Supply Chain Management

Question 1

Ashby’s Law of Requisite variety

Answer 1

“An organization needs to be as flexible as its environment”

Question 2

Super-tanker company

Answer 2

A company that is extremely vertically integrated. E.g. Philips in the 50s and 60s.

Question 3

Work-boat company

Answer 3

A company that is not very vertically integrated. Where non-core functions (including production and assembly) are outsourced. “The Modern Firm”

Question 4

Unit-Management / Unbundling of the firm

Answer 4

The process of splitting up vertically integrated firms into smaller Business Units. From super-tankers to work-boats.

Question 5

Collaborative Planning (Sales & Operations Planning)

Answer 5

Method where decision making is done across multiple organisation. Each link in the chain updates the others on a frequent basis. Then joint decisions are made on how to move forward

Question 6

Collaborative KPIs

Answer 6

Joint use of KPIs so that one company doesn’t optimize for themselves, but for the network

Question 7

Operations planning with Scenarios

Answer 7

TO BE DESCRIBED

Question 8

Myopic Management

Answer 8

Management form in which manager tend to obtain short-term firm-based gains.

Question 9

Business Dynamics

Answer 9

New perspective on management where the focus lies on long-term profit for the entire network.

Question 10

Exponential Decay

Answer 10

Feature of the negative feedback loop. The more there is of something, the faster it can be reduced.

E.g. The more rabbits there are, the faster they will die.

Question 11

First order material delay

Answer 11

Where the flow is a certain percentage of the stock. Most common form of delay

Question 12

Higher order material delay

Answer 12

Where the flow is a certain percentage of the stock,

Question 13

Information delay

Answer 13

The difference between the perceived value and the actual value.

E.g. the actual amount of corona infections versus how many positive tests there are.

Information delays have a noise suppressing quality

Question 14

Anchor and Adjustment Theory

Answer 14

Humans are quick to make first impressions (anchor). If this first impression is wrong it takes a lot of time to adjust to the actual situation.

Question 15

Five System Archetypes

Answer 15

• Exponential Growth
• Goal-seeking
• Oscillation
• S-shaped growth
• Overshoot & Collapse

Question 16

Steady State Value

Answer 16

The equilibrium values for the stocks that a particular system is working towards

Question 17

Rationality Filter

Answer 17

The filter you use to assess the validity of stories, ideas, and models you come across.

Economics and Mathematical models assume full rationality, but people are in fact nor rational.

Can’t be avoided.

Question 18

Cognitive Filter

Answer 18

Limitations in the cognitive ability to interpret situations. Humans have difficulty with dynamic systems, accumulations, delays, feedback-loops, etc.

Can’t be avoided

Question 19

Behavioral Limitations

Answer 19

Theory-loadedness of Observations by an individual.

Might be avoidable depending on the emotional state someone is in.

Question 20

Theory-loadedness

Answer 20

Observations are said to be “theory-laden” when they are affected by the theoretical presuppositions held by the investigator.

Question 21

Organizational limitations

Answer 21

The organization being unable to take the necessary steps, though the optimal decision is known

Question 22

Strategic Limitations

Answer 22

Capability trap, experience trap, good vibes trap

Question 23

Capability Trap

Answer 23

If a process throughput is not what it should be, you can work faster (work more) or smarter (improve process). Both take time, but only one adds to lowering process defects.

Working smarter is not very visible, might look like nothing is done.

Question 24

Experience Trap

Answer 24

When older people rely on their experiences even though their old experiences are not very effective at modern situations. Called the Brooks Law

Question 25

Service Ramp-up Trap

Answer 25

Thinking that you can ramp up rapidly, actually slows your ramp speed

Question 26

Why has good decision making become more complex?

Answer 26

Increasing volatility in the environment

Increasing technological complexity

Increasing interconnectedness

Question 27

Principal-Agent Theory

Answer 27

If an agent has two tasks, for which the performance of only can easily be measured, then the agent is likely to pay very little of no attention to the unmeasurable one.

Question 28

Principal-Agent Theory

Answer 28

If an agent has two tasks, for which the performance of only can easily be measured, then the agent is likely to pay very little of no attention to the unmeasurable one.

Question 29

Stock-flow failures

Answer 29

The phenomenon the individuals perform poorly with accumulative problems

Question 30

Priming

Answer 30

The phenomenon that a stimuli will result in a stronger or faster response of the brain of that stimuli was observed before.

Question 31

Availability Heuristic

Answer 31

The availability heuristic operates on the notion that if something can be recalled, it must be important, or at least more important than alternative solutions which are not as readily recalled.

Question 32

Planning Fallacy

Answer 32

The tendency to under-estimate the time and resources required to complete a certain (set of) task(s)

Question 33

Framing effect

Answer 33

The phenomenon of making a certain decision or forming a certain opinion based on information surrounding the topic that might not necessarily be representative

Question 34

Overconfidence: the WYISIATI rule

Answer 34

Due to the illusion of understanding and What You See Is All There Is, people may become overconfident in their predictions, judgments, and intuitions.

Question 35

Brooks Law

Answer 35

“A common mistake is in starting a project with one goal or one budget; and then when some of the variables change, as they always do in projects, managers decide to add staff but they fail to take into account time lags in hiring and training people, and projects end up late and over-budget.”

Question 36

Policy Perspective

Answer 36

Choosing the right distance / level of abstraction when modeling system dynamics. Not as close as psychology and not as far as to being unaware of internal structure / social culture

Question 37

Overt decision

Answer 37

Overt decisions are conscious decisions by people as part of management- and economic processes

Question 38

Implicit decisions

Answer 38

Implicit decisions are the unavoidable result of the state of a system. These are often still very important decision.