Study Guide Final: MGMT 339

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California State University, Fullerton *

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339

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Management

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May 14, 2024

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Study Guide Final: MGMT 339 Chapter 6: Lean Systems Differentiate between a push and a pull production system? Push system Every worker maximizes, own output, making as many products as possible. Pros: Focuses on keeping individual operators and workstations busy rather than efficient use of materials. Cons: Volumes of defective work may be produced. Line bottlenecks and inventories of unfinished products will occur. Hard to respond to special orders and order changes due to long throughput times Pull system: Production line is controlled by the last operation, Kanban cards control WIP. Pros: Controls maximum WIP accumulating at bottlenecks. Keeping materials busy, not operators. Operators work only when there is a signal to produce. Throughput time was WIP are decreased, faster reaction to defects and less opportunity to create defects. Cons: if a problem arises, there is no slack in the system. What is the purpose of lean production? Lean systems: operation system that maximizes the value added by each of a company’s activity by removing waste and delays from them. What is considered a “waste” in lean management? Over production Inappropriate processing Waiting Transportation Motion Inventory Defects Underutilization of employees
Chapter 7: Project Management: What is a work breakdown structure? A statement of all the work that has to be completed. (roadmap) Activity: the smallest unit of work effort consuming both time and resources that the project manager can schedule and control. What is a precedence relationship? A relationship that determines a sequence for undertaking activities; it specifies that one activity cannot start until a preceding activity has been completed. What is a critical path? The sequence of the activities between a project’s start and finish that takes the longest time to complete. What is the difference between earliest start time, earliest finish time, latest finish time and latest start time? Earliest start time (ES): the earliest finish time of the immediately proceeding activity. Earliest finish time (EF): an activity’s earliest start time plus estimated duration. Latest finish time (LF): the latest start times of the activity that immediately follows. Latest Start time (LS): the latest finish time minus its estimated duration. What is activity slack? The maximum length of time that activity can be delayed without delaying the entire project. Activities on the critical path have 0 slack. Activity slack is the amount of schedule slippage that can be tolerated for an activity before the entire project is delayed. Chapter 9: What are the primary reasons for holding inventory? Meet customer demand , prevent stock-outs , reduce transportation and ordering cost, establishing Just In time productions systems, variabilityand mitigating supply chain risks. What are the requirements for effective inventory management? A system to keep track of inventory Reliable forecast of demand and forecast error Knowledge of lead times and lead time variability Estimates of inventory holding, ordering, shortage cost
Classification system for inventory items Briefly describe each of the costs associated with inventory? Inventory (carrying ) holding cost: Cost proportional to the quantity of inventory held Facility storage, material handling (equipment), product deterioration, spoilage, breakage, obsolescence, pilferage, and opportunity cost of capital. Ordering cost (setup) cost: Cost of replenishing inventory. Generally increases with number of orders Bookkeeping exp. , ordering processing fees, transportation cost, receiving cost, and handling cost. List the mayor assumptions about the EOQ model The demand rate is constant and known with certainty. lead time is constant and known with certainty No constraints are placed on the size of each lot. The only two relevant cost re the inventory holding cost and the fixed cost per lot for ordering set up. Decisions for one item can be made independently of decisions for other items. Explain briefly how a higher carrying cost can result in a decrease in inventory. higher carrying cost puts pressure on businesses to efficiently manage their inventory levels to minimize expenses and maximize profitability. This often leads to a decrease in inventory through strategies such as lean inventory management, just-in-time inventory practices, and improved supply chain efficiency. Under what circumstances would the amount of safety stock held be: Large: High Demand Variability: If demand for a product fluctuates significantly or is difficult to predict accurately, a larger safety stock may be necessary to ensure that the business can meet unexpected spikes in demand without running out of stock. Long Lead Times: Products with long lead times, such as those sourced internationally or with complex manufacturing processes, may require a larger safety stock to compensate for the increased risk of stockouts during the replenishment cycle. Critical Items: For items that are crucial to business operations or have a high impact on customer satisfaction, maintaining a larger safety stock provides an extra layer of insurance against stockouts and ensures continuity of supply.
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