L4M7 Exam Dumps : Whole Life Asset Management

Explanation

The most common subjective forecasting techniques include the following:

- Market surveys

- Employee surveys

- Expert knowledge (Delphi method is a method using expert knowledge)

- Test marketing

Cycle counting is a periodic analysis of inventory in a storage location which is conducted through the counting of samples instead of physically counting the entire inventory available, so as to quickly have an accurate estimate of the inventory available without causing a stop to the day to day working as is the case with physically counting every unit.

The Pareto principle (also known as the 80/20 rule, the law of the vital few, or the principle of fac-tor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes.

Weighted moving averages assign a heavier weighting to more current data points since they are more relevant than data points in the distant past. The sum of the weighting should add up to 1 (or 100 percent).

Explanation

Master production schedule (MPS) plans items that have “direct” demand, or “independent de-mand.” With independent demand, the demand comes from sales orders, service orders, or fore-casts, and the demand comes directly from customer—or forecasted—requirements. It is the list that provides the timing of the production schedule and shows how much each machine can produce, how many shifts are used, etc.

A bill of materials (BOM) is a comprehensive inventory of the raw materials, assemblies, subas-semblies, parts and components, as well as the quantities of each, needed to manufacture a product.

Explanation

The costs of stockouts - the costs of being out of inventory - include:

- Loss of production output

- Costs of idle time and of fixed overheads spread over a reduced level of output

- Costs of any action taken to deal with the stockout, such as buying from another stockist at an enhanced price, switching production, obtaining substitute materials

- Loss of customer goodwill due to the inability to supply or late delivery.

(Procurement and Supply Chain management - 9th Edition, K. Lysons and B. Farrington, 2016)

LO 2, AC 2.2