SCM

Question 1

supply chain

Answer 1

supply chain is a system of organisations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer

Question 2

SCM activities are associated with:

Answer 2

the flow and transformation of goods from the raw materials stage to the end user, as well as the associated information and funds flows.

Question 3

The supply chain, which is also referred to as

Answer 3

the logistics network

Question 4

The supply chain consists of:

Answer 4

suppliers, manufacturing centres, warehouses, distribution centres, and retail outlets, as well as raw materials, work-in-process inventory, and finished products that flow between the facilities.

Question 5

A supply chain has three key parts:

Answer 5

Supply
Manufacturing
Distribution

Question 6

used products re-entry

Answer 6

In sophisticated supply chain systems, used products may re-enter the supply chain at any point where residual value is recyclable

Question 7

Supply Chain Management

Answer 7

It is the oversight of materials, information, and finances distributed from supplier to consumer.

The supply chain also includes all the necessary stops between the supplier and the consumer.

Question 8

SCM is also called

Answer 8

The art of management of providing the right product, at the right time, right place and at the right cost to the customer.

2PC and T

Question 9

Supply chain surplus

Answer 9

Supply chain surplus can be defined as the total profit shared by all the stages and intermediaries of a supply chain.

The greater the supply chain surplus the more successful is supply chain.

Supply chain success is measured by its overall surplus not by the profit at each stage.

Question 10

Back Ordering

Answer 10

A practice of placing a purchase order to a supplier for a product that’s temporarily out of stock in your warehouse and has already been ordered by your customers.

Back ordering is usually adopted during times of high demand and for slow-moving products that suddenly see a spike in demand

Question 11

Bill of Lading

Answer 11

A shipping document showing the type of goods, their quantity, and the destination address

issued by sea carrier of goods on receipt of cargo

Question 12

Blanket Purchase Order (BPO)

Blanket Order / call-off order

Answer 12

Blanket Purchase Order (BPO) is the preferred method for placing orders which will require multiple payments over a period of time.

Blanket Order: A method in which the buyer will agree to buy a certain quantity of one or more items over an agreed-upon period of time (which can range from a few days to several months) without specifying their exact shipment dates at the time of purchase.

The vendor can ship the goods in parts and on any convenient dates within this period. This is usually done when the buyer expects an increase in demand for certain products and would like to get a discount for making a larger purchase without locking up all of their capital.

Question 13

Bonded Warehouse

Answer 13

A location managed by the customs office or a government body, where you may store taxable goods and imports subject to duties for business purposes.

Question 14

Carnet

Answer 14

A legal document that will allow you to temporarily export items to another country and then reimport them back into the US within a year without paying import duties.

Question 15

Consignment

Answer 15

Most often it means the act of placing your goods in the care of a third-party warehouse owner (known as the consignee) who maintains them for a fee

Question 16

Cross docking

Answer 16

A method by which a business owner can ship goods that they have received from vendors to their customers with little to no storage time.

This method is typically used for perishable goods with a short shelf life and goods that are affected by temperature.

Question 17

Drop shipment

Answer 17

A situation where one of your vendors ships goods directly to your customers, on your behalf.

This is useful for selling slow-moving items with a long product life, without bearing the burden of storage and maintenance yourself.

Question 18

EDI

Answer 18

Electronic Data Interface/Interchange is a method of transferring transactions from one computer system to another, by converting the data into a standard that can be easily read by all systems.

used where the exchange of information between two or more parties happens on paper.

Question 19

Groupage

Answer 19

This is a method of grouping multiple shipments from different sellers (each with its own bill of lading) inside a single container.

the freight cost is split between these sellers.

Question 20

HS

Answer 20

Harmonized Set of Codes is a system of internationally accepted codes that help businesses and government bodies identify items while buying or selling them globally.

Question 21

Hitchment

Answer 21

refers to the process of combining two or more shipments into a single shipment that is recognized by a single bill of lading, even if they did not originate from the same point.

Question 22

IMDG codes

Answer 22

The International Maritime Dangerous Goods code was adopted under the 1960 SOLAS (Safety Of Life At Sea) convention

provides guidelines for safe handling of flammable, explosive, corrosive or radioactive materials and helps prevent incidents

Question 23

Landed Cost

Answer 23

The total cost of ownership of an item. This includes the cost price, shipping charges, custom duties, taxes and any other charges that were borne by the buyer.

Question 24

Waybill

Answer 24

A document prepared by the seller, on behalf of the carrier, that specifies the shipment’s point of origin, the details of the transacting parties (the buyer and seller), the route, and the destination address.

Question 25

Anticipation Stock

Answer 25

Inventory held in order to be able to satisfy a demand with seasonal fluctuations with a production level that does not fluctuate at all or that varies to a lesser extent than the demand.

Question 26

Backflushing

Answer 26

The deduction from inventory, after manufacture, of the component parts used in a parent by exploding the bill of materials by the production total of parents produced.

Question 27

Backhaul

Vs

Backflush

Answer 27

Generally a back haul is any return load taken after the delivery has been made.

When a truck transports a load from A to B, the trucking company will seek a commercial load for the return journey from B to A. This is known as the backhaul and underpins competitive pricing. The term is also used in IT to describe the transmission of data from point to point, for example from undersea cables to exchanges.

Question 28

Beyond Economic Repair (BER)

Answer 28

Where the projected cost of repair, normally for a repairable or rotable item, exceeds a management set percentage of the replacement value of the item concerned.

Question 29

De-Coupling Stock

Answer 29

Inventory accumulated between dependent activities in the goods flow to reduce the need for completely synchronized operations.

Inventory accumulated between two inter-dependent operations as a buffer against breakdowns or unevenness in machine production rates, thus reducing the need for output synchronization

Question 30

DRP

Distribution Requirement Planning

Answer 30

Distribution requirements planning (DRP) is a systematic process to make the delivery of goods more efficient by determining which goods, in what quantities, and at what location are required to meet anticipated demand. The goal is to minimize shortages and reduce the costs of ordering, transporting, and holding goods.

A time-phased finished good inventory replenishment plan in a distribution network. The function of determining the need to replenish inventory at branch warehouses over a forward time period.

A time-phased order point approach used where planned orders at branch warehouse level are exploded via MRP logic to become gross requirements on the supplying source enabling the translation of inventory plans into material flows.

Question 31

DRPII

Distribution Resource Planning

Answer 31

The extension of MRP into the planning of the key resources contained in a distribution system.

Question 32

Economic Order Interval (EOI)

Answer 32

In fixed order interval systems, the interval between orders that will minimise the total inventory cost, under a given set of circumstances, obtained by trade off analysis between the cost of placing an order and the cost of holding stock

Question 33

Enterprise Requirement Planning (ERP)

Answer 33

A further extension of MRP II whereby a single system embraces and integrates all aspects of business operations into a single database application.

Question 34

MRP I

Answer 34

Material Requirements Planning

A system to support manufacturing and fabrication organisations by the timely release of production and purchase orders using the production plan for finished goods to determine the materials required to make the product.

The 3 key inputs are:
Master production schedule,
Inventory status records
and Product structure records.

Question 35

MRP II

Answer 35

Manufacturing Resource Planning

A method for the effective planning of all the resources of a manufacturing company.
Ideally it addresses operational planning in units, financial planning in money, and has a simulation capability to answer what if questions.

Manufacturing resource planning is a direct out-growth and extension of material requirements planning (MRP-1).

Question 36

Perpetual Inventory System

Answer 36

An inventory control system where a running record is kept of the amount of stock held for each item.

Question 37

Periodic Inventory

Answer 37

An inventory control system classification for independent demand items where the number of items held is reviewed at a fixed time interval and the size of any resultant order depends on the stock on hand at the time of the review.

Question 38

Pareto Principle

Answer 38

heuristic rule which states that where there is a large number of contributors to a result, the majority of the result is due to a minority of the contributors.
Sometimes known as the 80/20 rule

Question 39

Pipeline Stocks

Answer 39

The products which are currently being moved from one location to another.

Question 40

Probabilistic (or Stochastic) Inventory Control

Answer 40

Models An inventory control system where all the variables and parameters used are treated as random variables.

It is assumed that the average demand for items is approximately constant over time and that it is possible to state the probability distribution of the demand, particularly during the lead time for replenishment.

Question 41

Production Lead Time

Answer 41

The time taken to manufacture or produce an item after an external order has been received until the item is available for packing.

Question 42

Pull System

Answer 42

A system where orders for an end item are pulled through the facility to satisfy demand for the end item. An examples of pull system is the JIT Kanban process

Question 43

Purchasing Lead Time (PLT)

Answer 43

The length of time between the decision to purchase an item and its actual addition to stock.

Question 44

Push System

Answer 44

A system where orders are issued for completion by specified due dates, based on estimated lead-times, or where the flow of material in a product structure is controlled and determined by the lower levels.

Question 45

Quarantine Stock

Answer 45

Quarantine stock refers to materials that belong to the user but is not yet ready for use.

An inventory of specific items that are kept for an emergency situation or items that are set aside for a specific use.

On-hand stock which has been segregated and is not available to meet customer requirements.

Question 46

Random Sample Cycle Counting

Answer 46

A method in which the particular parts to be counted are selected from the population of part numbers in a manner that has no inherent bias.

In this selection process, each part number has an equal chance of being selected.

Question 47

Re-Order Level (ROL) (or Re-Order Point – ROP)

Answer 47

The calculated level of stock within an inventory control system to which the quantity of a specific item is allowed to fall before replenishment order action is generated.

Question 48

Re-Order Quantity, Replenishment Order Quantity

Answer 48

The calculated order quantity necessary to replenish stocks at a given point in time

Quantity based systems are checked continually to determine if an order should be placed;
time based systems only have a count of stock at predetermined intervals and orders placed as required;
a distribution system plans orders to meet distribution needs; and
production based systems only order stock to meet

Question 49

Reverse Logistics

Answer 49

The requirement to plan the flow of surplus or unwanted material or equipment back through the supply chain after meeting customer demand.

Question 50

Rounding Order Quantity

Answer 50

That element of an order that has been added to the basic order quantity to meet a constraint imposed by the manufacturer or to optimise overall supply chain costs.

Question 51

Routing.

Answer 51

A process of optimising transport delivery routes to make better use of time and capacity to reduce overall costs. This type of fleet optimisation is generally supported with specialist software tools. Early tools used what was called the ‘travelling salesman’ algorithm.