Supply Chain Management Flashcards
What is the main advantage of the postponement strategy in supply chain management?
The ability to react to demand fluctuations in individual markets and maintain inventory flexibility.
What is the Bullwhip Effect in supply chains?
Demand fluctuations at the retail level cause larger fluctuations upstream in the supply chain.
What are the three types of costs minimized in supply chain optimization?
Warehousing costs, shortage costs, and order costs.
Define inbound and outbound logistics in supply chain terms.
Inbound: logistics with suppliers. Outbound: logistics with customers.
What is vendor-managed inventory (VMI)?
A strategy where the supplier manages inventory and forecasts for the retailer.
How does postponement reduce inventory costs?
By aggregating demand and delaying product configuration until closer to the market, reducing deviations.
What is the impact of discounts on supply chain demand?
Discounts can cause demand spikes and increased demand fluctuations.
How can the Bullwhip Effect be mitigated?
Reducing lead times, optimizing internal processes, and collaborative forecasting with supply chain partners.
What is bootstrapping in supply chain management?
A method to estimate metrics like demand variability and confidence intervals with minimal assumptions.
Why use simulations in supply chain optimization?
To test various scenarios and determine the most cost-effective configurations under uncertainty.
