This is represented by an item whose demand is linked directly to the demand or production level of another item.

(a)  

This refers to the inventory requirement for finished goods or a product available for customers’ consumption or use

(a)  

These are made up of the resources a business uses to produce its own goods. This category also includes goods used in the manufacturing process, such as components used to assemble a finished product.

(a)  

These are materials and parts that have been partially transformed from raw materials but are not yet finished goods and can include partially assembled items that are waiting to be completed.

(a)  

These are products that are ready to be shipped directly to customers, including wholesalers and retailers.

(a)  

These are items a business needs to operate, such as office equipment, packing boxes, and tools and parts to repair equipment.

(a)  

These are also known as holding costs

(a)  

These are costs involved in the acquisition and storage of inventory items

(a)  

The value of this cost depends on current interest rates which can range from 5% to 25%. Money used to purchase inventory items can be derived from borrowed capital and internal sources. Capital cost is derived from the interest rates of borrowed finances while opportunity cost is derived from the return that a money would generate if it is invested in other things

(a)  

The value of this cost ranges from 3% to 10%. This includes building rent or depreciation, utility costs, insurance, and taxes among others.

(a)  

The value of this cost ranges from 4% to 10%. This includes equipment lease or depreciation, power, and operating costs.

(a)  

The value of this cost ranges from 2% to 5%. The longer the period an inventory item is stored in the warehouse, the greater the costs associated with deterioration or obsolescence.

(a)  

These include fixed and variable costs associated with placing an order to purchase additional inventory

(a)  

are expenses that are independent of output and are incurred no matter what, such as rent, building, and machinery among others

(a)  

are expenses that vary with output.

(a)  

These are costs associated with changing production over, known as setup, which includes labor and parts as well as downtime

(a)  

involve both fixed and variable costs.

(a)  

minimizes total inventory costs by optimizing the tradeoffs between holding and ordering costs. It is the optimal inventory size that should be ordered with the supplier to minimize the total annual inventory cost of the business.

(a)  

Other names used for economic order quantity

(a)  

This involves decisions covering one (1) to three (3) years, such as adding facilities and equipment that have a long lead time.

(a)  

This involves decisions covering two (2) to 12 months, such as adding equipment, personnel, and shifts. This may also include subcontracting of production.

(a)  

Other term for Medium Range

(a)  

This involves decisions covering two (2) to three (3) months such as scheduling production and people and allocating machinery

(a)  

Other term for Short Range

(a)  

This is used for work that is nonroutine, with a unique set of objectives to be accomplished in a limited time frame. They are usually customer-specific and too large to be moved; so people, equipment, and supplies are moved to where they are being constructed or worked on.

(a)  

This usually operates on a relatively small scale. It is used when a low volume of high- variety goods or services will be needed. It can handle a wide variety of work; however, it is slow, costly per unit, and requires complex planning and scheduling. This requires a relatively high level of skill and experience because they must create products based on the customer’s design and specifications.

(a)  

This is used when a moderate volume of goods or services is desired, and it can handle a moderate variety of products and/or services. It is flexible since products or services can be easily added; however, it is moderately costly per unit and scheduling is moderately complex.

(a)  

This is used when higher volumes of more standardized goods or services are needed, and monotonous processing is required. It produces high volume with low unit cost but has low flexibility and costly downtime.

(a)  

·         This is used when a very high volume of non-discrete, highly standardized output is desired. It is very efficient in producing high volume; however, it is very rigid, costly, and involves high downtime cost. This requires a continuous flow rather than being divided into individual steps.

(a)  

refer to a firm’s ability to adjust customer demand to fit that demand to current available capacity.

(a)  

This can be accomplished through the use of advertising, pricing, promotions, and price cuts.

(a)  

These occur when an organization gets orders that they cannot fulfill.

(a)  

This can be used to balance demand on particular time periods.

(a)  

refer to the ability of an organization to adjust its available resource capacity to meet demand

(a)  

This involves flexibility in the workforce due to demand peaks and decline. Although workforce flexibility can prove beneficial to the company, it can also have risks and costs in terms of unemployment and new-hire training costs.

(a)  

This involves the ability/willingness of the workforce to run some overtime for periods with very high demand. On the contrary, it also means moving idle workers to other jobs to some extent, for periods with very low demand. Equipment and workers' efforts, to some degree, can also be sped up or slowed down.

(a)  

This involves hiring people for a specified period of time only, with no intention of keeping them in the company for good. It is common for contract manufacturers and in the service industry during the holiday season. There are times when quality and productivity suffer as a result of this approach.

(a)  

This is also referred to as contract manufacturing

(a)  

It is very common in some industries, such as cosmetics and household and personal-care products, especially when the demand for a new item is uncertain or a company doesn’t yet have the capability to make the product.

(a)  

Inventory may be produced before a peak season when excess capacity may be limited.

(a)  

This method uses a constant workforce and produces similar quantities each time period. It uses inventories and backorders to absorb demand peaks and decline. However, it tends to increase inventory holding costs.

(a)  

This method minimizes finished goods inventories by adjusting production and staffing to keep pace with demand fluctuations. It aims to match demand by varying either workforce level or output rate. However, it can negatively affect productivity and costs for instances of inaccurate demand forecasting.

(a)  

This method is a combination of level and chase plans. In some cases, inventory is increased ahead of rising demand, and in other cases, backorders are used to level output during extreme peak periods. There may be layoff of workers during the slower, extended periods, and companies may subcontract production or hire temporary workers to cover short-term peak periods. As an alternative to layoffs, workers may be reassigned to other jobs, such as preventive maintenance, during slow periods.

(a)  

Production for finished goods is based on a forecast using predetermined inventory targets. Customer orders are then filled from existing stock, and those stocks are replenished through production orders.

(a)  

Production is based specifically on particular customer orders. Usually standardized but low volume of custom items is produced to meet the customer’s specific needs. MTO environments are slower to fulfill demand than MTS environment because time is required to make the products from scratch. There also is less risk involved with building a product when a firm customer order is already in hand.

(a)  

Products are combined from components after the receipt of a customer order. The customer order initiates assembly of the customized product. This strategy can prove useful when there are a large number of end products, based on the selection of options and accessories that can be assembled from common components.

(a)  

Production uses customer specifications that require unique engineering design, significant customization, or newly purchased materials. Each customer order results in a unique set of part numbers, bills of material (list of items/resources required to make the product), and routings (steps to manufacture a product).

(a)  

Plans tasks from the date resources become available to determine the shipping date or the due date of finished goods or services. It is often used in businesses such as restaurants and machine shops.

(a)  

Plans tasks from the due date or required date of finished goods or services, to determine the manufacturing start date or any changes in capacity required. It is often used heavily in manufacturing and surgical hospitals.

(a)  

·         Jobs run in the order they are received. Perhaps the fairest, although not always most efficient, way of scheduling.

(a)  

Work on the jobs due the soonest

(a)  

Shortest jobs run earlier to make sure that they are completed on time. Larger jobs will possibly be late as a result.

(a)  

Start with the jobs that take the longest to get them done on time. This may work well for long jobs, but others will suffer as a result

(a)  

Jobs are processed according to the smallest ratio of time remaining based on due date.

(a)  

Other Term for Waiting line system

(a)  

It is used to estimate the number of potential

customers that can fit into the process of a service system at any given time

(a)  

. It typically works on a first-come, first-served basis. This type of waiting line presents a view of fairness to the customer which often causes a single line system to work best.

(a)  

It often provides different transaction types by customer type.

(a)  

It occurs when a customer chooses not to enter the waiting line

(a)  

It occurs when a customer enters the line, but leaves

(a)  

It occurs when a customer changes from one line to another

(a)  

involves hiring a third-party external service provider to perform a business function that is traditionally performed in-house by the company's own employees.

(a)