1) Aggregate Production Plan (Management)
Previous Definition
Aggregate planning is a high-level corporate planning activity. The aggregate production plan indicates production output levels for the major product lines of the company. The aggregate plan must be coordinated with the plans of the sales and marketing departments. Because the aggregate production plan includes products that are rurrently in production, it must also consider the present and future inventory levels of those products and their component parts. Because new products currently being developed will also be included in the aggregate plan. the marketing plans and promotions for current products and new products must be reconciled against the total capacity resources available to the company.
The production quantities of the major product lines listed in the aggregate plan must he converted into a very specific schedule of individual products, known as the master productionschedule (MPS).lt is a list or the products to be manufactured, when they should be completed and delivered, and in what quantities. The master schedule must be based on an accurate estimate of demand and a realistic assessment of the company's production capacity. Products included in the MPS divide into three categories: (1) finn customer orders, (2)forecasted demand, and (3) spare parts. Proportions in each category vary for different companies, and in some cases one or more categories are omitted. Companies producing assembled products will generally have to handle all three types. In the case of customer orders for specific products, the company is usually obligated to delivery the item by a particular date that has been promised by the sales department. In the second category. production output quantities are based on statistical forecasting techniques applied to previous demand patterns, estimates by the sales staff. and other sources. For many companies, forecasted demand constitutes the largest portion of the master schedule. The third category
consists of repair parts that will either be stocked in the company's service department or sent directly to the customer. Some companies exclude this third category from the master schedule since it does not represent end products.
The MPS is generally considered to be a medium-range plan since it must take into
account [he lead times to order raw materials and components, produce parts in the factory and
then assemble the end products. Depending on the product. the lead times can range from several weeks 10 many months; in some cases. more than a year. The MPS is' usually considered to he fixed in the near term. This means that changes arc not allowed within 6 week honzon because of the difficulty in adjusting production schedules within such a short pet-rod. However. schedule adjustments are allowed beyond 6 weeks to cope with changing demand patterns or the introduction of new products.Accordingly, we should
note that the aggregate production plan is not the only input to the master schedule. Other inputs that may came the master schedule to depart from the aggregate plan include new customer orders and changes in sales forecast over the near term.
(Gıoover, Automation, Production Systems and CIM. P 798-800)
New Definition (Better)
Aggregate production planning is concerned with the determination of production, inventory, and work force levels to meet fluctuating demand requirements over a planning horizon that ranges from six months to one year. Typically the planning horizon incorporate the next seasonal peak in demand. The planning horizon is often divided into periods. For example, a one year planning horizon may be composed of six one-month periods plus two three-month periods. Normally, the physical resources of the firm are assumed to be fixed during the planning horizon of interest and the planning effort is oriented toward the best utilization of those resources, given the external demand requirements.
Since it is usually impossible to consider every fine detail associated with the production process while maintaining such a long planning horizon, it is mandatory to aggregate the information being processed. The aggregate production approach is predicated on the existence of an aggregate unit of production, such as the "average" item, or in terms of weight, volume, production time, or dollar value. Plans are then based on aggregate demand for one or more aggregate items. Once the aggregate production plan is generated, constraints are imposed on the detailed production scheduling process which decides the specific quantities to be produced of each individual item.
The plan must take into account the various ways a firm can cope with demand fluctuations as
well as the cost associated with them. Typically a firm can cope with demand fluctuations by:
(a) Changing the size of the work force by hiring and firing, thus allowing changes in the production rate. Excessive use of hiring and firing may limited by union regulations and may create severe labor problems.
(b) Varying the production rate by introducing overtime and/or idle time or outside subcontract
ing.
(c) Accumulating seasonal inventories. The tradeoff between the cost incurred in changing pro-
duction rates and holding seasonal inventories is the basic question to be resolved in most
practical situations.
(d) Planning backorders.
These ways of absorbing demand fluctuations can be combined to create a large number of
alternative production planning options.
Costs relevant to aggregate production planning:
(a) Basic production costs: material costs, direct labor costs, and overhead costs. It is customary
to divide these costs into variable and fixed costs.
(b) Costs associated with changes in the production rate: costs involved in hiring, training, and
laying off personnel, as well as overtime compensations.
(c) Inventory related costs.
(G. Gallego, Production Management, p1)
2) External Failure Cost (Accounting)
Previous Definition
External failure costs are one component of the cost of quality, and are incurred if a defective product reaches the customer and fails during use. The most common components of this cost are warranty work and returns. However, lawsuits from customers may also be a component. Some individuals also believe that a measure of the cost of lost goodwill should be included as a component of external failure cost. In truth, it may be difficult to accurantly estimate the real cost of external failures.
(Swamidass, P. M., Encyclopedia of Production and Manufacturing Management, p. 133)
New Definition (Better)
External failure costs are the costs resulting from products or services not conforming to requirements or customer/user needs (which) occur after delivery or shipment of the product, and during or after furnishing of a service to the customer.
(E. Sower, R. Quarles, Cost of Quality Usage And Its Relationship to Quality System Maturity, p124)
3) Axiomatic Design (Design)
Previous Definition
(S. Cochran, W. Eversheim, G. Kubin, L. Sesterhenn, The Application of Axiomatic Design and Lean Management Principles, p12-13)
4) Fouling (Material)
Previous Definition
3) Axiomatic Design (Design)
Previous Definition
Axiomatic design is a method for guiding the efficient creation of new products, processes, systems, software, organizations, methods, etc. to obtain uncoupled or decoupled designs. According to axiomatic design, all designs involve the continuous processing of information between and within four distinct domains: consumer domain, functional domain, physical domain and process domain.
(Culley, S., Duffy, A., McMahon, C., Wallace, K., Design Methods for Performance and Sustainability, 13th International Conference on Engineering Design, p. 446)
New Definition (Better)
The approach of Axiomatic Design was advanced by Dr. Nam P. Suh in the mid-1970s with
the goal to develop a scientific, generalized, codified, and systematic procedure for design.
Axiomatic Design provides the designer with a theoretical foundation based on logical and rational thought processes and tools (Suh 1995). In order to systematize the thought process and to create demarcation lines between various design activities, four domains represent the foundation of Axiomatic Design procedure (Fig. 6).
The domain on the left relative to the domain on the right represents "what we want to
achieve", whereas the domain on the right represents the design solution of "how we propose to satisfy the requirements specified in the left domain". The customer domain is characterized by the customer attributes (CAs) the customer is looking for in a product, process, system or other design object. In the functional domain the customer attributes are specified in terms of functional requirements (FRs) and constraints (Cs). As such, the functional requirements represent the actual objectives and goals of the design. The design parameters (DPs) express how we want to satisfy the functional requirements. Finally, to realize the design solution specified by the design parameters, the system variables (SVs) are stated in the process domain.
The methodology provides a stringent procedure to deploy a system design in a “zigzagging”
decomposition process between the domains from highest to lowest design level. Within mapping between the domains the designer is guided by two fundamental axioms to produce a robust design (Suh 1990):
Axiom 1: The Independence Axiom
=> "Maintain the independence of the functional requirements".
Axiom 2: The Information Axiom
=> "Minimize the information content of the design".
The axioms offer a basis for evaluating and selecting designs. In most design tasks, it is
necessary to hierarchically decompose the problem. The FRs, DPs, and SVs can mathematically be described as vectors. The relationship between the design domains, of which each is represented by a vector, can be expressed as a matrix, respectively. This matrix is called the "Design Matrix" (DM) (compare case study). A design equation should be written for each transition between domains and at each decomposition level. Detailed information and elaborations on the scientific background of Axiomatic Design are provided by Suh (Suh 1990).
(S. Cochran, W. Eversheim, G. Kubin, L. Sesterhenn, The Application of Axiomatic Design and Lean Management Principles, p12-13)
4) Fouling (Material)
Previous Definition
The term fouling denotes that the heat transfer surfaces have been altered by such processes. Thus, when fouling occurs on both surfaces, there is a total of five resistances to heat transfer.
(Robert S. Brodkey, Harry C. Hershey, Transport Phenomena: A Unified Approach, p.531)
New Definition (Better)
The accumulation of unwanted deposits on the surfaces of heat exchangers is usually referred to as fouling. The presence of these deposits represents a resistance to the transfer of heat and therefore reduces the efficiency of the particular heat exchanger. The foulant may be crystalline, biological material, the products of chemical reactions including corrosion, or particulate matter. The character of the deposit depends on the fluid (liquid or gas) passing through the heat exchanger. It may be the bulk fluid itself that causes the problem of deposit formation, e.g. the decomposition of an organic liquid under the temperature conditions within the heat exchanger. Far more often than not, the fouling problem is produced by some form of contaminant within the fluid, often at very low concentration, e.g. solid particles or micro-organisms. Fouling can occur as a result of the fluids being handled and their constituents in combination with the operating conditions such as temperature and velocity. Almost any solid or semi solid material can become a heat exchanger foulant, but some materials that are commonly encountered in industrial operations as foulants include:
Inorganic materials:
Airborne dusts and grit
Waterborne mud and silts
Calcium and magnesium salts
Iron oxide
Organic materials:
Biological substances, e.g. bacteria, fungi and algae
Oils, waxes and greases
Heavy organic deposits, e.g. polymers, tars
Carbon
(T. R. Bott, Fouling of Heat Exchangers, p1)
(Sensors and Control Systems in Manufacturing, Sabrie Soloman, Ph.D., Sc.D., MBA, PE; p547-548)
New Definition (Better)
The economic order-quantity model considers the tradeoff between ordering cost and storage cost in choosing the quantity to use in replenishing item inventories. A larger order-quantity reduces ordering frequency, and, hence ordering cost/month, but requires holding a larger average inventory, which increases storage (holding) cost/month. On the other hand, a smaller order-quantity reduces average inventory but requires more frequent ordering and higher ordering cost/month. The cost- minimizing order-quantity is called the Economic Order Quantity (EOQ).
(B. Schwarz, The Economic Order-Quantity (EOQ) Model, p135)
5) Economic Order Quantity (Management)
Previous Definition
The economic order quantity (EOQ) is the quantity of goods that should be ordered at one time to ensure the lowest total inventory costs (holding cost plus ordering cost). There is a tradeoff between holding costs and ordering costs. When the order quantity is small and the inventory is kept low, the holding costs are also low. The ordering costs, however, are high, because orders must be placedoften and more clerical and receiving department time is needed. When the order quantities are large and inventory is kept high, the holding costs are high (more insurance, taxes, rent), but the ordering cost is low—fewer requisitions must be processed, and receiving operations are less frequent.
New Definition (Better)
The economic order-quantity model considers the tradeoff between ordering cost and storage cost in choosing the quantity to use in replenishing item inventories. A larger order-quantity reduces ordering frequency, and, hence ordering cost/month, but requires holding a larger average inventory, which increases storage (holding) cost/month. On the other hand, a smaller order-quantity reduces average inventory but requires more frequent ordering and higher ordering cost/month. The cost- minimizing order-quantity is called the Economic Order Quantity (EOQ).
(B. Schwarz, The Economic Order-Quantity (EOQ) Model, p135)
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