Flashcards
Week 5
Cards in this deck (31)
- 1Managing of suppliers benefitsReduced costs and time
Improved product quality
Strategic Alliances
Long term supply controls - 2Analysing supplier costsActivity based costing can be used to estimate total cost of ownership
- 3Total Costs of dealing with suppliersPurchase price
Cost to get goods to be used
Cost of holding inventory
Costs of poor quality
Cost of delivery failure - 4Evaluate supplier performance usingSPI (Supplier performance index)
- 5SPIRatio of supplier cost to total purchase price
- 6Forumla for SPISPI = total cost of dealing/total purchase price
*total cost of dealings includes total purchase price - 7Costs can includeUnit level = e.g. rework of products
Order level = e.g. cost to place order
Supplier level = e.g. supplier audit costs - 8Steps for SPI1. Total cost per unit for each activity x activity level
2. Total all cost of dealings
3. Times the number of units for total purchase price
4. SPI Formula applied - 9EOQEconomic Order Quantity
Optimal order quantity to minimise order and carrying costs - 10EOQ Formula
- 11Assumptions of EOQUsage is known and constant
Acquistion cost is constant
Entire order delivered at one time
Carrying costs are constant - 12Inventory re-order point (ROP)The level of inventory on hand at which to re order
- 13Safety StockExtra inventory kept on hand to cover any above average usage or demand
- 14ROP forumlaROP = ( inventory used per period of time x order lead time ) + safety stock
* the number used + the safety stock states the ROP to order the EOQ to get to the inventory level. The lead time provides when it should be ordered - 15Ordering, lead time and usage of plastic pellets inventory
- 16Just in Time (JIT) inventory systemIncrease profits
Improve firms competitive postion - 17Traditional Manufacturing layout: Each process passes through departments that specialize in one process.
- 18JIT Manufacturing layout Lead times are reduced so that the company can meet requested delivery dates and to respond quickly to customer demand
- 19Lead Times reduced byreducing setup times
improving quality
using cellular manufacturing
reducing - 20JIT inventory and production systemA comprehensive system for controlling the flow of manufacturing in a multi-stage production environment
- 21JIT underlying philosophy issimplifying of the production process by removing non-value-added activities
- 22Key features of JIT productionMaterials purchased in batches
Quick and inexpensive setups (cutting out non value added activities essential)
High quality levels for raw materials
Effective preventative maintenance of equipment and a flexible work team - 23JIT ordering can:Reduce number of suppliers
Develop long term contracts
Specify quality standards in cotract to reduce inspections
Use of E commerce to reduce costs - 24Costs of JItSubstantial investment to adopt
Increase in the risk of inventory shortages - 25Benefits of JITreduced cost of carrying inventory
fewer losses due to spoilage or theft
No oppoprtunity costs of high inventory
ELIMINATES NON VALUED ADDED ACTIVITY - 26Customer Relationship ManagementAnalysing data to understand customers and create strong relationship
May lead to improved customer service, retention and efficiency
*E commerce applications relevant - 27Customer cost analysisAnalysis of cost of products purchased by customers and the costs of customer-driven activities (e.g. marketing, distributing
- 28Customer profitability analysisRelative profitability of customers can be determined and used for a range of strategic decisions
Relative - 29Customer profitability analysis (cont.)
- 30Three levels of customer-driven activities and costsOrder level activities
Customer level activities
Market level activities - 31Customer performance measuresMarket share
Customer retention
Customer acquisition
Customer satisfaction
Customer profitability
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- Mid Sem Strat Flashcards on Week 5, created by Nicholas Rossi on 26/04/2016.
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- Nicholas Rossi
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