ADMN 580 Final EXAM part 2
Michael Porter
"If all you're trying to do is essentially the same thing as your rivals, then its unlikely that you'll be very successful"
Periodic Review
"fixed period" or "P" systems -inventory counted/recorded at regular time intervals -more frequent cycle counts for A items, less frequent for B or C items
inventory investment
% invested in inventory= (total inventory/total assets)* 100
Continuous Review
-"perpetual review", "fixed quantity" or "Q" systems -inventory review systematically -economic order quantity is ordered when a reorder point is reached -enabled by computerized inventory management systems
Supplier Power
-# of suppliers -size of suppliers -Uniqueness of service -Your ability to substitute -Cost of changing
EOQ Assumptions
-Demand is known, constant, and independent -Lead time is known and constant -Receipt of inventory is instantaneous and complete -Quantity discounts are not possible -Order and setup costs are fixed -No Stockouts (shortages)
Inventory Ordering Models
-EOQ & ROP: Production Order Quantity, Quantity Discount -Probabilistic Models: Single Period,Fixed Period
External Distributors
-Logistics -Traffic Management -Distribution Management
Supply Chain Ethics
-Loyalty to your organization -justice to those with whom you deal -faith in your profession
SCM Risk Factors
-Natural disasters -Currency Fluctuations -Single Source Risk
waterways
-certain geographic areas -ocean, inland waterway system, coastal waters -very large loads at very low cost -slowest -dominant in global trade -containers
pipeline
-high fixed cost -primarily for crude petroleum, refined petroleum products, natural gas -best for large or stable flows -pricing structure encourages use for predictable component of demand
Systems Integration
-information -planning -communications
Measuring SC performance
-inventory investment, -inventory turnover, -inventory Weeks (or days) of supply
Air
-location/# of hubs -Fleet assignment -maintenance schedule -Crew scheduling -prices and availability -rarely covers "last miles"
Trucks
-most widely used -Truckload (TL) -Less than Truckload(LTL)
Railroad
-move commodities over large distances -high fixed costs in equipment and facilities -scheduled to maximize utilization -transportation time can be long
Types of inventory
-raw material inventory -WIP: Work in Process -MRO: Maintenance/Repair/Operating -Finished Goods
Drop Shipments
-skip the warehouse -make the product and ship straight from the production line to the customer exactly where/when needed.
Less-than-truckload (LTL)
-small lots -hub and spoke system -may take longer than TL
Physical connections
-transportation/delivert channels -Inventory Storage Locations -Value-added action centers
multimodal
-use of more than one mode of transportation to move a shipment -grown considerably with increased use of containers -may be the only option for global trade -more convenient for shippers-one entity -key issue: exchange of information to facilitate transfer between different modes.
Describe the steps in supplier selection
4 stage process. Supplier Evaluation, Supplier Development, Negotiations, and Contracting
Consider a firm with a 2013 net income of $20 million, revenue of $60 million, and cost of goods sold of $25 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant, and equipment, how many weeks of supply does the firm hold? 4.16 weeks 2.60 weeks 5.20 weeks
4.16 weeks The firm holds 4.16 weeks of supply. Weeks of supply is determined by using the following formula: Weeks of supply = inventory investment/average weekly cost of goods sold In this case, as indicated in the question, the total inventory investment is $2 million. To calculate the average weekly cost of goods sold you take the total annual cost of goods sold (in this case $25 million as indicated in the question stem) and divide that by 52 weeks. Thus, the average weekly costs of goods sold is $ .481 million (25/52 = .481). Therefore, Weeks of supply = inventory investment/average weekly cost of goods sold Weeks of supply = 2/.481 Weeks of supply = 4.16
A grocery store is trying to find a new vendor for carrots. Its three criteria are: 1. Freshness, 2. Lot Size, and 3. Cost, with factor weights of .6, .1, and .3, respectively. What would a vendor with ratings of 6, 8, and 10 in the three respective categories score as a weighted total? 7.4 9.8 6.4
7.4 A vendor with ratings of 6, 8, and 10 in the three respective categories would have a weighted total score of 7.4. Weighted scores are calculated by multiplying the desired ratings (in this case 6, 8, and10) by the appropriate factor weights (in this case .6, .1, and .3) and summing the results. Therefore: 6 * .6 = 3.6 8 * .1 = .8 10 * .3 = 3 Next, we sum the results 3.6 + .8 + 3 = 7.4.
5 Ss Check List
A lean production check list: Sort, Simplify, shine, standardize, and sustain
Pilferage
A small amount of theft
Perpetual Inventory System
A system that keeps track of each withdrawal or addition to inventory continuously, so records are always current.
Which of the following is NOT a feature of Toyota's new Japanese plant? A. Instead of perching car chassis on raised platforms, they dangle from overhead conveyors. B. The assembly line has cars sitting side-by-side, rather than bumper-to-bumper. C. The assembly line uses quiet friction rollers with fewer moving parts, requiring less maintenance than conventional lines and reducing worker fatigue. D. Retooling permits faster changeovers, allowing for shorter product runs of components, supporting level scheduling.
A. Instead of perching car chassis on raised platforms, they dangle from overhead conveyors.
WOTF statements is true regarding lean sustainability? A. Lean and sustainability both seek to maximize resource and economic efficiency. B. Lean requires examining the systems in which the firm and its stakeholders operate. C. Lean drives out waste because waste has adverse affects on the environment, while sustainability drives out waste because waste adds nothing for the customer D. Sustainability is focused on only the immediate process and system.
A. Lean and sustainability both seek to maximize resource and economic efficiency.
With regard to the cost-based price model negotiation strategy, which of the following is true? A. Prices are based upon supplier costs. B. Potential suppliers each submit quotations as to price, delivery, and so on. C. Prices are based in some way upon market standards agreed to by both supplier and purchaser. D. Prices float based on what the customer is willing to pay.
A. Prices are based upon supplier costs.
How do pharmacies implement lean operations to ensure that customers will always receive their medications upon demand? A. They develop community networks as backup systems. B. They locate no further than 10 miles away from their suppliers. C. They pay a premium for 60-minute delivery from their suppliers. D. They hold a large amount of safety stock for all of their drugs.
A. They develop community networks as backup systems.
Which of the following activities does NOT need to be virtually eliminated for a lean organization? A. cross-training B. inventory C. material handling D. inspection
A. cross-training
Which of the following statements is NOT generally an implication stemming from an increase in the number of facilities? A. decreased total logistics cost B. increased customer satisfaction C. increased facility costs D. quicker response
A. decreased total logistics cost
Which of the following statements is NOT one of the response strategy decisions? A. gather and communicate market research data B. use buffer stocks to ensure speedy supply C. fast transportation D. low setup time
A. gather and communicate market research data
The 5Ss developed by the Japanese do NOT include A. safety. B. standardize. C. sort/segregate. D. simplify/straighten.
A. safety.
Which of the following statements is NOT true? A. closed-loop supply chain is a designed to optimize only reverse flows. B. "Closed-loop supply chain" is sometimes used as a synonym for "reverse logistics." C. A closed-loop supply chain prepares for returns prior to product introduction. D. Reverse logistics involves the processes of sending returned products back up the supply chain for resale, repair, reuse, remanufacture, recycling, or disposal.
A. closed-loop supply chain is a designed to optimize only reverse flows.
managing inventory
ABC inventory analysis inventory accuracy inventory review policies inventory ordering models
Explain opportunities in the supply chain
Accurate "pull data", Lot Size Reduction, Vendor Managed Inventory, blanket order, Collaborative planing/forecasting/replenishment, standardization, postpnement, electronic ordering and funds transfer, Drop shipping and special packaging
Us managers do what to 5 Ss?
Add two additional Ss; safety and support/maintenance
Fixed Quantity System (Q)
An ordering system with the same order amount each time
Total Annual Cost =
Annual Ordering Cost + Annual Holding Cost
Pareto Principle
Another name for ABC Analysis
Which of the following attributes is NOT for lean operations? A. Empower employees. B. Build processes that increase variability. C. Develop collaborative partnerships with suppliers. D. Develop worker flexibility.
B. Build processes that increase variability.
Which of the following statements is NOT true regarding channel assembly? A. Channel assembly postpones final assembly of a product so the distribution channel can assemble it. B. Channel assembly sends individual components, modules, and finished products, to the distributor. C. Channel assembly represents one way to implement postponement. D. Channel assembly treats distributors more as manufacturing partners than as distributors.
B. Channel assembly sends individual components, modules, and finished products, to the distributor.
Which of the following is NOT one of the principles for standard work practice at Toyota? A. Material and service flows are to be simple and direct. B. Improvements in the system must be made in accordance with the "scientific method," at the highest possible level in the organization. C. Internal and external customer-supplier connections are direct, specifying personnel, methods, timing, and quantity. D. Work is completely specified as to content, sequence, timing, and outcome
B. Improvements in the system must be made in accordance with the "scientific method," at the highest possible level in the organization.
The cost to produce the goods or services sold for a given period is referred to as A. weeks of supply. B. cost of goods sold. C. inventory turnover. D. inventory investment.
B. cost of goods sold.
JIT has an internal focus while lean production begins with an external focus on A. supplier relationships. B. customers. C. logistics. D. design.
B. customers.
Which of the following is NOT one of Taiichi Ohno's seven wastes? A. motion B. energy C. queues D. transportation
B. energy
What is the primary method in which airlines adjust to short-term fluctuations in customer demand? A. changes in inventory B. personnel availability C. denial of service D. postponement of service
B. personnel availability
Three criteria for designing distribution networks to meet customer expectations are: A. low cost, product choice and service. B. rapid response, product choice, and service. C. rapid response, low cost, and service. D. low cost, rapid response and product choice.
B. rapid response, product choice, and service.
Prior to embarking on supply chain design, operations managers must first consider A. how to select suppliers. B. "make-or-buy" and outsourcing decisions. C. what kind of distribution network to have. D. how to manage supply chain inventory.
B. "make-or-buy" and outsourcing decisions.
Who should Sears have copied?
Best Buy
Few Suppliers
Buyers are more apt to build relationships with sellers rather than just take the lowest bidder
How has McDonald's driven seconds out of the production process to be able to produce made-to-order hamburgers in 45 seconds? A. It altered its order-entry procedures. B. It changed its core management philosophy. C. It reconfigured its kitchen layout. D. It invented a stove that can cook hamburger meat in 22 seconds
C. It reconfigured its kitchen layout.
Inventory reduction via JIT is an effective tool for identifying A. holding costs. B. inefficiencies in warehouse layout. C. causes of variability. D. setup costs.
C. causes of variability.
Airfreight A. is the oldest means of freight transportation. B. represents about 10% of the tonnage shipped in the United States. C. is a fast-growing mode of shipping. D. is the best way to transport natural gas.
C. is a fast-growing mode of shipping.
Which of the following words means continuous improvement in Japanese? A. poka-yoke B. kanban C. kaizen D. sensei
C. kaizen
Which of the following strategies is part collaboration, part purchasing from few suppliers, and part vertical integration? A. horizontal integration B. joint ventures C. keiretsu networks D. virtual companies
C. keiretsu networks
which negotiation strategy bases price on a published, auction, or index price? A. cost-based price model B. competitive bidding C. market-based price model D. supply-based price model
C. market-based price model
The advantage of having many potential suppliers is their willingness to A. provide innovations. B. participate in JIT. C. offer lower prices in the short term. D. provide technical expertise.
C. offer lower prices in the short term.
The do-it-yourselfer plucked a gallon can of base paint from the shelf of the local hardware store and handed it to Keith, the cheerful clerk at the paint counter. Their eyes met briefly and the do-it-yourselfer silently handed over sample 150C-1, Musical Mist, to the clerk. It was impractical to keep several gallons of every possible color on the shelves at the hardware store, so the paint manufacturer had created clever workaround. The workaround was a computer-based system that added predetermined quantities of pigments to a gallon can of base paint depending on the desired shade, in this case, Musical Mist. The hardware store now needed to stock only the base paint, this machine, and a small supply of paint pigments in order to create the thousands of colors in its catalog. This scenario is a prime example of A. the bullwhip effect. B. drop shipping. C. postponement. D. vendor-managed inventory.
C. postponement.
Which of the following mitigation tactics could reduce economic risk? A. multiple transportation modes and warehouses B. subcontractors on retainer C. purchasing contracts that address price fluctuations D. franchising and licensing
C. purchasing contracts that address price fluctuations
Just In Time (JIT)
Continuous and forced problem Solving via a focus on throughput and reduced inventory
Contracting
Contracts are designed to share risks, share benefits, and create incentive structures to encourage supply chain members to adopt policies that are optimal for the entire chain.
What type of negotiation strategy requires the supplier to open its books to the purchasers? market-based price model competitive bidding cost-based price model
Cost- based price model *cost based price model* negotiation strategy requires the supplier to open its books to the purchasers - During this process, the supplier shares their accounting data with the purchaser to determine an appropriate supply cost based on the suppliers material, labor, and equipment rates. - *market-based price model* uses public, auction, or index prices to determine appropriate cost structures - *competitive bidding process* is most appropriate when suppliers are not willing to discuss costs or when good data does not exist to provide a market-based cost structure.
Virtually every restaurant deals with its suppliers on A. a production order quantity basis. B. an EOQ basis. C. a fixed-period inventory system basis. D. a JIT basis.
D. a JIT basis.
A response strategy requires suppliers be selected based primarily on A. being willing to share information. B. product development skills. C. cost. D. capacity, speed, and flexibility.
D. capacity, speed, and flexibility.
The advantage of having few suppliers is to A. Look for short-term attributes B. pursue low cost C. take advantage of diseconomies of scale D. form a long-term relationship
D. form a long-term relationship
The Japanese call the practice of stopping production when a defect occurs A. kanban. B. poka-yoke. C. kaizen. D. jidoka
D. jidoka
What is a concept that results in material being produced only when requested and moved to where it is needed just as it is needed? A. requisition system B. procrastination system C. push system D. pull system
D. pull system
consolidation
Distributions Centers (DCs) consolidate less-than-truckload (LTL) quantities into truckload (TL) quantities for more efficient product movement. -DCs group into more efficient direct shipments
A furniture maker has delivered a dining set to the end consumer rather than to the furniture store. The furniture maker is practicing __________. Drop shipping channel assembly postponement
Drop Shipping - furniture maker is practicing drop shipping - *drop shipping* supply-supply management technique where a product is shipped directly from the supplier to the end consumer - practice saves time and additional shipping costs - *Channel assembly* where a manufacturer sends individual components (rather than assembled units) to a distributor. The distributor is then responsible for final assembly. *Postponement* is the process of keeping a product generic as long as possible before customizing. This practice introduces flexibility into the supply chain and allows for a product to be customized to the desires of the end consumer.
inventory ordering models
EOQ & ROP Production Order Quantity Quantity Discount Probabilistic Models Single Period Fixed Period
Electronic Ordering and Funds Transfer
Electronic ordering and bank transfers are traditional approaches to speeding transactions and reducing paperwork.
Lean Operations
Eliminates waste through continuous improvement and focus on exactly what the customer wants
Finished Goods Inventory
End items that are ready to be sold but are still on the books
Safety Stock
Extra Stock to allow for uneven demand; a buffer
Gemba or Gemba Walk
Going to where the work is actually performed
Cost of Inventory
Holding cost, Ordering Cost, Set-up cost
Supplier Certifications
ISO 9000 or ISO 14000 are good
Incentives
Incentives push merchandise into the chain for sales that have not occurred. This generates fluctuations that are ultimately expensive to all members of the chain
Importance of Inventory
Inventory= no liquid cash
Large Lots
Large lots increase holding costs because of the size of the order, but t does drive down shipping and production costs
Airfreight
Less than 1% of tonnage shipped
Supply Chain Sustainability
Levis example
Which one of the following performance measures is not true of a world class firm? High percentage of on-time deliveries Long lead time Short time placing an order
Long Lead time - *large-lead time* indicates the inability to create quality products quickly and, therefore, this could be an indicator that the firm is not operating at the caliber of a world class firm. - Firms that are able to place orders quickly and reliably deliver products on time are meeting metrics that are important indicators of effective performance with regard to supply-chain management and customer relations.
Which of the following supply-chain strategies creates value by allowing suppliers to have economies of scale? long-term patnering with a few suppliers negotiating with many suppliers vertical integration
Long-term partnering with a few suppliers Long-term partnering with a few suppliers is the supply-chain strategy that creates value by allowing suppliers to have economies of scale. Economies of scale are realized because production costs can be spread across a longer period of time and a larger batch order. The supply-chain strategies of vertical integration and negotiation with many suppliers also have benefits, but they are not focused on building economies of scale.
Truckload (TL)
Low fixed cost imbalance between flows
MRO
Maintenance Repair and Operating supplies keep the processes running
MRO Inventory
Maintenance, repair, and operating materials
Identify the 6 sourcing strategies
Many Suppliers, Few Suppliers, Vertical Integration, Joint Ventures, Keiretsu Networks, Virtual Companies
Sourcing Strategies
Many suppliers Few suppliers Vertical integration Joint ventures Keiretsu networks Virtual companies
Local Optimization
Members of the chain are inclined to focus on maximizing local profit or minimizing immediate cost based on their limited knowledge. A Dist. gets a huge order from a retail store, so then he makes a huge order from the Mfg.
Waterways
More attractive when cost is favored over speed
Is a supply chain really a chain?
No, more like a web
Single-Stage Control of Replenishment
One member of the supply chain has the responsibility of monitoring inventory and purchasing more based on the pull end of the user
Optimize Cost Efficiencies
Optimize cost efficiencies using inventory wisely
Seven Wastes
Over Productions, queues, transportation, inventory, motion, over processing, and defective product
Production Order Quantity Model (Formula)
PUT ON SHEET
Quality Discount
PUT ON SHEET
The Five Parts of the Scor Model
Plan Make Deliver and Return`
Internal Functions
Processing, purchasing, planning, quality assurance, shipping
WIP inventory
Products or components that are no longer raw materials but have yet to become finished products
Satisfy Customers
Provide expected level of customer service
Make vs Buy Analysis
Q=(FCmake-FCbuy)/(VCbuy-VCmake)
Reorder Point Formula
ROP=dL
Objective of Inventory
Satisfy Customers Optimize Cost Efficiencies Minimize Investment
Which of the following is not an advantage of the "few suppliers" concept? Sharing trade secrets between firms Suppliers' willingness to provide technological expertise Suppliers' willingness to participate in JIT systems
Sharing trade secrets between firms Sharing trade secrets between firms is not an advantage of the "few suppliers" concept. Trade secrets are part of what gives a firm a competitive advantage, and it is unlikely that such information would ever be shared with an outside firm. In fact, trade secrets are one motivation to pursue another type of supply-chain strategy—vertical integration. Vertical integration is where a company develops the skills, capacity, and equipment to internalize the production of goods and services. Suppliers' willingness to participate in JIT systems and provide technological expertise are two of the common advantages of the few suppliers supply-chain strategy.
Railroads
Ship 40% of all commodities
5 S
Sort Straighten Shine Standardize Sustain
Supplier Partnerships
Suppliers and purchasers work together to remove waste and drive down costs for mutual benefit
Many Suppliers
The order is more apt to go to the lowest bidder
Standardization
The purchasing department should make special efforts to increase levels of standardization. That is obtaining a varity of similiar components with labeling, coloring, packaging, or slightly different engineering specs
Throughput
The rate at which units move through a process
Mfg Cycle Time
The time between the arrival of raw materials and the shipping of finished products
Trucking
The vast majority of MFG goods are moved by truck
what term is used to describe the outsourcing of logistics? shipper managed inventory third- party logistics outside logistics
Third-Party Logistics - *third-party* or specialized logistics firms, represent a potential way for operations managers to drive down inventory costs and improve delivery speed and reliability - as an example, Dell has a partnership with FedEx as a third-party logistics firm to help handle the packing and shipment of their products - the terms shipper managed inventory and outside logistics are not used to describe the outsourcing of logistics
Which of the following best describes vertical integration? To produce goods or services previously purchased To build long-term partnerships with a few suppliers To develop the ability to produce products which complement the original product
To produce goods or services previously purchased The statement to produce goods or services previously purchased best describes vertical integration. Vertical integration can help provide a strategic advantage for firms that have the capital and talent to handle the additional scope of responsibility. Specifically, vertical integration can help reduce costs, increase quality, and ensure timely delivery. Building long-term partnerships with a few suppliers is a supply-chain strategy called "few suppliers." Creating complementary products is a business model and manufacturing strategy focused on differentiation; it is not, however, considered a common supply-chain strategy.
Outsourcing
Transferring to external suppliers a firm's activities that have traditionally been internal
holding inventory is costly
True
Safety Stock
a buffer of stock used to maintain a desired service level and mitigate the risk of stockout
Make or Buy decsision
a choice between producing a component or service within the firm or purchasing it from an outside source
Pull System
a concept that results in material being produced only when requested and moved to where it is needed just as it is needed
Cycle Counting
a continuing reconciliation of inventory with inventory costs.
Cycle Counting
a continuing reconciliation of inventory with inventory records
what is Make vs Buy a decision to?
a decision to vertically integrate
Joint Ventures
a firm may engage in a collaboration to enhance their new products prowess or tech skills
kaizen
a focus on continuous improvement
Keiretsu Network
a japanese term that describes suppliers who become part of a company coalition
Quantity Discount
a reduced price for items purchased in large quantities
SCOR (Supply Chain Operations Reference model
a set of processes, metrics, and best practices developed by the APICS Supply Chain Council
Probabilistic Model
a statistical model applicable when product demand or any other variable is not known but can be specified by means of a probability distribution
closed loop supply chain
a supply chain that is designed to optimize all forward and reverse flows
Fixed Period System (P)
a system in which inventory orders are made at regular time intervals. Scheduled orders
Which of the following could reduce distribution risk? a. careful selection, monitoring and effective contracts with penalties b. secure IT systems c. use multiple suppliers d. cross- country diversification
a. careful selection, monitoring and effective contracts with penalties
Which of the following statements is NOT one of the differentiation strategy decisions? a. use buffer stocks to ensure speedy supply b. modular design to aid product differentiation c. minimize inventory to avoid product bsolescence d. gather and communicate market research data
a. use buffer stocks to ensure speedy supply
What is developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor? a. vertical integration b. outsourcing c. horizontal integration d. virtual companies
a. vertical integration
Forward Integration
acquiring "downstream" capabilities of production or distribution
Backward integration
acquiring "upstream" sources of raw materials or components
waste
adds cost customers will not pay for
Which one of the following distribution systems offers quickness and reliability when emergency supplies are needed overseas? trucking airfreight waterways
airfreight - *Airfreight* offer quickness and reliability when emergency supplies are needed overseas. - Airfreight is among the fastest and most reliable ways to ship supplies and freight and is frequently used to ship lightweight items nationally and internationally. -*Waterways* are one of the oldest transportation methods. Cargo shipped on the waterways is typically low value and bulky. - Waterways are an important method of shipping if shipping costs are more important than speed as waterways are cost efficient, but very slow. -*Trucking* vast majority of manufactured goods; however, given the reliance on highways it is not the most effective way to ship goods overseas.
Raw Materials
all products can be traced back through their supply chain to basic raw materials
logisitics MGMT
an approach that seeks efficiency of operations through the integration of all material acquisition, movement, and storage activities
Consignment Inventory
an arrangement in which the supplier maintains title to the inventory until it is used
cycle counting
an audit of what you physically have on hand vs what is on your books
Finished Goods inventory
an end item ready to be sold but still an asset on the companys books
Economic Order Quantity (EOQ)
an inventory optimization method, part of a continuous review system, determines "how much" and "when" to order minimizes total ordering and holding cost
Functions of inventory
anticipate demand decouple processes reduce purchase cost hedge against inflation
functions of inventory
anticipate demand decouple processes reduce purchase cost hedge against inflation
toyota production system (TPS)
anton pull system & kanban standard work practices minimal machines kaizen area jidoka level schedules jit respect for public & empower employees assembly components
value
anything customers will pay for
Probabilistic Models
applied when demand is not constant pr certain (the road is bumpy)
probabilistic models
apply when demand is not constant or certain safety stock
Blanket Orders
are unfilled orders with a vendor and are also called open orders or incomplete orders?
Reorder Point Always equals what?
average demand during lead time plus safety stock
weeks of supply
average inventory/ (cost of goods sold/52weeks)
Inventory control models assume that demand for an item is a) always dependent not he demand for other items b) either independent of or dependent on the demand for other items c) identical to the demand for other items d) always independent on the demand for other items
b) either independent of or dependent on the demand of other items
WOTF does NOT belong to ordering costs a) clerical support b) interest payments c) cost of supplies d) order processing
b) interest payments
Policies based on ABC analysis might include investing a) the most time and effort verifying the accuracy of records of B items b) more in supplier development for A items c) more in inventory security for C items d) extra care in forecasting for C items
b) more in supplier development for A items
WOTF types of inventory describes inventory that has been purchased but not processed? a) WIP b) raw materials c) maintenance/repair/operating supply inventory d) finished goods inventory
b) raw materials
What is the cost to prepare a machine or process for production? a) preparation cost b) setup cost c) holding cost d) ordering cost
b) set up cost
What is transferring a firm's activities that have traditionally been internal to external suppliers? a. keiretsu network b. outsourcing c. vertical integration d. make or buy
b. outsourcing
Three common measures of supply chain performance are: a. percentage invested in inventory, inventory turnover, and debt/equity ratio. b. percentage invested in inventory, inventory turnover, and weeks of supply. c. debt/equity ratio, inventory turnover, and weeks of supply. d. percentage invested in inventory, debt/equity ratio, and weeks of supply
b. percentage invested in inventory, inventory turnover, and weeks of supply
A lawnmower assembly plant uses a variety of nuts, bolts, screws, and other fasteners in its operation. Its supplier delivers these items directly to the point of use on the assembly line and ensures that there are always sufficient quantities of fasteners to maintain the production schedule. This is an example of a.e-procurement b. vendor-managed inventory c. postponement d. single stage control of replenishment
b. vendor-managed inventory
Bucket inventory (ABC)
based on the criticality of the -annual dollar volume -high shortage or holding cost -Anticipated engineering changes -Delivery problems and/or -Quality problems
Joint Ventures
because vertical integration can be dangerous, firms may opt for some form of formal collaboration
safety stock
buffer of stock used to maintain a desired service level and mitigate the risk of stockouts
ways to optimize costs
buffer process flow with WIP maintain level workforce reduce setup costs achieve volume discounts
Lean Layout Tactics include
building work cells for families of products, including a large number of operations in a small area, minimizing distance, etc
Consumers/Customers
buy the stuff
WOTF does NOT belong to holding costs? a) pilferage, scrap, and obsolescence b) insurance on inventory c) order processing d) storage costs
c) order processing
One use of inventory is a) to tightly synchronize production and distribution processes b) to tightly synchronize a firm's production with its customers demand c) to provide a hedge against inflation d) to ensure that item cost is maximized
c) provide a hedge against inflation
The objective of inventory management is to a) provide a selection of goods for anticipated customer demand b) decouple various parts of the production process c) strike a balance between inventory investment and customer service d) take advantage of quantity discounts
c) strike a balance between inventory investment and customer service
Supply chain managers outsource logistics to meet three goals: a. drive down inventory investment, lower delivery costs, and provide better market response. b. lower delivery costs, improve delivery reliability and speed, and provide better market response. c. drive down inventory investment, lower delivery costs, and improve delivery reliability and speed. d. drive down inventory investment, improve delivery reliability and speed, and provide better market response.
c. drive down inventory investment, lower delivery costs, and improve delivery reliability and speed.
Trucking a. is the least used transportation mode for manufacturing goods b. is one of the least flexible transportation modes c. is increasingly using computers to manage its operations d. does not play a rolse in multimodal sipping
c. is increasingly using computers to manage its operations
a supply chain ends with a. suppliers b. manufacturers c. satisfied customer d. distributors
c. satisfied customer
quick set ups
changing production lines over quickly minimizes downtime focus on improving equipment set up external setup internal set up
Which of the following is an opportunity for effective management in the supply chain? the bullwhip effect multistage control of replenishment channel assembly
channel assembly *Channel assembly* is an opportunity for effective management in the supply chain. There are multiple opportunities for effectively managing the supply chain including channel assembly. Channel assembly is the technique where a manufacturer sends individual components (rather than assembled units) to a distributor. The distributor is then responsible for final assembly. Multistage control of replenishment is not an effective management technique. Instead, an effective management technique would be single-stage control of replenishment where the responsibility for monitoring and managing inventory is assigned to one member of the supply chain. This removes the distortions and multiple forecasts that create the bullwhip effect.
What is a supply chain designed to optimize both forward and reverse flows? a. reverse-loop supply chain b. bullwhip look supply chain c. open loop supply chain d. closed loop supply chain
closed look supply chain
multi modal
combines shipping methods, very common
perpetual review
continuous review inventory reviewed systematically order placed when reaches reorder point uses computerized inventory systems
Sourcing
continuously improve how goods and services are purchased to ensure competitiveness by focusing on quality, cost, and delivery
ordering cost
cost of the ordering cost process po forms processing administration clerical
holding cost
cost to keep or carry inventory in stock
set up cost
cost to prepare a machine or process for a production run change tool swap fixture clean line
The three classic types of negotiation strategies are __________. many suppliers, few suppliers, and vendor selection cost-based price model, market-based price model, and competitive bidding distributive bargaining, arbitrative bargaining, mediated bargaining
cost-based price model, market-based price model, and competitive bidding -*cost-based price model* requires the supplier to open its books with the purchaser to determine an appropriate cost based on the suppliers material, labor, and equipment rates. - *market-based price model* uses public, auction, or index prices to determine appropriate cost structures. -*competitive bidding process* is most appropriate when suppliers are not willing to discuss costs or when good data does not exist to provide a market-based cost structure.
Evolution of Production Techniques
craft mass line tps/jit lean
decouple processes
creates a buffer between various steps in a production process (or between stages of a supply chain)
multifunctional workers
cross trained in multiple duties assume more responsibility trained in tqm/kaizen techniques understand key performance indicators
Pipelines
crude oil natural gas and petro products
types of inventory accuracy
cycle counting
WOTF is Not a type of inventory a) raw material b) finished goods c) work in process d) MRP
d) MRP
ABC analysis divides an organizations on hand inventory into 3 classes based upon a) unit price b) the number of units on hand c) annual demand d) annual dollar volume
d) annual dollar volume
EOQ assumptions
demand is known, constant and independent lead time is known and constant receipts are instant and complete quantity discounts are ignored order and set up costs are fixed no stockouts
Few Suppliers Strategy
developing longer term partnering relationships with fewer suppliers
Vertical Integration
developing the ability to produce goods or services previously purchased or to actually buy a supplier or distributor
Vertical integration
developing the ability to produce goods or services previously purchased, or actually buying a supplier or distributor.
Concerns of Suppliers in Supplier inventory
diversification, lead time, quality, and lot sizesL
ABC Analysis
divides on-hand inventory into three classifications on the based off of annual dollar volume. annual demand multiplied by cost per unit
downside of too much inventory
drives longer lead times masks quality problems increases cost
focus as lean ops managers
eliminate waste remove variability improve throughput
lean operations
eliminates waste through continuous improvement and focus on exactly what the customer wants
Finished Goods
end items that are ready to be sold, but are still on the books
lean approach
enhance value/ eliminate waste focus on the goal keep it simple/ make it visible improve processes continuously & incrementally be flexible
anticipate demand
ensure goods are available in anticipation of customer demand protect from fluctuation int hat demand
Anticipate Demand
ensure goods are available on anticipation of customer demand and protect from fluctuations in that demand
abc inventory analysis
establish policies that focus on the few critical parts bucket inventory based
ABC Inventory Analysis
establish policies that focus on the few critical parts (rather than the many trivial ones)
Typical Supply Chain
external suppliers-> Internal Functions-> External Distributors-> Consumers/Customers
Supplier Evaluation
finding potential suppliers and determining the likelihood of their beocming good suppliers
flexible resources
flexible equipment flexible team members
Remove variability by
focus on TQM
Toyota Production System (TPS)
focus on continuous improvement, respect for people, and standard work practices
Accurate "Pull" Data
generated by sharing POS info so that each member of the chain can use computer assisted ordering
lean & JIT
get the right goods in the right amounts to the right place at the right time
Robust
giving satisfactory answers even with substantial variation in the parameters
Direct suppliers
goods
Class A items
high annual dollar volume: -real-time focus -continuous Review -Active Managemen -Frequent Supplier Contract
cost of inventory
holding cost ordering cost set up cost cost of shortages
EOQ
how much to order
The trucking industry is establishing Web sites, which let shippers and truckers find each other in order to ________. find the most efficient routes improve logistics effiency regulate pricing
improve logistics efficiency The trucking industry is establishing Web sites, which let shippers and truckers find each other in order to improve logistics efficiency by using some of the industry's idle capacity.
Lead time
in purchasing systems, the time between placing an order and receiving it; in production systems, the wait, move, queue, set up, and run times for each component produced
Bullwhip Effect
inaccurate or distorted demand information in a supply chain
periodic review
inventory counted and recorded at regular time intervals appropriate quantity ordered after each review
Raw Material
inventory that has been purchased but not yet processed
WIP
inventory that has undergone some change but is not yet completed
inventory turnover
inventory turnover= cost of goods sold/average inventory
what is a unit cost
is one component of inventory
Kanban
japanese for card simple visual design that authorizes next lot/item to be produced or ordered
uniform plant loading
jit/ lean level scheduling same mix of products is made each day in small lots
TQM concepts
kaizen (continuous improvement) six sigma employee empowerment benchmarking JIT Taguchi Concepts TQM tools
small lot sizes
less inventory leads to higher quality and shorter lead times goal is single unit lot sizes
Explain issues in the supply chain
local optimization, Incentives, LArge Lots, bullhip effect
cost of shortages
loss of customer goodwill, backorder handling, and lost sales
The cost of Shortages
lost of customer goodwill, back order handling, and lost sales.
Lot Size Reduction
lot sizes are reduced through aggressive mgmt. this may include developing economic shipments less than truck loads, providing discounts based on annual total volume, and reducing costs of ordering through techniques such as standing orders and various forms of electronic purchasing.
Class C Items
low annual dollar volume: -system managed -Review issues Only -Order as needed -Limited Supplier Contact
Which of the following is not a concern of the supply chain? Maintenance scheduling Warehousing and inventory levels Credit and cash transfers
maintenance scheduling Maintenance scheduling is not a concern of the supply chain. Supply-chain management is focused on all of the activities associated with procuring materials and services, transforming those materials into intermediate goods, and delivering those goods to customers. Maintenance scheduling is not part of those associated activities. However, credit and cash transfers and warehousing and inventory levels are all associated with effective supply-chain management.
Supply Chain Management
management of activities related to: procuring, transforming, delivering
Logistics and Distributions
managing the movement of the stuff you make into the hands of your paying customers
The purchasing approach that holds the suppliers responsible for maintaining the necessary technology, expertise, and forecasting ability plus cost, quality, and delivery competencies is __________. many suppliers few suppliers Keiretsu
many suppliers - The purchasing approach that holds the suppliers responsible for maintaining the necessary technology, expertise, and forecasting ability plus cost, quality, and delivery competencies is many suppliers. - With a many-suppliers strategy, a firm submits a request for bids out to suppliers. - Suppliers then respond to the demands and specifications for the request. - This approach holds the supplier responsible for meeting the needs of the request. - This includes making sure that the supplier has the necessary technology and expertise to deliver quality products and services. - The few suppliers supply-chain strategy is focused on developing long-term relationships with a few dedicated suppliers. - Long-term suppliers have a vested interest in the procuring firm and the end customer and function much more like a partnership. - The Keiretsu supply-chain strategy is focused around building a coalition of supplier businesses that partner with the end manufacturer. - In some cases, the manufacturing firms even become financial supporters of the suppliers.
The purchasing approach that holds the suppliers responsible for maintaining the necessary technology, expertise, and forecasting ability plus cost, quality, and delivery competencies is __________. Keiretsu many suppliers few suppliers
many suppliers The purchasing approach that holds the suppliers responsible for maintaining the necessary technology, expertise, and forecasting ability plus cost, quality, and delivery competencies is many suppliers. With a many-suppliers strategy, a firm submits a request for bids out to suppliers. Suppliers then respond to the demands and specifications for the request. This approach holds the supplier responsible for meeting the needs of the request. This includes making sure that the supplier has the necessary technology and expertise to deliver quality products and services. The few suppliers supply-chain strategy is focused on developing long-term relationships with a few dedicated suppliers. Long-term suppliers have a vested interest in the procuring firm and the end customer and function much more like a partnership. The Keiretsu supply-chain strategy is focused around building a coalition of supplier businesses that partner with the end manufacturer. In some cases, the manufacturing firms even become financial supporters of the suppliers.
pull system
material is produced only when it is requested and moved to where it is needed jit
Raw Material Inventory
materials that are usually purchased but have yet to enter the mfg process
Vendor Managed Inventory
means the use of a local supplier to maintain inventory for the mfg or retailer
Class B Items
medium annual dollar volume: -Occasional Focus -Periodic Review -Transactional -Occasional Supplier Contact
kaizen event
members of a work cell or team meet to develop improvements in the process
Minimize Investment
minimize things tied up in inventory
multifunctional machines
moveable/ portable plug in power/ or air flexible requires minimal set up time eliminates wasted space
Negotiations
must negotiate: credit and delivery terms, quality standards, and cooperative advertising agreements Cost cost-supplier opens its books Market Based- based on published, auction or indexed price Competitive Bidding- need to have several suppliers and several bids out
internal setup
must stop work to perform this task
Many Suppliers Strategy
negotiating with many suppliers, playing one against another
excess and obsolete
no longer needed in production or isn't saleable
What does inventory =?
non liquid cash
tradition plant loading
not lean same product is made until weekly requirement is filled
Bullwhip effect
occurs when orders are relayed from retailers to dist, to wholesalers, to mfg
Simple EOQ Models
only account for average demand during lead time
lean manufacturing
optimize inventory levels implement pull production reduce lot sizes improve set up times load plant uniformly develop flexible resources design efficient work areas
Local optimization is a supply-chain complication best described as __________. optimizing one's local area without full knowledge of the organizational need the result of supply chains built on suppliers with compatible corporate cultures obtaining very high production efficiency in a decentralized supply chain
optimizing one's local area without full knowledge of the organizational need Local optimization is a supply-chain complication best described as optimizing one's local area without full knowledge of the organizational need. Businesses operating in a complex supply chain have a tendency to focus on maximizing the local profit and minimizing costs without fully communicating the reasons for changes in product demand. For example, consider the situation where a local flower supplier receives a larger order of flowers from a normal customer. Local optimization would indicate that the supplier will increase their order from the grower for the next shipment because they were not aware the increased demand was a one-time event—the local film festival. Local optimization does not describe production efficiency or focus on the compatibility of corporate cultures.
The transfer of some of what are traditional internal activities and resources of a firm to outside vendors is __________. a make-or-buy decision Keiretsu outsourcing
outsourcing - The transfer of some of what are traditional internal activities and resources of a firm to outside vendors is outsourcing. - Outsourcing is the term used to describe the decision to move any aspect of a firm's operation to an outside vendor. This is frequently done by businesses that want to focus on areas of the business directly tied to their central operation and competitive advantage. - Any task that falls outside of central operations can be outsourced. - *Make-or-buy decisions* are focused on helping a business understand whether it is more advantageous to buy a particular part or product from an outside vendor or to produce the part themselves. - *Keiretsu* is a type of supply-chain strategy that focuses on integrating the two strategies of building relationships with a few suppliers and vertical integration. - As with traditional make-or-buy decisions, Keiretsu does include purchasing goods from suppliers. However, make-or-buy decisions and Keiretsu would not typically be considered a type of outsourcing.
taiichi ohnos 7 + 1 wastes
overproduction queues transportation inventory motion overprocessing defective parts underutilizing employees
Keiretsu Networks
part purchasing from few suppliers and part vertical integration. The supplier becomes a part of the coalition named keiretsu. long term relationships where they collaborate as partners.
inventory review policies
periodic review perpetual review
economic order quantity
perpetual review how much to order minimizes total ordering and holding cost point which order cost=holding cost
Supply Chain Links
physically connected to enable the flow of goods and integrated via information systems to enable the flow of data -physical connections -systems integration
uniform plant loading defined
plant is level loaded so the same mix of products is made each day in smaller lots can do because of quick set ups
EOQ point
point at which Order =Holding Cost
Which of the following is an aspect of environmental risk in supply-chain management? raw material availability political issues secure financial transactions
political issues - *politcal issues* aspect of environmental risk in supply-chain management - supply chains are global phenomena crossing borders, continents, countries - as a result, operations managers must consider diverse set of risks as they develop their supply chain - environmental risks that operations managers must consider include political issues, custom duties, tariffs, security screening, and risk of terror attacks - Secure financial transactions are included as part of the risk analysis focusing on supply-chain controls. - The availability of raw materials are included as part of the risk analysis focusing on supply-chain processes.
Which of the following is an aspect of environmental risk in supply-chain management? Political issues secure financial transactions raw material availability
political issues - *political issues* included as an aspect of environmental risk in supply- chain management - supply chains are global phenomena crossing borders, continents, and countries - operations managers must consider a diverse set of risks as they develop their supply chain - environmental risks that an operations manager must consider include political issues, custom duties, tariffs, security screening, and risk of terror attacks - Secure financial transactions are included as part of the risk analysis focusing on supply-chain controls. - the availability of raw materials are included as part of the risk analysis focusing on supply-chain processes.
Keeping a product generic as long as possible before customizing is known as __________. forward integration postponement backward integration
postponement Keeping a product generic as long as possible before customizing is known as postponement. This process is very useful when making somewhat generic products (like computers, printers, televisions, etc.). While the external features of these devices will be different, the primary mechanisms that make each device function are similar. Thus, it makes sense for a company to postpone putting the external elements on a computer or television until farther along in the production cycle so that a business can more easily meet customer expectations. Forward and Backward integration are two types of vertical integration. Forward integration is the term used to describe the situation where a maker of parts begins to produce final products. An example of forward integration is American Apparel clothing company. This company makes clothes and then sells them in their own branded store rather than through a traditional retail department store. Backward integration is the term used to describe the situation where a larger firm purchases a former supplier. For example, backward integration would occur if a car manufacturer purchased a controlling share in a tire company or glass manufacturer.
external setup
prep tasks that can be done while current job is still running
JIT
produce just as needed driving optimized inventory levels, improved quality, lower costs after inventory is lowered you can focus on process improvement to decrease variability and risk
lead time types
production lead time purchasing lead time
hedge against inflation
protect against upward price changes lock in a price
Hedge against inflation
protect against upward price changes (aka "lock in a price")
decouple processes
provide a buffer between various steps in a production process or between stages of a supply chain
Raw Materials Inventory
purchased but not yet processed
With the growth of the JIT, which of the following distribution systems has been the biggest loser? railroads trucking airfreight
railroads With the growth of the JIT, the railroads-based distribution systems have been the biggest loser. JIT manufacturing techniques require the use of small, frequent deliveries, and railways cannot accommodate this need easily. The JIT process has increased the demand airfreight and trucking.
types of inventory
raw materials work in process finished goods MRO Excess and Obsolete
efficient work area
reduced wip less floor space required reduced labor cost heightened participation increased utilization of equipment
lean benefits
reduction in inventories improved quality shorter lead times lower production costs increased productivity increased equipment utilization greater flexibility more employee involvement
Virtual Companies
rely on a variety of good, stable supplier relationships to provide services on demand. Suppliers may provide a variety of services that include payroll, hiring personnel designing products, and distributing product. When a fashion designer license the manufacture of the design.
virtual company
rely on a variety of supplier relationships to provide services on demand
Specific Goals of Supplier Partnerships
removal of unnecessary activities, removal of in plant inventory, removal of in transit inventory, and obtain improved quality and reliability
Shrinkage
retail inventory that is unaccounted for between receipt and sale
level schedules
scheduling products sot hat each days production meets the demand for that day
indirect suppliers
services
upside of optimized inventory
shorter lead times improved quality reduced cost
Time replenishment orders
so that new inventory arrives just as the last unit is being consumed
ultimate objective of SCM
structure the supply chain to maximize its competitive advantage and benefits to the ultimate customer.
MRO
supplies keeping the processes running
External Suppliers
supplies/ provides anything purchased by the company -direct suppliers-goods -indirect suppliers-services
eliminate waste ways
taiichi ohnos 7+1 wastes 5S
reduce purchase costs
take advantage of quantity discounts buy in bulk
Reduce purchase costs
take advantage of quantity discounts (aka buy in bulk)
kanban
the Japanese word for card, which means signal
A restaurant runs a special promotion on lobster and plans to sell twice as many lobsters as usual. When this large order is sent to the distributer, the distributer assumes the large size is a trend, not a one-time event. The distributer, therefore, places an even larger order with the lobsterman. This is the result of __________. a pass-through facility the bullwhip effect vendor-managed inventory
the bullwhip effect This is the result of the bullwhip effect. This bullwhip effect is a term used to describe the phenomenon of where orders are communicated through multiple parties including retailers, distributors, wholesalers, and manufacturers. At each level, variations and fluctuations are introduced that can either elevate or decrease the reported demand. The bullwhip effect ends up decreasing customer service and increasing costs. The bullwhip effect is a problem associated with a supply chain that is not integrated. There are a number of strategies that can be used to integrate a supply chain including the utilization of pass-through facilities and/or vendor-managed inventory. Pass-through facilities speed product shipment by holding merchandise and delivery from the same distribution hub. Vender-managed inventory is a system where the vendor/supplier actually keeps inventory on stock and delivers directly to the department that will use the product. This approach works well for inventory stock that can have multiple uses. For instance the same type of fabric could be used for sheets, pillow-cases, and curtains.
Supplier Development
the buyer makes sure the supplier has an appreciation of quality requirements, product specs, schedules and deliveries, and procurement policies
Inventory Ordering Cost
the cost of ordering process; PO Forms, Processing, Administration, Clerical
ordering cost
the cost of the ordering process
holding cost
the cost to keep or carry inventory in stock
Inventory Holding Cost
the cost to keep or carry inventory in stock; housing, handling, labor, investment, risk
Inventory Set-up Cost
the cost to prepare a machine or process for a production run; change tool, swap fixture, clean line -often measured and tracked as "setup Time"T
set up cost
the cost to prepare a machine or process for production
Supply Chain
the flow of products (and/or services) from raw materials all the way thru to the final customer.
A disadvantage of the "few suppliers" strategy is __________. the lack of cost savings for customers and suppliers the possible violation of the Sherman antitrust act the high cost of changing partners
the high cost of changing partners - while the few partners model has many advantages, it also has costs - one such difficulty associated with the few suppliers model is the high cost of changing partners - the long-term relationship that is common in a few partners model creates dependence between the firms that can sometime backfire when one partner can no longer meet their expectations
Reorder Pont (ROP)
the inventory level (point) at which action is taken to replenish the stocked item
Reorder Point (ROP)
the inventory level (point) at which action is taken to replenish the stocked item.
reorder point
the inventory level at which action is taken to replenish the stocked item when to order
Lean Inventory
the minimum inventory necessary to keep a perfect system running
Reverse Logistics
the process of sending returned products back up the supply chain for value recovery or disposal
throughput
the rate at which units move through a process
Purchasing Lead Time
the time period between placing an order and delivery of the item
purchasing lead time
the time period between placing an order and delivery of the item
Set up time
the time required to prepare a machine or process for production
production lead time
the wait, move, queue, setup and runt times for each component produced
Production Lead time
the wait, move, queue, setup, and run times for each component produced
Postponement
this withholds any modification or customization to the product (keep it generic) as long as possible. This would be minimize internal variety and maximize external variety
Six Major means of shipping
trucking, railroads, airfreight, waterways, pipelines. and multimodal
shipping systems
trucks, railroad, air, waterways, pipeline, multimodal
Work in Process Inventory
undergone some change but is not yet completed
lean systems
understand the customer & focus on value eliminate non-value added waste
flexible equipment
use of multifunctional machines
flexible team members
use of multifunctional workers
Inventory to Sales Ratio
useful barometer for the performance of an organization and a strong indicator of prevailing economic conditions
Cross-Sourcing
using one supplier for a component and a second supplier for another component, where each supplier acts as a back up for the other
The three stages of vendor selection, in order, are __________. vendor evaluation, vendor development, and negotiations vendor development, vendor evaluation, and negotiations vendor evaluation, negotiations, and vendor development
vendor evaluation, vendor development, and negotiations the first stage of vendor selection is the vendor evaluation stage. The vendor evaluation stage involves identifying vendors and determining if they would be reliable suppliers. The second stage, vendor development, focuses on integrating a supplier into the supply chain. This stage involves outlining product specifications, developing quality control systems, creating a payment system, and developing procurement policies. The third stage, negotiations, is focused on quality, delivery, payment, and costs.
The three major variations of online catalogs are grouped by __________. vendors, intermediaries, and buyer exchange systems EDI, ERP, ASN systems cost- based, market-based, and competitive bidding systems
vendors, intermediaries, and buyer exchange systems - That is, it is common to receive catalogs from vendors (i.e., Office depot, Lands end, etc.), catalogs from intermediaries that promote goods from multiple vendors within the same industry (i.e., office supply catalog, automotive part catalog, gardening supply catalog), and catalogs from buyer exchanges where buyers from a particular industry can economically purchase large quantities of goods (i.e., Marriot and Hyatt using Avendra to save money on hotel goods).
warehousing
warehouses hold (store) inventory and can include plant, regional, and local warehouses
ROP
when to order
Counteracting the Bullwhip Effect
work with all tiers of the supply chain to bring more stability to the system
