Supply Chain Management: Exam 4
Supply Chain Management
Coordinating supply chain activities to deliver goods/services efficiently. Ex: Walmart coordinating suppliers + trucks.
Ordering Cost
Cost to place orders. Ex: Shipping paperwork.
Setup Cost
Cost to prepare equipment for a new run. Ex: Resetting machine.
Holding Cost
Cost to store inventory. Ex: Rent.
Dependent Demand
Demand driven by another item. Ex: Car tires depend on car production.
Bullwhip Effect
Demand swings increase as you move up the supply chain. Ex: Small retail change → big supplier change.
Independent Demand
Demand unrelated to other items. Ex: Finished goods.
Safety Stock
Extra inventory to prevent stockouts.
Channel Assembly
Final product assembled at distribution center. Ex: Dell customizing computers.
Virtual Companies
Firms that outsource most functions and focus on core activities. Ex: A company that designs clothes but outsources production.
Closed-Loop Supply Chain
Forward + reverse flows combined to reuse products. Ex: Recycling old phones.
SCOR Model
Framework for evaluating and improving supply chain performance.
Reverse Logistics
Handling returns and recycling. Ex: Amazon returns.
Inventory Turnover
How many times inventory is sold and replaced. High = selling fast.
Omnichannel
Integrated shopping experience across online, store, mobile. Ex: Target pickup + delivery.
Reorder Point (ROP)
Inventory level where you reorder. Ex: Reorder Coke at 100 bottles.
Shrinkage
Inventory loss due to theft, damage, errors.
WIP (Work in Process)
Items still being worked on. Ex: Half-built cars.
Keiretsu
Long-term partnership between company and suppliers. Ex: Toyota supplier network.
Blanket Order
Long-term purchase order for repeated deliveries. Ex: Monthly restocking agreement.
Maintenance, repair, and operating items.
MRO Inventory
Single-Stage Control of Replenishment
One member controls inventory decisions for the whole chain.
EOQ
Order size that minimizes holding + ordering costs.
CPFR (Collaborative Planning, Forecasting, and Replenishment)
Partners share data to reduce inventory + improve forecasting.
Logistics Management
Planning and controlling movement/storage of goods. Ex: UPS routing.
Service Level
Probability of not stocking out. Ex: 95% _________ = 5% risk.
Pull Data
Real-time sales data pulling inventory through the chain. Ex: POS scanner sending data to supplier.
1. meet demand 2. decouple processes 3. get quantity discounts 4. hedge inflation.
Reasons for holding inventory:
Blockchain
Secure digital record to track supply chain events. Ex: Tracking food source.
Vendor-Managed Inventory (VMI)
Supplier manages retailer's inventory levels. Ex: Pepsi restocking Walmart.
Drop Shipping
Supplier ships directly to customer. Ex: Wayfair furniture delivery.
Setup Time
Time needed to get equipment ready for production.
Single-Period Model
Used for one-time items or limited shelf life. Ex: Holiday cookies.
Outsourcing
Using external suppliers for goods/services previously done in-house. Ex: Hiring a 3PL for shipping.
Cross-Sourcing
Using multiple suppliers for the same item to reduce risk. Ex: Having two paper suppliers.
Vertical Integration
Company owns multiple steps of its supply chain. Ex: Tesla making its own batteries.
Finished Goods
Completed products ready to sell. Ex: Packaged cookies.
Raw Materials
Basic inputs of production. Ex: Flour.
ABC Analysis
Classifying inventory by importance (A=most valuable).
