C Pop quiz answers

C.1 Chapter 1. Reading a value stream map

The answers for the Pop Quiz will appear shortly (after the seminar).

Table 1.4 asked the following questions that can be answered by inspecting Figure 1.1.

  1. What is the pacemaker process? The assembly stage
  2. How long is the planning cycle? One week
  3. What level of availability is achieved by the vendor managed inventory? 88.46%
  4. What is the variance of the demand process? 29
  5. How much raw material inventory do we hold on the average? 36.5
  6. What is the safety stock level at the raw material inventory location? 30
  7. What is the variance of the confirmed production plan? 123.6
  8. What is the variance of the vendor managed inventory? 199.4
  9. What is the suppliers fill rate? 96.48
  10. What forecasting method is used in the ERP system? Exponential smoothing, with a smoothing parameter of \(\alpha=0.4\)
  11. What is the customers lead time? \(T_p=2\)
  12. How far away is the supplier? 200km
  13. How bullwhip is generated by the planning system? The system bullwhip is 3.97
  14. What is the confirmed (planned) bullwhip? The planned bullwhip is 4.26
  15. What is the supplier’s bullwhip? The supplier’s bullwhip is 11.74
  16. What is the suppliers NSAmp? The suppliers NSAmp = 728 / 123.6 = 5.88
  17. What is maximum customers demand? This information is not given on the VSM
  18. What is the maximum quantity assembled? 44
  19. What replenishment strategy is used in the production planning system? Order-up-to (OUT) policy
  20. Detailed scheduling is conducted with the aid of which planning tool? Gantt charts

C.2 Chapter 2. Selecting your replenishment strategy

Table 2.2 presented some Yes or No type questions that should lead you to your replenishment strategy. Each product/customer location pairing in your portfolio may have a different answer to the 18 questions, but Table C.1 should give you some ideas of suitable strategies.

Table C.1: Answers to guide your replenishment strategy selection
Question Yes No
Q1 OUT Level, POUT
Q2 POUT OUT, Pure pull
Q3 Level, POUT OUT, Pure pull
Q4 Batch Anything but Batch
Q5 Level, POUT OUT, Pure Pull, Batch
Q6 OUT POUT
Q7 Level, POUT OUT
Q8 Level, POUT OUT
Q9 OUT POUT
Q10 POUT Any strategy
Q11 POUT Level
Q12 POUT Any strategy
Q13 POUT, OUT Any strategy
Q14 POUT Pure Pull, Level, OUT
Q15 OUT POUT
Q16 POUT Any strategy
Q17 OUT, POUT Batch
Q18 Forecast Any strategy

C.3 Chapter 3. Selecting a forecasting mechanism

Note, the answers to this pop quiz change depending on the supply chain setting, the costs, the objectives, and the replenishment strategy. It is a qualitative choice and you could have other equally valid, but different, answers.

Table C.2: Automatic model selection by tuning the Damped Trend parameters
Question Answer Comments
Q1 Damped Trend Convex increasing demand, use \(\phi>1\).
Q2 Exponential Smoothing, Moving Average or Naïve A zero forecast or a forecast based on Croston’s Method could also have been used (but both are not explained in this workbook).
Q3 Exponential Smoothing or Moving Average Small fluctuations around a constant, un-trended mean.
Q4 Holts Linearly increasing demand. Damped trend with \(\phi=1\) could also have been used.
Q5 Exponential Smoothing, Moving Average Two non-trended time series, with a step change between them. Use small \(\alpha\) or \(n\) during the period of change if its timing is known.
Q6 Holt’s Linearly increasing demand. Damped trend with \(\phi=1\) could also have been used.
Q7 Damped Trend The time series is concave increasing in the first half, use \(0<\phi<1\). In the second half, the time series is concave decreasing, use \(\phi>1\).
Q8 Damped Trend The time series is concave decreasing, use \(\phi>1\).
Q9 Damped Trend The time series is convex decreasing, use \(1>\phi>0\).
Q10 Exponential Smoothing or Moving Average Two step changes between un-trended demand. Use small \(\alpha\) or \(n\) during the period of step change if its timing is known.
Q11 Exponential Smoothing or Moving Average Small fluctuations around a constant, un-trended (albeit small) mean.
Q12 Damped Trend or Holt’s The first quarter of the time series is convex increasing, use \(\phi>1\). The second quarter is concave increasing, use \(1>\phi>0\). The third quarter is concave decreasing, use \(\phi>1\). The final quarter is convex decreasing, use \(1>\phi>0\).

C.4 Chapter 4. Setting the cadence of your pacemaker

This section is currently under construction

Figure C.1: This section is currently under construction

C.5 Chapter 5. The shortest path through the product wheel

Figure C.2 shows that the answer to the shortest path through the product wheel is \(\{A,B,D,C,A\}\) and the minimised cost is 14. Figure C.2(a) translates the cost matrix in Table 5.2 into a direct acyclic graph. Figure C.2(b) provides the workings of the solution.

Solution to the product wheel pop quiz

Figure C.2: Solution to the product wheel pop quiz

C.6 Chapter 6. Calculating MRP nerviousness

Calculating MRP nervousness

This section is currently under construction

Figure C.3: This section is currently under construction