CH 12, 13, 14

Geographical information system (GIS)

A system of computer software, hardware and data that the firm's personnel can use to manipulate analyze, and present information relevant to a location decision.

catalog hubs

A system whereby suppliers post their catalog of items on the internet and buyers select what they need and purchase them electronically.

Value analysis

A systematic effort to reduce the cost or improve the performance of services or products, either purchased or produced.

Electronic data interchange (EDI)

A technology that enables the transmission of routine business documents having a standard format from computer to computer over telephone or direct leased lines.

Centralized placement

Keeping all the inventory of a product at a single location such as at a firm's manufacturing plant or a warehouse and shipping directly to each of its customers.

Green purchasing

The process of identifying, assessing, and managing the flow of environmental waste and finding ways to reduce it and minimize its impact on the environment.

Channel assembly

The process of using members of the distribution channel as if they were assembly stations in the factory

Make-to-order

The product is based on standard design; however, component production and manufacture of the final product is linked to customer's specifications

Make-to-stock

The product is built to a sales forecast and sold to the customer from a finished goods stock.

Assemble-to-order

The product is built to customer specifications from a stock of existing components.

Design to order

The product is designed and build entirely to customer's specifications.

Euclidean distance

The straight-line distance, or shortest possible path, between two points.

Customer Service

The supplier is frequently on the customer's site and better understands the opersations of the customer, improving response times and reducing stockouts.

modeling

The three functionalities of data​ storage, map​ displays, and​ ________ are critical parts of an intelligent Geographic Information Systems​ (GIS), and are used in all GIS applications.

Average aggregate inventory value

The total average value of all items held in inventory for a firm.

SCOR Model

A framework that focuses on a basic supply chain of plan, source, make, deliver, and return processes repeated again and again along the supply chain.

design the new building a firm is considering.

A geographic information system probably would NOT be used to

Center of gravity

A good starting point to evaluate locations in the target area sing the load-distance model

Presourcing

A level of supplier involvement in which suppliers are selected early in a product's concept development stage and are given significant, if not total responsibility for the design of certain components or systems of the product.

Vendor-managed inventories (VMI)

A system in which the supplier has access to the customer's inventory data and is responsible for maintaining the inventory on the customer's site.

Offshoring

A U.S. company faced with spiraling costs in their customer care center recreated that service in Luxembourg at a fraction of the cost. This is an example​ of:

Concurrent engineering

A concept that brings product engineers, process engineers, marketers, buyers information specialists quality specialists, and suppliers together to design a product and the processes that will meet customer expectations.

that have high capacity cushions

A design feature for responsive supply chains include firms

Quality of life

A factor that considers the availability of good schools, recreational, facilities, cultural events, and an attractive lifestyle.

expected changes in customer demand.

A firm has the least amount of control over external causes of​ supply-chain dynamics. External causes include

Backward integration

A firm's movement upstream toward the sources of raw materials, parts, and services through acquisitions.

Location A

A manager is looking for a new facility location. The annual fixed costs and variable costs for three alternatives follow. If the new​ facility's output is expected to be​ 10,000 units per​ year, which location is​ preferred? Location Fixed Costs per Year Variable Costs per Unit A ​$200,000 ​$10.00 B ​$250,000 ​$6.00 C ​$310,000 ​$2.00

​12,500 units per year

A manager is looking for a new facility location. The annual fixed costs and variable costs for two alternatives follow. At what level of annual output would each location provide the same total​ cost? Location Fixed Costs Variable Costs A ​$200,000 ​$10.00 B ​$250,000 $6.00

make-or-buy decision

A managerial choice between whether to outsource a process or do it in-house

3700

A manufacturer with four production locations wishes to minimize the shipping cost to their four warehouses. The supply from each factory and the demand of each warehouse are shown in the table along with the cost to ship one unit from each factory to each warehouse. Factory Warehouse 1 Warehouse 2 Warehouse 3 Warehouse 4 Total Supply A ​ $5 ​$6 ​$4 ​$7 250 B ​ $8 ​$3 ​$7 ​$4 150 C ​ $6 ​$4 ​$5 ​$6 300 D ​ $7 ​$3 ​$4 ​$2 250 Total Demand 300 200 150 300 What is the lowest total cost for the factories to supply the​ warehouses?

Auction

A marketplace where firms place competitive bids to buy something.

Load-distance method

A mathematical model used to evaluate locations based on proximity factors.

Radio frequency Identification (RFID)

A method for identifying items through the use of radio signals from a tag attached to an item.

channel assembly

A process called​ _________________ is where members of the distribution channel act as if they were assembly stations in the factory.

Early supplier involvement

A program that includes suppliers in the design phase of a service or product.

Transportation method for location problems

A quantitative approach that can help solve multiple-facility location problems.

​break-even analysis.

A quantitative method used to evaluate multiple locations based on total cost of product or service operations is called

load-distance method.

A quantitative method used to evaluate single locations based primarily on proximity is called

inventory pooling

A reduction in inventory and safety stock because of the merging of uncertain and variable demands from the customers is called

inventory pooling.

A reduction in inventory and safety stock because of the merging of uncertain and variable demands from the customers is called

Inventory pooling

A reduction in inventory and safety stock because of the merging of variable demands from customers.

Critical mass

A situation whereby several competing firms clustered in one location attract more customers than the total number who would shop at the same stores at scattered locations.

Cooperative orientation

A supplier relation in which the buyer seller are partners, each helping the other as much as possible.

Competitive orientation

A supplier that views negotiations between buyer and seller as a zero-sum game: what one side loses, the other side gains, and short-term advantages are prized over long-term commitments.

Next-shoring

A supply chain strategy that involves locating processes in close proximity to customer demand or product R&D

Offshoring

A supply chain stratey that involves moving processes to another country

Forward integration

Acquiring more channels of distribution, such as distribution centers (warehouses) and retail stores, or even business.

Distribution center

A warehouse of stocking point where goods are stored for subsequent distribution to manufacturers, wholesalers, retailers, and customers.

Exchange

An electronic marketplace where buying firms and selling firms come together to do business

Inventory turnover

An inventory measure obtained by dividing annual sales at cost by the average aggregate inventory value maintained during the year

Weeks of supply

An inventory measure obtained by dividing the average aggregate inventory value by sales per week at cost

Configurator

An order placement process software system which gives customers easy access to data relevant to the options available for a product is called

3.1, 2.7

A​ dry-cleaning firm has decided to operate stores in five neighborhoods in which a market analysis has determined the demand level. Its strategy is to establish a centralized plant to process the cleaning and pressing. The stores will serve as collection and distribution points and as locations at which other personal services activities will be offered. Given the following relative map grid points and demand​ levels, locate a starting point for the location of the plant. Store A B C D E X 1 2 3 4.5 4.75 Y 1 4 2 0.5 4.25 D 50 75 60 45 80

D

A​ dry-cleaning firm has decided to operate stores in five neighborhoods in which a market analysis has determined the demand level. Its strategy is to investigate the best site to expand into a centralized plant to process the cleaning and pressing. It has completed a qualitative assessment and wants to supplement its analysis by rating a series of conditions for each site. Given the following preference​ matrix, identify the preferred site for the plant. ​Cleaner's Site Scores Factor Name Weight A B C D E 1 Proximity 25 10 8 8 9 7 2 PowerCost 25 8 7 8 8 8 3 Public trans 15 3 6 7 8 9 4 ​Mixed-use 15 1 8 6 5 7 5 Road quality 10 9 6 8 9 8 6 Demand level 10 5 8 7 7 8

C

A​ dry-cleaning firm has decided to operate stores in five neighborhoods in which a market analysis has determined the demand levels. Its strategy is to investigate the best site to expand into a centralized plant to process the cleaning and pressing. The other stores will serve as collection and distribution points and as locations at which other personal services activities will be offered. Given the following relative map grid points and demand​ levels, identify the best store location to serve as the site of the plant. Assume that site A is not appropriate for expansion. Store A B C D E X 1 2 3 4.5 4.75 Y 1 4 2 0.5 4.25 Demand 50 75 60 45 80

5.0

A​ firm's database showed that the average value of all inventory items for the year was​ $7,650. The cost of goods sold was reported at​ $76,500. Because the company closes for two weeks each​ year, its business year is reduced in length. How many weeks of supply were held in​ inventory?

Not a coalition of the​ firm's suppliers.

Backward integration is achieved through

postponement

Concept whereby some of the final activities in the provision of a service or product are delayed until the orders are received.

Collaborative effort

Customers must be willing to allow the supplier access to their inventory information, which is facilitated by RFID but must be bolstered by information on forecasts, sales promotions, and other demand-related data. The implication is that the supplier assumes an important administrative role in the management of the inventory. Thus an atmosphere of trust and accountability is required.

distribution centers

Companies that engineer products to customer specifications normally do not have​ _______________ as part of their supply chains.

Supply chain design

Designing a firm's supply chain to meet the competitive priorities of the firm's operations strategy.

location of competitors.

Dominant factors in manufacturing include all of the following EXCEPT

design-to-order (DTO)

Firms that design and build products entirely to the​ customer's specifications tend to use which of the following supply chain​ designs?

Written agreement

It is important that both parties fully understand the responsibilities of each partner. Areas such as billing procedures, forecast methods, and replenishment schedules should be clearly specified. Further, the responsibility for obsolete inventory resulting from forecast revisions and changes in contract lengths should be included.

tier 1 suppliers

For the manufacturing​ firm, tier 2 suppliers provide​ ______________ with components.

A. the firm acquires its business customers B. the firm acquires its own distribution centers and retail stores C. the firm acquires more channels of distribution D. All of the above.

Forward integration can mean which of the​ following?

A. reducing the time lag between paying for materials and receiving payment for manufactured products B. reducing the backlogs of orders C. reducing lead times D. All of the above.

In which of the following ways can supply chain design improve positive net cash​ flows?

Forward placement

Locating stock closer to customers at a warehouse, DC, Wholesaler, retailer.

process integration.

Offshoring is usually at a disadvantage to a more local process approach in the area of

​Purchasing, production, distribution

Organizations have traditionally divided the responsibility for managing the flow of materials and services among which three​ departments?

Bullwhip effect

The phenomenon in supply chains whereby ordering patterns experience increasing variance as you proceed upstream in the chain.

A. the firm with a technology advantage may be setting up the other firm to be a future competitor. B. it is difficult to fully integrate outsourced processes with the​ firm's other processes. C. deciding to outsource a process before making a​ good-faith effort to fix the existing one. D. All of the above.

Pitfalls that should be carefully explored before outsourcing include

Operating Expenses

Selling expenses, fixed expenses, and depreciation are considered operating expenses

Cost Saving

Suppliers and customers eliminate the need for excess inventory through better operational planning. VMI lowers costs by reducing administrative and inventory costs. Order placement costs are also reduced.

Supply chain risk management

The practice of managing the risk of any factor or event that can materially disrupt a supply chain, whether within a single firm or across multiple firms.

Facility Location

The process of determining geographic sites for a firm's operations

Purchasing

The activity that decides which suppliers to use, negotiates contracts, and determines whether to buy locally.

Sole sourcing

The awarding of a contract for a service or item to only one supplier

Rectilinear distance

The distance between two points with a series of 90-degree turns, as along city blocks.

Supply Chain integration

The effective coordination of supply chain processes through the seamless flow of information up and down the supply chain

mass customization.

The firm that allows customers to select from a variety of standard options to create the service or product of their choice is practicing

Long-term commitments.

Under a competitive orientation to supplier​ relations, the relationship does NOT include which of the​ following?

an extreme case of forward inventory placement.

Vendor managed inventories are

Not location, supply, and demand

What are the three dimensions of​ multiple-facility location​ problems?

make-to-stock (MTS)

What is the one popular design for efficient supply​ chains?

A. Losing skills and knowledge and having a hard time starting manufacturing again. B. The ability of the subcontractor to deliver on time and with high quality should be considered D. Losing direct control over production. E. Obtaining skills and knowledge in the production of solenoids.

What other​ factors, besides​ costs, should the automobile company consider before revising its supply chain for​ SUVs? What are the possible consequences of subcontracting the production of​ solenoids? ​(Mark all that​ apply.)

30 to 40 percent

What percentage of total income from sales does the typical service provider spend on purchased services and​ materials?

preference matrix

When quantifiable costs and other​ measures, as well as various qualitative​ factors, must be considered as parts of a complete​ evaluation, which tool is most​ useful?

the best shipping pattern between plants and warehouses for a particular set of plant​ locations, each with a given capacity.

When used to study supply chain logistics​ networks, the transportation method can be used to find

Onsite expansion

Which location option holds the advantages of being the least​ expensive, quickest to​ accomplish, and​ doesn't split up​ operations?

Availability of good schools

Which of the following factors is NOT a determinant of a favorable labor​ climate?

Onset of diseconomies of scale

Which of the following factors might be a potential disadvantage of​ on-site expansion?

material cost of goods sold

Which of the following is NOT one of the three basic ways inventories are​ reported?

faster delivery times

Which of the following is an advantage of forward inventory​ placement?

technology transfer to another country or company

Which of the following is not a benefit of​ outsourcing?

annual transportation costs

Which of the following would not be considered a qualitative location selection​ factor?

GIS

Which​ decision-making tool is especially useful when decisions have a geographical​ aspect?

50,000

You currently make a part on old equipment at a cost of​ $50,000 per year and a variable cost of​ $20 / unit. You have found an outside supplier who will make the part for​ $15 / unit if you will pay their annual fixed costs of​ $200,000/year. The following table summarizes the details of this make versus buy decision.

Outsourcing

paying suppliers and distributors to perform processes and provide needed services and materials