Supply Chain - Test 1

Sales and Operations Planning (S&OP)

A process that brings all the demand and supply plans for the business (sales, marketing, development, productions, sourcing, finance) together to provide management with the ability to strategically direct the business to achieve a competitive advantage

Distribution Requirements Planning (DRP)

A time-phased finished good inventory replenishment plan in a distribution network. The function of determining the need to replenish inventory at branch warehouses.

Periodic Review System

An inventory system that is used to manage independent demand inventory where the inventory level for an item is checked at regular intervals and restocked if fallen below some predetermined level (ie a reorder point)

Continuous Review System

An inventory system used to manage independent demand inventory. The inventory level for an item is constantly monitored, and as soon as inventory falls below the a predetermined level (ie reorder point) a replenishment order is automatically triggered

Just-in-time (JIT)

An inventory-management approach in which supplies arrive just when needed for production or resale

A type of inventory system that issues an order whenever a withdrawal is made from inventory, is known as?

Base Stock Level System

Which of the following is an engineering document that shows an inclusive listing of all the component parts and assemblies making up the final product?

Bill of Materials

Inventory Turns

COGS/avg inventory value The # of times that an inventory cycles during the year (more=better)

Successful modern supply chain management typically includes the practice of?

Collaborating and sharing information between supply chain partners aka CPFR

What does the acronym CPFR represent?

Collaborative Planning, Forecasting, & Replenishment

Which one of the following is NOT one of the four Foundations of Supply Chain Management? A. Logistics Management B. Operations Management C. Demand Management D. Supply Management E. Integration

Demand Management

Aggregate Production Plan

Hierarchical planning process that aims to establish production rates to satisfy customer demand. Translates annual business, marketing plans, and demand forecasts into a production plan for a product family* in a plant or facility - planning horizon of at least 1 year

Materials Requirement Planning (MRP)

Introduction of new computer tech led to this method of determining what materials are needed and when they are needed to support the production plan

The process of converting a parent item's planned order releases into component gross requirements is called?

MRP Explosion

Push Business Model

Make to Stock - producing stock on the basis of anticipated demand

Pull Business Model

Make to order stock - not made until product is demanded

_______________________ measures the size of the forecast error in units. It is calculated as the average of the unsigned errors over a specified period of time.

Mean Absolute Deviation

Which one of the following is NOT a type of qualitative forecasting? A. Sales force composite B. Consumer survey C. Jury of executive opinion D. Naïve method

Naïve method

Bill of Materials (BOM)

One of the three primary inputs of MRP; a listing of all of the raw materials, parts, subassemblies, and assemblies needed to produce one unit of a product.

Logistics

Refers to activities that occur within a single org. Deals with inventory management, warehousing, distribution, and transportation

The medium-range capacity planning technique used to check the feasibility of the Master Production Schedule (MPS) is called?

Rough-cut Capacity Planning (RCCP)

When creating a quantitative forecast, data should be evaluated to detect for a repeating pattern of demand from year to year, or over some other time interval, with some periods of considerably higher demand than others. This is known as a?

Seasonal Variation

Organizations that choose to implement one single system with all of the desired applications from a single vendor is said to have chosen a?

Single integrator solution

Which inventory stock level is generally used for a very specific purpose or future event, and for a defined period of time?

Strategic Stock

RFID

Successor to the barcode for tracking individual unit of goods. RFID does not require direct line of sight to read a tag and information on the tag is updatable.

In the absence of any other information or visibility, individual supply chain participants can begin second-guessing what is happening with ordering patterns, and potentially start over-reacting. This is known as?

The Bullwhip Effect

Which of the following is NOT an example of an ordering cost for products purchased from a supplier? A. The cost of transmitting the order B. The cost of receiving the product C. The cost associated with processing the invoice D. The opportunity cost of not ordering from a least cost supplier E. The cost of handling the product

The opportunity cost of not ordering from a least cost supplier

The primary purpose of the basic economic order quantity model is

To minimize the sum of ordering cost and holding cost

Qualitative Forecasting

based on opinion and intuition

Which one of the following is NOT a common mode of transportation in the supply chain? Air Bus Pipeline Rail Truck Water

bus

Forecasting

business function that estimates future demand for products so that they can be purchased or manufactured in appropriate quantities in advance of need

Collaborative Planning, Forecasting, & Replenishment (CPFR)

business practice of combining intelligence of multiple trading partners to share plans, forecasts, and delivery schedules with one another to ensure a smooth flow of goods/services across the supply chain Combats the Bullwhip Effect

ABC system

classifies inventory based on the degree of importance A items are highest priority, accounting for 20% of total items but 80% of cost B items require closer management but can be prone to obsolscene C items are lowest value and priority

Demand Planning

comes after forecasting process; management and other experts review the forecast to ensure it's aligned with the company's strategy, business policies, and business knowledge

Dependent demand

demand for an item that is directly related to other items or finished products (component or material used in making finished product) Demand is calculated

Independent demand

demand for an item that is unrelated to the demand for other others (finished products, spare parts, service parts) Demand is forecasted

Collaborative Planning, Forecasting, and Replenishment is the process of combining statistical forecasting techniques and judgment to construct demand estimates for products or services.

false

Forecasts are more accurate the farther out into the future that you forecast.

false

Independent Demand is demand for an item that is directly related to other items or finished products, such as a component or material used in making a finished product.

false

Master Production Scheduling is a process that brings all the demand and supply plans for the business (sales, marketing, development, production, sourcing, and finance) together to provide management with the ability to strategically direct the business to achieve a competitive advantage

false

Material Requirement Planning is the system intended to develop long-range plans (more than a year away) concerning product families manufactured by the organization.

false

Service firms offer intangible products (meaning products that cannot be physically touched), therefore, they do not have a supply chain.

false

The Chase Production Strategy relies on a constant output rate and capacity while varying inventory and backlog levels to handle the fluctuating demand pattern.

false

The goal of Supply Chain Management is to increase customer service by increasing inventory and reducing costs.

false

The lowest inventory level at which a new order must be placed to avoid a stockout is known as the Replenishment Threshold

false

There are no inventories in the service industry.

false

Inventory costs which are independent of the output quantity are called?

fixed costs

Economic Order Quantity (EOQ)

fixed order quantity model based on the tradeoff between annual inventory order costs and annual inventory carrying costs

Strategic Stock

internal inventory stock level that is beyond cycle and safety stock, generally used for a very specific purpose and/or a defined period of time (ie Christmas trees)

Safety Stock

internal inventory stock level that is like a buffer between what is actually needed to meet anticipated demand

cycle stock

internal inventory stock level that is meant to satisfy company's immediate demand

facilitating products

items that are used to help facilitate the service ex. restaurants can't inventory the actual dining service but they can the facilitating products - the food, tableware, etc

Mean Absolute Deviation (MAD)

measures the size of the forecast error in units. Absolute errors for a series of time periods are added and then divided by the number of time periods

make to order

part of finished goods inventory where goods are not produced until a customer order is received

make to stock

part of finished goods inventory where product is produced prior to customer order

reverse logistics

part of the supply chain management that deals with planning and controlling the process of moving goods back from customer to point of origin

Which of the following MRP terms represents a committed order awaiting delivery for a specific period?

scheduled receipt

Bullwhip Effect

the phenomenon in supply chains where even a small change in demand at the end-consumer side, will cause an increasing variance moving upward in the chain

Barcodes

track products and stock levels for inventory management

Cause-and-Effect Models can have multiple independent variables.

true

It was intense global competition that led manufactures to adopt Supply Chain Management (SCM) and other practices such as Just-in-Time (JIT).

true

Strategic partnerships are seen as one of the foundations of supply chain management

true

Supply chain management starts with understanding the flow.

true

The Economic Order Quantity (EOQ) is the optimal order size because it minimizes the annual total inventory cost.

true

The four broad categories of inventory are raw materials, work-in-process, MRO, and finished goods.

true

The goal of supply chain planning is to balance supply and demand in a way that realizes the financial and service objectives of the company.

true

The three basic production strategies for addressing the aggregate planning problem are the chase production strategy, the level production strategy, and the mixed production strategy.

true

The top 2 primary functions of inventory are (1) To meet customer demand, and (2) To buffer against uncertainty in demand and/or supply.

true

Work in Progress

type of inventory - goods in various stages of completion throughout the plant

Finished Goods

type of inventory - goods that are available for sale and/or shipment to the customer

Maintenance, Repair and Operating (MRO)

type of inventory - materials for the manufacturing operation and business but do not end up part of the finished product

Raw Materials

type of inventory - purchased items or extracted materials that will turned into the good

Quantitative Forecasting

uses mathematical models and historical data to make forecasts

Master Production Schedule (MPS)

what the company plans to produce (regardless of customer demand) expressed in specific configurations, quantities, and dates, and includes how operations will use available resources disaggregation of aggregate production plan