BEC Unit 2 Module 4 Flashcards
SCOR Model
Attempted to create a generic model for supply chain analysis
Four key management processes:
— Plan, Source, Make, Deliver
Plan (SCOR)
Properly balance supply and demand
Sales Forecasts
Source (SCOR)
Select Vendors, Collect and process vendor payments
Make (SCOR)
Turn raw materials into finished products
Manage Production Process, manufacture product, test product, and package the product
Deliver (SCOR)
Getting finished product into the hands of customer
–Forecasting, pricing, managing of orders
Safety Stock
Ensures that customer supply requirements are met
–Reliability of sales forecasts, customer dissatisfaction, stockout costs, lead time, seasonal demands
Reorder Point
Safety Stock + (Lead Time x Sales During Lead Time)
Economic Order Quantity
Attempts to minimize total ordering and carrying costs
E = SQUARE ROOT of: 2 x Sales x Cost per Purchase Order / Annual Carrying Cost
—-Assumptions: Demand is known, so does not consider stock-out costs or safety stock; Carrying costs and ordering costs per unit are fixed
Largest source of Short-term Credit for Small Firms?
- -Commercial Paper
- -Trade Credit
- -Bankers’ Acceptance
- -Installment Loans
Trade Credit
Spontaneous Source of Financing A.) A/R B.) Debentures C.) Preferred Stock D.) A/P
A/P
Just-In-Time
Reduces lag time between inventory arrival and inventory use.
Benefits: Tying production schedule with demand, more efficient flow of goods between warehouses and production, reduced setup time, improved efficiency
Draft
Delays outflow of cash and increases payable float
Materials Requirement Planning
Projects and plans inventory levels in order to control the usage of raw materials. Primarily applies to raw materials and work in process
Carrying Cost
Storage costs, Insurance Costs, Opportunity Costs, Lost inventory due to spoilage or obsolescence
–The lower the carrying costs of inventory, the more inventory companies are willing to carry
