BCOR 3050 EXAM 2 STUDY GUIDE
Quality - Answer -The extent to which the product or service meets or exceeds the
expectations of the customer
Internal Customer - Answer -Recipient of anothers work within an organization.
External Customer - Answer -Customers outside the organization between the
organization and the consumer
Demings Chain Reaction - Answer -Improve quality --> Decrease costs --> Productivity
improves --> Capture market with better qaulity and price --> Stay in business -->
Provide jobs
Total Quality Management - Answer -Prevention based management system for
identifying and meeting customer needs at every level of the organization
Characteristics of Product Quality - Answer -Performance, Features, Reliability,
Conformance, Durability, Serviceability, Aesthetics, Perceived Quality
SIPOC - Answer -Suppliers, Inputs, Process, Outputs, Customers
DMAIC - Answer -Define, Measure, Analyze, Improve, Control
Six Sigma - Answer -Popularized by Jack Welch at Motorola, it indicates that the mean
is six standard deviations away from the nearest customer imposed limits
series system - Answer -If one component fails, the entire system fails
parallel system - Answer -uses redundancy, the system will successfully operate as
long as one component functions
Objective of an inventory system - Answer -When items should be ordered, what
quantity to order them in
bullwhip effect - Answer -When the decisions of one part of the supply chain ripple
through the entire system.
Reasons to Carry Inventory - Answer -Set-up and ordering costs • Customer service
and variation in demand • Labor and equipment utilization • Transportation cost • Costs
of materials/quantity discounts
Reasons to Reduce Inventory - Answer -• Storage and Handling
• Interest and opportunity cost
• Property taxes and insurance premiums
, • Shrinkage and spoilage
Cycle Inventory - Answer -a quantity of inventory that varies in proportion to order
quantity
Safety Stock Inventory - Answer -surplus inventory that a company holds to protect
against uncertainties in demand, lead time, and supply
Anticipation Inventory - Answer -inventory built in anticipation of future demand
Pipeline Inventory - Answer -inventory that is in the process of moving from one
location in the supply chain to another
work in process inventory - Answer -goods that are partway through the manufacturing
process but not yet complete
Remanufactured/reconditioned inventory - Answer -products that have been used by a
customer and then reacquired by a company and either remanufactured or
reconditioned for resale
Continuous review system - Answer -An inventory system used to manage
independent demand inventory. The inventory level for an item is constantly monitored,
and when the reorder point is reached, an order is released.
Periodic review system - Answer -an inventory system that has a fixed time between
orders but has different order quantities from order to order
Economic order quantity - Answer -the order quantity that minimizes the total annual
cost of ordering and holding inventory for a particular item
Lead time - Answer -time between when an order is placed and when it is expected to
arrive
Enterprise Resource Planning - Answer -integrated information system that supports
most enterprise processes and data storage needs across the entire organization
Electronic data interchange - Answer -allows companies or units within a company to
exchange orders, forecasts, and invoices electronically without human intervention to
enter data into the receiving system
ABC Systems - Answer -Inventory systems that utilize some measure of importance to
classify inventory items and allocate control efforts accordingly
Bin System - Answer -a type of inventory system that uses either one or two bins to
hold a quantity of the item being inventoried; an order is placed when one of two bins is
empty or a line on a single bin is reached.
Quality - Answer -The extent to which the product or service meets or exceeds the
expectations of the customer
Internal Customer - Answer -Recipient of anothers work within an organization.
External Customer - Answer -Customers outside the organization between the
organization and the consumer
Demings Chain Reaction - Answer -Improve quality --> Decrease costs --> Productivity
improves --> Capture market with better qaulity and price --> Stay in business -->
Provide jobs
Total Quality Management - Answer -Prevention based management system for
identifying and meeting customer needs at every level of the organization
Characteristics of Product Quality - Answer -Performance, Features, Reliability,
Conformance, Durability, Serviceability, Aesthetics, Perceived Quality
SIPOC - Answer -Suppliers, Inputs, Process, Outputs, Customers
DMAIC - Answer -Define, Measure, Analyze, Improve, Control
Six Sigma - Answer -Popularized by Jack Welch at Motorola, it indicates that the mean
is six standard deviations away from the nearest customer imposed limits
series system - Answer -If one component fails, the entire system fails
parallel system - Answer -uses redundancy, the system will successfully operate as
long as one component functions
Objective of an inventory system - Answer -When items should be ordered, what
quantity to order them in
bullwhip effect - Answer -When the decisions of one part of the supply chain ripple
through the entire system.
Reasons to Carry Inventory - Answer -Set-up and ordering costs • Customer service
and variation in demand • Labor and equipment utilization • Transportation cost • Costs
of materials/quantity discounts
Reasons to Reduce Inventory - Answer -• Storage and Handling
• Interest and opportunity cost
• Property taxes and insurance premiums
, • Shrinkage and spoilage
Cycle Inventory - Answer -a quantity of inventory that varies in proportion to order
quantity
Safety Stock Inventory - Answer -surplus inventory that a company holds to protect
against uncertainties in demand, lead time, and supply
Anticipation Inventory - Answer -inventory built in anticipation of future demand
Pipeline Inventory - Answer -inventory that is in the process of moving from one
location in the supply chain to another
work in process inventory - Answer -goods that are partway through the manufacturing
process but not yet complete
Remanufactured/reconditioned inventory - Answer -products that have been used by a
customer and then reacquired by a company and either remanufactured or
reconditioned for resale
Continuous review system - Answer -An inventory system used to manage
independent demand inventory. The inventory level for an item is constantly monitored,
and when the reorder point is reached, an order is released.
Periodic review system - Answer -an inventory system that has a fixed time between
orders but has different order quantities from order to order
Economic order quantity - Answer -the order quantity that minimizes the total annual
cost of ordering and holding inventory for a particular item
Lead time - Answer -time between when an order is placed and when it is expected to
arrive
Enterprise Resource Planning - Answer -integrated information system that supports
most enterprise processes and data storage needs across the entire organization
Electronic data interchange - Answer -allows companies or units within a company to
exchange orders, forecasts, and invoices electronically without human intervention to
enter data into the receiving system
ABC Systems - Answer -Inventory systems that utilize some measure of importance to
classify inventory items and allocate control efforts accordingly
Bin System - Answer -a type of inventory system that uses either one or two bins to
hold a quantity of the item being inventoried; an order is placed when one of two bins is
empty or a line on a single bin is reached.
