks