SUPPLY CHAIN EXAM 1 REVIEW

Which type of demand is forecasted?

Independent Demand

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?

Bullwhip Effect

Poor communication and inaccurate forecasts along the supply chain can results in the?

Bullwhip effect

If a supply chain is made up of the following companies, who is considered the second-tier supplier of the Manufacturer? Raw Material Supplier ==> Intermediate Supplier ==> Manufacturer ==> Wholesale Customer ==> Retail Customer

Raw Material Supplier

Which inventory system classifies inventory based on the degree of importance in order to determine which inventories should be counted and managed more closely?

ABC System

The hierarchical planning process that translates the annual business plan, marketing plans, and demand forecasts into a production plan for a product family in a plant or facility is known as?

Aggregate Production Plan (APP)

What is the name of the engineering document that shows all component parts and materials which make up the final product?

Bill of Material (BOM)

Companies in the service industry cannot maintain an inventory of services, however, they can maintain an inventory of _________________ which are items that are used during the service being provided.

Facilitating Products

Costs which cannot be traced directly to the volume of units being produced are known as variable costs.

False

When a company utilizes a "make to stock" strategy, the company is also said to be using a "pull" business model

False

The Supply Chain Operations Research (SCOR) Model is?

Plan, Source, Make, Deliver/Return, and Enable

When creating a quantitative forecast, if you detect a repeating pattern of demand data from year to year with some periods of considerably higher demand than others. This is known as what type of variation?

Seasonal Variation

A supply chain consists of . . . ?

Suppliers, Manufacturers, and Customers facilitated through the use of Logistics

Which one of the following is NOT one of the Fundamentals of Forecasting?

The more "granular" the forecast, the more accurate it is

When a supply chain planner talks about using the BOM to do an MRP Explosion, they are talking about?

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

The primary purpose of the basic economic order quantity model is?

To minimize the sum of ordering cost and holding cost

The planning function that determines the need to replenish finished product inventory at branch warehouses, when there are multiple warehouses in the network, is called what?

Distribution Requirements Planning (DRP)

Which one of the following is NOT a Benefit of Supply Chain Management?

Increased inventory

Companies establish Time Fences in order to?

Minimize the impact of changes and costly disruptions

One of the main differences between Barcodes and RFID is that Barcodes require a direct line of sight to read the information, and RFID does not.

True

The Master Production Schedule represents?

What the company plans to produce

For every forecasting problem, there is one best forecasting technique.

False

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

True

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

True

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

True

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

Mean Absolute Deviation (MAD) is a measure of forecast bias. MAD indicates the tendency of a forecast to be consistently higher or lower than actual demand.

False

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

False

To handle a fluctuating demand pattern, the Level Production Strategy adjusts the production rate and capacity to exactly match demand.

False

_______________________ 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. (Fill-in-the-blank with one of the terms below).

Mean Absolute Deviation

Why would a company want to use ABC analysis when managing their inventory?

So they can focus their limited resources on the items that have the highest inventory value

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

True

The foundational elements of Supply Chain Management are; Integration, Supply Management, Logistics Management, and Operations Management

True

The key disadvantages of the Material Requirements Planning (MRP) system include; loss of visibility, and the fact that MRP ignores capacity and shop floor conditions.

True

A company that is adjusting the production rate and capacity to exactly match demand by increasing and decreasing labor, materials, or necessary resources as needed, is using which basic production strategy?

Chase Production

The Inventory Turnover Ratio shows how many times a firm turns over its inventory in an accounting period, and higher (i.e., more) inventory turnover is generally viewed as negative.

False

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

True

The top two primary functions of inventory are to meet customer demand, and to buffer against uncertainty in demand and/or supply.

True

Time Series forecasting models make predictions about the future based on analysis of past data.

True