Supply Chain Management: Exam 4

Supply Chain Management

Coordinating supply chain activities to deliver goods/services efficiently. Ex: Walmart coordinating suppliers + trucks.

Ordering Cost

Cost to place orders. Ex: Shipping paperwork.

Setup Cost

Cost to prepare equipment for a new run. Ex: Resetting machine.

Holding Cost

Cost to store inventory. Ex: Rent.

Dependent Demand

Demand driven by another item. Ex: Car tires depend on car production.

Bullwhip Effect

Demand swings increase as you move up the supply chain. Ex: Small retail change → big supplier change.

Independent Demand

Demand unrelated to other items. Ex: Finished goods.

Safety Stock

Extra inventory to prevent stockouts.

Channel Assembly

Final product assembled at distribution center. Ex: Dell customizing computers.

Virtual Companies

Firms that outsource most functions and focus on core activities. Ex: A company that designs clothes but outsources production.

Closed-Loop Supply Chain

Forward + reverse flows combined to reuse products. Ex: Recycling old phones.

SCOR Model

Framework for evaluating and improving supply chain performance.

Reverse Logistics

Handling returns and recycling. Ex: Amazon returns.

Inventory Turnover

How many times inventory is sold and replaced. High = selling fast.

Omnichannel

Integrated shopping experience across online, store, mobile. Ex: Target pickup + delivery.

Reorder Point (ROP)

Inventory level where you reorder. Ex: Reorder Coke at 100 bottles.

Shrinkage

Inventory loss due to theft, damage, errors.

WIP (Work in Process)

Items still being worked on. Ex: Half-built cars.

Keiretsu

Long-term partnership between company and suppliers. Ex: Toyota supplier network.

Blanket Order

Long-term purchase order for repeated deliveries. Ex: Monthly restocking agreement.

Maintenance, repair, and operating items.

MRO Inventory

Single-Stage Control of Replenishment

One member controls inventory decisions for the whole chain.

EOQ

Order size that minimizes holding + ordering costs.

CPFR (Collaborative Planning, Forecasting, and Replenishment)

Partners share data to reduce inventory + improve forecasting.

Logistics Management

Planning and controlling movement/storage of goods. Ex: UPS routing.

Service Level

Probability of not stocking out. Ex: 95% _________ = 5% risk.

Pull Data

Real-time sales data pulling inventory through the chain. Ex: POS scanner sending data to supplier.

1. meet demand 2. decouple processes 3. get quantity discounts 4. hedge inflation.

Reasons for holding inventory:

Blockchain

Secure digital record to track supply chain events. Ex: Tracking food source.

Vendor-Managed Inventory (VMI)

Supplier manages retailer's inventory levels. Ex: Pepsi restocking Walmart.

Drop Shipping

Supplier ships directly to customer. Ex: Wayfair furniture delivery.

Setup Time

Time needed to get equipment ready for production.

Single-Period Model

Used for one-time items or limited shelf life. Ex: Holiday cookies.

Outsourcing

Using external suppliers for goods/services previously done in-house. Ex: Hiring a 3PL for shipping.

Cross-Sourcing

Using multiple suppliers for the same item to reduce risk. Ex: Having two paper suppliers.

Vertical Integration

Company owns multiple steps of its supply chain. Ex: Tesla making its own batteries.

Finished Goods

Completed products ready to sell. Ex: Packaged cookies.

Raw Materials

Basic inputs of production. Ex: Flour.

ABC Analysis

Classifying inventory by importance (A=most valuable).