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SCM > Exam 1 Module 1-4 > Flashcards

Exam 1 Module 1-4 Flashcards

1
Q

How did Walmart become one of the most successful companies in world

A

They built stores near Dostribution centers

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2
Q

What is logistic network design strategy

A

Where do you put stores and DC

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3
Q 
What do DC do regarding 
Labor cost
Transport cost
Inventory cost 
Customer service
A

Labor, transport, inventory cost are reduced

Customer service is improved

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4
Q

What is an economies of scope

A

It is spreading cost out over more stores ; this is done by build ng more DC to increase networks

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5
Q

What was Walmart’s early networking strat?

A

Locate stores next to DC

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6
Q

What is the theme throughout SCM

A

How w logistics and supply chain management can be used to create a competitive advantage

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7
Q

What is logistics

A

The management of the flow of inventory and storage inventory;

So that cost are minimized and customer service is maximized

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8
Q

What is supply chain management

A

Integrating business processes between different functions

Customer and suppliers

Suppliers to suppliers

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9
Q

What is economies of scale

A

By increasing volume you can decrease the total cost of transporting materials and good

High volume = Low cost

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10
Q

What are the four major component of processes?

A

Inputs
Outputs
Controls
Mechanics

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11
Q

What is process improvement and what is it concerned with

A

You get accurate inputs
Better forecasting

Concerned wit increasing speed of the process while reducing the cost of it
Or
Increasing the reliability of the process without changing the order of activities

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12
Q

What is process redesign

A

Vendor managed inventory - they order for you

No need for forecasting methods

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13
Q

Why do companies outsource?

A

Companies decide that another company can provide more value by providing their services

Ex. 3rd part logistics providers 3PIs

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14
Q

What is a 3PI

A

A firm that supplies logistics and possibly other scm services

Reduce risk

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15
Q

What are the 4 Rs of supply chain competition

A

Responsiveness
Reliability
Resilience
Relationships

Cost is an extra one

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16
Q

What is responsiveness

A

The ability to change logistics and supply chain management activities quickly

Can be costly

Ex. Changing from serving 10 store out of one dc to serving dc

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17
Q

What is reliability

A

Being able to execute consistently on an activity or a process and maintain a target level of performance

Ex. Deliver faster than expected

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18
Q

How do you measure reliability

A

Standard deviation - measure of uncertainty

Coefficient variation = SD / Mean

Has a large impact on safety stock

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19
Q

What is safety stock

A

Expected number of units that are in hand just befor the replenishment is received and available for sale

Don’t expect to sell; extra inventory we have in hand just in case of running out

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20
Q

What is resilience

A

Being able to deal with unexpected disruptions in the supply chain

Can you recover form problems quickly

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21
Q

What is relationships

A

Being able to manage connections, interaction, communication, and maintain trust between customer and suppliers in the supply chain

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22
Q

Why is cost a big factor in logistics

A

Logistics is about cost minimization

If you don’t do it then your competitors will

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23
Q

What is inventory turns

A

It measures inventory performance

Unit sales or cogs / inventory
Shows how many turns a year

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24
Q

What are inventory holding costs?

A 
Cost of holding inventory 
Space 
Risk
Service cost 
Capital
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25
What does obsolescence mean regarding service cost
More inventory more likely to be obsolete Ex. You have a lot of iPhone in stock but soon the new one will come out making the others obsolete
26
What does capital (the largest cost) mean regarding to inventory holding cost
Cost of tying up capital in inventory Hurdle rate Minimum rate of return on investment
27
What are the four pillars of supply chain excellence
Human Resources Organizational design Information tech Organizational measurement
28
What is efficiency in scm
To reduce cost
29
What is effectiveness in scm
Providing value to customers
30
What happened in 1960 in scm
Activities were fragmented and everything is very inefficient
31
1980s considering scm
Activities began to be integrated Truck delivering item would leave empty = most expensive thing is to transport empty air Made more efficient by dilevery to train and then outing things back into truck
32
1990 in scm
Everything is fully integrated throughout activity
33
Supply chain defined
Set of three or more organizations directly linked by one or more of the upstream and downstream FLOWS of product, services, finances, and information from a source to a customer
34
What is the 80-20 rule
80 percent sales come from 20 percent suppliers Therefore you want to know your suppliers and prioritize the relationship
35
How to assess risks
Usually cost but generally you use past experience and learn from them
36
What is risk prevention
To prevent risk
37
Risk management
Management of the risk
38
Total cost ownership what is it
Company has to think about the cost when doing the things
39
Total cost ownership cost
``` Acquisition Transportation Management/Administrative Maintenance Operating Inventory Technical support Training Disposal ```
40
What 3 things make up customer service
Pre transaction Transaction Post transaction
41
What happens during pre transactions
Concerns how the policies, organizational structure l, and culture if a company affects the customer How easy it is for a shopper to investigate my product
42
What does transaction mean
Service includes common metric of customer service such as | %of items in stock, %of time an item is in stock, fill rate, lead time
43
What happens in post transaction
Includes such factors as availability of spare parts, technical support, feedback and complaint process Having to purchase a part to fix item you purchased
44
A leveling of production cost between China Mexico and the US means that us firms will increasingly focus on ________ to be competitive
Agility flexibility responsiveness
45
Considering measure in stock inventory: what does Item fill rate mean
Tells you the % of demand fulfilled from in hand inventory of items out of stock can tell you the percentage of time in stock but cannot tell you the demand you are loosing
46
How do you calculate perpetual inventory
Amount received - amount sold
47
What does perpetual inventory do
Measures % of time in stock and % of items in stock
48
What is phantom inventory
The system thinks there is more inventory than there really is It can be a problem bc it won’t place order bc it thinks you have the inventory when you don’t
49
Assume an item is in stock for 2 weeks but out of stock on the 3 week. We would use this info to calculate
Percentage of time in stock
50
Perpetual inventory is one of the major ways that __________ and percentage of items in stock are measured
Percentage of time in stock
51
What can happen in stock outs regarding customers
``` Switch behavior Try new item Delay purchase Impulse buy May end up losing customer ```
52
Retail shelf is very expensive bc
Opportunity cost of alt product
53
Normal distribution
Bell curve You only need to parameter -mean : average - standard deviation : estimates by variance
54
+ or - 1 standard deviation from the mean is what percent
68
55
+ or - 2 standard deviation from the mean is what percentage
95
56
+ or - 3 standard deviation from the mean is what percentage
99
57
If you want to compute an optimal service level for stocking inventory the correct formula is what
Cost of not having enough per unit / sum of the cost and having too much and the cost of not having enough
58
If store manager says “ I shoot for a 95 percent service level” what do they mean
When a customer wants a product she want it to be these st least 95 percent of the time
59
What is logistics the seven r definition
``` Getting the right product right customer right quantity right condition at right place at the right time at the right cost ```
60
What is the difference between SCM and Logistics
Scm is the flow of things from the suppliers to suppliers through many entity to end user Logistics Part of the scm
61
What is more broader scm or logistics
Scm
62
Why is logistics important to the economy
It is a widely accepted barometer used to gauge the rate of growth in economy Total logistics cost increase a little from 2016 to 2017 7.6 to 7.7 Munched improves from 1979 (19) Deregulation of transport was the cost
63
Where is the money from logistics going to
Transportation essentially has 2/3 of money spent Specifically motor carriers are the most spent
64
Why is water shipping cheaper
Bc more volume at once = actual cost Lower
65
What are the 5 types of economic utility
``` Form Possession Quantity Place Time ```
66
What are the logistics interfaces
Manufacturing Accounting Finance Marketing and sale
67
What are the 4ps (marketing mix)
Price Product Promotion Place
68
Relationship be required inventory level and order cycle length relationship
OC goes up inventory goes up Proportional Ex. Increasing order cycles from 1 to 5 days will cause inventory to go up
69
Relationship of the cost of lost sales to inventory cost
Want to be equilibrium
70
Relationship of the cost of lost sale to transportation cost
Transportation cost up = cost of lost sales down
71
Relationship with product dollar value to various logistics cost
As dollar value of product up = spend more on packaging And transportation up High value of product goes up = inventory cost up Density larger = cost up
72
Types of logistics
Business Military Event Service

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