CH. 1-7

Question 1

bullwhip effect

Answer 1

the increased variance in the demand for inventory as you go upstream in the supply chain toward the primary suppliers of raw goods

Question 2

supply chain is the same as what?

Answer 2

value chain and value network

Question 3

Operations

Answer 3

ensures that the exact products customers want are produced efficiently and in a cost-effective manner.lt is the function whose job is to organize the transformation of raw materials into finished product

Question 4

Sourcing

Answer 4

is the function responsible for linking the organiza­ tion to its suppliers, and ensuring an efficient supply of materials.

Question 5

enterprise resource planning (ERP).

Answer 5

large software programs used for planning and coordinating all resources throughout the entire enterprise. They allow data sharing and communication within and outside of the firm, enabling collaborative decision making.

Question 6

(RFID)

Answer 6

Radio frequency identification- chips that track the location of products

Question 7

postponement

Answer 7

waiting till the last second to package and label goods until after demand is more certain. The goods are made and stored and labeling is what is postponed till the last minute

Question 8

cash to cash cycle

Answer 8

how long it takes to convert the order into cash

Question 9

business strategy

Answer 9

is a plan for the company that clearly defines the company’s long-term goals, how it plans to achieve these goals, and the way the company plans to differentiate itself from its competitors. A business strategy should leverage the company’s core competen­ cies, or strengths, and carefully consider the characteristics of the marketplace.

Question 10

Supply chain strategy is

Answer 10

a long-range plan for the design and ongoing management of all supply chain decisions that support the business strategy.

Question 11

experience curve

Answer 11

describes the relationship between unit costs and cumu­ lative volume, where organizational costs are reduced due to experience and learning effects that result from processing a higher volume.

Question 12

product positioning strategy

Answer 12

this decision directly relates to the form in which the company stores its finished
products and the length of delivery lead time it can provide to its customers.

Question 13

Make-to-stock

Answer 13

is a strategy that produces finished products for immediate sale or delivery, in anticipation of demand. Companies using this strategy produce a standardized product in large volumes.

Question 14

Assemble-to-order strategy,

Answer 14

also known as built-to-order, is where the

product is partially completed and kept in a generic form, then finished when an order is receiv

Question 15

Make-to-order

Answer 15

is a strategy for customized products or products with

infrequent deman

Question 16

sourcing strategy

Answer 16

looking at what your company is good at and then deciding what they want to outsource and do themself

Question 17

dependency risk.

Answer 17

As a firm engages in more
sophisticated sourcing engagements it often tailors and adapts its operations to match those of its vendor. By doing so the firm may benefit by taking advantage of the vendor’s economies of scale. This is particularly true in cases that require specialized technology and equipment, and specialized training of staff. How­ ever, these arrangements create a risk that the firm will become overly depen­ dent on the vendor. This can have short-term problems, such as lack of performance on the part of the vendor that disrupts operations. It can also have strategic consequences, as the firm’s future direction is tied to that of the vendor. The decision of whether to outsource should be based on the inter­ dependence of the outsourced function with other internal processes. Compa­ nies should not outsource such highly integrated functions, particularly when high adaptation with the vendor or supplier is required.

Question 18

Competitive priority

Answer 18

what the company focuses on as their priority in order to create their comparative advantage

Question 19

product traceability.

Answer 19

This means that the supply chain has the ability to easily trace a product from point of origin in the supply chain, through to the customer, and back down the supply chain in the case of returns

Question 20

order qualifiers

Answer 20

characteristics that allow the product to secure a place in the market

Question 21

order winners

Answer 21

characteristics that allow the product to win the customers over in the market, whether it is a business or a person/consumer

Question 22

“supply chain masters”

Answer 22

and have the ability to “strong-arm” their suppliers into com­ pliance. EX: walmart, costco

Question 23

business process is

Answer 23

a structured set of activities or steps with specified outcomes

Question 24

transactional view

Answer 24

focuses on making supply chain processes more efficient and effective based on quantitative metrics. This can be achieved through supply chain network redesign to promote speed and eliminate redundancy, by standardizing transactions to improve efficiency, and imple­ menting better information technology to improve transfer of information and Improve accuracy.

Question 25

relationship view

Answer 25

focused on managing relationships across the supply chain. This involves managing relationships between people and organizations, and linking-up processes across organizations of the supply chain. For example, this might mean managing the order fulfillment process throughout the entire chain coordinating with suppliers and measuring per­ formance along the chain. This also means that managers from each organization, who are part of the process coordinate activities, work toward common goals and have a common language

Question 26

TOC

Answer 26

Theory of constraints- weakest link constraint- every system has one or more limiting factor that is preventing it from further achieving its goal. This is analogous to the weakest link of a chain.

Question 27

design capacity

Answer 27

the maximum output capacity of a facility

Question 28

Effective capacity is

Answer 28

the maximum output rate that can be sustained under normal conditions

Question 29

ERP

Answer 29

enterprise resource planning- a system integration technology, enables sharing of information and data across the enterprise for better decision making.

Question 30

transactional marketing

Answer 30

focusing on getting transactions from customers and not on long term relationships with customers

Question 31

Relational marketing

Answer 31

focusing on relationships and understanding that maintaining customers is more profitable than transactional marketing

Question 32

Organizational end user

Answer 32

a company that buys the product for its employees to then use to get their jobs done

Question 33

standardized strategy

Answer 33

aka mass marketing, all customers are viewed in the same way. It provides a minimal amount of product customizatio

Question 34

micro-marketing or one-to-one marketing

Answer 34

recognizes that each individual customer may have their own unique requirements
EX: walmart requiring large suppliers to develop info systems that can work directly with theirs

Question 35

(VOC)

Answer 35

Voice of the customer is the process of capturing customer needs and preferences. Customer needs can be broken into three levels: basic needs, performance needs, and excitement needs.
EX: Zara asking the customers for the next fashion line

Question 36

QFD

Answer 36

Quality function deployment - task is to translate general customer requirements into specific product characteristics.

Question 37

channel of distribution is

Answer 37

the way products and services are passed from the manufacturer to the final consumer

Question 38

direct channel of distribution

Answer 38

farmer at a farmers market

Question 39

indirect channel of distribution

Answer 39

P&G to walmart

Question 40

Exclusive distribution

Answer 40

having a special means of distribution that gives you exclusivity on the market
it also has an advantage in reaching customers or eliminating cost

Question 41

Intensive distribution

Answer 41

A marketing strategy under which a company sells through as many outlets as possible, so that the consumers encounter the product virtually everywhere they go:

Question 42

transformation role

Answer 42

in the organization by converting a

company’s inputs into finished goods and service

Question 43

ESI

Answer 43

Early supplier involvement (ESI)- suppliers get involved in the early stages of product design. Ideas can also come from competitors, by observing their products and success rate.

Question 44

Reverse engineering

Answer 44

Companies can also buy a competitor’s product then analyze its parts and features.
was used by Ford in the design of its Ford Taurus

Question 45

what are the 4 stages of the product life cycle?

Answer 45

typically four stages: introduction, growth, maturity and decline.

Question 46

Intermittent processes are

Answer 46

used for many deferent products of only a small batch needed.
used to produce a large variety of products with different processing requirements in lower volumes. Examples are an auto body shop, a tool and die shop, or a healthcare facility

Question 47

Repetitive processes are

Answer 47

used to produce one, or a few, standardized products in high volume. Examples include an automobile assembly line, a cafeteria, and an automatic car wash.

Question 48

Project processes are

Answer 48

used to make one-of-a-kind products exactly to cus­ tomer specifications. These processes are used where there is high custom­ ization and low product volume, as each product is different. Examples include construction, shipbuilding, medical procedures, custom tailoring, and interior design

Question 49

Batch processes are

Answer 49

used to produce small quantities of products in groups or batches based on customer orders or product specifications. They are also known as job shops. The volumes of each product produced are still small, and there can still be customization. Examples can be seen in bakeries, edu­ cation, and printing shops. The classes you take at the university use a batch process.

Question 50

Line processes are

Answer 50

designed to produce a large volume of a standardized product for mass production. They are also known as flow shops, flow lines, or assembly lines. With line processes the product that is produced is made in high volume with little or no customization. Think of a typical assembly line that produces everything from cars, computers, television sets, shoes, candy bars, even food items.

Question 51

Continuous processes

Answer 51

operate continually to produce a very high volume of a fully standardized product. Examples include oil refineries, water treatment plants, and certain paint facilities. The products produced by continuous processes are usually in continual rather than discrete units such as liquid or gas. They usually have a single input and a limited number of outputs. Also, these facilities are usually highly capital intensive and automated.

Question 52

Fixed Position Layout.

Answer 52

A fixed-position layout is used when a product cannot be moved during production, usually due to size. They are typically used for producing large products such as homes, buildings, bridges, large ships, airplanes, and spacecraft. The greatest supply chain challenge here is for all of the resources to come together at the product’s location in the right sequence at the right time. Consider the process of construction where different tasks must be performed in sequence, such as installing electrical wiring and plumbing, putting up dry wall,

Question 53

Process Layout.

Answer 53

best suited when producing many different types of products in low volume, as seen in intermittent processes. Here products have different processing needs and it would be almost impossible to create a sequence of departments to accommodate each one. As a result resources are grouped by process-hence the term “process” layout. Here the product is moved between groupings based on need. A grocery store is another example, where food items are grouped based on their use, with sections for dairy, meat, bakery, canned goods, and produce. Retailers also use process layouts, with departments for shoes, children’s clothing, cosmetics, and jewelry. Figure 5.9 shows a process layout for a small clinic.

Question 54

Product Layout.

Answer 54

A product layout arranges resources in sequence to enable efficient production of the product.
most suited for producing a high volume of one, or a few similar, products. An automotive assembly line, an automatic car wash, or a buffet table are perfect examples.

Question 55

Cellular Layouts.

Answer 55

attempt to combine product layouts and process layouts and form a number of small assembly lines called work cells.
Cellular layouts group items based on similar processing characteristics and arrange workstations to form a number of small assembly lines called work cells. Then workstations within each individual work cell are arranged using product layout

Question 56

line balancing

Answer 56

ensuring that each step in the assembly line is in the right order and has enough time to accomplish their part of the product

1. IDENTIFY TASK TIMES AND PRECEDENCE RELATIONSHIPS
2. DETERMINE CYCLE TIME
3. DETERMINE THE THEORETICAL MINIMUM NUMBER OF WORKSTATIONS
4. ASSIGN TASKS TO WORKSTATIONS
5. COMPUTE EFFICIENCY

Question 57

list major Impact cost categories

Answer 57

Procurement/purchasing costs
Production costs
Inventory costs
Warehousing/distribution costs
Inbound and outbound transportation costs
Capital requirements

Question 58

what is velocity of inventory?

Answer 58

the speed at which inventory is moving through the supply chain

Question 59

cycle stock

Answer 59

we hold a normal level of inventory and when the red light goes on we make the order with a hopefully reliable supplier and hopefully we never go too far below the red light level.
it is the stock that is in each part of the supply chain i.e. supplier, distributer, manufactures,etc.

Question 60

safety stock

Answer 60

what is in between the different parts of the supply chain

i.e. supplier, distributer, manufactures,etc.

Question 61

JIC

Answer 61

just in case

Question 62

JIT

Answer 62

just in time

Question 63

push

Answer 63

Manufactures push

making the order based on forecast and expecting the retailers to store it

Question 64

pull

Answer 64

customers pull

wait for the order to be made and then make it and send it off to the customer

Question 65

transformation role

Answer 65

converting a company’s inputs into finished goods and service

Question 66

Strategic sourcing

Answer 66

goes beyond focusing on just the price of goods to looking at the sourcing function from a strategic and future oriented perspective. It considers sourcing opportuni­ ties that will solve greater problems for the buying firm and give it a competitive advantage

Question 67

operational impact

Answer 67

is dependent upon an efficient and effective sourcing function. It is sourcing that ensures that the right
materials are available throughout the organization and supply chain, in the right quantities and at the right places exactly when needed

Question 68

fair price,

Answer 68

which is the lowest price that can be paid while ensuring a continuous supply of quality goods.

Question 69

(TCO)

Answer 69

Total cost of ownership- is the purchase price plus all other costs associated with acquiring the item. This includes transportation, administrative costs, follow-up, expediting, storage, inspection and testing, warranty, customer service, and handling returns.

Question 70

Functional products

Answer 70

are those that satisfy basic functions or needs. They include items such as food purchased in grocery stores, gas and oil for transportation and heating, and household items from batteries to light bulbs
typically have stable and predictable demand and long
life cycles. It is easier to source for functional products due to this stability
supply chains are easier to manage; however, they typically have low profit margins.

Question 71

innovative products

Answer 71

are purchased for other reasons, such as innovation or status, and include high fashion items or technology products, such as those seen in the computer industry.
have highly unpredictable demand and short life cycles. New and innovative products are introduced quickly and their demand is difficult to forecast. Although they have higher profit margins their supply chains are much more difficult to manage.

Question 72

stable or an evolving supply process

Answer 72

is where sources of supply are well established, manufacturing processes used are mature, and the underlying technology is stable. Consider sourcing apples, lumber, or undershirts

Question 73

inventory turnover

Answer 73

higher number is usually better, the days it takes to sell the inventory on hand,
sales/inventory
or
COGS/ avg. inventory

Question 74

MRP

Answer 74

material requirements planning

Question 75

weeks of supply,

Answer 75

provides the length of time demand can be met with on-hand inventory
avg. on hand inventory/ avg. weekly usage

Question 76

Logistics

Answer 76

is the business function responsible for transporting and delivering products to the right place at the right time throughout the supply chain

Question 77

physical distribution

Answer 77

the former name of logistics, was primarily focused on shipping goods on the outbound side of the organization and now includes upstream flows as well

Question 78

business logistics,

Answer 78

which is focused on the movement and storage of goods throughout the entire supply chain.

Question 79

military logistics,

Answer 79

which is focused on supporting military needs

Question 80

event logistics,

Answer 80

which involves organizing and deploying resources in preparation for an event

Question 81

ASRS

Answer 81

automated storage and retrieval systems-

Question 82

economies of distance

Answer 82

the longer the distance moved at one time the lower the per unit cost

Question 83

Cross docking

Answer 83

Cross-docking is an approach used to reconfigure bundles of product where, rather than making larger shipments, larger shipments are broken down into small shipments for local delivery in an area.
often done in a highly coordinated manner so that the products are never stored in inventory
timing is very important, JIT

Question 84

“break-bulk”

Answer 84

operation where a large shipment is received and then needs to be
broken into smaller quantities for deliveries at multiple locations. The function of the warehouse in this case is to split the single order into multiple orders and arrange for deliveries.

Question 85

Steps in Factor Rating:

Answer 85

Step 1: Identify key decision factors (e.g., proximity to customers, transporta­ tion, infrastructure, taxes)
Step 2: Assign weights to each factor based on its importance; factor weights must add to 100.
Step 3: Establish a scale for evaluating each location relative to each factor. The most common is scale is a five-point scale, with 1 being poor and 5 excellent.
Step 4: Evaluate each location based on the factors selected, using the scale set up in Step 3.
Step 5: Compute a score for each location by multiplying the weight of the factor by the score for that factor and summing the results of each alternative.
Step 6: Select location with the highest score.

Question 86

Material handling

Answer 86

is concerned with the physical handling of the product. This includes loading and unloading of goods from vehicles, placement and order picking of goods in the warehouse, and movement throughout facility, such as
warehouse staging and dock areas.