test 2 Flashcards
procurement
Refers to the raw materials, component parts, and supplies bought from outside organizations to support a company’s operations
Procurement manager roles
- Reduce cycle times
- Play an internal role in product development
- Generating additional revenues through collaboration with the marketing department1
Benefits of pcards
- Reduction in number of invoices
- firm makes one payment each month regardless
- Allows employees to make purchases in minutes rather than days
- allow suppliers to be paid in a more timely fashion
Cons of pcards
- currency differences
- availability of technology
- difference in card acceptance
- cultural issues with program
Supplier selection framework (5)
- Identify need for supply
- Situation analysis
- Identify and evaluate potential suppliers
- Select suppliers
- Evaluate decisions
Evaluating decision step
Process based decision - Is an assessment of the supplier’s service
Performance based performance - Is focused on the supplier’s actual performance on a variety of criteria including cost and quality
Demand management
“the creation across the supply chain and its markets of a coordinated flow of demand.”
Three types of forecasting models?
- Cause and effect
- Time series
- Judgemental
Judgemental demand forecasting?
Used when there is very little historical data. Techniques include surveys and the analog technique
Time series forecasting model
assumption that future demand is entirely dependent on past demand. techniques include simple and weighted moving averages
Cause and effect forecasting
Assumes that one or more factors are related to demand and that the relationship between cause and effect can be used to estimate future demand.
Simple regression
Multiple regression
What is order cycle
refers to the time from when a customer places an order to when goods are received
Four stages of the order cycle
- Order transmittal
- Order processing
- Order picking and assembly
- Order delivery
Order transmittal
refers to the time from when the customer places an order until the seller receives the order
Order processing
refers to the time from when the seller receives an order until an appropriate location (i.e. warehouse) is authorized to fill the order
Order picking and assembly
includes all activities from when a warehouse is authorized to fill the order until goods are loaded aboard an outbound carrier
Can account for 2/3 of facilites costs and time. Easiest opportunity to improve
Order delivery
is the time from when a transportation carrier picks up the shipment until it is received by the customer.
Four dimensions of customer service
Time, dependability, Communication, convenience
Customer profitability analysis
the allocation of revenues and costs to customer segments or individual customers to calculate the profitability of the segments or customers
Recognizes that not all customers are the same and some should be treated differently
3 inventory costs to consider
Carrying costs, ordering costs, Stockout costs
Carrying costs
This is holding inventory. Is expressed in percentage terms
Ordering costs
associated with ordering inventory, such as order costs and setup costs. (inventory availability, credit check, cost of receiving an order)
Stockout costs
The amount of the money that is lost for not having an item that a customer wants at the time
base stock
Inventory stored to handle basic demand
safety or buffer stock
additional stock that is held to guard against uncertainty in demand
Pipeline or in transit stock
Stock that is en route between warehouses
Speculative stock
inventory held for seasonal demand, projected price increases or potential shortages
Psycic stock
inventory held to stimulate demand (retail)
What is a recorder point and the equation
Level of inventory when a replenishment order is place
ROP = daily demand * length of replenishment cycle + safety stock
Economic order quality
Determines the point at which the sum of carrying costs and ordering costs is minimized, or the point at which carrying costs equal ordering costs
Lean manufacturing
Focuses on the elimination of waste
Three factors that can influence facility location?
- Location of supply markets
- Customer service expectations
- Cost considerations
Trade patterns
Commodity flow data studied to determine changes occurring in the movement of raw materials and semi processed goods
What are brownfields?
Previously used site that contain chemicals or other types of industrial waste
What is a free trade zone?
Nondomestic merchandise may be stored, exhibited, processed, or used in manufacturing operations without being subjected to duties and quotas until the goods or their products enter the customs territory of the zone country
Free trade subzones
refer to specific locations at an existing free trade zone
popular with automobile manufactors
Facility relocation vs facility closing
relocation - associated with growth
closing - associated with business contraction
Industry cluster concept
Offers organizations proximity to key suppliers
Catalyst in the development of supplier parks
Key reason for warehousing
Because patterns of consumption and production do not happen at the same time
Accumulating
warehousing function that brings together similar stock from different sources
Allocating
warehousing function that involves breaking bigger quantities into smaller quantities
Assorting
refers to building up a variety of different products for resale to particular customers
Sorting out
separating products into grades and qualities desired by different target markets
Warehouses vs distribution centers
Warehouses are trying to maximize use of available storage space
Distribution centers want to maximize throughput. They want to keep rapid movement of products thru facility
Cross docking facilites
the process of receiving product and shipping it out the same day or overnight without putting it into storage. Different from distrubtion center because products are products are in for less than 24 hours
Benefits: products reach their destination quicker. Reduced inventory carrying costs
3 different warehouses for renting
Public, Contract, and Multiclient warehousing
Public warehouses
allows users to rent on a month to month basis. More locational flexibility.
Drawbacks: lack of control by the user
Private warehousing
Owned by the firm sorting the goods. Generates high fixed costs. Considered by companies with high volume of inventory
Offers control to the owner
Contract warehousing
When the user rents the warehouse for a long period of time. Vendor and client share the same amount of risk. .
not as expensive as private warehousing but more expensive than public.
Multiclient warehousing
Services purchased through 1 year contracts. Attractive to smaller organizations. Usually other companies stuff is stored there too..so services are less customized
Conventional, narrow, and very narrow aisles
Conventional are safer but allow less place for storage. Narrow are more specialized and very narrow require more expensive equipment
