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supply chain management > Chap 1 > Flashcards

Chap 1 Flashcards

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1
Q

What is a Supply Chain?

A

A network of suppliers, manufacturers, and customers involved in producing and delivering a product or service.

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2
Q

What are the key elements of a Supply Chain?

A
  • Suppliers: provide raw materials
  • Manufacturers: create the final product
  • Customers: receive and use the product
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3
Q

What is the Supply Chain Flow?

A

Suppliers → Manufacturers → Wholesalers/Distributors → Retailers → Customers

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4
Q

What are the tiers of suppliers and customers?

A
  • Tier 1: Direct supplier/customer
  • Tier 2, Tier 3, etc.: Indirect suppliers/customers
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5
Q

What is the End-to-End Supply Chain?

A

Covers the entire process from raw materials to customer delivery.

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6
Q

What is Supply Chain Management (SCM)?

A

Managing and coordinating the network of trading partners to deliver products efficiently.

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7
Q

What are the goals of SCM?

A
  • Increase Customer Satisfaction
  • Reduce Costs & Inventory Levels
  • Enhance Coordination Across the Chain
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8
Q

What are the components of SCM?

A
  • Planning
  • Sourcing
  • Manufacturing
  • Delivering
  • Returning (Reverse Logistics)
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9
Q

What does the SCOR Model stand for?

A

Supply Chain Operations Reference Model

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10
Q

What are the 5 Key Performance Attributes of the SCOR Model?

A
  • Reliability
  • Responsiveness
  • Agility
  • Cost
  • Asset Management
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11
Q

What are the phases of the SCOR Model?

A
  • Plan
  • Source
  • Make
  • Deliver
  • Return
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12
Q

What is involved in the ‘Plan’ phase of Supply Chain Processes?

A

Establishes demand forecasting, production scheduling, and inventory planning.

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13
Q

What are the types of Purchased Goods?

A
  • Raw materials: Steel, copper, chemicals
  • Components: Screws, motors, plastic parts
  • Packaging materials: Boxes, labels
  • Office supplies & equipment
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14
Q

What is the focus of Logistics?

A

Efficient movement of goods within a single organization.

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15
Q

What is the difference between Push and Pull Supply Chains?

A
  • Push Model: Forecast-driven, products produced based on anticipated demand
  • Pull Model: Order-driven, products produced in response to actual demand
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16
Q

What was the focus of Supply Chain Management in the 1950s to 1960s?

A

Mass production and cost reduction.

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17
Q

What is the Inventory Turnover Ratio?

A

Inventory Turnover = Cost of Goods Sold (COGS) / Average Inventory

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18
Q

What does the Order Fill Rate indicate?

A

Customer service level.

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19
Q

What is the Bullwhip Effect?

A

Small fluctuations in demand amplify up the supply chain, causing inventory issues.

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20
Q

What are the causes of the Bullwhip Effect?

A
  • Lack of demand visibility
  • Order batching
  • Price fluctuations
  • Rationing & Shortage Gaming
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21
Q

What is the purpose of Demand Planning?

A

Combining statistical forecasting with market intelligence to create a reliable demand estimate.

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22
Q

What are the three types of Forecasting Horizons?

A
  • Short-Term: weeks/months
  • Medium-Term: months/years
  • Long-Term: years/decades
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23
Q

What is Naïve Forecasting?

A

Assumes next period’s demand equals last period’s actual demand.

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24
Q

What does the Mean Absolute Deviation (MAD) measure?

A

The average error in units.

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25
What is the formula for Forecast Bias?
Bias = ∑(A - F)
26
What is the purpose of Sales & Operations Planning (S&OP)?
Aligns supply chain operations with business goals.
27
What are the key inputs for Master Production Scheduling (MPS)?
* Demand forecasts * Production capacity * Inventory levels
28
What is the definition of Independent Demand?
Demand not dependent on any other product.
29
What are the two main types of Supply Chain Models?
* Demand-Driven Supply Chain * Supply-Driven Supply Chain
30
What is the goal of Aggregate Production Planning (APP)?
Translates business plans and forecasts into a production plan.
31
What is the formula for Available-to-Promise (ATP)?
ATP = On-hand Inventory + Planned Production - Customer Orders
32
What are the challenges in Reverse Logistics?
* Customer dissatisfaction * Cost of processing returns * Managing defective inventory
33
What is the role of technology in the future of Supply Chain Management?
Focus on digitalization, automation, and sustainability.
34
What does Master Production Scheduling (MPS) define?
What, how much, and when to produce.
35
What are the key inputs for MPS?
* Demand forecasts * Production capacity * Inventory levels
36
What is the Level Strategy in MPS?
Constant production, fluctuating inventory.
37
What is the Chase Strategy in MPS?
Matches production with demand.
38
What is the Hybrid Strategy in MPS?
Mix of both Level and Chase Strategies, using overtime and inventory holding.
39
What does Available-to-Promise (ATP) ensure?
Inventory is allocated to customer orders.
40
What is the formula for ATP?
ATP = On-hand Inventory + Planned Production - Customer Orders
41
What is the Firm Time Period in Time Fencing?
No changes allowed without approval.
42
What is the Planned Time Period in Time Fencing?
Adjustments allowed.
43
What is the purpose of Material Requirements Planning (MRP)?
Ensures the right materials are available at the right time.
44
What are the key inputs for MRP?
* MPS (Master Production Schedule) * Bill of Materials (BOM) * Inventory Status * Planned Receipts
45
What is Independent Demand?
Demand not linked to another product.
46
What is Dependent Demand?
Derived from independent demand.
47
What is a Single-Level BOM?
Direct components required for a product.
48
What is a Multi-Level BOM?
Includes subassemblies and raw materials.
49
What is the purpose of Capacity Planning?
Determines how much output can be produced.
50
What are the types of Capacity Planning?
* Resource Requirements Planning (RRP) * Rough-Cut Capacity Planning (RCCP) * Capacity Requirements Planning (CRP)
51
What is the purpose of Distribution Requirements Planning (DRP)?
Manages the movement of finished goods across distribution centers.
52
What are the key components of DRP?
* Demand forecasts by location * Inventory levels by location * Replenishment schedules * Lead times
53
What is the purpose of Advanced Planning & Scheduling (APS)?
Uses algorithms to optimize scheduling and resource allocation.
54
What are the key features of APS?
* Real-time planning * Optimization of production & inventory * Simulation of multiple scenarios
55
What is the purpose of Enterprise Resource Planning (ERP)?
Integrates all business functions (finance, HR, supply chain, CRM).
56
What are major ERP providers?
* SAP * Oracle * Microsoft
57
What are common ERP implementation issues?
* Lack of executive support * Poor training * High complexity
58
What is the formula for Available-to-Promise (ATP)?
ATP=(On-hand Inventory + Planned Production) - Customer Orders
59
What is the formula for Net Requirement in MRP?
Net Requirement = Gross Requirement - (On-hand Inventory + Scheduled Receipts)
60
What is the formula for Mean Absolute Deviation (MAD)?
MAD = ∑|A - F| / n
61
What is the formula for Mean Absolute Percentage Error (MAPE)?
MAPE = ∑(|A - F| / A) n × 100%
62
What is the formula for Mean Squared Error (MSE)?
MSE = ∑(A - F)² / n
63
What is the purpose of inventory management?
Balances demand, supply, and cost efficiency.
64
What are the categories of inventory?
* Raw Materials * Work-in-Process (WIP) * Finished Goods * Maintenance, Repair, & Operating (MRO) Supplies
65
What is Cycle Stock?
Meets immediate demand; replenished cyclically.
66
What is Safety Stock?
Buffer stock to cover demand/supply variability.
67
What is Strategic Stock?
Extra inventory held for specific events.
68
What is Pipeline Inventory?
Goods in transit or held by supply chain partners.
69
What is Obsolete Inventory?
Expired, damaged, or unsellable stock.
70
What are the costs related to inventory?
* Direct Costs * Indirect Costs * Variable Costs * Fixed Costs * Carrying Costs * Order Costs
71
What are the two inventory review models?
* Periodic Review System * Continuous Review System
72
What is the formula for Reorder Point (ROP)?
ROP = Demand during Lead Time (d × L)
73
What is Economic Order Quantity (EOQ)?
Optimizes order size to balance ordering costs and carrying costs.
74
What is the formula for EOQ?
EOQ = √(2DS / H)
75
What is the ABC System?
Classifies inventory based on importance.
76
What is the purpose of barcodes in inventory control?
Tracks real-time inventory movement.
77
What is the formula for Inventory Turnover Ratio?
COGS / Average Inventory
78
What is the formula for Weeks of Supply?
Average Inventory / Average Weekly Demand
79
What is the formula for Days of Supply?
Inventory / Daily Demand
80
What is Total Cost of Ownership (TCO)?
Purchase Price + Quality Costs + Service Costs + Delivery Costs
81
What are the advantages of centralized purchasing?
* Lower costs * Better volume discounts
82
What are the advantages of decentralized purchasing?
* More flexibility * Better local supplier relationships
83
What are challenges in global sourcing?
* Tariffs & non-tariff barriers * Longer lead times * Exchange rate risks * Supplier reliability
84
What is the purpose of government procurement?
Must be transparent & accountable.
85
What is the purpose of competitive bidding in government procurement?
Lowest responsive & responsible bidder wins.
86
What is a Bid Bond?
Ensures bidder will accept the contract.
87
What is a Performance Bond?
Ensures contract work is completed on time.
88
What is a Payment Bond?
Protects against unpaid subcontractors.
89
What is the formula for Reorder Point (ROP)?
ROP = d × L ## Footnote Where d = Demand per period and L = Lead time in periods.
90
What is benchmarking in the context of purchasing?
Comparing purchasing performance with industry leaders.
91
What are key performance indicators (KPIs) for purchasing?
* Cost savings achieved * Supplier defect rates * On-time delivery performance * Purchasing cycle time
92
What are some strategic sourcing initiatives?
* Supplier integration * e-Procurement automation * Lean purchasing to reduce waste * Supplier collaboration on innovation
93
What is the main impact of the purchasing function?
It impacts cost, quality, and efficiency.
94
What factors influence the Make vs. Buy decision?
* Strategy * Risk * Cost
95
What does Total Cost of Ownership (TCO) include?
All cost elements beyond price.
96
What are the differences between Centralized and Decentralized Purchasing?
* Centralized: Greater efficiency * Decentralized: More flexibility
97
What are the benefits and challenges of global sourcing?
Benefits include cost savings; challenges include complexity and risk.
98
What is the purpose of EOQ in inventory management?
To optimize inventory ordering.
99
What does strategic sourcing aim to achieve?
* Reduce costs while maintaining/improving quality * Improve supplier relationships and supply chain efficiency * Optimize global supplier base
100
What are the steps in the strategic sourcing process?
* Identify Spend Areas * Form Sourcing Teams * Develop Strategy * Analyze the Market * Select & Negotiate with Suppliers * Implement Supplier Relationship Management (SRM)
101
What are the key sourcing strategies?
* Insourcing * Outsourcing * Single-Sourcing * Multi-Sourcing
102
What is Supplier Base Rationalization?
Reducing the number of suppliers to improve quality, reduce costs, and strengthen relationships.
103
What criteria are used for supplier evaluation?
* Cost * Quality * Capacity * Service * Innovation
104
What is the definition of a Strategic Supplier Alliance?
A long-term partnership between a buyer and supplier to pursue common goals.
105
What are the benefits of Strategic Supplier Alliances?
* Higher revenue & profit * Competitive advantage * Risk mitigation * Market expansion
106
What is the process of Spend Analysis?
* Define Scope * Identify Data Sources * Consolidate & Clean Data * Categorize by Commodity/Supplier * Analyze for Cost-Saving Opportunities
107
What are the categories of sourcing?
* Non-Critical * Bottleneck * Leverage * Strategic
108
What is a Reverse Auction?
Suppliers bid competitively online to offer the lowest price.
109
What is Vendor-Managed Inventory (VMI)?
Supplier monitors and manages buyer’s inventory.
110
What is Ethical Sourcing?
Ensures responsible business practices in the supply chain.
111
What are Sustainable Sourcing Goals?
* Grow Revenue * Reduce Costs * Go Green * Manage Risk * Build Brand Value
112
What is the main difference between Single-Sourcing and Multi-Sourcing?
* Single-Sourcing: Better supplier relationships * Multi-Sourcing: Reduces supply disruption risk
113
True or False: Strategic sourcing optimizes supplier selection to reduce costs and improve supply chain performance.
True

supply chain management (2 decks)

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