C-F: Articles

Question 1

What are functional products?

Answer 1

• Satisfy basic needs
• Predictable demand and long life cycles
• Low profit margins
• Product variety is low and lead times are long

Question 2

What are innovative products?

Answer 2

• Unpredictable demand and a short life cycle
• Product variety is high and lead times need to be short
• High profit margin and volatile demand

Question 3

What is the physical function of the supply chain?

Answer 3

Converting raw materials into parts, components and finished goods

Question 4

What are physical costs?

Answer 4

Costs associated with production, transportation and inventory storage

Question 5

What is the market mediation function of the supply chain?

Answer 5

Ensuring that the variety of products reaching the marketplace matches what consumers want to buy

Question 6

What are market mediation costs?

Answer 6

When supply falls short or exceeds demand

Question 7

What are four tools to cope with uncertainty in demand?

Answer 7

1. Accept that uncertainty is unavoidable
2. Reduce uncertainty by finding new source of data for example
3. Avoid uncertainty by cutting lead times and increasing supply chain flexibility
4. Hedge against the remaining residual uncertainty

Question 8

What are the two elements of accurate response?

Answer 8

1. Takes into account missed sales opportunities

2. Distinguishes products for which demand is relatively predicate and unpredictable

Question 9

What did Sport Obermeyer do to implement accurate response?

Answer 9

1. Introduced computerized systems
2. Anticipated demand for raw materials and pre-positioned them
3. Used air fright if delivery due date came close
4. Pursaded key retailers to place orders sooner
5. Used ‘buying committee’ to create a consensus forecast

Question 10

What is risk-based production sequencing?

Answer 10

1. Using non-reactive capacity to produce products with predictable demand
2. Using reactive capacity for early demand information

Question 11

What are the two changes in forecasting that accurate response requires?

Answer 11

1. Being more resourceful in using demand indicators

2. Instituting a system for tracking forecasting errors