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supply chain management > Chap 1 > Flashcards

Chap 1 Flashcards

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
Q

What is the formula for Forecast Bias?

A

Bias = ∑(A - F)

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26
Q

What is the purpose of Sales & Operations Planning (S&OP)?

A

Aligns supply chain operations with business goals.

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27
Q

What are the key inputs for Master Production Scheduling (MPS)?

A
  • Demand forecasts
  • Production capacity
  • Inventory levels
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28
Q

What is the definition of Independent Demand?

A

Demand not dependent on any other product.

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29
Q

What are the two main types of Supply Chain Models?

A
  • Demand-Driven Supply Chain
  • Supply-Driven Supply Chain
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30
Q

What is the goal of Aggregate Production Planning (APP)?

A

Translates business plans and forecasts into a production plan.

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31
Q

What is the formula for Available-to-Promise (ATP)?

A

ATP = On-hand Inventory + Planned Production - Customer Orders

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32
Q

What are the challenges in Reverse Logistics?

A
  • Customer dissatisfaction
  • Cost of processing returns
  • Managing defective inventory
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33
Q

What is the role of technology in the future of Supply Chain Management?

A

Focus on digitalization, automation, and sustainability.

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34
Q

What does Master Production Scheduling (MPS) define?

A

What, how much, and when to produce.

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35
Q

What are the key inputs for MPS?

A
  • Demand forecasts
  • Production capacity
  • Inventory levels
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36
Q

What is the Level Strategy in MPS?

A

Constant production, fluctuating inventory.

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37
Q

What is the Chase Strategy in MPS?

A

Matches production with demand.

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38
Q

What is the Hybrid Strategy in MPS?

A

Mix of both Level and Chase Strategies, using overtime and inventory holding.

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39
Q

What does Available-to-Promise (ATP) ensure?

A

Inventory is allocated to customer orders.

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40
Q

What is the formula for ATP?

A

ATP = On-hand Inventory + Planned Production - Customer Orders

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41
Q

What is the Firm Time Period in Time Fencing?

A

No changes allowed without approval.

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42
Q

What is the Planned Time Period in Time Fencing?

A

Adjustments allowed.

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43
Q

What is the purpose of Material Requirements Planning (MRP)?

A

Ensures the right materials are available at the right time.

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44
Q

What are the key inputs for MRP?

A
  • MPS (Master Production Schedule)
  • Bill of Materials (BOM)
  • Inventory Status
  • Planned Receipts
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45
Q

What is Independent Demand?

A

Demand not linked to another product.

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46
Q

What is Dependent Demand?

A

Derived from independent demand.

47
Q

What is a Single-Level BOM?

A

Direct components required for a product.

48
Q

What is a Multi-Level BOM?

A

Includes subassemblies and raw materials.

49
Q

What is the purpose of Capacity Planning?

A

Determines how much output can be produced.

50
Q

What are the types of Capacity Planning?

A
  • Resource Requirements Planning (RRP)
  • Rough-Cut Capacity Planning (RCCP)
  • Capacity Requirements Planning (CRP)
51
Q

What is the purpose of Distribution Requirements Planning (DRP)?

A

Manages the movement of finished goods across distribution centers.

52
Q

What are the key components of DRP?

A
  • Demand forecasts by location
  • Inventory levels by location
  • Replenishment schedules
  • Lead times
53
Q

What is the purpose of Advanced Planning & Scheduling (APS)?

A

Uses algorithms to optimize scheduling and resource allocation.

54
Q

What are the key features of APS?

A
  • Real-time planning
  • Optimization of production & inventory
  • Simulation of multiple scenarios
55
Q

What is the purpose of Enterprise Resource Planning (ERP)?

A

Integrates all business functions (finance, HR, supply chain, CRM).

56
Q

What are major ERP providers?

A
  • SAP
  • Oracle
  • Microsoft
57
Q

What are common ERP implementation issues?

A
  • Lack of executive support
  • Poor training
  • High complexity
58
Q

What is the formula for Available-to-Promise (ATP)?

A

ATP=(On-hand Inventory + Planned Production) - Customer Orders

59
Q

What is the formula for Net Requirement in MRP?

A

Net Requirement = Gross Requirement - (On-hand Inventory + Scheduled Receipts)

60
Q

What is the formula for Mean Absolute Deviation (MAD)?

A

MAD = ∑|A - F| / n

61
Q

What is the formula for Mean Absolute Percentage Error (MAPE)?

A

MAPE = ∑(|A - F| / A) n × 100%

62
Q

What is the formula for Mean Squared Error (MSE)?

A

MSE = ∑(A - F)² / n

63
Q

What is the purpose of inventory management?

A

Balances demand, supply, and cost efficiency.

64
Q

What are the categories of inventory?

A
  • Raw Materials
  • Work-in-Process (WIP)
  • Finished Goods
  • Maintenance, Repair, & Operating (MRO) Supplies
65
Q

What is Cycle Stock?

A

Meets immediate demand; replenished cyclically.

66
Q

What is Safety Stock?

A

Buffer stock to cover demand/supply variability.

67
Q

What is Strategic Stock?

A

Extra inventory held for specific events.

68
Q

What is Pipeline Inventory?

A

Goods in transit or held by supply chain partners.

69
Q

What is Obsolete Inventory?

A

Expired, damaged, or unsellable stock.

70
Q

What are the costs related to inventory?

A
  • Direct Costs
  • Indirect Costs
  • Variable Costs
  • Fixed Costs
  • Carrying Costs
  • Order Costs
71
Q

What are the two inventory review models?

A
  • Periodic Review System
  • Continuous Review System
72
Q

What is the formula for Reorder Point (ROP)?

A

ROP = Demand during Lead Time (d × L)

73
Q

What is Economic Order Quantity (EOQ)?

A

Optimizes order size to balance ordering costs and carrying costs.

74
Q

What is the formula for EOQ?

A

EOQ = √(2DS / H)

75
Q

What is the ABC System?

A

Classifies inventory based on importance.

76
Q

What is the purpose of barcodes in inventory control?

A

Tracks real-time inventory movement.

77
Q

What is the formula for Inventory Turnover Ratio?

A

COGS / Average Inventory

78
Q

What is the formula for Weeks of Supply?

A

Average Inventory / Average Weekly Demand

79
Q

What is the formula for Days of Supply?

A

Inventory / Daily Demand

80
Q

What is Total Cost of Ownership (TCO)?

A

Purchase Price + Quality Costs + Service Costs + Delivery Costs

81
Q

What are the advantages of centralized purchasing?

A
  • Lower costs
  • Better volume discounts
82
Q

What are the advantages of decentralized purchasing?

A
  • More flexibility
  • Better local supplier relationships
83
Q

What are challenges in global sourcing?

A
  • Tariffs & non-tariff barriers
  • Longer lead times
  • Exchange rate risks
  • Supplier reliability
84
Q

What is the purpose of government procurement?

A

Must be transparent & accountable.

85
Q

What is the purpose of competitive bidding in government procurement?

A

Lowest responsive & responsible bidder wins.

86
Q

What is a Bid Bond?

A

Ensures bidder will accept the contract.

87
Q

What is a Performance Bond?

A

Ensures contract work is completed on time.

88
Q

What is a Payment Bond?

A

Protects against unpaid subcontractors.

89
Q

What is the formula for Reorder Point (ROP)?

A

ROP = d × L

Where d = Demand per period and L = Lead time in periods.

90
Q

What is benchmarking in the context of purchasing?

A

Comparing purchasing performance with industry leaders.

91
Q

What are key performance indicators (KPIs) for purchasing?

A
  • Cost savings achieved
  • Supplier defect rates
  • On-time delivery performance
  • Purchasing cycle time
92
Q

What are some strategic sourcing initiatives?

A
  • Supplier integration
  • e-Procurement automation
  • Lean purchasing to reduce waste
  • Supplier collaboration on innovation
93
Q

What is the main impact of the purchasing function?

A

It impacts cost, quality, and efficiency.

94
Q

What factors influence the Make vs. Buy decision?

A
  • Strategy
  • Risk
  • Cost
95
Q

What does Total Cost of Ownership (TCO) include?

A

All cost elements beyond price.

96
Q

What are the differences between Centralized and Decentralized Purchasing?

A
  • Centralized: Greater efficiency
  • Decentralized: More flexibility
97
Q

What are the benefits and challenges of global sourcing?

A

Benefits include cost savings; challenges include complexity and risk.

98
Q

What is the purpose of EOQ in inventory management?

A

To optimize inventory ordering.

99
Q

What does strategic sourcing aim to achieve?

A
  • Reduce costs while maintaining/improving quality
  • Improve supplier relationships and supply chain efficiency
  • Optimize global supplier base
100
Q

What are the steps in the strategic sourcing process?

A
  • Identify Spend Areas
  • Form Sourcing Teams
  • Develop Strategy
  • Analyze the Market
  • Select & Negotiate with Suppliers
  • Implement Supplier Relationship Management (SRM)
101
Q

What are the key sourcing strategies?

A
  • Insourcing
  • Outsourcing
  • Single-Sourcing
  • Multi-Sourcing
102
Q

What is Supplier Base Rationalization?

A

Reducing the number of suppliers to improve quality, reduce costs, and strengthen relationships.

103
Q

What criteria are used for supplier evaluation?

A
  • Cost
  • Quality
  • Capacity
  • Service
  • Innovation
104
Q

What is the definition of a Strategic Supplier Alliance?

A

A long-term partnership between a buyer and supplier to pursue common goals.

105
Q

What are the benefits of Strategic Supplier Alliances?

A
  • Higher revenue & profit
  • Competitive advantage
  • Risk mitigation
  • Market expansion
106
Q

What is the process of Spend Analysis?

A
  • Define Scope
  • Identify Data Sources
  • Consolidate & Clean Data
  • Categorize by Commodity/Supplier
  • Analyze for Cost-Saving Opportunities
107
Q

What are the categories of sourcing?

A
  • Non-Critical
  • Bottleneck
  • Leverage
  • Strategic
108
Q

What is a Reverse Auction?

A

Suppliers bid competitively online to offer the lowest price.

109
Q

What is Vendor-Managed Inventory (VMI)?

A

Supplier monitors and manages buyer’s inventory.

110
Q

What is Ethical Sourcing?

A

Ensures responsible business practices in the supply chain.

111
Q

What are Sustainable Sourcing Goals?

A
  • Grow Revenue
  • Reduce Costs
  • Go Green
  • Manage Risk
  • Build Brand Value
112
Q

What is the main difference between Single-Sourcing and Multi-Sourcing?

A
  • Single-Sourcing: Better supplier relationships
  • Multi-Sourcing: Reduces supply disruption risk
113
Q

True or False: Strategic sourcing optimizes supplier selection to reduce costs and improve supply chain performance.

supply chain management (2 decks)

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