4 - Supply Chain Planning I: Flexibility

Question 1

What is leanness?

Answer 1

A supply chain is lean if the inputs are minimized for a given objective or target value. Efficiency.

Question 2

What is agility?

Answer 2

A supply chain is agile if it is able to respond quickly to unforeseen changes/variation of parameters or constraints. An agile process can handle great variation in demand. Effectiveness.

Question 3

What is transferable capacity?

Answer 3

It allows a firm to be more agile by producing different products at different plants.

Question 4

Explain Constellation I

Answer 4

It is a situation in which products are negatively correlated. This allows a firm to transfer capacity in order to maintain efficiency. In this case transferable capacity is advantageous.

Question 5

Explain Constellation II

Answer 5

When demand for both products decreases significantly for a brief time, then a firm can use transferable capacity to make both products at one plant and shut down another.