Exam 1

Question 1

Supply Chain

Answer 1

• organizations, people, activities, info and resources involved in moving a product or service from the origins of supply all the way to the point of final consumption

Question 2

Supply Chain Management

Answer 2

systematic coordination of traditional business functions within a certain organization and across organizations in the supply chain for the purpose of improving the long-term performance of individual enterprises and the system as a whole

Question 3

4 types of economic utility

Answer 3

1. what customers’ needs are and what they are willing to exchange to fill the need
2. form
3. time
4. place

Question 4

Form

Answer 4

-design of the product itself
-obtained by transforming a customers needs into products or services

Question 5

Place

Answer 5

-obtained through the process of making a good or service more easily obtainable to potential customers

Question 6

Time

Answer 6

-created by providing easy availability of a good or service at the time when customers need or want it

Question 7

Traditional Framework of integrated supply chain operations

Answer 7

-shows how integration should occur between the demand creation side of a business and the supply chain demand fulfillment side
-lots of energy and initiatives to bring both sides together
-Sale and operation planning (S&OP)

Question 8

Demand Side of integrated internal operations

Answer 8

-activities involved with understand customers, who there are, and what they are willing to exchange
-market and sales
-own actual sales and forecast of what _____ will look like in the future

Question 9

Supply side of integrated internal operations

Answer 9

-dedicated to fulfilling demand once it’s created
-parts that have to go out and procure raw materials, convert them into a product and get it to the customer

Question 10

Supply Chain Operations Reference Model (SCOR)

Answer 10

-Plan, source, make, deliver, and return
-clear framework for understanding the steps that SC needed to take in order to fulfill demand for downstream customers in a minimus total cost framework

Question 11

Function of the SCOR model

Answer 11

-horizontal handoffs between functions and organizations, focused on the different processes and activities within each functional area
-could use to see what company was doing good on and what they needed to improve

Question 12

Steps of SCOR Model

Answer 12

1. planning across purchasing, manufacturing and logistics to determine the types and volume of inputs required over the next planning period, why level of manufacturing to meet planned output, capacity in logistics to deliver on expected demand
2. detailed different processes and activities within source, make, deliver required to deliver on each area

Question 13

Customer Segmentation

Answer 13

• SC managers must look for differences in their customer base across form, time and place value requirements
  -some don’t want to pay for high levels of all types of value
  -some find great value in top levels of service and will pay for it

Question 14

How customers are segmented

Answer 14

-identify which customers fit into which category, then design the supply chain to provide that value, balancing th required value with the cost of providing it

Question 15

cost/benefit of supply chain customer value

Answer 15

understand the cost/benefit tradeoffs of different levels of value provision for meeting the desired value at appropriate price for different customer segments

Question 16

Total cost of ownership

Answer 16

-method for quantifying the costs for every activity along the supply stream, including acquisition, transportation, storage and selling of goods
-cost to buy something plus the cost to operate it over its useful life

Question 17

Asset turnover

Answer 17

• tells us how productive the firm’s assets are at generating revenue

Question 18

Return on assets (ROA)

Answer 18

-financial metric that captures the financial outcome of revenue, costs, and asset utilization
-measures ability to turn assets into profit

Question 19

Profit margin

Answer 19

-tells us how well firm controls cost

Question 20

ROA formula

Answer 20

net income/total assets

Question 21

Asset turnover formula

Answer 21

net sales / average total assets

Question 22

Earnings before interest, taxes, depreciation, and amortization (EBITDA) formula

Answer 22

earnings before taxes and interest + depreciation expense + amortization expense

Question 23

The Perfect Order

Answer 23

-notion that supply chain has an impact on revenue
-combo of all the different elements that an order must possess in order to be considered perfect
-order is not perfect unless every element of the order score card is performed correctly

Question 24

perfect order calculation

Answer 24

-mutual agreement between customer and provider as to what items constitute a perfect order
-70 perfect out of 100 = 70%

Question 25

Operational elements of a perfect order

Answer 25

• items available, order picked up correctly, timely arrival, product as expected, shipment not damaged

Question 26

Informational elements of a perfect order

Answer 26

correct order entry, ship date allows delivery, paperwork complete, correct invoice, accurate overcharges, no customer deductions, no errors in payment processing

Question 27

The great divide

Answer 27

-lack of communication between creation and management of demand (marketing and sales) and fulfillment of demand (supply chain)
-focus more on meeting monthly, quarterly, and yearly plan rather than customer wants

Question 28

Upstream activities of great divide

Answer 28

• traditionally conducted far in advance of actual demand and in large sizes

Question 29

downstream activities of great divide

Answer 29

• demand is fulfilled from existing inventory, which is used as a buffer

Question 30

Traditional cost accounting

Answer 30

accounting method used to determine the cost of making products to make profit
-adds overhead rate to the direct costs of manufacturing a product

Question 31

Activity based costing

Answer 31

-identifies all of the specific overhead operations related to the manufacture of each product
-solves problems of traditional costing