Chapter 10 Flashcards
Information distortion is exaggerated by the fact that
supply chains today produce a large amount of product variety.
The situation in which fluctuations in orders increase as they move up the supply chain from retailers to wholesalers to manufacturers to suppliers is known as
the bullwhip effect.
The bullwhip effect causes
different stages of the supply chain to have a very different estimate of what demand looks like.
The lack of coordination within a supply chain will result in a decrease in
level of product availability
and
replenishment lead time.
Long term boom and bust cycles that mimic the bullwhip effect include
memory chips for personal computers.
The bullwhip effect decreases
product availability.
and
profitability.
The bullwhip effect
hurts the relationships between different stages of the supply chain.
The bullwhip effect moves a supply chain
away from the efficient frontier by increasing cost and decreasing responsiveness.
Situations where incentives offered to different stages or participants in a supply chain lead to actions that increase variability and reduce total supply chain profits are referred to as
incentive obstacles.
Incentives that focus only on the local impact of an action result in decisions that
do not maximize total supply chain profits.
The lack of supply chain coordination on various measures of performance has costs associated with it. Which of the following is one of these costs?
Manufacturing
The lack of supply chain coordination on various measures of performance has costs associated with it. Which of the following is one of these costs?
Quality
The impact of the lack of coordination on supply chain processes decreases for the following measure:
level of product availability.
The sales typically measured by a manufacturer are
the quantity sold to distributors or retailers (sell-in).
Situations where demand information is distorted as it moves between different stages of the supply chain, leading to increased variability in orders within the supply chain are referred to as
information processing obstacles.
The fact that each stage in a supply chain forecasts demand based on the stream of orders received from the downstream stage results in
a magnification of fluctuations in demand as we move up the supply chain from the retailer to the manufacturer.
The lack of information sharing between the retailer and manufacturer
leads to a large fluctuation in manufacturer orders.
Actions taken in the course of placing and filling orders that lead to an increase in variability are referred to as
operational obstacles.
When a firm places orders in lot sizes that are much larger than the lot sizes in which demand arises,
variability of orders is magnified up the supply chain.
Situations in which the pricing policies for a product lead to an increase in variability of orders placed are referred to as
pricing obstacles.
Forward buying results in
large orders during the promotion period followed by very small orders after that.
Problems in learning within organizations that contribute to the bullwhip effect are referred to as
behavioral obstacles.
Operational improvements that reduce lot sizes can dampen the bullwhip effect by
decreasing the amount of fluctuation that can accumulate between any pair of stages of a supply chain.
Managers can improve coordination within the supply chain by
aligning goals and incentives.
All transportation decisions should be evaluated based on their effect on
total costs.
Coordination requires every stage of the supply chain to focus on
supply chain surplus.
A manufacturer with significant market power should use
two-part tariffs and volume discounts to achieve coordination.
If demand is uncertain, a manufacturer can incentivize retailers to provide high levels of product availability by using
buyback contracts.
One appropriate measure to reduce replenishment lead times is to
order electronically.
Which method would serve to reduce the information distortion in a supply chain consisting of a fabricator, manufacturer, supplier, and a retailer?
Make the manufacturer responsible for all decisions regarding product inventories at the retailer.
In a continuous replenishment program, the wholesaler or manufacturer replenishes a retailer regularly based on
the POS data of the retailer.
In most instances, CRP systems are driven by
the withdrawals of inventory from retailer warehouses.
The replenishment decision in a VMI system is owned by the
manufacturer.
Quite often in a VMI system, the inventory is
owned by the supplier until it is sold by the retailer.
In a VMI system, the ________ must share demand information with the ________.
retailer, manufacturer
If retailers sell products from competing manufacturers in a VMI system,
inventory at the retailer will be higher than optimal.
What is the responsibility of a designated category leader?
The category leader manages purchasing decisions for all retailers.
A fundamental aspect of successful collaboration is
identification and resolution of exceptions.
Successful collaborative planning, forecasting and replenishment must be built on a foundation of
data synchronization and established standards for exchanging information.
The most common form of collaboration observed in practice is
distribution center replenishment.
Trading partners collaborate on store-level POS forecasts in
store replenishment collaboration.
A high fashion retailer should rely on
interpretation of industry trends and customer tastes to forecast next season’s demand.
The local hominy man is anticipating a bumper crop this year, so he arranges with a chain of grocery stores to stock up on his hominy as part of a Homina Homina Hominy campaign to lure customers in to the stores during September for cans of the divinely salty, yet nutritious vegetable. This approach is an example of
retail event collaboration.
Retailers of all sizes can explore CPFR as a strategic option, but in order to be scalable, ________ is needed.
technology
Mickey the manager reviewed his company’s customers’ orders for the past year and compared the variability of those orders with the variability of the orders he placed with his suppliers. This comparison allowed him to estimate his own company’s contribution to
the bullwhip effect.
One of the best ways to solve coordination problems is
through teams comprised of different members of the supply chain.
The full benefit of coordination is achieved when
the entire supply chain network is coordinated.
