Supply Chain Exam One

what all is considered and included in the total procurement price

- traditional basic input costs - direct transaction costs - supplier relational costs - landed costs - quality costs /factors - operations logistics costs all added together equals total procurement price T.D.S.L.Q.F.O (tate does so little quality for olivia)

what are the five supply chain drivers?

1. Production 2. Inventory 3. Location 4. Transportation 5. Information P.I.L.I.T "pilit are good drivers for supply chain"

four categories of the matrix

1. distinctives 2. criticals 3. generics 4. commodities (memorize what goes in each square in the quadrant)

when production scheduling, the three balancing objectives are high utilization rates, _____ inventory levels, and ______ levels of customer service

1. high utilization rates 2. low inventory levels 3. high levels of customer service

what does Ft refer to in the exponential smoothing method : what does At stand for in the formula? what does the a stand for

1. last periods forecast (Ft) 2. last periods actual value (At) 3. alpha ; a number between 0 and 1

what are the four types of patterns you look for when looking at a time series model?

1. level 2. trend 3. seasonality 4. cycle

what are the four variables (factors) that impact forecasting

1. supply 2. demand 3. product characteristics 4. Competitive Environment

what does pareto's principle state?

80% of sales comes from 20% of items in assortment

Which tool is useful in logistics planning when items are grouped by their sales activity?

80-20 curve

Multi Product production facility step one

Economic Lot Size ;

regarding spatial relationships within supply chain networks distance between facilities impacts which warehouse is used but not impact inventory carrying costs. True or false

FALSE

supply chain management is concerned with the effective and efficient flow of products, and finances, but not with the flow of information

FALSE

true or false: the fewer suppliers there are and the longer the lead times, there is decreased potential for uncertainty in the supply market

FALSE Increased

true or false: simpleset negotiations are for direct goods

FALSE they are for indirect goods

regarding spatial relationships within supply chain networks, transportation cost decrease with distance . True or false

FALSE transportation costs normally increase with distance

service levels are required to be high for specialty goods True or false

FALSE ; not required to be high

logistics management is solely transportation. T or F

FALSE ; the flow and storage of inventory but NOT solely transportation

products that complete with or complement each other should not be forecasted together . T or F

FALSE ; they SHOULD be forecasted together

The five major drivers for supply chain drivers are production, inventory, innovation, location, and transportation. True or false?

False

quantify how well a supply chain is performing

KPIs

What does KPI stand for?

Key Performance Indicator

what is the EOQ formula

Q = the square root of 2RA / VW

when looking at a multiproduct production facility you will calculate (R) which is the Run Out Time. How do you calculate R- values?

R= P over D Run out time = Number of units on hand divided by demand in units for a day or week ; you then put them in order from least to greatest for the sequence of production runs

The integrated process of plan, _______ , make, _________, ________, and enable

Source, deliver, and return P.S. Mason Does Read Everything definition of supply chain

when using the exponential smoothing method, your alpha should be small such as a= 0.1 true or false

TRUE

consumption above expectations is either a problem or reflects inaccurate expectations true or false

TRUE consumption is bad

What is supply chain ??

The integrated process of plan, source, make, deliver, return, and enable ... (this is the most important part to remember of the defintion) spanning from the suppliers supplier to the customers customer

T or F forecasts should consider events that are planned for in the upcoming period like promotions and sales specials for both an organization and it competitors

True

top 20% are _____ items ; next 30% are _____ items ; remaining 50% are _____ items each category can be distributed differently

a ; b ; c

how do managers categorize items in the item procurement importance matrix?

based on the measures of value or profit and risk

purchasing benches and shelves for starbucks is ________ purchasing whereas purchasing coffee beans for starbucks is ________ purchasing

benches and shelves is indirect coffee beans are direct

minimizing the level of investment in the logistics system ... which strategy? capital reduction cost reduction service improvement

capital reduction

casual models explore ______ and _______ relationships

cause and effect relationships

supply chain management is the ______ of production, inventory, location, and transportation among the ____ in a supply chain to achieve the best mix of ____ and ______ for the market being served.

coordination, participants, responsiveness, efficiency

product design defines the shape of a supply chain and impacts _____ of a product and ___________ of a product

cost and availability

improved operations is for _______ When you increase operating efficiency you have less _______, _________, and _______ you are saving more money but what about the customers....

cost efficiency less product , less warehouses, less stores

what are the three strategies to managing logistics operations ?

cost reduction, capital reduction, and service improvement

higher service levels are for ___________ To have higher service levels you have more _______, _________, and ______ however, when you have higher service levels for customers you have higher ______

customer service / effectiveness more product, more warehouses, and more stores (more fulfillment centers) you have higher cost when you focus on customer service bc you are paying more for products and warehouses and stores.

Logistics is the management of the flow and storage of inventory such that total cost is minimized and ____________ are achieved.

customer service levels

how does a forecaster look for data patterns in a time series model?

data = historic pattern ; historical ONLY ; assumes past influences future

which part of the purchasing process is considering which products to purchase, how much, and when? DONT NEED TO KNOW THIS

decision making

to increase their purchasing power with suppliers, companies can : what is the risk considered with this?

decrease the number of suppliers they do business with ; centralized power

what are the two impacts of product design that affects the supply chain required

design of a product and component selection

purchasing : goods and services required to produce (______) and to operate (______)

direct and indirect

based on the item procurement importance matrix, engineered items are _______

distinctiveness

The goal of supply chain management is to achieve both ______ and ______

efficiency and effectiveness

what is the most frequently used time series method bc of the ease of use and minimal amount of data needed?

exponential smoothing formula

the less producers there are of a product and the shorter lead times, the more predictable supply is. T or F

false ; the MORE producers there are of a product and the shorter the lead times, the more predictable supply is.

direct purchasing refers to the activity of purchasing goods and services that are required for a firm to operate true or false

false ; direct purchasing refers to the activity of purchasing goods and services that are required for a firm to PRODUCE

a common tool of casual modeling is exponential smoothing true or false

false ; most frequently used in time series

logistics is the management of __________ and _______ of _______

flow and storage of inventory

The objective of supply chain strategy and design is to focus on __________ costs while improving ________ __________ Cost = _________ while customer service = _________

focus on REDUCING COSTS while IMPROVING CUSTOMER SERVICE Cost = efficiency Customer service = effectiveness

production runs in SMALL BATCHES and has LOW LEVELS of inventory and has HIGHER production costs Frequent productions runs or less frequent production runds

frequent production runs

In a supply chain network, carrying lower levels of inventory can serve to

increase operating efficiency

Simplest negotiations are for ____ goods [price-based]. More complex negotiations are for ______ materials [other requirements]

indirect ; direct

How do you determine the economic lot size?

it is like EOQ and done for each product - production set up costs with cost of carrying inventory

B items in the 80-20 curve have ______ _____ distribution and __________ levels of stocks availability

less wide ; intermediate levels

The goal of using the Economic Order Quantity (EOQ) is to

minimize total cost

which part of the purchasing process requires supply chain objective considered and QTY, prices, delivery dates, and payment terms

order specifics

the goods and services required to product (Direct) and operate (indirect)

procurement

what is considered a value when looking at the item procurement importance matrix? is it ture products have value or profit potential but risk ?

product features that lead to profits or competitive advantage yes

the transaction process of buying products and services

purchasing

what is step 2 of the multiproduct production facility

sequence of production

what are the three physical goods that have attributes that can impact logistic costs

shape, volume, and weight

C items in the 80-20 curve are ______ central stocking point and _______ stocking levels

single ; lower

production runs in ______ batches for frequent production runs BUT it runs in ________ batches for less frequent production times

small ; larger

which category of goods is the lowest distribution costs? Specialty shopping convencie

specialty

numbers and ratios that companies monitor to measure how efficiently and effectively goods are delivered to customers

supply chain metrics

the integrated process of plan, source, deliver, return, and enable spanning from the suppliers' supplier to the customers' customer

supply chains

what is considered a risk when looking at the item procurement importance matrix?

the cost associated with not having the item

distribution costs as a percentage of sales for shopping goods are typically ___%

they are typically 15%

use historical demand only ; best with stable demand

time series

which forecasting method is this? assumes information needed to generate a forecast is contained in a time series of data ; assumes the future will follow same patterns as the past

time series model

which forecasting method is this? assumes the future will follow same patterns as the past

time series model

what are the quantitative methods?

time series models and casual models

what is the key to spatial relationships in supply chain logistics

transportation costs

Casual models use MORE than just historical sales as data True or false

true

T or F Supply chain forecasts must cover a time period that encompasses the combined lead times of all components that go into the creation of a final product

true

consumption below expectations is either a problem or reflects an opportunity to gain cost efficiencies through procurement true or false

true

cost reduction strategy is reducing the variable costs associated with movement and storage true or false

true

distribution costs as a percentage of sales for convenience goods are typically high (as much 33%) true or false

true

good supply chain management leads to firm competitive advantage True or false

true

higher a values in the exponential smoothing formula may place too much weight on last periods random variation true or false

true

indirect spending is spending on maintenance, goods, and services for day to day operations true or false

true

negotiated contracts require trade-offs between unit price of a product and other value-added services true or false

true

production scheduling allocates available capacity [equipment, labor, and facilities] to the work that needs to be done. The goal is to use available capacity in the most efficient and profitable manner true or false

true

service levels must be high to secure customer patronage for convenience goods (toiletries and food items) True or false

true

the total procurement price is more than just the basic purchase price true or false

true

true or false can be 50% or more of product cost when looking at the impact of product design

true

true or false the business plan and operating model alignment states that suppliers need to have the capabilities to support specific needs

true

true or false: forecasts for mature products can cover longer timeframes than forecasts for products that are developing quickly

true

when conducting purchasing activity, a modified buy is a type of rebuy true or false

true

True or false Random variation cannot be predicted

true some portion of that data you cant predict because it is just random

T or F products and markets for which there is little historical data and lots of variability are the most difficult to forecast for.

true ; know it is LITTLE historical data and lots of variability

generally, a company seeks to narrow down the number of suppliers it does business with T or F

true ; selecting suppliers principle

T or F : supplier capabilities assessment uses criteria that asses more than just prices (such as quality, technical support, etc) is this the best combination of capabilities?

true ; yes

which part of the purchasing process is considering POs generated, order transmittal (technology)

vendor communication

what does distance impact in spatial relationships ?

which warehouse is used & Related this may impact inventory carrying cost

A items in the 80-20 curve have wide / narrow distribution and high / low levels of stock availability pick one

wide ; high

Do you increase or decrease the product per facility to run the facility efficiently and produce to level of demand ?

you decrease; you want one product per facility Numerous products per facility: Complexity introduced. Each product produced for a period and then switching occurs to next product.