90914172

ATP sama dengan scheduled receipts + starting inventory = actual purchases scheduled Forecasted available harmony (PAB) incorporates a calculation to get customer requests. PAB = prior period PAB & MPS – greater of (customer purchases or outlook demand) Frosty Zone – capacity and materials happen to be committed to particular orders, senior mgmt authorization required for adjustments. Slushy Region – ability and material are dedicated to less extent. Tradeoffs has to be met among marketing and making Liquid Zone – any changes could be made to the MPS • • • • • • • • • • • • three or more CPIM Exam – Principles of Source Chain Supervision Practice Research Sheet

Phase Four – Master Requirements Planning • • • • • • Supplies Requirements Preparing has 2 major objectives1) determine requirements 2) keep priorities current Independent demand must be prediction, dependent require is related to the necessity for different items (higher level assemblies or products) Material Requirements Planning (MRP) drives Development Activity Control (PAC) and buying. MRP strategies the release and receipt dates for instructions. PAC and purchasing must plan and control the efficiency of requests to meet the due date ranges The Material Requirements Planning System has 3 inputs 1) master production schedule 2) inventory ecords 3) expenses of supplies Inventory records have 1) planning elements (header records) and 2) status of every item that changes collectively transaction Invoice of Material is “a listing of all the subassemblies, intermediaries, parts and recycleables that go into making the parent set up showing the quantities of each required to call and make an assembly”. 3 points 1 . BOM displays all the parts required to help to make one item 2 . Each part or perhaps item has only one item number 3. A component is described by their form, match or function. If these change, they become new, exceptional parts (i. e. n you fresh paint something) Multilevel bills will be formed as logical groups of parts into subassemblies, based on the fact that product is assembled (i. elizabeth. an auto contains a frame, underchassis, doors, house windows and engine as subassemblies) Summarized reference table contains each of the parts necessary to make a single assembly, made by the product design and style engineer Preparing bills are artificial groupings of parts for planning purposes. They just do not represent buildable products but the average product Where-used information give the same information as being a bill of fabric, but provides parents for any component.

Tires might be used on several types of cars Pegging report is a lot like a wherever used report but only shows father and mother for which there is certainly an existing necessity (rather than all parents, even individuals with no current production) Expenses of material bring the following functions 1 . merchandise definition – components to produce a product 2 . engineering modify control – recording becomes design of a product or service 3. assistance parts – replacement parts necessary to fix a broken element are identified from the invoice of material 4. planning- determine what supplies are required to create a finish product a few. rder access – the order access system generally automatically configures the purchase with parts and computes the total expanded price 6. manufacturing – provide a list of parts required to make an item 7. priced at – method of determining immediate material and a composition for saving direct labor and releasing overhead Business lead time may be the amount of time necessary to perform a surgical procedure – it provides order prep, queuing, processing, moving receiving and inspecting Exploding is definitely the process of growing the requirements by usage amount and documenting the appropriate requirements throughout the product tree 4 • • • • • • • • • • • • • • • • • • • CPIM Exam – Basics of Supply Sequence Management Practice Study Sheet Offsetting is a process of placing the exploded requirements in their right periods based upon lead period The planned order relieve of the parent or guardian becomes the gross dependence on the part Releasing an order means that authorization has to getting to buy the essential material or manufacturing to make the component (check component availability first) Planned receipts will be orders place on manufacturing or on a merchant and represent a dedication to make or buy.

Planned receipts on the MRP record are available orders on the factory. If the goods are received in to inventory and available for employ, the buy is shut out, as well as the scheduled invoice moves into on-hand inventory Net Requirements = gross requirements – scheduled statements – available inventory Low level code is the lowest level on which a part is located in all expenses of material.

Dependant on starting with the lowest level of any bill of material and doing work up to the portion Responsibility of planner should be to 1) release (release) purchases to getting or manufacturing 2) reschedule due times of available (existing) purchases as needed 3) overcome errors trying to find all their cause 4) solve important material agendas by expediting or re-planning 5) put together with others Planned purchases are instantly scheduled by the computer. Released orders are responsibility with the planner.

Firm planned instructions can be held against changes Exception text messages advise the planner once something demands attention Transaction messages mean that the advisor must tell the MRP software of all actions including 1) discharge an buy 2) timetable a receipt 3) in order to the data Feedback to the program comes from 1) suppliers activities through getting 2) early or late completion at the factory 3) management actions such as changing the expert production routine Reducing systems nervousness of constant improvements through firm planned requests 5 CPIM Exam – Basics of Supply Chain Management Practice Study Bed sheet

Chapter Five – Capacity Management • • • • • • • Capacity may be the amount of work that can be done in a certain time span. “The capability of a worker, equipment, work middle, plan or organization to product end result per period of time”. Potential is the charge of doing job, not the amount of work done Potential required may be the capacity of any system or perhaps resource required to produce a preferred output in a given period of time Load is the amount of released and planned operate assigned to a facility for a particular time period Capability management is responsible for determining the capacity needed to accomplish the concern plans. The function of building, measuring, monitoring, and altering limits or perhaps levels of capability in order to implement all production schedules Ability Planning may be the process of deciding the resources necessary to meet the goal plan as well as the methods needed to make that capacity offered Capacity control is the means of monitoring production output, evaluating it with capacity plans, • • • • and acquiring corrective activities when needed Capability planning method is as uses 1 . etermine the capacity sold at each function center in each time period 2 . identify the load at each work middle in whenever period a few. resolve dissimilarities between offered capacity and required potential Resource Preparing involves long-range capacity useful resource requirements and it is directly linked to production planning. If the source plan can not be devised to satisfy the production plan, then the creation plan should be changed Difficult cut potential planning is definitely medium selection and the ability requirements plan is brief range.

Advices for the Capacity planning incorporate 1) available shop orders 2) prepared order launches 3) routings • • • • • • • • 4) time standards 5) lead instances 6) work center capabilities An open purchase file is a record of all the active store orders Organized order releases are determined by the pc’s MRP common sense based upon the gross requirements for a particular portion Routing is a path basically follows via work center to work center since it is completed.

A routing file should are present for every element manufactured and contain 1) operations to become performed 2) sequence of operations 3) work centers to be used 4) likely alternative operate centers 5) tooling necessary at each operation 6) normal times to get setup and run for each and every piece A piece center is composed of a number of machines or employees capable of accomplishing the same work.

A work centre file contains information on the capacity and move, wait and queue ties associated with the middle The move time is the time delivered to move materials from one workstation to another. All the wait time is a time a career is at a work center following completion and before staying moved. The queue time is the time a job holds back at a work center prior to being dealt with. Lead time is the sum of line, setup, run, wait and move times. Capacity obtainable is the ability to produce a volume of output in a given time frame.

It is effected by 1) product technical specs 2) merchandise mix 3) plant and equipment 4) work efforts Unit of output is acceptable if there is not really a wide variety of goods produced including paper generators measuring in tons of newspaper, if certainly not, the common factor is period Standard period is the time required to associated with product by using a given technique of manufacture (through time research techniques) 6 • • • • • • • • • • • CPIM Exam – Basics of Supply Chain Management Practice Study Piece Demonstrated ability is realized from historic data (and is the normal, not maximum output).

Determined or rated capacity is founded on available time, utilization, and efficiency Utilization = several hours actually worked / offered hours 5. 100% Performance = real rate of production as well as standard charge of development * 100% Rated capability = offered time * utilization 2. efficiency Time needed for each order is the setup some the operate time Fill is the quantity of the necessary times for the planned and actual orders to be operate on the work center in a specific period.

Calculate load by simply 1) identify standard several hours of procedure time for every planned and released order for each job center simply by time period 2) add all the standard hours together Operate center load report displays 1) over capacity 2) under potential work centers Scheduling is described as “timetable pertaining to planned occurrences” To compute back organizing (start while using due date and work backwards to the start off date) you must know 1 . quantity and due date 2 . collection of businesses and job centers required 3. setup and run times for every single operation some. queue, wait around and maneuver times five. ork center capacity readily available (rated or perhaps demonstrated) The develop a timetable 1) for each and every work purchase, calculate the required time at each job center 2) starting with the due date, routine back to get the completion and start dates for each operation 2 different ways of handling capacity available 1) customize load (shift orders ahead or back) 2) change the capacity of accessible (schedule over time, adjust the workforce simply by hiring or firing workers, shift workforce b/n operate centers, use alternate routings on job centers to shift from bottlenecks, subcontract) CPIM Exam – Fundamentals of Supply Chain Supervision Practice Examine Sheet Chapter Six – Production Activity Control • Production Activity Control (PAC) is responsible for carrying out the grasp production plan and the material requirements strategy (also employ labor and machines correctly, minimize WIP, and maintain consumer service). The Materials requirements plan authorizes PAC to: 1 . relieve work orders for making 2 . take control of work requests and ensure on time completion three or more. responsible for in depth planning of order movement through manufacturing 4. anage day-to-day activity Dispatching is usually releasing instructions to the shop floor as authorized by material requirements plan Control is 1) ranking orders by priority 2) review actual overall performance of work instructions to slated 3) screen , control WIP, business lead times and queues 4) Report performance, operation times, order amounts and recycle Flow manufacturing (high volume standard products) can be repeating manufacturing (cars) or continuous manufacturing (gasoline). Major features 1 . routings are set and organized accordingly, the quantity of time to conduct work at one center • • • • • • • • • • • • is usually roughly similar to other work centers 2 . work centers produced a restricted range of similar products several. material moves via physical transfer (little WIP) 4. capacity is usually fixed by line Spotty manufacturing has its own variations in product design, process requirements and buy quantities. Major characteristics 1 ) Flow of work is varied and depends upon design. They are going to take basically time at each work place (not balanced) 2 . equipment and workers are versatile 3. throughput times are long, WIP is significant 4. apacity required depends on the mix of items being constructed and is hard to predict Creation Activity Control (PAC) need to have four Organizing Files to route supplies through making –– item master document, product structure file, routing fie and work centre master document Item Grasp File – there is a single record for every single part number. Contains header details such as information, lead period, quantity accessible , available Bill of fabric File record the single level quantities to assemble a parent

Redirecting file includes a series of procedures needed to make the item Function center expert file consists of all relevant data on a work center including ability, number of machine and labor hours, performance, utilization, etc… Every active manufacturing order (in process) has a record in the shop purchase master data file. The shop order detail file includes a record of every single operation necessary to make an item Objective of scheduling is always to meet delivery dates and make the finest use of making resources Developing lead time consists of 1) queue period 2) set up time 3) run period 4) hold out time 5) move period (transit among work centers).

Typically in intermittent making queue period consists of 85-95% of total lead period Cycle Period / Throughput Time – length of time via when material enters a production center until it completely 8 • • • • • • • • • • • • • • • • • CPIM Exam – Principles of Supply Chain Managing Practice Research Sheet Forwards scheduling assumes that materials procurement and operation arranging start when the order is usually received, and the operations happen to be scheduled ahead from this time.

This ends in an early completion and the earliest delivery day for a item Backward scheduling is booking the last operation first and working returning to the latest begin date. WIP is decreased and there is very little slack may possibly impact customer service Infinite loading assumes the workstations include capacity offered when necessary. It does not consider the impact of other purchases in the system Finite loading takes into account the other purchases Operation overlapping – another operation is allowed to begin before the entire lot is done on the earlier operation.

This kind of reduces total manufacturing period, need to decide sub-lot size Operation splitting also reduces lead time – slice order in? and run using two equipment at the same time, additional setup period is incurred but work time is usually cut by 50 % Load progressing shifts insert to different routines when there is a shortage of ability Overloaded operate stations are bottlenecks the moment required potential is more than the obtainable capacity, or “a facility, function, office or resource whose capability is comparable to or lower than the demand put upon it” Throughput is the total amount of production dealing with a center.

Bottlenecks control the throughput of all items processed by them. Operate should be planned at the logjam at the maximum rate it might process function (its capacity) Bottleneck rules include the subsequent: 1 . using a non-bottleneck resource is definitely not based on its potential (or capacity), but simply by another limitation in the program 2 . utilizing a non-bottleneck reference 100% of the time does not generate 100% usage 3. ability of the program depends on the capability of the bottleneck 4. ime saved for a non-bottleneck saves the machine nothing five. capacity and priority must be considered with each other 6. loads can, and really should, be break up 7. target should be in balancing movement through the shop Bottleneck rules include the subsequent: 8. set up a time stream before every single bottleneck (an inventory queue) 9. control the rate of fabric feeding the bottleneck twelve. do everything to provide the required bottleneck potential (better use, few setups) 11. adjust loads (use alternate job centers, subcontracting, even if more expensive) 12. hange the schedule (last resort) Theory of limitations is a five step process 1) determine the constraint (limits throughput not inventory or production) 2) make use of the constraint (consider spinning shifts in order that the constraint will certainly not be allowed to end up being idle 3) subordinate anything to the restriction (don’t concentrate on anything else) 4) lift the constraint (find approaches to increase the available hours with the constraint) 5) once the constraint is not really a bottleneck, find the new a single and replicate these steps Arranging system pertaining to the restrictions is called Drum-Buffer-Rope Drum is a “drumbeat” or pace of production Buffer is important for the reason that constraint is never starved pertaining to inventory String – pull in material in to the constraint with the right time To control queue and meet delivery commitments, creation activity control must 1) control the effort going in a great coming out of a piece center (called input / output control) 2) established the correct goal of requests to run at each work middle. Generally, if perhaps queue may be controlled, delivery can be met 9 • • • • • • CPIM Exam – Basics of Supply Chain Management Practice Study Linen An Input / Result control system is a method of managing queues and work-in-process business lead times by monitoring and controlling the suggestions to, and output coming from, a facility. This information is definitely shown with an input / output record Operation Sequencing is a way of short-term preparing of actual jobs to become run in each job center based upon capacity and priorities.

Control of priorities can be exercised through dispatching Dispatching is the function of choosing and sequencing available careers to be manage at person work centers. It contains the effort center, normal hours, item number and specifics, priority information, and careers coming to the task center Dispatching rules include 1) first come, initial served 2) earliest task due date 3) earliest operation due date 4) shortest control time Critical ratio sama dengan (due time – present date) as well as lead time remaining. CRYSTAL REPORTS &lt, you (order behind schedule) CRYSTAL REPORTS = one particular (on schedule) CR &gt, 1 (order ahead of schedule) CR zero or less (order is already late) Production reporting supplies feedback on what is happening at the plant.

Types of information required include 1) order status 2) every week input / output by simply work center 3) exception reports 4) inventory status 5) performance summaries 15 CPIM Examination – Fundamentals of Source Chain Administration Practice Analyze Sheet Section Seven – Purchasing • • • • • • • • • • • • Purchasing is the “process of buying”. Manufacturing Preparing and Control (MPC) need to decide when should you order which raw materials. Purchasing then spots the buy and is in charge of seeing that the order occurs on time Making firms use 50% of their sales dollars in the purchase of raw materials, parts, and supplies Purchasing aims include 1) obtaining right quantity and quality of services 2) etting the minimum costs 3) ensuring ideal supplier providers 4) retaining good provider relationships In order to meet objectives need to 1) decide purchasing requirements 2) select right suppliers 3) work out the best price 4) administer method Purchasing routine consists of 1) receiving requisitions 2) select suppliers (RFQ) 3) decide correct cost 4) providing purchase orders 5) followup to ensure delivery dates met 6) getting and receiving materials 7) approving accounts for payment Specification factors consist of 1) quantity requirements 2) value requirements 3) functional requirements Functional specs are concerned while using end usage of the item and what the item is supposed to do. Functional specifications are the most important requirements Quality can be stated to be attained if it fulfills the needs of the end user.

The levels of rendering user satisfaction include 1) quality and product planning 2) top quality and item design 3) quality and manufacturing 4) quality and use Useful specifications may be described 1) by company 2) by physical qualities including functionality 3) simply by engineering images Description by brand is employed where the goods are patented or perhaps the supplier has created a choice Specifications happen to be by buyer (custom) or by normal specifications (industry or authorities standards) You will find three types of distributor sourcing 1 ) sole finding – only one supplier readily available 2 . multiple sourcing – use several supplier for the item (better service and lower cost) 3. sole sourcing – dedicate to one supplier the moment there is more than one available to produce a long-term partnership Factors in selecting suppliers include 1) technical ability 2) manufacturing capability 3) reliability 4) after-sales support 5) dealer location 6) other considerations (credit terms) 7) price Ranking method is used (criteria and weight) to select suppliers Fair price is a competitive price. Work with fixed and variable costs to analyze.

Four types of goods for value negotiations 1) commodities (copper, coal, etc…) 2) regular products (by many suppliers) 3) components of small value (lower cost of ordering) 4) made to purchase items Adviser / purchaser responsibilities incorporate 1) producing materials requirements 2) expanding schedules 3) issuing shop orders 4) releasing materials 5) focal points etc… Contracting buying assures suppliers specific amount of business and minimizes deal costs EDI enables consumers and suppliers to digitally exchange deal information just like purchase orders, invoices and material requirements Internet, Intranet, and Extranet (shared Intranet) available just to company and also other party sharing • • • • • • • • 11 CPIM Exam – Basics of Supply Cycle Management Practice Study Bed sheet Chapter Eight – Foretelling of • • • • Demand managing is the function of recognizing and handling the demand pertaining to products. comes with 1) foretelling of 2) purchase processing 3) making delivery promises 4) interfacing between It • • • • • • • • anufacturing planning and control as well as the marketplace Order processing occurs when a customer’s order is received Demand shows the advantages of an item, product sales shows the fact that was actually marketed. Because demand cannot always be satisfied, demand is above sales Require patterns incorporate four types: 1 . Tendency – raising in a steady pattern of demand, or perhaps level. May be geometric or exponential installment payments on your Seasonality – fluctuates with regards to the time of year several. Random deviation – many factors impact demand. Design of deviation can usually end up being measured 4. Cycle – wavelike boosts and decreases throughout the economy impact demand Stable demand retains their particular shape and dynamic changes do not.

The greater stable the necessity, the easier it is to forecast. The average demand can be the same as it is for stable and active patterns. Generally the steady pattern is forecasted Independent demand is usually not related to the demand for just about any other service or product. Dependent demand occurs in which demand is derived from a second item. Only self-employed demand has to be forecasted Foretelling of has 4 major rules: 1 . Predictions are usually incorrect. Expect problems 2 . Every single forecast will need to contain an estimate of problem 3. Predictions are more correct with people or groups 4. Predictions are more correct for nearer time periods Three principles of information collection will be: 1 .

Record data inside the same conditions as necessary for the outlook 1) data based on demand, not shipments 2) forecast time period need to be the same as the schedule period 3) those items being forecasted should be handled by making 2 . Record the circumstances in the data. Other factors like product sales promotions and competitors’ revenue are important a few. Record demand separately for different customer teams – low cost vs . price tag may will vary trends 3 forecasting methods are 1) qualitative methods 2) extrinsic techniques 3) intrinsic approaches Qualitative approaches are predictions based on judgment, intuition and informed viewpoints (SWAGS) Extrinsic forecasting methods are assignments based on external factors (bricks to housing starts, auto tires to fuel consumption).

This can be more helpful for forecasting with regard to a large category of products (cars) Intrinsic forecasting techniques work with historical info to outlook. These are the most crucial techniques, including: 1 . normal demand 2 . moving uses 3. dramatical smoothing (a moving normal without retaining prior months) – 90% of the forecast is based on the prior months’ average and 10% on the current months’ average. 12 • • • • • CPIM Test – Basics of Supply Chain Managing Practice Study Sheet Fresh forecast sama dengan alpha 2. (latest demand) + (1 – alpha) * (previous forecast) with alpha among 0 and 1 5. Seasonal index shows how high over or beneath an average to get a product. Seasons index sama dengan period common demand as well as average demand for all intervals. Average require is “deseasonalized demand”.

Pertaining to seasonal require, 1) simply use deseasonalized data intended for forecast 2) forecast deseasonalized demand 3) apply the seasonality index to the deseasonalized forecast Forecast error is the difference between actual demand and forecast require. Due to tendency and randomly variation Prejudice exists when the cumulative genuine demand varies from the cumulative forecast. Tendency is a systemic error, have to change the outlook Random deviation – requirements on the demand pattern in the project. Normal error should be zero Suggest absolute change (MAD) is known as a way to measure prediction error. Normal distribution simply by standard deviation +- 1 MAD (60%), +- a couple of MAD (90%) +- several MAD (98%). MAD is a tracking sign to see if there is bias.

Tracking signal = sum of forecast errors / MAD 13 CPIM Exam – Basics of Supply Sequence Management Practice Study Sheet Chapter Eight – Inventory Fundamentals • • Stocks usually stand for between 20 and 60 percent of total property Aggregate products on hand management functions according to their classification (raw material, work in progress, and finished goods) and the function they carry out rather than on the individual product level. That involves 1) flow and kinds of products on hand needed 2) supply and demand patterns 3) functions that stocks perform 4) objectives of inventory managing 5) costs associated with inventories Item inventory management is also maintained at the item level.

Managing rules incorporate 1) which in turn individual items are most important 2) how individual items are being controlled 3) how much to order previously 4) when should you place an order Unprocessed trash are purchased items received which have not joined the production method, including elements, component parts and subassemblies WIP is definitely raw materials which may have entered the manufacturing procedure and are being worked on Completed goods will be ready to be distributed as taken part items Syndication inventories are finished items located in the distribution program Maintenance, restore and functional supplies (MRO) are items that are utilized in production but don’t become part of the final product, which includes hand equipment, spare parts, etc… Anticipation stocks are built in anticipation of future demand (i. electronic. created ahead of xmas) Basic safety stock is to cover unpredictable fluctuations in supply, require or business lead time. That prevents stockouts Lot-sized inventory are items purchased or manufactured in amounts greater than needed immediately.

This is certainly done to make the most of shipping discount rates or lessen setup costs. This is also known as cycle share Transportation stocks exist due to the time needed to maneuver inventories. They are also called pipe or activity inventories. The average amount = (transit time in days) * annual require / 365 Hedge inventory (usually finished with commodities) is done if rates fluctuate and buyers expect prices to increase, so that they buy even more now Products on hand management aims include 1) maximum customer support (orders sent on schedule, stockouts) 2) working efficiency (build seasonal arrays, larger development runs, however in larger quantities).

Balance this against costs, and tied up $$ in assets Item cost is the retail price paid for a purchased item (includes direct costs like transportation, persuits and insurance) also called arrived price. Can even be determined internal including direct material, immediate labor and factory expense Carrying costs include every expenses incurred by the organization due to volume. 1) capital costs or perhaps opportunity cost of $$ tangled up in inventory 2) safe-keeping costs which include space workers, and equipment 3) risk costs consist of obsolescence, destruction, theft and deterioration. Typically 20%30% of inventory costs are holding costs Buying costs will be associated with placing an order either with the factory or possibly a supplier. Does not depend on amount ordered. ) production control costs 2) setup and teardown costs 3) lost capacity cost 4) po costs Average cost = (fixed expense / quantity of orders) & variable price Stockout costs expensive as a result of back buy costs, misplaced sales and lost buyers Inventory turns = total annual cost of products sold / average products on hand ABC inventory determines the relative significance of items and then has several levels of handles 14 • • • • • • • • • • • • • • • • • • • • • • • • • CPIM Examination – Essentials of Source Chain Administration Practice Research Sheet 1 ) A things – 20% of items are the cause of 80% of dollars installment payments on your B things – 30% of items be the cause of 15% of dollars 3. C things – 50 percent of items are the cause of 5% of dollars To calculate DASAR use 1 . determine annual usage 2) multiple twelve-monthly usage by simply cost u get total dollars 3) list things by total annual usage 4) calculate cumulative annual dollar usage and percentages 5) group ranked items in a, B and C categories ABC rules are 1) have plenty of low-value “C” items (order a years at a time and carry lots of safety stock) 2) use money and control work saved to lower inventory of high-value products (A items) A products – excessive priority – tight control and frequent review, expedite when needed B items – medium top priority – very good controls with normal focus and finalizing C items – low priority – use basic controls and order a large number of items Summary – ought to balance cost of carrying products on hand against 1) customer service 2) operating performance (longer development runs and fewer setups) 3) cost of placing requests (decrease with less orders) 4) vehicles and managing costs (smaller orders cost more per item) 15 CPIM Exam – Basics of Supply Sequence Management Practice Study Linen Chapter Ten – Buy Quantities • • • • • • • • • • • • • • • • • • Primary question , Decision guidelines to determine how much should be purchased at one time Inventory keeping product (SKU) will be individual things in a particular inventory Lot or set is a amount produced jointly and sharing the same development costs and specifications Whole lot for great deal says order exactly what is needed – utilized in just-in-time environment, also to get “A” products on hand items Fixed order volume rules declare exactly how many should be ordered each time a great order is placed (i. e. 500 units). This is a simple system Min-max system – orders built when amount available visitors order level. At that point order the difference between quantity readily available and the maximum (i. at the. f you could have a optimum or five-hundred units, and you order by 100 models, your purchase would be placed for 400 units) Buy “n” periods supply – demand for a number of future durations (months, times or weeks) Economic Purchase Quantity (EOQ) is the decision method to minimize the cost of ordering and the expense of carrying inventory Assumptions of EOQ 1) demand is usually constant 2) item purchased or manufactured in lots 3) order prep costs and inventory costs are well-known 4) replacement unit occurs at one time Average products on hand = purchase quantity as well as 2 Quantity of orders per year = total annual demand as well as order quantity A = # of units annually S sama dengan ordering costs I = annual carrying costs (percentage) c = unit expense Q sama dengan order quantity Annual purchasing costs = number of purchases * price per order Annual carrying cost = average products on hand * cost of carrying a single unit for one year Total annual costs = gross annual ordering costs + twelve-monthly carrying costs EOQ takes place where the buying costs sama dengan the carrying costs.

EOQ increases because the total annual demand (A) and the cost of ordering (S) increases, and will decrease since the cost of having inventory (i) and device cost (c) increase. Variety discounts consist of 1) purchase costs 2) ordering costs 3) having costs (saving on order and placing your order costs, embrace carrying costs) Period buy quantity (POQ) calculated a fiscal time between instructions. Divide EOQ / average weekly use. Ordering costs are the same nevertheless carrying costs are decreased EOQ concerns 1 . uneven demand – EOQ assumes demand is definitely uniform and that replenishment arises immediately. When not true use period – order amount 2 . expectation inventory –when you need to build ahead three or more. inimum instructions – can be a guideline from suppliers – pertaining to C items, order a great deal, not an EOQ 4. vehicles inventory may reduce expense per unit for huge orders five. multiples (ship in skid-load lots) of sixteen CPIM Exam – Fundamentals of Source Chain Administration Practice Study Sheet Chapter Eleven – Independent Require Ordering Devices • • Main question – when to place a alternative order? 3 basic devices 1) purchase point program (for independent demand) 2) periodic review system (for independent demand) 3) materials requirements preparing (for based mostly demand) Buy point system – the moment quantities fall to a predetermined level, an order is positioned. Must be when ever there is share available to satisfy demand before the new stock arrives (lead time). ) quantities are fixed 2) order stage is determined by common demand during the lead period 3) time of reorders depend on genuine demand certainly not on a regular schedule Buy point = demand through the lead time + security stock Security stock is actually a calculated extra amount of stock ordered to protect against concern. Calculation depends upon 1) variability of demand during business lead time 2) frequency of reorder 3) service level desired 4) length of business lead time (longer the time, a lot more safety share that has to become carried) Protection lead time protects against timing uncertainty by planning order releases and order receipts earlier than required Security factor – service level is straight related to the quantity of standard deviations provided while safety stock and is generally called the protection factor.

The service level is the percentage of order cycles with no stockout Basic safety stock sama dengan sigma 5. safety aspect (sigma sama dengan 1 regular deviation) The only time a stockout takes place is the moment stock is usually running low and this occurs whenever an order is placed. If business lead time is zero, the typical deviation of demand (during lead time) is zero. As business lead time boosts, the standard change increases by a sluggish rate. Sigma for lead time interval = sigma for prediction interval 5. square reason behind (lead period interval/forecast interval) Two trash can system – a quantity of the item equal to the buy point amount is set besides (in the second bin) and not used right up until main variety is gone. If the main variety is gone, a great order is positioned, and manufacturing continues from the safety share Perpetual inventory record product is an up to date record of transactions.

Consists of permanent (header record) and variable info (quantities, amounts, etc…) Focus on level require is the volume equal to the demand during the lead time and also demand throughout the review period plus protection stock is a maximum level inventory (for periodic review system, which will doesn’t automatically reorder) Division inventory includes all the finished goods placed anywhere in the distribution program (central source facility and distribution centers) Unless a firm delivers directly from factory to customer, require on the manufacturer is created by distribution centers (served by central supply). Thus even if demand is usually uniform it will not appear like that at the center because it depends on when the distribution centers place their particular replenishment orders Decentralized system – every single distribution centre determines what it needs and once and places orders about central source.

Local control is better although has bad impact on development. Stock is “pulled” throughout the system Central system – all forecasting and order decisions are created centrally. Circulation centers do not say in what they obtain. Stock is definitely “pushed” through the system. Generally stock that is sold is replaced with extra inventory for promotions. Results in lower level of customer service 18 • • • • • • • • • • • • • • • CPIM Exam – Basics of Supply Cycle Management Practice Study Linen Distribution requirements planning forecasts when the circulation centers will certainly demand merchandise from central supply. Then this factory can easily plan for production and interact to customer demand

Chapter Twelve – Physical Inventory and Warehouse Management • • • • Warehousing management objectives are to 1) reduce cost 2) maximize customer support Elements consist of 1) present fast customer care 2) observe items 3) minimize the whole cost of going goods in and out of storage area 4) contact customers Capital costs will be space and materials managing equipment (based on optimum demand). Operating costs incorporate labor, and productivity of labor is definitely measured in # of units that can be moved everyday (which depends on capital investment) Warehouse actions include the pursuing elements: 1 ) Receive products 1) check vs . purchase and bill of lading 2) check quantities 3) check for harm 4) inspect goods in the event required installment payments on your

Identify the products (put SKU on them) 3. Put goods in storage some. Hold goods (protect and maintain in great condition) five. Pick items (select by stock and bring to dock) 6. Marshal the shipment (select merchandise that comprise a single buy, check, upgrade order records) 7. Give the delivery (package requests, prepare paperwork, load in vehicle) almost 8. Operate an info system (maintain records, may be manual or perhaps computer based) Best warehouse practices 1) maximize make use of space (largest capital cost) 2) use labor and equipment properly (largest functioning cost, more productive) Dice Utilization and Accessibility – goods will be stored on the ground and over a floor.

Space is also necessary for aisles, acquiring, shipping, office buildings, order choosing and set up Accessibility means that you can get to items you want with a lowest amount of effort (if you don’t have to move anything else, it can be 100% accessible) Cube usage can be elevated by investing in racks or perhaps tiers (additional capital price to reduce handling costs) Simple stock discovering systems 1) group functionally related products together (all hardware) 2) group fast-moving items jointly 3) group physically similar items with each other (i. at the. items that need to be frozen) 4) locate doing work stock and reserve stock separately (working stock used for order picking) Fixed area system designates an SKU a permanent position. Minimize record keeping (only uses fifty percent of cube space) Suspended location program stores products where ever a location can be found.

Increases cube use but must be computer structured Point of usage storage sets inventory near to where it can be used (on the assembly line) Central storage puts every inventory within a central site to improve control and maintain information Methods of purchase picking and assembly 1 ) Area program – the order picker walks via the church aisle like a superstore (used for small places) 2 . Zone system – the warehouse is broken into areas and specific zones, and purchase pickers operate only inside their own place. Each trader sends them to the marshaling area wherever they are constructed for shipment (only a single order in a time) 18 • • • • • • • • • • • • • • • • • • • • • CPIM Test – Basics of Source Chain Administration Practice Examine Sheet a few.

Multi-order program – identical to zone system except that many orders will be aggregated ahead of sending to marshaling area Reserve inventory and operating stock may be separated – a separate employees is used to replenish the significant stock through the reserve inventory To maximize control, use a very good part numbering system. Use a simple, well-documented transaction program 1) determine item 2) verify volume 3) record the deal 4) literally execute the transaction. Limit physical get (lock). Coach your work power well Correct inventory information allow you to 1) operate a highly effective materials management system 2) preserve satisfactory customer service (don’t promise what you may have) 3) operate efficiently and proficiently 4) examine nventory Poor inventory information will result in 1) lost revenue 2) shortages 3) extra inventory 4) low production 5) poor delivery efficiency 6) increased expediting Reasons behind inventory problems include 1) unauthorized transactions 2) unguaranteed access 3) poor schooling 4) erroneous transactions 5) poor program 6) lack of audit functionality (cycle counting) Measuring products on hand accuracy is carried out through threshold (amount of permissible variance between products on hand records and physical count) – could possibly be 100% or perhaps less Essential to audit documents to have exact inventory and audit the system to find reasons behind errors and eliminate all of them (cycle counts track imperfections, periodic audits do not) Primary reason for periodic (annual) inventory is perfect for financial auditing.

Needs 1) housekeeping (sort inventory) 2) identification 3) training Means of physical inventory 1) count items and record over a ticket 2) verify rely by recounting or testing 3) once verification is usually complete acquire tickets 4) reconcile results to systems Pattern counting matters inventory constantly during the year. 1) allows for on time detection of problems 2) reduces “down time” for facility 3) uses qualified personnel. Rely frequency ought to increase depending on value or perhaps ABC system Cycle is important can occur 1) when order is placed (ensure order is usually correct) 2) when buy is received 3) the moment inventory record reaches absolutely no 4) when a specified # of orders has occurred 5) for the error arises 19 CPIM Exam – Basics of Supply Sequence Management Practice Study Piece Chapter Tough luck – Physical Distribution • • • • • • Physical distribution is a movement of materials through the producer for the consumer. Is it doesn’t responsibility of the distribution section.

Objective is to design and operate a system that fulfills customer service requirements at a minimum cost Physical source is the movement and safe-keeping of goods from suppliers to manufacturing Physical distribution may be the movement and storage of finished merchandise from the end of creation to the buyer Transaction route is concerned together with the transfer of ownership (negotiate, sell and contract) Division channel is concerned with the transfer or delivery of goods and services Particular way a strong moves elements depends on 1) channel of distribution being used (retailer to consumer or producer to wholesaler) 2) types of markets offered (dispersion, # of customers, size of orders) 3) characteristics with the product (weight, density, fragility) 4) type of transportation obtainable (planes, train locomotives or trucks) Six inter-related activities of physical distribution: 1 . Transportation – going goods away from firm’s structures – regarding 30%-60% of distribution costs – gives “place value” to the product 2 . Syndication inventory – all finished goods at any point in the division system.

Makes up about 25% , 30% of total division costs – add “time value” for the product three or more. Warehouses (distribution centers) – used to store inventory 4. Materials managing – movements and storage of goods inside distribution middle. Trade off between capital (costly) and working (efficiency) costs 5. Defensive packaging – must be safeguarded and identified, and go with storage and vehicles 6th. Order digesting and connection – a significant part to communicate between intermediaries Target of division management is to minimize minimal total program cost, not simply transportation or perhaps distribution inventory, while getting together with the services level essential.

In general, elevating customer service ends in an increase in costs Marketing is responsible for transferring possession through providing, promotions, etc… and physical distribution provides the customer items. Physical syndication also helps make demand through prompt delivery and item availability Physical supply of components into development must be trustworthy with a substantial service level because the cost of interrupted creation may be huge Location of factory can often be decided based on access to source (plants near coal or trains, metal plants near water, etc . ) Costs of carriage are ways, terminals and vehicles 1 . ways – paths over which the jar operates (roads, tracks) could be self supplied or simply by gov’t 2 . erminals – areas where carriers load and unload merchandise to and from cars and generate connections between local and long haul several. vehicles are used except when it comes to pipelines Railways provide their particular ways, ports and cars (large capital investment). Acceleration is good, and prices are affordable, best more than long miles Roads – do not offer their own ways but carry out provide cars. Most costs are operating in nature. Needs extensive street net – best for small volume goods to a spread market twenty • • • • • • • • • • • • • • • • • • • • • • • • • • • • • CPIM Exam – Basics of Supply Cycle Management Practice Study Sheet Air – requires an air system – gov’t provides ports but you need to provide very own planes.

Best advantage is usually time, disadvantage is price Water – no cost intended for using waterway, costs are low although time is usually long Sewerlines – have high capital costs and low functioning costs For Hire – jar may take goods for the public like a common company or underneath contract into a shipper Common carriers – standing provide to serve the public. They will only carry the goods they may be authorized to carry Contract companies haul just for those with a contract, not common people. Private carriers own or perhaps lease all their equipment and operate this themselves. Corporations normally only do this whenever they have adequate internal amount Transportation cost elements 1) line transport 2) pick-up and delivery 3) fatal handling 4) billing and collecting Line-haul costs – the transporter has costs to move the truck and so they vary directly with distance (not weight). There is a cost per mile and a distance approach.

Lin-haul expense per hundred or so weight may differ with the cost per mile, the distance moved, and the excess weight moved. The constraints are the fat and cu volume of the automobile. If shippers want to reduce transportation costs, they should 1) increase the weight shipped 2) maximize thickness Pickup and delivery costs – similar to line-haul costs except expense depends on time spent (charge for each pickup) – more affordable if weight is consolidated Terminal controlling costs rely upon the # of times a shipment must be loaded, managed and unloaded. If full truckloads happen to be shipped, they can go straight to their very own destination Billing and collecting costs could be reduced simply by consolidating hipments and minimizing the pick up frequency To decrease transportation costs 1) decrease line carry costs simply by increase weight shipped 2) decrease grab and delivery by lowering the # of pick-ups (consolidate) 3) decrease airport terminal handling costs by combining shipments 4) decrease payment costs simply by consolidating shipping Rate charged by transporter will vary simply by 1) benefit (increase their liability) 2) density (carry more weight is good) 3) perishability (requires special handling) 4) product packaging (risk of damage). Rate structures will be TL (truck load) or perhaps LTL (less than truckload). LTL could be up to totally higher than TL rates Basic warehouse is usually where items are placed for a long time and goal is usually to protect items until needed (document depository, furniture) Distribution warehouse gets goods in large tons, stores briefly, and then fractures them into smaller instructions. Emphasis on movements and controlling rather than storage space.

Measured by throughput, certainly not volume of storage Warehouses fill up three requires 1) transport consolidation 2) product blending 3) services Product mixing deals with grouping of different products into a great order as well as the economies that warehouses can offer in doing this (receive TL, dispatch LTL). Support improves by simply placing goods near customers Shipping price / assistance depends on 1) number of buyers 2) geographic distribution from the customers 3) customer purchase size 4) number and placement of plants and division centers (have control over this item) Laid-down cost (LDC) is the delivered cost of a product or service to a particular geographic point. Includes every costs of moving the products. LDC sama dengan product expense + (transportation costs per mile * distance) Market boundary is the line among two or more source sources the place that the laid-down value is the same twenty-one • • • • • • • • CPIM Examination – Essentials of Supply Chain Managing Practice Examine Sheet Since more istribution centers happen to be added to the program 1) cost of TL deliveries IN to circulation centers boosts 2) cost of LTL shipments to buyers decreases 3) total expense of transportation to decrease Role of packaging is always to carry the items safely through a distribution program to a buyer 1) determine the product 2) contain and protect the merchandise 3) lead to physical syndication efficiency Unitization is the debt consolidation of a number of units in large units, or unit loads, so that there is significantly less handling Pallet is a platform measuring forty-eight by forty by 5 and designed so it may be lifted with a forklift. Loaded with packages, it forms a cube which is a unit weight. Materials managing is the short-distance movement within a plant or distribution middle. Unloading and loading of transportation automobiles and distribute and call to mind of goods via storage. Objectives include: 1 ) increase cube utilization by using height of building and making aisles no more than possible installment payments on your reduce controlling 3. increase speed 3 types of materials managing equipment. Conveyors move material between 2 fixed details (expensive). Professional trucks are not gas powered (more flexible than conveyors).

Cranes and hoists can move materials vertically or flat within their area of operation (make good make use of vertical space) As division centers will be added, distribution costs decrease, and inventory-carrying costs maximize. With a frequent sales volume level, as the quantity of distribution centers increases, the necessity on each reduces. This causes an increase in total safety share in all division centers. Operating costs increase because that they move with # of handles, not really sales. Program service ability can be scored by percentage of marketplace served within a given period. It improves quickly as first and second division centers are built (in the best 1-2 markets) but then decline. 22 CPIM Exam – Basics of Supply Sequence Management Practice Study Linen Chapter Just fourteen – Companies Processes • • • • •

Product stages include 1) introduction stage (most expensive and risky) 2) expansion phase (production increases and unit costs drop) 3) maturity period (price competition severe) 4) decline stage (profits decline) 2 elements to consider with product selection 1) too narrow, lose clients 2) also broad, buyers happy but costs maximize due to decrease of specialization Simplification is the means of making something easier to do or produce (remove pointless products and variations) Standardization makes sure that all items will be as well and interchangeable Modularization uses standardized parts for flexibility and variety – doesn’t invariably reduce the • • • • • • • • • • • ange of choice for the client (use element parts) Specialty area – a limited range of products supplies benefits 1 . allow development of specially designed gear 2 . reduce the number of setups 3. labor develops velocity and dexterity Product and market concentrate can be depending on customer grouping (similar customers), demand features (volume), or perhaps degree of customization Process concentrate is based on similarity of process Focused stock where factory specializes in a narrow merchandise mix for a niche market Items must be built to be 1) functional (perform as specified) 2) low-cost processing (made at least cost) Simultaneous Engineering runs between item design and process design and style (better potential for designing efficient product by least cost). ) lessen time to market 2) decrease cost because of less alterations 3) increase quality 4) lower total system expense (involve discipline support in first design) Method – a procedure is a technique of doing anything, generally concerning a number of methods or operations. Process design and style is the growing and developing of the measures Five factors to be considered when designing a process 1 . product design and quality level – equipment must be capable of meet quality level 2 . Demand habits and flexibility necessary – if there is variation in demand process has to be flexible enough to respond a few. quantity / capacity concerns – make use of different process for one item than to get 100, 500 items some. customer engagement – more involvement with engineer to order than make to stock your five. ake or buy decision – order more than 50 percent of goods manufactured General Purpose Equipment can be used to get a variety of functions. Special purpose machinery is built to perform certain operations on a single work piece or a few similar job pieces (i. e. a machine to get sewing t-shirt colla

Tweet