Operations Management Final Exam |
61 Questions & Answers
Supply Chain - -The facilities, functions and activities involved in producing
and delivering a product or service from suppliers to customers.
- Supply Chain Management - -Managing flow of information through supply
chain in order to attain the level of synchronization that will make it more
responsive to customer needs while lowering costs.
- Objective of Supply Chain Management - -Respond to uncertainty in
customer demand without creating costly excess inventory.
- Importance of supply management - -In order to compete in a global
marketplace, a company has to count on all members of the supply chain.
- Factors contributing to uncertainty - -Inaccurate demand forecasting, long
variable lead times, late deliveries, incomplete shipments, product changes,
batch ordering, price fluctuations and discounts, and inflated orders.
- Negative effects of uncertainty - -Lateness and incomplete orders
- Keys to effective supply chain management - -Information,
Communication, Cooperation and Trust
- Benefits of sharing information among supply chain members - -Reduced
bullwhip effect, early problem detection, faster response, build trust and
confidence, parties electronically exchange
- Bullwhip Effect - -Occurs when slight demand variability is magnified as
information moves back upstream.
- Factors contributing to bullwhip effect - -When supply chain members
make ordering decisions with an eye to their own self-interest and/or they do
not have accurate demand information from the adjacent supply chain
members.
- Negative effect of bullwhip effect - -Overreaction leads to inventory
surplus
- Mitigate negative effective of bullwhip effect - -communication and
demand forecasting
- Risk Pooling - -Risks are aggregated to reduce impact of individual risks
, - Maximax - -A very optimistic decision criterion that results in the
maximum of the maximum payoffs
- Maximin - -A pessimistic decision criterion that chooses the maximum of
the minimum payoffs
- Equal Likelihood - -(AKA LA PLACE) A decision criterion that weighs each
state of nature equally. The weights are multiplied by each decision and then
summed. Then the maximum is chosen.
- Hurwicz Criterion - -Decision criterion where decision payoffs are weighted
by a coefficient of a. For each decision alternative, the max payoff is
multiplied by α and the min payoff is multiplied by 1-α. Then choose the
max.
- Minimax Regret - -The maximum payoff is selected from each state of
nature, then all other payoffs are subtracted from the maximums. Then
choose the minimum of those equations. OPPORTUNITY LOSS
- Inventory Turn formula - -COGS/Avg aggregate value of inventory
- Days of Supply formula - -Avg aggregate value of inventory / (COGS ÷
365)
- Avg Aggregate Value of Inventory - -Σ(avg inventory for item i) x (unit
value item i)
- Weighted Moving Average - -Use the numbers closest to time frame you
are forecasting (ie, 3 month moving avg for December would average Nov,
Oct and Sept).
- CPFR - -Collaborative Planning, Forecasting, and Replenishment. Two or
more companies in a supply chain synchronize their demand forecasts into a
single plan to meet customer demand.
- Elements of Supply Chain Integration - -Information sharing among supply
chain members; Collaborative planning, forecasting, replenishment and
design; Coordinated workflow, production and operations and procurement;
Adopt new business models and technology.
- Benefits of CPFR - -Reduced bullwhip effect; Lower Costs (material,
logistics, operating, etc); Higher capacity utilization; Improved customer
service levels.
61 Questions & Answers
Supply Chain - -The facilities, functions and activities involved in producing
and delivering a product or service from suppliers to customers.
- Supply Chain Management - -Managing flow of information through supply
chain in order to attain the level of synchronization that will make it more
responsive to customer needs while lowering costs.
- Objective of Supply Chain Management - -Respond to uncertainty in
customer demand without creating costly excess inventory.
- Importance of supply management - -In order to compete in a global
marketplace, a company has to count on all members of the supply chain.
- Factors contributing to uncertainty - -Inaccurate demand forecasting, long
variable lead times, late deliveries, incomplete shipments, product changes,
batch ordering, price fluctuations and discounts, and inflated orders.
- Negative effects of uncertainty - -Lateness and incomplete orders
- Keys to effective supply chain management - -Information,
Communication, Cooperation and Trust
- Benefits of sharing information among supply chain members - -Reduced
bullwhip effect, early problem detection, faster response, build trust and
confidence, parties electronically exchange
- Bullwhip Effect - -Occurs when slight demand variability is magnified as
information moves back upstream.
- Factors contributing to bullwhip effect - -When supply chain members
make ordering decisions with an eye to their own self-interest and/or they do
not have accurate demand information from the adjacent supply chain
members.
- Negative effect of bullwhip effect - -Overreaction leads to inventory
surplus
- Mitigate negative effective of bullwhip effect - -communication and
demand forecasting
- Risk Pooling - -Risks are aggregated to reduce impact of individual risks
, - Maximax - -A very optimistic decision criterion that results in the
maximum of the maximum payoffs
- Maximin - -A pessimistic decision criterion that chooses the maximum of
the minimum payoffs
- Equal Likelihood - -(AKA LA PLACE) A decision criterion that weighs each
state of nature equally. The weights are multiplied by each decision and then
summed. Then the maximum is chosen.
- Hurwicz Criterion - -Decision criterion where decision payoffs are weighted
by a coefficient of a. For each decision alternative, the max payoff is
multiplied by α and the min payoff is multiplied by 1-α. Then choose the
max.
- Minimax Regret - -The maximum payoff is selected from each state of
nature, then all other payoffs are subtracted from the maximums. Then
choose the minimum of those equations. OPPORTUNITY LOSS
- Inventory Turn formula - -COGS/Avg aggregate value of inventory
- Days of Supply formula - -Avg aggregate value of inventory / (COGS ÷
365)
- Avg Aggregate Value of Inventory - -Σ(avg inventory for item i) x (unit
value item i)
- Weighted Moving Average - -Use the numbers closest to time frame you
are forecasting (ie, 3 month moving avg for December would average Nov,
Oct and Sept).
- CPFR - -Collaborative Planning, Forecasting, and Replenishment. Two or
more companies in a supply chain synchronize their demand forecasts into a
single plan to meet customer demand.
- Elements of Supply Chain Integration - -Information sharing among supply
chain members; Collaborative planning, forecasting, replenishment and
design; Coordinated workflow, production and operations and procurement;
Adopt new business models and technology.
- Benefits of CPFR - -Reduced bullwhip effect; Lower Costs (material,
logistics, operating, etc); Higher capacity utilization; Improved customer
service levels.
