L6M9 Exam Preparation Material | Supply Network Design

Explanation:
The Theory of Constraints (TOC) includes the Drum, Buffer, and Rope approach. This method helps manage constraints in production by synchronising workflow. The Drum sets the pace, the Buffer protects against variability, and the Rope ensures efficient scheduling. Boat and safe harbour are not part of TOC. (See p.204)
For further reading on Drum-Buffer-Rope, refer to this resource:
Theory of Constraints - Fortelabs

Explanation:
Optimum capacity is achieved when:
Customer demand is met (B)
Production costs are minimized (C)
Incorrect options:
(A) is false because optimum capacity isn’t necessarily the physical limit
(D) is false because the factory should be operating at a profit, not breakeven
(E) is false because the lowest cost per unit is achieved, not the highest
(F) is false because inventory levels should be minimized, not maximized (to reduce storage costs) (See LO 1.3, p.46)

Explanation:
Sequencing involves balancing logic, cost, and speed to optimise production. Prioritising orders purely by arrival time (Option A) or cost efficiency (Option B) might not be practical. Similarly, making sure all orders finish at the same time (Option D) isn't always necessary. (See p.183)

Explanation:
The item described is a ‘regular seller’―important to customers but not sold in high volumes. Keeping an average of 3 days' stock balances demand with the effort required for stock management. "Never be out of stock" is only for high-demand, critical items, while "monthly stock review" might lead to lost sales. (See p. 158)

Explanation:
The Improvement Gap Analysis measures customer dissatisfaction levels. It describes the current state of an organisation and what needs to be done to reach the desired state. The gap between these states represents customer dissatisfaction. The IPA matrix by Piccolo et al categorises dissatisfaction into four quadrants, helping organisations determine whether action is needed. (See p. 137)