MRP/ERP
This system ensures materials are available for production when needed while minimizing inventory
What is MRP (Material Requirements Planning)?
This planning horizon typically covers 3 to 18 months.
What is aggregate planning horizon?
This is the average number of times inventory is sold and replaced in a year.
What is inventory turnover?
This phenomenon describes demand variability amplification up the supply chain.
What is the bullwhip effect?
This is the average number of customers in a system?
What is L?
This system integrates all functional areas of a firm into a single database.
What is ERP (Enterprise Resource Planning)?
This strategy adjusts workforce levels to match demand.
What is a chase strategy?
This model determines optimal order quantity.
What is EOQ (Economic Order Quantity)?
This improves coordination by sharing information across firms.
What is supply chain integration?
This law relates L, λ, and W.
What is Little’s Law?
This is the primary input to MRP that lists product structure.
What is a Bill of Materials (BOM)?
This strategy uses inventory buildup to absorb demand fluctuations.
What is a level strategy?
This is the cost of holding one unit in inventory for a year.
What is holding cost?
This strategy reduces the number of suppliers to improve relationships.
What is supplier consolidation?
This is the average time a customer spends waiting in line.
What is waiting time (Wq)?
This determines net requirements by subtracting inventory on hand from gross requirements.
What is netting?
This cost includes hiring and firing workers in aggregate planning.
What is labor adjustment cost?
This inventory system places orders at fixed time intervals.
What is a periodic review system?
This metric measures total time from raw materials to customer delivery.
What is lead time?
This occurs when arrival rate exceeds service rate.
What is system instability?
This MRP output shows when and how much to order or produce.
What is a planned order release?
This combines both chase and level strategies.
What is a mixed strategy?
This is the inventory level that triggers a new order.
What is reorder point?
This strategy aligns production with actual customer demand.
What is demand-driven supply chain?
This model assumes random arrivals and exponential service times.
What is the M/M/1 queue?