316.

Functions of Demand Management : Forecasting, Order Entry, Order Status

317. Distribution Resource Planning (Physical Distribution) : Transportation,

Distribution Centre Capacity + Finances

318. In Transit Inventory (pipeline Inventory)….P135

319. In transit Lead Time …..P268

in-transit lead time is accounted for by being offset as a gross requirement in
the supply warehouse.
In DRP, the lead time between warehouses is offset as the planned shipment
to the
receiving warehouse becomes the gross requirement in the supply
warehouse.

320. Logistics - Obtaining and distributing products and materials

Logistics is the art and science of purchasing, producing, and
distributing materials to
ensure the products are in the right place and in the proper quantities

321. Physical Distribution Functions

322-323. Push-Pull System

328. Intransit inventory can be best defined as material moving between

geographic locations.
This would include plant to distribution centers or movement between
warehouses.

329. Planned orders from the warehouse in a DRP system become gross
requirements in the
master production schedule at the factory. The logic is similar to the MRP
logic.

331. The mode is the MOST frequent value in a group of values.

332. The mean is the AVERAGE of a group of values.

333. The median is the MIDDLE value where half the values are above and
half the values are
below the median.
334. The planned order release creating demand from a branch
warehouse would become a
gross requirement at the central warehouse offset for transport
lead time.
(related to 319)

336. Safety stock exists to protect against unknown future demand and the
uncertainties of
supply.

337. The projected available balance (PAB) is the inventory balance

projected into the future.
available-to-promise (ATP) is the uncommitted portion of the inventory and
the planned
production maintained in the master schedule.
338. the time elapsed between the receipt of the customer order and the
shipment of the
Product is the Delivery Cycle

339 Delivery lead time is the actual time from the receipt of the customer
order to the delivery
of the product..

340. Normal distribution means that most of the observations are grouped
close to the mean
and a deviation from the mean is as likely to be negative as positive. When
graphed, the
data distribution looks like a bell shaped curve.

341. Hedge stock is inventory used to protect against the uncertainty of

demand and is similar
to safety stock, except a hedge incorporates timing.

342. Super bills are at the top level of the product structure and aggregate
lower level
components into modules.

345. Resource planning is used for the long range planning of facilities,
equipment, and
capital. The calculations are made based on the capacity and load of key
resources (i.e., a
plant or warehouse). These calculations are done based on the forecast.
348. The standard deviation is equal to 1.25 MAD. MAD is a simpler formula
to use in
calculating the safety stock.

349. The planning horizon is the amount of time the master schedule
extends into the future.
The minimum length of the planning horizon should be equal to the
cumulative lead time
of the longest lead time part. It should go out as far as the time it takes to
bring new
capacity on line.

351. The material requirements planning system converts the MPS into
detailed component
needs using the bill of materials and the inventory balances.

352. When calculating the available-to-promise inventory, only the actual

customer orders and
the scheduled production, as determined by the master production schedule,
are
considered. In the first time period only, the on hand inventory would be
used until the
first MPS is slotted.

353. Statistically, increases in customer service levels would require

increases in safety stock.
However, practically speaking, this is not always the case. Reliable supply
chains and
reliable forecasting may allow increases in customer service without the
corresponding
increase in safety stock.

354. Time-phased order point uses MRP logic for independent demand items.
As a result, lot
sizes are needed to determine the right quantity to order. Since MRP logic is
used, timephased
order point can be used for gross requirements which are created from a
forecast.