The production chain: bill of materials, requirements and stock

Bill of materials and routing, production order, push and pull flow, net requirements, safety stock, reorder point and just-in-time.

The outline, topic by topic

Each topic is weighted the way the exam weighs it.

Bill of materials: what is it?
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The list of a product's components and their quantities, level by level.
A bicycle is made of wheels, which are made of rims and spokes: it is a tree. Requirements calculation goes down it level by level.
120 bicycles are due in week 8 and 30 are in stock. How many bicycles still have to be made?
- 90
- 120
- 150
- 30
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90
Net requirement = gross requirement − stock = 120 − 30 = 90. This net bicycle requirement then sets the gross requirement of the components.
In …, each part is made or delivered at the exact moment the next station needs it, to reduce stock.
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In just-in-time, each part is made or delivered at the exact moment the next station needs it, to reduce stock.
It cuts stock and work in progress, but makes the workshop fragile: with no safety stock, a late delivery stops it.
Routing: what is it?
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The sequence of operations needed to make a product, with the workstation and duration of each.
The bill of materials says what the product is made of, the routing says how it is made. Both are needed for planning.