SCM 301 Exam #6

Assortment warehousing is

A form of warehousing in which a wide array of goods is held close to the source of demand in order to assure short customer lead times

_____ is a form of warehousing in which strategically placed hubs are used as sorting or transfer facilities

A hub-and-spoke system

A roadrailer is

A specialized rail car the size of a standard truck trailer that can be quickly switched from rail to ground transportation by changing the wheels

A multimodal solution is

A transportation solution that seeks to exploit the strengths of multiple transportation modes through physical, information, and monetary flows that are as seamless as possible

_____ is when incoming shipments are from a single source or manufacturer

Break-bulk warehousing

_____ is a sourcing strategy in which a company uses a single supplier for one particular part of service and another supplier with the same capabilities for a different part or service, with the understanding that each supplier can act as a backup for the other supplier

Cross sourcing

_____ profiles the major forces and trends that are impacting an industry, including pricing, competition, regulatory forces, substitution, technology changes, and supply/demand trends

Industry analysis

_____ is a term used to refer to the observation that any change, even a small one, in the requirement for items at the top of the bill of material can have drastic effects on items further down the bill of material.

MRP nervousness

_____ is the use of supply chain partners to provide products or services

Outsourcing

_____ is a structured approach used by decision makers to develop a sourcing strategy for a product or service, based on the value potential and the relative complexity or risk represented by a sourcing opportunity

Portfolio analysis

_____ is a term used to describe the effect of $1 in a cost savings increasing pretax profits by $1 and a $1 increase in sales increasing pretax profits only by $1 multiplied by the pretax profit margin

Profit leverage effect

_____ is the ratio of earnings to sales for a given time period

Profit margin

_____ is a field in the master schedule record that indicates estimated inventory level at the end of each time period.

Projected ending inventory

_____ is a sourcing strategy in which the buying firm depends on a single company for all or nearly all of a particular item or service.

Single sourcing

_____ is the application of quantitative techniques to purchasing data in an effort to better understand spending patterns and identify opportunities for improvement

Spend analysis

_____ is any operation that stores, repackages, stages, sorts, or centralizes goods or materials

Warehousing

_____, in the context of master scheduling, is confirmed demand for products

a booked order

Forecasted demand, in the context of master scheduling, is

a company's best estimate of the demand in any period

Master scheduling is

a detailed planning process that tracks production output and matches this output to actual customer orders

A purchase order (PO) is

a document that authorizes a supplier to deliver a product or service and often includes key terms and conditions, such as price, delivery, and quality requirements

Cross-docking is

a form of warehousing in which large incoming shipments are received and then broken down into smaller outgoing shipments to demand points in a geographic area

Postponement warehousing is

a form of warehousing that combines classic warehouse operations with light manufacturing and packaging duties to allow firms to put off final assembly or packaging of goods until the last possible moment

Consolidation warehousing is

a form of warehousing that pulls together shipments from a number of sources (often plants) in the same geographic area and combines them into larger - and hence more economical - shipping loads

An objective function is

a quantitative function that an optimization model seeks to optimize (i.e. maximize or minimize)

Planning and control is

a set of tactical and execution-level business activities that includes master scheduling, material requirements planning, and some form of production activity control and vendor order management.

A direct truck shipment is

a shipment made directly, with no additional stops, changing of trucks, or loading of additional cargo

A less than truckload (LTL) shipment is

a smaller shipment, often combined with other loads to reduce costs and improve truck efficiencies

Multiple sourcing is

a sourcing strategy in which the buying firm shares its business across multiple suppliers

A common carrier is

a transportation service provider that handles shipments on a case-by-case basis, without the need for long-term agreements or contracts

An optimization model

a type of mathematical model used when the user seeks to optimize some objective function subject to some constraints

A cost-based contract is

a type of purchasing contract in which the price of a good or service is tied to the cost of some key input(s) or other economic factors, such as interest rates

Warehousing

an operation that stores, repackages, stages, sorts, or centralizes goods or materials

The term _____ refers to a specialized form of an optimization model that attempts to assign limited capacity to various demand points in a way that minimizes costs

assignment problem

The term ______ refers to a field in the master schedule record that indicates the number of units that are available for sale each week, given those that have already been promised to customers.

available to promise (ATP)

The first step of the strategic sourcing process, which is sometimes kicked off in response to an entirely new need within an organization, in the vast majority of cases, is

conducted to improve the performance of a firm's existing sourcing activities

Booked orders, in the context of master scheduling, are

confirmed demand for products

A _____ is a transportation service provider that handles shipments for other firms based on long-term agreements or contracts

contract carrier

_____ is a time-phased planning approach similar to MRP that uses planned orders at the point of demand (customer, warehouses, etc.) to determine forecasted demand at the source level (often a plant).

distribution requirement planning (DRP)

According to the top-down model of manufacturing planning and control systems, production activity control

ensures that in-house manufacturing takes place according to plan; it also helps manufacturing managers identify potential problems and take corrective actions.

According to the top-down model of manufacturing planning and control systems, vendor order management

ensures that materials ordered from supply chain partners are received when needed; it also helps purchasing managers identify potential problems and take corrective actions

According to the top-down model of manufacturing planning and control systems, sales and operations planning

establishes overall production, workforce, and inventory levels

_____ is the process of working backward from the master production schedule for a level 0 item to determine the quantity and timing of orders for the various subassemblies and components

exploding the BOM

The _____ of the procure-to-pay cycle is ordering; the most common way the ordering step begins is through the release of a purchase order. A purchase order (PO) is simply a document that authorizes a supplier to deliver a product or service and often includes terms and conditions, such as price, delivery, and quality requirements

first step

A _____ is a type of purchasing contract in which the stated price does not change, regardless of fluctuations in general overall economic conditions, industry competition, levels of supply, market prices, or other environmental changes

fixed-price contract

_____, in the context of master scheduling, is a company's best estimate of the demand in any period.

forecasted demand

A _____ is an agent who serves as an intermediary between an organization shipping a product and the actual carrier, typically on international shipments

freight forwarder

Total cost analysis

is a process by which a firm seeks to identify and quantify all of the major costs associated with various sourcing options

Portfolio analysis

is a structured approach used by decision makers to develop a sourcing strategy for a product or service, based on the value potential and the relative complexity or risk represented by a sourcing opportunity

The term _____ refers to the amount of product that will be finished and available for sale at the beginning of each week.

master production schedule (MPS)

According to the top-down model of manufacturing planning and control systems, _____ determines when specific products will be made, when specific customer orders will be filled, and what products/capacities are still available to meet new demands.

master scheduling

The term _____ refers to a detailed planning process that tracks production output and matches this output to actual customer orders.

master scheduling

_____ is a planning process that translates the master production schedule into planned orders for the actual parts and components needed to produce the master schedule items

material requirements planning (MRP)

Return on assets is

net income/average total assets

In the second step of the strategic sourcing process, decision makers

often need to develop a more detailed picture, or profile, of the internal needs of the organization, as well as the characteristics of the external supply base

Sustainability is

performing activities in a manner that meets the needs of the present without compromising the ability of future generations to meet their needs

The term _____ refers to the amount of time the master schedule record or MRP record extends into the future.

planning horizon

_____ ensures that in-house manufacturing takes place according to plan; it also helps manufacturing managers identify potential problems and take corrective actions.

production activity control

_____ uses the master production schedule to monitor key resource requirement

rough-cut capacity planning

_____ is a form of warehousing that attempts to position seasonal goods close to the marketplace. At the end of each season, the goods are either liquidated or moved back to a more centralized location

spot stock warehousing

A statement of work refers to

terms and conditions for a purchased service that indicate, among other things, what services will be performed and how the service provider will be evaluated

The master production schedule (MPS) is

the amount of product that will be finished and available for sale at the beginning of each week

Exploding the BOM is

the process of working backward from the master production schedule for a level 0 item to determine the quantity and timing of orders for the various subassemblies and components

Cost of goods sold is

the purchased cost of goods from outside suppliers

Planning lead time is

the time from when a component is ordered until it arrives and is ready to use

Insourcing is

the use of resources within the firm to provide products or services

A _____ is a service firm that handles all of the logistics requirements for other companies

third-party logistics provider (3PL)

Material requirements planning (MRP)

translates the master schedule for final products into detailed material requirement

According to the top-down model of manufacturing planning and control systems, _____ ensures that materials ordered from supply chain partners are received when needed; it also helps purchasing managers identify potential problems and take corrective actions.

vendor order management