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What is MGT 124?
What is MGT 124?
MGT 124 focuses on the production/operations side of management! Be prepared to do some math involving forecasts, breakeven point, and so much more!
Forecasting? Like the weather forecast?
Forecasting? Like the weather forecast?
Nope! This type of forecasting is used in businesses to predict, plan, and budget the growth for their company.
Take a look at this video for a lesson (with examples!) on forecasting! This would be extremely helpful to better understand what forecasting is.
Let's Talk Strategies!
Let's Talk Strategies!
Let's take a look at Chapter 8 and Chapter 9, two important chapters for MGT 124!
Chapter 8: Location Strategies
Center of Gravity is mentioned as well as a few other topics!
Chapter 9: Layout Strategies!
Takt time and cycle time are discussed in the video as well!
Next up...Inventory and Supply Chain!
Chapter 12: Inventory Management
An important concept to know is the ABC Analysis! This is a way to introduce a category by implementing a scale, rating from Class A to Class C.
Class A represents having high annual dollar value and is considered to be very pricey and brings in a lot of revenue.
Class B represents having medium annual dollar value.
Class C represents having low annual dollar value and is considered very cheap and a lot of items.
Next up is the Basic EOQ Model!
Holding costs = the costs of holding or "carrying" inventory over time
Ordering costs = the costs of placing and order and receiving goods
In manufacturing, setup cost = cost to prepare a machine or process for manufacturing an order.
MAKE SURE TO KNOW THIS FORMULA: EOQ = Q* = sqrt((2DS)/H) where D = ANNUAL demand in units for inventory, S = Setup/ordering cost for each order, and H = holding/carrying cost for each order.
Lastly, Total Cost Structure!
The formula looks something like this: Setup/Order cost (S) + Holding Cost (H) = Total Cost
*Be mindful that Total Cost is NOT a straight line function!
*ALSO! This is driven by CONSTANT ordering quantity (Q).
Let's Talk About the Bullwhip Effect!
Are bulls actually involved?
No silly! It's the idea that demand fluctuates based on the demand from the retailers to the manufacturers. Essentially, the demand growth increases as one goes from the retailer to the manufacturer of the supply chain.
Oh! That makes sense. So, how is it caused?
Check out the video on the right to find out!
Formulas!!
Formulas!!
Productivity:
Single Factor Productivity = Output / (Input (Labor Cost))
Multi-Factor Productivity = Output / (Labor + Materials + Energy + Capital + Miscellaneous)
Percent of Change = ((New Productivity - Old Productivity) / (Old Productivity)) * 100
Factor Rating:
Weighted Score = (Factor Rating) x (Factor Weight)
Forecasting Techniques:
Naive Approach = assumes demand in next period will be equal to demand in most recent period
Moving Average = (∑ demand in previous "n" periods) / n
Weighted Moving Average = [∑((Weight for period "n") (Demand in period "n"))] / ∑ Weights
Linear Regression:
Linear Regression: ŷ = α + bx
Slope (b) = (n (∑xy) - (∑x)(∑y)) / (n (∑x^2) - (∑x)^2)
y-intercept (α) = (∑y - (b)(∑x)) / n
Exponential Smoothing:
New Forecast = Last period's forecast + α (Last period's actual demand - Last period's forecast)
Design for Disassembly:
DfD Score = (Resale Value + Recycling Revenue) − (Processing Costs + Disposal Costs)
Expected Monetary Value (EMV) / Revenue Retrieval:
EMV = Σ (Probability x Monetary value)
Revenue Retrieval = Total resale revenue + Total recycling revenue – (Total processing cost + Total disposal cost)
Upper & Lower Control Limits:
Grand X-Bar = (Σ X̄(i)) / # of samples
Mean Range R-Bar = (Σ R(i)) / # of samples
Upper Control Limit X-Chart (UCLx) = X̄ + (A2 * R̄)
Lower Control Limit X-Chart (LCLx) = X̄ - (A2 * R̄)
Upper Control Limit R-Chart (UCLr) = D4 * R̄
Lower Control Limit R-Chart (LCLr) = D3 * R̄
Breakeven Analysis (Units):
Breakeven Points in Units (BEPx) = Total fixed Cost / (Price per unit - Variable costs per unit)
Breakeven Analysis (Dollars):
Breakeven point in dollars (BEP$) = BEPx * Price per unit = Total fixed cost / (Price per unit - Variable cost per unit) * Price per unit = Total fixed cost / (1 - Variable cost per unit / Price per unit)
Crossover Analysis:
Crossover Point = (Fixed Cost of Option B - Fixed Cost of Option A) / (Variable Cost per Unit of Option A - Variable Cost per Unit of Option B)
Center-of-Gravity Method:
X-Coordinate of Center of Gravity = Σ x-coordinate of location i * Quantity of goods moved / Σ Quantity of goods moved
Y-Coordinate of Center of Gravity = Σ y-coordinate of location i * Quantity of goods moved / Σ Quantity of goods moved
Labor Cost Per Unit:
Labor Cost Per Unit = Labor Costs Per Day / Production (units per day)
Average Observed Time, Normal Time, & Standard Time:
Average Observed Time = Σ of the times recorded to perform each element / # of observations
Normal Time = Average Observed Time * Performance Rating Factor
Standard Time = Total Normal Time / (1 - Allowance Factor)
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