Review for Exam II This exam will be

Review for Exam II This exam will be administered Wednesday, June 29, 2016, usual time and place

Exam Format ® 100 multiple choice ® no problems ® Closed-book ® Closed-notes ® Closed-neighbor ® BRING---pencil, calculator, orange scantron sheet

Exam Coverage ® Chapter 10, Chapter 11, Supplement to Ch 11, Supplement to Ch 13, Supplement to Ch 14 and Chapter 15 -second half ® Simulation modeling in the supplement to Chapter 13, but not the content of Chapter 13—will test that later. . . recall that there were no HW problems on chapters 13 and 14—just their supplements. ® LP problems in the supplement to Chapter 14, but not the content of Chapter 14—will cover that later.

Supply Chains ® The integrated group of business processes and activities that form the supply chain include all of the following except ____. procurement of services, materials, and components from suppliers B. production of the products and services C. distribution of products to the customers D. information technology A. ® Hint: take a retailer perspective

In modern supply chain systems, ____ replaces inventory ® Information ® Capital ® labor ® Intelligence ® Creativity

Which of the following terms is synonymous with ‘supply chain’? a) b) c) d) e) Demand chain Value chain Service chain All of the above A and b only

One way to reduce the bullwhip effect is for supply chain members to ____. make ordering decisions independently of each other b) share demand forecasts up and down the supply chain with other supply chain members c) restrict information flows between supply chain members d) forecast demand independently of other supply chain members a)

What is the difference between the use of EDI and faxing a business document? ® Faxing requires someone on the receiving end to key in the information, costing money and diminishing quality (through the inadvertent inclusion of defects), but adding no value

When making important decisions and taking significant actions, would you say that you, like corporations, use a model ____. a) b) c) d) e) never often sometimes always answers will vary from one student to another

In discrete/stochastic simulation, we are interested in ® Entity idleness ® Entity travel time ® Entity time in the system ® Resource utilization ® All of the above

In discrete/stochastic simulation, which of the following components has time duration? ® Events ® Activities ® Entities ® Resources ® All of the above

Simulation, including discrete/stochastic simulation, is appropriate for which of the following three decision environments? ® Decision Making (DM) under Certainty ® DM under risk and uncertainty ® DM under change and complexity

Math programming models, like the transportation and transshipment models we looked at, are appropriate for which decision making environment ® Decision Making (DM) under Certainty ® DM under risk and uncertainty ® DM under change and complexity

What is reduced cost? ® Reduced cost is only zero when the associated decision variable is nonzero. When a decision variable IS zero, the reduced cost tells us by how much the associated cost//profit coefficient must be changed in order to get that decision variable to take on a value above zero.

What is shadow price? ® Shadow price measures the amount of change we can expect in the objective function value accruing from a unit increase in a constraint right-hand side.

Buster Brown Shoes # of work shoes # of dress shoes X 1 X 2 X 0 MAX 12 * 600 + 16 * 200 10400 S. T. 1 * 600 + 2 * 200 1000 <= 1, 000 1 * 600 + 1 * 200 800 <= 1, 000 Leather 1 * 600 + 0 * 200 600 <= 600 Work Heels 0 * 600 + 1 * 200 <= 500 Dress Heels All X's >= 0 Which constraints have slack? (slack is the amount of resource that is unused) Labor

® If you increased the amount of labor available by 1 unit, how much increase will you get in the objective function? Constraints – Buster Brown shoes Final Shadow Constraint Allowable Cell Name Value Price R. H. Side Increase Decrease $J$5 Labor 1000 8 1000 400 $J$6 Leather 800 0 1000 1 E+30 200 $J$7 Work Heels 600 400 600 $J$8 Dress Heels 200 0 500 1 E+30 300

® Suppose, in the Buster Brown problem you were to increase the number of dress heels by 100…. . what would be the effect on the objective fcn? Constraints Final Shadow Constraint Allowable Cell Name Value Price R. H. Side Increase Decrease $J$5 Labor 1000 8 1000 400 $J$6 Leather 800 0 1000 1 E+30 200 $J$7 Work Heels 600 400 600 $J$8 Dress Heels 200 0 500 1 E+30 300

® If you increased the amount of leather available by 1 unit, how much increase would you get in the objective function? Constraints-Buster Brown Cell Name $J$5 Labor $J$6 Leather Work $J$7 Heels Dress $J$8 Heels Final Shadow Constraint Allowable Value Price R. H. Side Increase Decrease 1000 8 1000 400 800 0 1000 1 E+30 200 600 400 600 200 0 500 1 E+30 300

Peanuts, Cashews and Almonds ® The optimal solution calls for how many lbs of mix 1 to produce? Peanuts, Cashews, Almonds MAX S. T. # of lbs of MIX 1 # of lbs of MIX 2 X 1 X 2 X 0 1. 79 * 0 + 1. 99 * 52500 68460 Minus 0. 62875 * 0 + 0. 686 * 52500 0. 625 * 0 + 0. 4 * 52500 21000 <= 42, 000 Peanuts 0. 375 * 0 + 0. 4 * 52500 21000 <= 21, 000 Cashews 0 * 0 + 0. 2 * 52500 10500 <= 14, 000 Almonds

Peanuts, Cashews Sensitivity ® Which type of nut would you add more of to increase profitability? Peanuts, Cashews or Almonds? ? Constraints Final Shadow Constraint Allowable Cell Name Value Price R. H. Side Increase Decrease $K$6 Peanuts 21000 0 42000 1 E+30 21000 $K$7 Cashews 21000 3. 26 21000 7000 21000 0 14000 1 E+30 3500 $K$8 Almonds 10500

® By how much must you adjust the objective coefficient of X 2 in order to get it to take on a value greater than 0? Adjustable Cells Final Cell Name Value $E$3 * X 1 $I$3 * X 2 56000 Reduced Objective Allowable Cost Coefficient Increase Decrease 0 0 -0. 009333333 1. 23125 1 E+30 0. 00875 1. 304 0. 009333333 1 E+30

HW 10 -2—Not Assigned Homework Problem #10 -2 Raw Materials oak pine brass fixtures stains joiners Work in Process frames drawers panels chests tables Finished Goods chests coffee tables Average Total Inventory Unit Cost ($) Value 8000 6 48000 4500 4 18000 1200 8 9600 3000 2 6000 900 1 900 Total 82500 200 30 6000 400 10 4000 600 50 30000 120 110 13200 90 90 8100 Total 61300 500 150000 200 350 70000 Total 220000 Cost of goods sold = Average aggregate value of inventory = 3700000 363800 Inventory turns = 10. 17 Days of supply = 35. 89

HW 10 -4 Homework Problem #10 -4 Raw Materials 1 2 3 4 5 Average Inventory 7200 4500 3200 4800 6900 Work in Process A B C D Unit Cost ($) 8. 5 7. 2 15. 4 13. 7 10. 5 Total 100 70 60 35 16200 13500 6100 14400 Total Finished Goods X Y Z 20 10 10 Total Value 61200 32400 49280 65760 72450 281090 1620000 945000 366000 504000 3435000 78700 65300 86000 Total 1574000 653000 860000 3087000 Cost of goods sold = 18500000 Average aggregate value of inventory = 6803090 Inventory turns = 2. 72 Days of supply = 134. 22

Southwest Airlines turns at a gate…. . ® What are the entities? ® Name some events… ® Name some activities… ® What is the difference between an activity and an event? ® What is the relationship between an event and an activity?

Chapter 15 – ERP ® Inventory for Dependent Demand will NOT be covered…. ® Exam coverage of this chapter starts on page 700

What is the information architecture modern ERP systems are currently based on? ®Mainframe/glass house ®Client/server ®N-tier distributed ®None of these

Every application software package consists of 1. 2. 3. 4. 5. Presentation management component Business logic management component Data management component All of the above 1 and 2 only

ERP ® Is software that organizes and manages a company’s business processes by sharing info across functional areas ® Large caps have been there and done that—transitioned to ERP ® Mid and small caps are mostly there ® This concept has been around since 1995 ® The road to implementation has been rough

More ERP ® Based on an N-tier distributed architecture ® Not on mainframe glasshouse

• Advantages of N-tier architecture ® Provides for data integration ® Better usage of MIPS on both PCs and servers ® Solves the 36 -month backlog of the centralized MIS shop ® Enables a better career path for the MIS professional

N-Tier distributed architecture ® Is decentralized or centralized, or some combination of these (which? ) ® Utilizes thick clients or thin clients (which? )

ERP Modules ® Sales & distribution ® Production & Materials Management ® Quality management ® Human resource management ® Project management ® Accounting and controlling/finance ® Supply chain management ® Customer relationship management

ERP Terms ® Best-of-breed ® Collaborative product commerce ® Customer relationship management ® Supply chain management ® XML

Re-engineered Computer Architectures ® Started with mainframe/glasshouse ® Migrated to client/server ® Evolved to N-tier distributed

Why did such re-engineering occur? ® There was no data integration ® MIPs on mainframes were hugely expensive and very much in demand ® MIPs on PCs were idle 95% of the time and extremely cheap ® Backlogs for MIS shops were at 36 months ® Developing new applications were slow and expensive

Distributed architectures solved these problems ® Data resides behind a single database engine

Components of any Software Application

Components in brief

Mainframe Architecture (circa 1993) Mainframe Computer

First solution: Client/server architecture Thick Clients (PM, BL) Database Server (DM)

Modern solution of today: NTIER DISTRIBUTED ARCHITECTURE ® This is a distributed architecture like client/server, but now the application is distributed across three or more computing boxes on the network

N-Tier distributed Architecture Thin Clients (1/2 PM) Database Application Server 2 Data Server (DM) Application Server 1

Take a closer look at the Application Servers Application Server runs the business logic component and half ot the presentation management component—the portion the serves out the web pages

Comments on N-Tier Distributed Architecture ® Clients are called ‘thin’ because the only thing running on them is the Internet Browser ® The IT professional doesn’t have to install anything on the client ® More re-use is possible—specifically that internet browser

Advantages of N-Tier Distributed Architecture ® Like Client/server, it accommodates enterprise visibility because the data are integrated and accessible through a single DBMS—that Oracle engine ® Applications can be built rapidly because there is abundant reuse The DM module is reused ® Half of the PM component is reused ® There are reuse opportunities within the rest of the PM component and the BL component as well ®

More advantages of N-Tier ® IT professionals don’t have to be remotely loaned out to marketing, management, accounting and finance ® They can now be centrally located and managed where career paths will exist for them

Application Servers do Two things ® They serve out web pages upon request ® They do all of the business logic processing.

ERP Modules ® Finance/Accounting ® Sales Marketing ® Production/Materials Management ® Human Resources ® Supply Chain Management ® Customer Relation Management

These modules would be placed in a ® Thin client ® Data server ® Application server ® Mainframe WHICH? ?

ERP Implementation Methodology ® Analyze business processes ® Choose modules to implement ® Align level of sophistication ® Finalize delivery and access ® Link with External Partners

Customer Relationship Management ® CRM software plans and executes business processes that involve customer interaction, such as marketing, sales, order fulfillment, and service (not manufacturing) ® CRM is focused on customers, not products

Collaborative Product Commerce ® Software concerned with new product design and development, as well as product lifecycle management

Connectivity ® A common data management component ® API’s (Application Programming Interfaces) ® EAI (Enterprise Application Integration) ® XML (Extensible Markup Language) ® Dr. Viator (accounting) teaches a course in this language

Chapter 10 --Supply Chain Management--SCM ® Plants/warehouses/distribution/ information infrastructure ® Most of America’s product gets moved by _____ (air, water, rail, truck, pipeline). ® What is COVISINT? ? ® Collaboration, Vision, INTegration ® What benefits accrue from SCM?

What’s new and exciting in SCM? ? ® Information Technology (specifically enterprise visibility) ® Has changed everything ® SCM Software modules within ERP systems ® I 2 Technologies ® Has reduced uncertainty ® Which has reduced _______ l ® INVENTORY Which is a form of ________ l INSURANCE

Inventory turns ® Calculated on an annual basis ® The more, the better ® Inputs: ® Cost of goods sold ® Average aggregate value of inventory ® = (cost of goods sold)/(avg aggregate value of inventory)

Average aggregate value of inventory ® Calculated by taking the product of the unit cost with the number of units and then summing these products for all inventory categories

Days of supply ® Avg agg value of Inv*365/Ann cost of goods sold ® Or simply… 365/inventory turns

Manufacturing Inventory Types ® Raw materials inventory ® Work-in-process inventory ® Finished goods inventory

Supply Chain Management Terms ® ® ® ® ® Bullwhip effect Collaborative planning, forecasting and replenishment Continuous replenishment Core competencies Cross-docking E-business E-marketplaces E-procurement EDI Inventory turns Landed cost Logistics Order fulfillment RFID Sourcing Vendor-management inventory ® Warehouse management system ® ® ®

Simulation ® Two types— ® Continuous deterministic ® VENSIM is an example ® Discrete stochastic ® PROMODEL is an example ® Each of these two types differ by method of time advance

Time advance in continuous deterministic simulation ® Time is advanced in small, equidistant increments ® The simulation engine is really integrating differential equations

Time advance in discrete stochastic simulation ® Time is advanced from event to the next chronological event

MONTE CARLO— ® The computer-generation of random numbers using an

Which simulation gestalt uses activities, events, entities and their attributes? ® Continuous deterministic? ® Discrete stochastic?

The Excel function RAND() generates… ® Normally-distributed random variates ® Gamma-distributed random variates ® Uniformly-distributed random variates ® Exponentially-distributed random variates

To get a non-uniform random variate, we often start with ® A normal random variate ® A lognormal random variate ® A uniform random variate ® A triangular random variate

That’s it from here…GOOD LUCK Tomorrow!!