SCM 470 Quiz 2 Graded A+

SCM 470 Quiz 2 Graded A+ Safety Stock ️protects from uncertainty Decoupling Inventory ️different processing rates Anticipatory Inventory ️prebuild inventory for the future Cycle Stock ️average lot or badge size Pipeline Inventory ️moving from point A to point B Reasons to HOLD inventory ️- Meet customer demand - Temper uncertainty - Economies of scale - Profit during inflation - Manage lead times Reasons to MINIMIZE inventory ️- Obsolescence, breakage, theft - Storage and handling costs - Taxes and insurance - Opportunity costs of money - Hidden costs of quality Work in Process (WIP) ️throughput time * processing rate (demand) All 7 types of muda ️1) Waiting time, 2) transport, 3) overprocessing, 4) overproduction, 5) inventory, 6) motion, 7) defect Average Aggregate Inventory ️Safety stock + cycle stock + pipeline transit Economic Order Quantity (EOQ) ️sqrt((2*demand*setup costs)/(holding inventory*cost of unit)) Utilization Rate ️Average storage / storage capacity Bottleneck ️slowest process that limits the output Throughput time ️sum of cycle time; 1/rate of process + 1/rate of next process + etc... Processing rate ️rate of bottleneck Ways to reduce setup time ️-eliminate unneeded steps -reduce the time to complete one or more steps (become more efficient)