Scm 300 Supply Chain Management Exam 2

Front 1

Why is the study of waiting lines important in running a business? Especially in America?

Back 1

first come, first serve

if a company favors one person, everyone else gets offended because we think the company doesn't see us as equal

Front 2

How do you make a customer happy?

Back 2

short lines

Front 3

what is the cost of waiting to a customer?

Back 3

their time

Front 4

what is the cost to the company for keeping lines short?

Back 4

money

Front 5

waiting line goals

Back 5

find the proper balance between long lines/unhappy customers and idle staff/high cost

Front 6

waiting line system diagram

Back 6

rectangle = business

Front 7

balking is...

Back 7

the line alone scared them away before they actually enter the business

Front 8

reneging is...

Back 8

they got in line, but decided to leave because the line was taking too long

Front 9

finite pool (how many potential customers)

Back 9

few potential customers; every customer in the store significantly decreases the chance of another customer arriving

ex: retail store that sells jumbo jet airplanes

Front 10

infinite pool (how many potential customers)

Back 10

many potential customers; odds barely affected by new arrivals

ex: mcDonalds

Front 11

type of customers (degree of variability)

Back 11

• prepared/unprepared customer
• big/small orders
• high/low maintenance customers
• paying cash vs check

Front 12

arrival rates (degree of variability)

Back 12

• steady stream of customers?
• busy and slow time periods?
• busy and slow days of the week?
• seasonal trends?

Front 13

single line

Back 13

first come, first served (FCFS); sense of fairness

Front 14

multiple lines

Back 14

line jumping or jockeying

Front 15

1st come, 1st served (priority discipline rules)

Back 15

served in order you arrive in; better system overall

Front 16

earliest due date or shortest processing time (priority discipline rules)

Back 16

homework?

Front 17

reservations or appointments possible (priority discipline rules)

Back 17

restaurants, homework

Front 18

emergency situations (priority discipline rules)

Back 18

emergency rooms

Front 19

preemptive discipline (priority discipline rules)

Back 19

special rules; VIP lines, frequent fliers

Front 20

lambda

Back 20

mean arrival rate

Front 21

mu

Back 21

mean service rate

Front 22

always set up you rates this way

Back 22

numerator = customers, cars, reports

denominator = sec, min, hrs, days

Front 23

rho

Back 23

= lambda / mu

percentage of time a server is busy

Front 24

ns =

Back 24

average number of customers in the system

Front 25

ts=

Back 25

average time spent in the system

Front 26

nl=

Back 26

average length of queue

Front 27

tl=

Back 27

average time spent in queue

Front 28

n=

Back 28

customers

Front 29

t=

Back 29

time

Front 30

l=

Back 30

line or queue

Front 31

s=

Back 31

system

Front 32

Pn=

Back 32

(1-p)p^n

probability of EXACTLY n customers in the system

only works for single line single server model*

used in gambling

Front 33

what is the probability of FEWER than 4 in the system? example

Back 33

p0+p1+p2+p3

Front 34

probability of 4 OR LESS in the system?

Back 34

P0+P1+p2+p3+p4

Front 35

probability of MORE THAN 4 in the system?

Back 35

1- (P0+P1+p2+p3+p4)

Front 36

system measures illustration

Back 36

Front 37

probability of 4 OR MORE in the system

Back 37

1-(P0+P1+p2+p3)

Front 38

Back 38

2 are in line, but 3 are in the system

Front 39

why are lines so long at DMV, post office, and amusement parks?

Back 39

there is no incentive to improve (government)

amusement parks have no competition

Front 40

manager of taget salary starts at...

Back 40

125,000

Front 41

people pick grocery stores based on what department?

Back 41

produce - because everything else is fairly generic

Front 42

what departments are almost always on the perimeter of grocery stores?

Back 42

liquor, produce, flowers, meat, milk, bakery, and deli

Front 43

what are the 2 most profitable departments in a grocery store?

Back 43

1. meat
2. produce

Front 44

why are the milk (not including cheese and butter) and bakery departments usually in the corners of the store?

Back 44

because people get these items most often; exposes consumers to the whole store

Front 45

facilitating goods are...

Back 45

items that need to be kept in inventory to maintain operations

ex: plates, utensils, etc

Front 46

What is VMI?

Back 46

vendor managed inventory - inventory planning and replenishment system where supplier (vendor) accepts negotiated responsibilities that typically include monitoring and restocking

Front 47

value to vendor and retailer of VMI

Back 47

• common goal - end customer is the focus
• learning opportunities - vendor and retailer learn about each other and their needs; vendor has more interactions with end customers in the retail environment
• retailer - fewer responsibilities; decreases costs
• vendor - better understanding of demand rates, fewer retailer errors; responsive

Front 48

VMI challenges

Back 48

• goal alignment
• everything must be defined and discussed prior to arrangement
• process related - different ways of getting things done
• schedule related - when should things get done?
• performance and quality related - metrics, motivation, discipline, reliability, consistency
• people related - everyone must BUY-IN, culture clashes, equity issues, attire, professionalism
• IT compatibility, sharing concerns

ex: if you tell all trucks to deliver between 6-10 and they all come at once, one may pull up out front and make a bad impression

Front 49

upstream refers to...

Back 49

in the direction of the suppliers

Front 50

downstream refers to...

Back 50

in the direction of the customer

Front 51

back-end refers to...

Back 51

out of sight (to customers)

ex: why you don't have product on the shelf - workers too lazy etc

Front 52

front-end refers to...

Back 52

visible to customers

ex: being rude to your customer

Front 53

push system

Back 53

you buy a lot of materials, make a lot of computers, and send to the customer

Front 54

push system advantages

Back 54

• high inventories - low ordering costs (less orders); quantity discounts; high customer service rates possible (less likely to run out of product)
• shorter lead times (order placement to delivery time) - allows inventory to be closer to the customer; quicker delivery if required; decreases customer's need for safety stock
• mistakes and defects tolerable - time to inspect; inventory can support returns

Front 55

push system cons

Back 55

• high inventories - high holding costs and risk of obsolescence
• low customization flexibility - items manufactured a long time ago, far away; less of an opportunity for customization; requires a static market
• mistakes and defects tolerable - humans use any allowances provided; more waste, higher operational costs
• forecasting miscalculations can be costly - demand high - shortages, lost revenue; demand low - high amounts of waste

Front 56

pull system

Back 56

• is seen as a supply chain because you are supplying customer with what they need
• pull system is a demand chain - they make only what you need
• there is no inventory - have to hustle to get stuff to the customer quickly

Front 57

pull system advantages

Back 57

• low inventories - low holding costs - fewer pipeline storage requirements; decreased handling, shrinkage, damage
• demand driven system - make only what is required; minimizes waste - materials, labor, transportation
• flexible manufacturing possible - higher customer satisfaction - specific needs, high performance; able to adapt to changes - market needs, technology, laws
• closer supplier ties are developed - more efficient coordination; quality - higher performance items can be developed

Front 58

pull system cons

Back 58

• low inventories - high ordering costs; lead times may be long - increase in supply chain anxiety (safety stock?)
• risky customer service rates - vulnerable to: unexpected spikes in demand, seasonal demand, marketing errors, supply chain partner weaknesses/errors, labor utilization and labor contract issues
• tougher sell? - high tech items require customer be educated; do display items/pics portray all options and variations?
• forecasting miscalculations can be costly - demand high - does SC have available speed/capacity?; demand low - did you build too much capacity? sunk costs

Front 59

Back 59

2 outcomes possible:

1. 1000 computers/month - too much, unacceptable ROI
2. 50,000 computers/month - orders late, customers unhappy, missed opportunities, competition grows

Front 60

Should you use a push or pull system?

Back 60

the market should dictate your strategy

if it wants high customization, use pull

if the market is static, nothing changing, you should use push

neither is good unless you are using it in the right manner

Front 61

old school vs new school philosophies

Back 61

Front 62

Lean manufacturing philosophy

Back 62

• a production philosophy that strives to meet consumer demand and desires but with minimal inventory levels and minimal SC waste
• tend to be PULL oriented
• AKA JIT or TPS

Front 63

primary goals of Lean manufacturing: JIT philosophy

Back 63

• minimize inventory - inventory is evil - hides problems
• eliminate all types of waste - quality control, 7 types of waste

Front 64

managing lean manufacturing for the long-run

Back 64

• open communication flows required
• intelligent and flexible HR
• continuous improvement culture

Front 65

why is lean manufacturing required in Japan?

Back 65

because real estate costs are so high, they need to have a small EOQ for it to make sense

Front 66

recap of supply chain basics

Back 66

1. focus on people
2. competitive priorities
3. measuring success
4. maximize value
5. productivity

Front 67

focus on people (recap of supply chain basics)

Back 67

good SC decisions positively impact customers, employees, and investors

Front 68

competitive priorities (recap of supply chain basics)

Back 68

good SCs deliver the right mix of cost, quality, speed, and flexibility to their target market

Front 69

measuring success (recap of supply chain basics)

Back 69

the best SCs are effective (great products), efficient (minimal resources/waste), and adaptable (ready for change; constantly evolving)

Front 70

maximize value (recap of supply chain basics)

Back 70

provide customers the best possible product and service bundle at the lowest possible cost and in the most convenient way

Front 71

productivity (recap of supply chain basics)

Back 71

maximize a company's high quality output using the fewest resources possible

Front 72

8 SC processes

Back 72

1. product development and commercialization
2. supplier relationship management
3. manufacturing flow management
4. demand management
5. order fulfillment
6. customer relationship management
7. customer service management
8. returns management

Front 73

shrinkage formula

Back 73

order size required = (actual demand) / (proportion of acceptable product per order)

(300) / (100% - 2%)

always round up; from retailer to supplier

Front 74

square root rule - risk pooling

Back 74

inventory future =

inventory present [(sqrt WH future) / sqrt WH present)]

ex: going from 4 to 2 warehouses:

inv future = 6000 [(sqrt 2) / (sqrt 4)]

Front 75

Integration is...

Back 75

the bringing together of groups that were separated in the hopes of seeing improvements

Front 76

the bullwhip effect is...

Back 76

a SC phenomenon where fairly stable demand results in a proliferation in the amount of inventory that is carried as one travels upstream in the SC

Front 77

causes of the bullwhip effect

Back 77

1. order batching
2. forward buying
3. rationing
4. shortage gaming

Front 78

order batching (causes of the bullwhip effect)

Back 78

when companies place large and infrequent orders from their suppliers; typically done to take advantage of quantity discounts and economies of scale in purchasing and delivery; creates communication gaps (uncertainty)

Front 79

forward buying (causes of the bullwhip effect)

Back 79

is the result of suppliers offering sales; buyers want to take advantage of low prices, but aren't buying based on demand, but rather on price; causes true demand to be unknown by suppliers

Front 80

shortage gaming (causes of the bullwhip effect)

Back 80

often caused by rationing; buyers often place larger orders than required bc they are afraid of being rationed

Front 81

controlling the bullwhip effect (2 ways)

Back 81

1. every day low pricing (EDLP)
2. vendor management inventory (VMI)

Front 82

keys to lean manufacturing

Back 82

• high performance quality
• consistent quality
• quality at the source
• continuous improvement
• poka-yoke
• close supplier ties
• small lot sizes
• standardized components and work methods
• dedication to the workforce
• using automation when appropriate
• short setup/change-over

Front 83

poka-yoke (keys to lean manufacturing)

Back 83

mistake-proofing

5 wires connecting to different devices; solution is to make each wire have a different connector to the specific device