Supply Chain Exam 2 Flashcards
What are payment terms?
The period where the customers must pay you for the product that you have supplied them.
What is the ideal payment term for better cash flow?
A short payment term.
What is promotional pressure?
What kind of special offers that the customer can offer to their consumers.
What happens to consumer demand when there is a discount?
Consumer demand will increase since it will be cheaper for them.
What is a short promotional horizon?
1 week.
What are the pros of high promotional pressure?
- Higher demand
- Higher revenue
What are the cons of high promotional pressure?
- Lower contract index
What are the pros of low/no promotional pressure?
- Higher contract index
What are the cons of low/no promotional pressure?
- Lowering demand
What are the pros of a short promotional horizon?
- Higher contract index
What are the cons of a short promotional horizon?
- Less time to plan for an increase in demand
What are the pros of a long promotional horizon?
- More time to plan for an increase in demand
What are the cons of a long promotional horizon?
- Lower contract index
What is category management?
Allows you to eliminate the selling of a product to any or all customers.
What is vendor managed inventory?
Managing the inventory on the customer’s behalf.
What are reasons to switch suppliers?
- Poor delivery reliability
- Poor quality
- High contract index
- Long lead times
What does good component quality ensure?
Better adherence to production plans, lower rejection rates, and less safety stock required.
What is dual sourcing?
Where a supplier would supply more than one component type.
What is the cost of supplier development?
60,000 pounds per year.
What does a shorter frozen period provide?
Flexibility and responsiveness.
What are the risks of a longer frozen period?
High risks of stock out and need for safety stock.
What is raw material inspection?
Looking at the raw materials coming in and delivered to catch any poor quality items.
What is breakdown training?
A training course that will reduce the breakdowns.
What is preventative maintenance?
Weekly downtime can be limited if you undertake preventive maintenance.
