Explanation I Test

8/9/2019 Explanation I Test

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Excerpts from Assignments Submitted to Explain the Questions posed in First Test (Quiz)

Que: Cycle Countingis

Ans: Periodic auditing of the inventory quantities in the store to ensure accuracy

Excerpt from Ashish Kumars assignment - Cycle counting: A inventory items require tight control

policies and close managerial scrutiny, through frequent policy review i.e. cycle counting, a periodic audit of

inventory quantities to ensure accuracy. Typically A items are so designated either because they are critical

items or they represent an unusually high dollar value inventory items.

Que: A service firm, after preparing the MPS can prepare ____________________ to determine the

equipment, staff and other materials required to meet demand, at the time they are needed.

Ans: Bill or Resources

Excerpt from Aarthi Mohans assignment - The service analogy to the Bill of Materials in a

manufacturing company is the Bill of Resources (BOR), which is a record of a service firms parent-

component relationships and all of the materials, equipment time, staff and other resources associated with

them, including usage quantities.

Que: The quantity of end items that marketing department can assure to deliver on specified dates to

customer is known as

Ans: Available-to-Promise (ATP) inventory

Excerpt from Aarthi Mohans assignment - The quantity of end items that marketing can promise to

deliver on specified dates is called Available-to-promise (ATP) inventory.

Que: CHARTER is

Ans: Assignment of product families to a specific plant or sub-process within a plant

Excerpt from Abdul Akbars assignment - Charter:-assignment of the product families to a specific

plant or sub process within a plant.

Que: Brief Low-level coding

Ans & excerpt from Ankit Guptas assignment - Low level coding bringing about all the identical

parts which occur at the same level for each end product so that the total number of parts and materials

needed for a product can be computed easily. Ex If item N is needed as an input for item L and item M and

item M is needed as an input for item L then item N can be lowered to level 2


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Que: Mention two Expedient Methods to calculate reorder level in fixed-order quantity model

Ans and excerpt from Alka Agrawals assignment -

EXPEDIENT METHODS - Due to the variation in demand and the complexity of calculating quantities for

each component, some expedient methods have also been suggested to determine reorder level:

a. Ultraconservative method: multiply the largest daily usage ever occurred to the longest lead time ever

made by the supplier

b. Safety stock percentage method: safety stock = avg demand * avg lead time * % of safety stock required.

c. Square root of lead time usage method: safety stock = square root of average usage lead time. Because it

is seen that lead time seldom increases by the value equal to its square root.

d. Demand percentage method: determine what percentage of stock outs can be borne without seriously

affecting production. Based on this, calculate the safety stock and reorder level.

e. Simulation exercises: this is more demanding, but provides a closer approximation of actual variation indemand.

Que: Hiring and Laying-off employees, using overtime, using part-time labor are all cases of modifying

supply component to manage capacity in aggregate demand planning. One of the following is a case of

modifying demand component to manage capacity in aggregate demand planning:

Ans: Pricing & promotion

Excerpt from Amrita Rani & Ankita Gargs assignment -

The aggregate planning problem can be clarified by a discussion of the various decision options available.

These will be divided into two types of decisions:

Those modifying demand and they are:

1) Pricing 2) Advertising and Promotion

3) Backlog or reservations 4) Development of complementary products

And those modifying supply and they are:

1) Hiring and layoff of employees 2) Using overtime and under time

3) Using Part-time or temporary labour 4) Carrying Inventory

5) Subcontracting 6) Making Cooperative arrangements

Que: Name two mathematical approaches to aggregate planning

Ans & excerpt from Anju Khatris assignment -

The following are some of the better known mathematical techniques that can be used in more complex

aggregate planning applications.


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Linear programming

Mixed integer programming

Linear decision rule

Modeling management Behavior

Search decision rule

Simulation

Que:

If M = 1000, I = 300, Q = 50, when to place order?

Ans & excerpt from Basharat Abasss assignment - q = 700 (i.e. Order to be placed when q Q) and in

all other cases q < Q.

Que: Mention one advantage and one disadvantage of MRP system

Ans & excerpt from Akbars assignment -

Disadvantages - i) Integrity of the data

ii) Assuming lead time is always same while building MRP

Advantages - i) Proper planning of receipts

ii) Inventory cost reduction as we procure when needed

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Explanation I Test