SCM 309 exam 1 combined quizes
Product or customization flexibility
-Options offered -Built to your specifications
Core Competency
a harmonized combination of multiple resources and skills that distinguish a firm in the marketplace
Long-range: Aggregate Production Plan (APP)
usually covers a year or more, involves the construction of facilities & major equipment purchase
Postponement
a business strategy which maximizes possible benefit and minimizes risk by delaying further investment into a product or service until the last possible moment.
Organizational Strategy
a dynamic long-term plan that maps the route towards the realization of a company's goals and vision.
Blockchain
a growing list of records, called blocks, that are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data.
In making inventory decisions, the purpose of the basic Economic Order Quantity (EOQ) model is to: -minimize ordering costs -minimize customer dissatisfaction -minimize carrying costs -minimize the sum of the carrying costs and ordering costs.
-minimize the sum of the carrying costs and ordering costs.
Shigeo Shingo's 7 Types of Waste
1. Defects - Can cause additional waste 2. Overproduction - production used to mask shortcomings 3. Transportation - No value added, possible loss 4. Motion - Employees and machines 5. Waiting - Wasted resources during wait 6. Inventory - Not providing a return 7. Over-processing - More work than required for creating final product
When demand and supply planning are not synchronized (2 things)
1. Shortage of products that customers want 2. Surplus of products that customers do not want
Which of the following would refer to the 80/20 rule when applied to the ABC inventory control system? -80 percent of the unit cost accounts for 20 percent of the items -20 percent of the items account for 8- percent of the tasks -80 percent of the items account for 20 percent of the groups -80 percent of the total annual $ usage is accounted for, by 20 percent of the items
80 percent of the total annual $ usage is accounted for, by 20 percent of the items
Mass customization
Ability to make goods and services that global customers require at any volume and time Both product and volume flexibility
Chase Strategy
Adjusts capacity to match demand. Firm hires & lays off workers to match demand. Finished goods inventory remains constant. Works well for make-to-order firms.
An assumption of the basic Economic Order Quantity (EOQ) is: -Demand is unknown -Demand is variable -An item is produced continuously -An item is purchased in lots or batches
An item is purchased in lots or batches
Order qualifiers:
Basic customer expectations • Minimum performance level required to stay in business
Volume Flexibility
Coping with demand changes Large and/or small orders (timely)
Supplier selection criteria includes quantitative and aspects to be considered. Identity from the list below which one is a quantitative criterion:
Cost
Porter's Generic Strategies Model
Cost Leadership, Differentiation, or Focus.
MTS (Make to stock)
Customer order is picked from the Finished Goods inventory and delivered customer
MTO (Make to order)
Customer order triggers manufacturing of the product (time phased so that the promised customer delivery date can be met).
ETO (Engineer to order)
Customer order triggers order-specific engineering, after which the product is made according to order
You order a box of pencils from an office supply store and use them one-by-one until they are all gone. The pencils are: -Safety stock -Cycle stock -in transit stock -usage stock
Cycle stock
Operational Planning
Day-to-day mix
Corporate strategy
Defines businesses in which corporations participate and develop plans for
World class businesses have supply chains that are:
Demand driven, Agile, Collaborative
Independent demand is the: -Internal demand for all end-item parts and materials -absolute demand for all items -Forecasted demand for purchased items -Demand for a firm's end products
Demand for a firm's end products
Functions involved in demand and supply integration (4 things)
Financial Planning Demand Planning Supply Planning Inventory Planning
Competitive Advantage
Firm's ability to achieve market and financial superiority over its competitors
Order winners:
Goods and service features and performance characteristics that differentiate one customer benefit package from another • Help win the customers' business
Business strategy
Helps make decisions about the competitive priorities that SBUs need to pursue to gain competitive advantage
Enterprise Resource Planning (ERP)
Integrates internal operations with a common software platform and centralized database system.
vendor-managed inventory (VMI)
Inventory planning and replenishment system where supplier (vendor) accepts negotiated responsibilities that typically include monitoring and restocking using point-of-sale (POS) data.
Strategy is Dynamic:
It changes over time, most companies adapt strategy in the light of circumstances.
Tactical Planning
Level of volume output per time
Mixed Production Strategy
Maintains stable core workforce while using other short-term means, such as overtime, subcontracting & part time helpers to manage short-term demand.
Longest to shortest Order Penetration Point (OPP)
Make to stock (MTS) Assemble to order (ATO) Make to order (MTO) Engineer to order (ETO)
Strategic Planning
Match capabilities with marketing needs
Planning Principles
Maximize Customer Service Minimize operating costs Minimize inventory
ATO (Assemble to order)
Order is assembled based on order.
In terms of Supplier Segmentation, only some inputs are strategic resources. Using a Pareto Classification, __________ items should have 5-year contracts, 1 or 2 suppliers, and collaboration for joint designs.
Pareto Class A
Short-range: Materials Requirement Planning (MRP)
Plan covers few days to few weeks. Detailed planning process for components and parts to support the master production schedule
Intermediate: Master Production Schedule (MPS)
Plan spans six to eighteen months. Shows the quantity and timing of end items.
Level Strategy
Relies on a constant output rate while varying inventory & backlog according to fluctuating demand. Firm relies on fluctuating finished goods & backlogs to meet demand. Works well for make-to-stock firms.
Operations strategy
Set of decisions made across value chains that supports implementation of higher-level business strategies
Functional strategy
Set of decisions that each functional area develops to support its particular business strategy
Design Capacity
The maximum workload that an organization is capable of completing in a given period of time
Rough-Cut Capacity Plan (RCCP)
The medium-range capacity plan used to check the feasibility of the Master Production Schedule (MPS). Converts MPS from production needed to capacity required, then compares it to capacity available. Tactical decision
Capacity Requirements Planning (CRP)
The process of determining short-range capacity requirements.
Capacity Planning
The process of determining the operational capacity required to meet demand
scan-based trading
The process where suppliers maintain ownership of inventory at the retailer until items are scanned at the point of sale
The Delphi method used for forecasting
Uses a panel of experts, whose identities are typically kept confidential from one another, to respond to a sequence of questionnaires
Productivity Firm's perspective
What did I make? (Outputs) What was the cost? (Inputs)
Value Customer's Perspective
What do I get? What is the price?
Which of the following is true under the Periodic Review System? -it is more expensive to administer compared to the Continuous Review System -a lower level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system -the only uncertainty is the magnitude of demand during the delivery lead time -a higher level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system
a higher level of safety stock is needed to buffer against uncertainty in demand over a longer planning horizon, compared to the EOQ system
Bill of Materials (BOM)
a list of the raw materials, sub-assemblies, intermediate assemblies, sub- components, parts, and the quantities of each needed to manufacture an end product.
Resource Requirement Planning (RRP)
a long-range capacity planning module, checks whether aggregate resources are capable of satisfying the aggregate production. Resources considered include gross labor hours & machine hours
which of the following is true of the R-squared (R2) value in Excel's Trendline function?
as the value of R2 gets higher, the line will be a better fit for the data
In the linear trend equation, (formula) identity the term that signifies the trend
bt
The primary goal of Supplier Relationship Management is to
continuously improve performance
Competitive Priorities
cost, quality, time, flexibility, innovation
When demand and delivery lead time are known and constant, the recorder point is equal to: -safety stocks -economic order quantity -demand multiplied by the delivery lead -demand multiplied by the delivery lead time plus the safety stock
demand multiplied by the delivery lead
Which one of the following descriptions best defines the cycle service level as a measure of customer service? -the preferred proportion of annual demand instantaneously filled from stock -desired probability of not running out of stock in any one inventory cycle -the number of stockout tolerated per year -the preferred proportion of days in the year when an item is in stock
desired probability of not running out of stock in any one inventory cycle
Master Production Scheduling (MPS)
detailed disaggregation of the aggregate production plan, listing the exact end items to be produced by a specific period.
Distribution Requirements Planning (DRP)
determination of replenishment and positioning of finished goods in the distribution network
Scope
focus (offering its products to selected segments of the market) or industry-wide, offering its product across many market segments.
In linear regression output, the R-squared value _______ .
gives the proportion of variation in the dependent variable that is explained by independent variable
Standard residuals
help detect outliers that may bias the results of a regression analysis
Strategic Alliance utilized a ________ amount of resources and they should be used _______.
high; selectively
quantitative forecasts use mathematical techniques that are based on
historical data
Inaccurate forecasts can results in negative outcomes like
imbalances in supply and demand
Which of the following factors is (are) NOT included in the carrying cost? -cost of capital -obsolescence -inspecting incoming inventory -spoilage
inspecting incoming inventory
demand-supply integration (DSI)
integrates supply-management and demand-generating functions of a business
Time-series models may exhibit seasonal effects of cyclical effects. A seasonal effect differs from a cyclical effect in that a seasonal effect
is one that repeats that fits intervals of time, typically a year, month, week or day
What of the following is a disadvantage of carrying too much inventory? -it leads to higher annual inventory ordering costs -it leads to lower average finished goods inventories -it creates an unnecessary waste of scare resources -it increases the need to purchase items
it creates an unnecessary waste of scare resources
which of the following is true of linear functions used in predictive analytical models?
it is used when there is a steady decrease or increase over a range of a variable
Cost vs Differentiation Strategy
lower costs than its competition or differentiating itself along dimensions valued by customers to command a higher price
the process lifecycle
measure of the maturity of the manufacturing process.
the product lifecycle
measure of the maturity of the product or market
The Goal of capacity planning:
minimize the discrepancy between an organization's capacity and demand
Which of the following factors is (are) NOT included in the ordering cost? -obsolescence -purchasing department overhead costs -developing and sending purchase orders -bill paying
obsolescence
A(n) ______ is an extreme value that is different from the rest of the data
outlier
When there is not a lot of currently relevant data available it is generally best to use
qualitative forecasting
As the service level increases, -safety stock decreases at a decreasing rate -safety stock increases at a decreasing rate -safety stock decreases at an increasing rate -safety stock increases at an increasing rate
safety stock increases at an increasing rate
If the given time series has no trend and no seasonality, the most appropriate forecasting model to determine the forecast of the time series is the _______ model
single moving average
There are different types of Supplier Relationships. A Transactional Relationship is characterized by the following statements, EXCEPT
supplier base is small
Material Requirements Plan (MRP)
system of converting the end items from the master production schedule into a set of time-phased component part requirements
strategy
the approach by which an organization seeks to develop the capabilities required for achieving its competitive advantage
For the basic Economic Order Quantity (EOQ) model, which of the following relationship is NOT true? -Average cycle inventory level equals one-half the order size -the average dollar level of inventory equals unit price multiplied by order quantity -the optimal number of orders per year equals annual demand divided by the EOQ -At EOQ, annual ordering cost equal annual carrying cost
the average dollar level of inventory equals unit price multiplied by order quantity
Demand Planning
the combined process of forecasting and managing customer demands to create a planned pattern of demand that meets the firm's operational and financial goals
There are different types of Supplier Relationships. A Strategic Alliance Relationship is characterized by the following statements, EXCEPT
the duration of the relationship is short
Which of the following statements hold true for safety stock? -the lower the opportunity cost of the funds invested in inventory, the smaller the safety stock needed -the greater the uncertainty associated with forecasted demand, the lower the level of safety stock needed -the higher the profit margin per unit, the lower the safety stock necessary -the greater the risk of running out of stock, the larger the safety stock needed
the greater the risk of running out of stock, the larger the safety stock needed
Production Planning
the planning of production and manufacturing modules in a company or industry.
For a simple linear regression model, what does the Y intercept (80) represent?
the predicted value of Y when X = O
What does a multiple linear regression analyzed examine
the relationship between one dependent and more than one independent variables
Which one of the following is NOT a reason for firms to carry inventory? -to increase production/ setup costs -to meet variations in products demand -to allow for production scheduling flexibility -to take advantage of quantity discounts
to increase production/ setup costs
Product-Process matrix
tool to analyze the fit between a chosen product positioning and manufacturing process.
Random variations in a Time Series components are due to
unpredictable events
Radio Frequency Identification (RFID)
uses electronic tags and labels to identify objects wirelessly over short distances
Low prices can be achieved by:
• High productivity • High capacity utilization • Achieving economies of scale • Efficient design and operation of the supply chain • Improvement in quality
Goals of Corporations
• Sustainable long-term profits • Maximize Return on Investment (ROI)