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Independent- demand and dependent-demand
Independent-demand:The demand for an item is not directly dependent upon the demand for any other item that is being produced
Dependent-demand:The demand for an item is directly dependent upon the demand for another item that is being produced
2.JIT purchasing
(1) Profile of JIT purchasing
JIT purchasing system receives frequent receipts of material from suppliers to meet immediate requirements
(2) The following features define a JIT purchasing system
①A commitment to 0 defects by buyer seller
②Frequent shipment of small lot sizes according to strict quality delivery performance standards
③Closer, even collaborative, buyer-seller relationship
④Stable production schedules sent to suppliers on a regular basis
⑤Extensive sharing of electronic info btw supply chain members
(3) Key points of implementation of JIT purchasing
①Not tolerate high stock level, less-than-perfect quality
②It is not a one-time effort but rather a continuous improvement process
③Cultural and personnel mind-set changes
④Most important, JIT purchasing does not mean pushing stock back to supplier, but rather requires cooperation, coordination and info sharing to eliminate stock across the supply chain
(4) JIT purchasing barriers
①Dispersed supply base
The greater the distance btw buyer and seller, the greater the variability around delivery times
②Historical buyer-seller relationships
JIT system requires mutual trust and respect
③Number of suppliers
④Supplier quality performance
A total commitment to product and delivery quality is prerequisite for a successful JIT system
3. Bill of material
(1) Profile of BOM
A list of the components, their description, their relationship to one another, and the quantity of each required to make one unit of a product
(2) Low-level coding ╳
The item is coded at the lowest level at which it occurs
Low-level coding is a convention to allow easy computing of the requirement of an item
When BOM has thousands of items or wh
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