chap 4: business strategies Flashcards
is a general term that refers to a sequence of Interlinked undertakings that an organization operating in a specific industry engages in.
Value chain
It looks at every phase of the business from the time of procurement of raw materials to the time its products reach its eventual end users or consumers.
value chain analysis
is a broad continuum of specific activities employed by a company
supply chain management
which includes the sourcing, ordering, and inventory storing of raw materials. parts, and services
Purchasing or supply management
also known as manufacturing and assembly
Production and operations,
which is the efficient warehousing. inventory tracking order entry. management, distribution and delivery to customers
logistics
which include promoting and selling to customers.
Marketing and sales
term used for purchasing formerly termed as procurement
supply management
is to obtain the tight materials by meeting quality requirements in the right quantity, for delivery at the right time and the right place, from the right source, with the right service, and at the right price.
The goal of supply management
- Specify the need clearly by writing down the details.
- Identify and analyze possible sources of supply.
- Ask potential suppliers for their respective quotations, proposals, and bids.
- Compate and evaluate submitted documents, then select the suppliers. Both buyers and suppliers agree and determine the terms of the contract. Correspondingly, the negotiated order placements follow.
• Steps in sourcing and ordering:
The role of inventory is to buffer uncertainty. It includes all purchased materials and goods, partially completed materials and component parts, and finished goods.
inventory management
is ordering the right quantity of SKUs at minimum inventory costs.
Inventory management
is the sum total of ordering costs and carrying costs.
Inventory cost
are variable costs associated with placing an order with the supplier like managerial and clerical costs in preparing the purchase.
Ordering costs (set-up costs)
are costs incurred for holding inventory in storage like handling charges, warehousing expenses, insurance, pilferage, shrinkage, taxes, and costs of capital.
Carrying costs (holding costs)
The inventory model answers two questions:
“How much to order?” and “When to order?”
The question, how much to order, is answered by determining the
Economic Order Quantity (EOQ).
seeks to determine an optimal order quantity where the sum of the annual order costs and annual carrying costs is minimized.
The EOQ
The question, when to order. is answered by computing the
Reorder Point (RP)
are processes that transform operational input into output to satisfy consumer needs and requirements.
Production and operations
This transformational process consists of
manufacturing and assembly
is the process of producing goods using people or machine resources. It commonly refers to industrial production where raw materials are converted into finished goods.
Manufacturing
is the process of putting together raw materials into a desired output. Quality raw materials and parts, efficient production layouts and processes, and employees with skills and motivation are essential to effective transformational process.
Assembly
is the function of physically packing finished goods or merchandises in a building, room. or any space for temporary storage. While these items are stocked in storerooms, they are timetabled for release to customers or buyers.
Warehousing
