Chapter 13 Flashcards
strategic sourcing
development and management of supplier relationships to acquire goods and services in a way that aids in achieving the needs of a business
specificity
refers to how commonly available the material is and whether substitutes can be used
Request for proposal (RFP)
commonly used for purchasing items that are more complex or expensive and where they may be a number of potential vendors
Vendor-managed inventory
customer actually allows the supplier to manage the inventory policy of an item or group of items
Forward buying
term that refers to when a customer, responding to a promotion, buys far in advance of when an item will be used
bullwhip effect
variability in demand is magnified as we move from the customer to the producer in the supply chain
Continuous replenishment
program for automatically supplying groups of items to a customer on a regular basis
Functional products
staples that people buy in a wide range of retail outlets, such as grocery stores and gas stations
Innovative products
products such as fashionable clothes and high-end personal computers that typically have a life cycle of just a few months
Total Cost of Ownership
Estimate of the cost of an item that includes all the costs related to the procurement and use of the item including disposing of the item after its useful life
when are ownership costs incurred
Ownership costs are incurred after the initial purchase and are associated with the ongoing use of the product or material
what does inventory turnover measure
measure of supply chain efficiency
Average inventory value
average total value of all items held in inventory for the firm valued at cost
Weeks-of-supply
preferred measure of supply chain efficiency that is mathematically the inverse of inventory turn times 52
