The total cost of ownership (TCO) is an estimate of the cost of an item that includes all
the costs related to the procurement and use of an item, but does not include any of the
costs related to disposing of the item after it is no longer useful.
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In a net change MRP system requirements and schedules are considered rigid and never
updated.
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The time-phased plan specifying how many and when the firm plans to build each end
item is called the master production schedule (MPS).
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Lean production requires a “push & pull” system of inventory replenishment.
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LTPD in acceptance sampling stands for “lot tolerance for parts defective.”
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The frequency of adding to productive capacity should balance the costs of upgrading
too frequently and the costs of upgrading too infrequently.
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Computing the quantity of each component that goes into a finished product can be
done by expanding (or exploding) each item in a product structure file and summing at
all levels.
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Which of the following statements holds TRUE for Kanban production control
systems?
A. The authority to produce or supply additional parts comes from upstream operations
B. In a paperless control system, containers can be used instead of cards
C. The cards or containers make up the Kanban push system
D. They require substantial quantitative analysis prior to implementation
E. They have not been successful outside of Japan and the United States
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The optimal strategy for innovative products is to use an efficient supply-chain.
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Six-sigma refers to the philosophy and methods that some companies use to eliminate
defects in their products and processes.
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MRP is based on dependent demand.
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An operational goal of total quality management is ensuring that the organization’s
systems can consistently produce the product or service as it is designed.
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A free trade zone is typically a closed facility into which foreign goods can be brought
without being subject to the usual customs requirements.
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Because the factors governing demand for products are very complex, all forecasts of
demand contain error.
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The capacity cushion is the ratio of capacity used to the best capacity level.
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In a waiting line situation, multiple lines occur only when there are multiple servers.
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(p. 38; Exhibit 2.5) In a partial measure of productivity the denominator of the ratio
would include all resources used or all inputs.
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The computation of a firm’s inventory position is found by taking the inventory on hand
and adding it to the on-order inventory, and then subtracting back-ordered inventory.
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