Exam 3 Review
Chapters: 13 (Inventory Management), 11 (Aggregate Planning), & 12 (MRP)
Ch.13 – Inventory Management
 All materials in textbook and slides, including all key words and definitions of terms.
 Definitions of inventory and inventory management and control.
o Why is inventory important?
o What are the functions of inventory?
o Are we focused on independent or dependent demand? What is independent demand?
 Inventory Counting and Counting Systems and Technologies
 ABC Classification system
 Relevant inventory control models in chapter: Single Period, Fixed Order Quantity, and Fixed-Time Period –
know characteristics of each, applications or examples, etc.
 Sources of costs, cost curves, and how we determine EOQ using these curves
 Problems – be able to do all calculations associated with these models (inventory levels and costing)
o Single-period model
o EOQ model – Q, R, R with uncertainty, SS
o Periodic Model – q, SS
Ch. 11 - Aggregate Planning
 All materials in textbook and slides
 What is Aggregate Planning (AP)? What is its purpose or goal?
 Definitions and characteristics of sales and operations planning
 Methods for dealing with variation
 Inputs of process
 AP Strategic Approaches
o 2 pure strategies: Chase and Level – understand characteristics of both, strengths and weaknesses
 AP in service industries – just have idea of how we use AP in this setting
 Yield Management
 Know what the Master Schedule is and its purpose
 No problems
Ch.12 - MRP
 What is MRP? Does it deal with independent or dependent demand?
o What is dependent demand? What is lumpy demand?
 Know the 3 inputs to the MRP, what information they provide, and any related terms/materials
o Master Production Schedule
 Cumulative lead time
o Bill of Materials
 Know how to interpret a product structure tree and what it is; low-level coding
o Inventory Records File
 MRP Record – all terms
 Safety Stock and Safety Time in the MRP
 Lot Sizing Rules and how they are used in MRP problems
 Pegging and Backflushing
 Primary and Secondary MRP reports – know how the reports are categorized and their description
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MRP in Services – just know examples of how this can be used
MRP Benefits and Requirements
MRP II and Closed Loop MRP; System Stability and Nervousness
Time fences
ERP – basic definition
Problems – Given demand for a finished good, product structure tree, lead times, lot sizes, and inventory onhand levels, you must work the MRP.