5696905
Description
Flashcards by Tshilidzi Thathaisa, updated more than 1 year ago
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Created by Tshilidzi Thathaisa
over 8 years ago
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| Question | Answer |
| what is EOQ | It is the economic order quantity,where holding costs and odering costs are their minimum. on a graph it is the point where HC and OC intercest. This point is an optimum point |
| Formula for EOQ | carrying cost AKA holding cost order cost is the cost per order |
| What are the ASSUMPTIONS for the EOQ formula? | *Holding cost per unit remain constant Average inventory = 1/2 order quantity; ▫ Sales can be forecasted and are evenly over the year ▫ Waiting time for orders is determined beforehand and orders are received without delays. =There is no safety stock |
| What is the production run formula? How do you determine the no. of runs? | same as EOQ just remove cost per order and put setup cost. -this detemines the size(no. of units) of each run -no. of runs = annual demand/size of each run |
| Re-order point formula? | Re-order point = average lead time x average usage per period + safety stock minus outstanding orders* |
| optimum safety inventory level ? | where the total cost of holding the inventory and the out-of-stock costs are minimised. |
| Out of stock cost | When stockout occurs for raw material and WIP the cost of being out of stock = cost of stoppage in production and the resulting inefficiencies that occur In the case of finished goods, the opp cost will consist of lost contribution |
| Discuss MRP | MRP=Material requirements planning With MRP orders are only placed when components and raw materials are required to maintain the production flow. MRP can be defined as a computerised planning system which determines the timing and quantity of finished products required, from this the required raw material components and sub-components of each production phase are determined. This planning system is based on a master production schedule. For the purpose of planning the required components it is necessary to determine a "bill-of-materials" for each finished product. It is also necessary to have detailed inventory lists for each component and sub-component so that the required raw materials can be determined. |
| Discuss JIT | JIT=Just in time The objective of JIT is to manufacture the required items of the required quality and in the required quantities at the exact time they are required. More specific objectives include: eliminating activities that do not add value to the goods and services that are being supplied; reducing the inventory levels to a minimum or to zero; zero-defect production; optimal flexibility of the plant so that it is economically justifiable to manufacture only one unit per production run; to have no delays in the manufacturing, management or packaging process as a result of equipment failure; on time delivery of goods and services by suppliers and to clients. |
| optimized production technology | Optimized production technology The OPT approach determines what is limiting increased output by identifying bottle-necks (limiting factors). The objective is to remove bottle-necks or, if this is not possible, to ensure the optimal application of the limiting factors/resources. The factors that are not limited must be scheduled in such a way to ensure that not more products are manufactured that can be absorbed by the most limiting factors (bottle-necks). |
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