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| capability of a manufacturing or service resource to accomplish its purpose over a specified time period |
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| achieved when the average unit costs occur if a good or service's average unit costs decreases as the capacity and/or volume of throughput increases |
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| occur when the average unit costs of a good or service increases as the capacity and/or volume of throughput increases |
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| way to achieve economies of scale without extensive investment in facilities and capability.Has a narrow range of goods and services, a targeted market segment, and dedicates its processes to maximum efficiency. |
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| Safety Capacity (Capacity Cushion) |
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| amount of capacity reserved for unanticipated events like demand surges, materials shortages |
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| specification of work to be performed for a customer or a client |
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| Setup time, processing time, and order size |
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| variables affecting a workorder |
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| complementary goods and services |
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| produced or delivered using the same resources available to the firm (balance out seasonal demand) |
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| Short-Term Capacity Management |
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| done by adjusting short-term capacity levels. Add or share equipment, sell unused capacity, change labor capacity + schedules, /change labor skill mix, shift work to slack periods |
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| Revenue Management Systems (RMS) |
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| dynamic methods to forecast demand, allocate perishable assets across market segments, deciding when to overbook and by how much, deciding what price to charge different customers |
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| set principles that focuses on increasing total process throughput |
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| the amount of money generated per time period through actual sales |
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| anything that limits an organization from moving toward or achieving its goal |
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| associated with the capacity of a resource. Bottleneck work activity which limits capacity of the entire process, or a nonbottleneck activity in which idle capacity exists |
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| Process of projecting the value of one or more variable into into the future |
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| enables companies to integrate planning information from different departments or organize into a single demand plan |
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| length of time on which a forecast is based. Can be months to decades long |
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| Unit of measure for the time period used in a forecast |
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| set of observations measured at successive points in time or over successive periods of time |
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| Underlying pattern of growth or decline in a time series |
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| characterized by repeatable periods of ups aand downs over short periods of time |
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| unexplained deviation of a time series from a predictable pattern |
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| 1-time variation that is explainable? |
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| difference between the observed value of the time series ad the forecast, or At-Ft |
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| equations that are used to compare different forecasting methods to determine which method is the best |
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| based on the assumption that the future will be a forward representation of past trends. Methods include time-series and regression |
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| simple moving average forecast |
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| average of the most recent k observations in a time series. works best when the horizon is short and there is no major trend or pattern |
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| single exponential smoothing |
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| forecasting technique that uses a weighted average of past time-series values |
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| method for building a statistical model that defines a relationship between numerical variable. Examples are dependent or independent variable(s). |
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| multiple linear regression model |
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| model that has more than one independent variable, including economic indexes & demographic factors |
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| Relies upon opinions and expertise of people in developing forecasts. Has 2 approaches, grass roots and the delphi method |
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| forecasting achieved by asking those who are close to the end consumer about the customer's purchasing plans |
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| forecasting by expert opinion by gathering judgements and opinions of key personnel. Based off of the experience and knowledge of the situation from people both inside and outside the company |
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| provides a method for monitoring a forecast by quantifying bias |
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| Made up of component parts, subassemblies, and supplies. The inputs to manufacturing and service delivery processes |
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| Work-in-process (WIP) inventory |
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| made up of partially finished products in various stages of completion that are awaiting further processing |
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| made up of completed products ready for distribution or sale to customers |
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| additional amount of inventory that is kept over and above the average amount required to meet demand |
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| Environmentally preferable purchasing (EPP) |
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| affirmative selection and acquisition of products and services that effectively minimize negative environmental impacts |
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| ordering costs or setup costs |
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| result of the work involved in placing purchase orders with suppliers |
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| inventory-holding costs or inventory-carrying costs |
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| expenses associated with carrying costs |
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| shortage costs or stockout costs |
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| associated with a SKU being unavilable when needed to meet demand |
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| price paid for purchased goods or the internal costs of producing them |
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| inventory characteristic in which each item is ID'ed by a unique identifier, called a stock-keeping unit (SKU) |
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| Single item or asset stored at a particular location |
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| Inventory characteristic in which demand can have multiple different characteristics. It can be independent, dependent, static, or dynamic. It can also be constant (deterministic) or it can be assumed that it is uncertain (stochastic) |
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| Number and duration of time periods |
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| inventory characteristic in which firms are concerned with planning inventory requirements over an extended number of time periods. Can either be single period or multiple time periods |
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| inventory characteristic that is the time between the placement of an order and its receipt. It is affected by transportation, frequency and size of the order, and supplier production schedules |
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| Inventory characteristic where there is an inability to satisfy the demand for an item. Either backorder can occur or lost sale |
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| Occurs when a customer is wiling to wait for an item to be back in stock |
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| occurs when the customer is unwilling to wait for an item to come back into stock, and purchases the item elsewhere |
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| inventory analysis that classifies SKU's into groups according to the total annual dollar usage.(3 catagories) |
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| Fixed Quantity Inventory System (FQS) |
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| Invenotry system when order quantity or lot size is fixed. Same amount (Q), is ordered every time. Process of triggering an order is based on the inventory position |
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on hand quanitity (OH) plus any orders placed but have not arrived (scheduled receipts), minus and backorders (BO)
IP=OH+SR-BO |
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| When inventory fall at or below a certain value, r, and a new order is placed. This is the value of the inventory position that triggers a new order |
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| Economic Order Quantity (EOQ) Model |
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| Classic economic model that minimizes that total cost. The sum of the inventory-holding cost and the ordering costs. Assumes a single SKU and entire order quantity arrives at one time, lead time is constant, demand for the item is continuous over time, and no stockouts are allowed |
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| results from purchasing or producing in larger lots than are needed for immediate consumption or sale. |
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| Cost of storing one unit in inventory for the year (C sub-h) |
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| When demand is uncertain, using EOQ based on average demand will result in stockouts. This is the additional planned on-hand inventory that acts as a buffer to reduce the risk of a stockout |
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| desired probability of not having a stockout during a lead-time period |
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| Fixed period system (FPS) |
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| Inventory system in which inventory position is checked only at fixed intervals of time, T, rather than on a continuous basis. Principal decisions are time between reviews (T), and replenishment level (M) |
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| Single Period Inventory Model |
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| Inventory model which applies to inventory situations in which one order is placed for a good in anticipation of future selling season where demand is uncertain. The unsold products are then sold for slavage value |
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