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SCM 301 EXAM 1
SCM 301 EXAM 1
45
Business
Undergraduate 2
02/18/2013

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Cards

Term
What are the 4 foundations of Supply Chain Management?
Definition

Supply Management

Operations

Distribution

Integration of these

Term
Strategic partnerships, Vendor Managed Inventory and Supplier Certification are all examples of...
Definition
the Supply Management foundation of SCM
Term
Demand management, MRP, ERP, Inventory Management, Lean Production and Six Sigma are all examples of...
Definition
the Operations foundation of SCM
Term
Transportation management, CRM, Distribution networks, Global supply chains, and Logistics management are all examples of...
Definition
the Distribution foundation of SCM.
Term
What is the Bullwhip Effect?
Definition
Small changes in customer demand ripple through the supply chain; forecasts and orders become amplified and accumulate.
Term
What are some causes of the Bullwhip Effect?
Definition

Order Batching/Safety Stock

End-of-Year Budget Usages

Price Fluctuations/Forward-Buying (stocking up due to sale)

Term
The lengthening of the supply chain has decreased labor and material costs but...
Definition
it increased risk and caused higher security costs.
Term
Ways to minimize the Bullwhip Effect:
Definition

Reducing the length of the supply chain

Vendor-Managed Inventory

Make consumer demand available to suppliers

Everyday low pricing/minimizing price DEALS

Term
In order to help reduce the Bullwhip effect, many retailers have adopted _________ ___ _____, which is when...
Definition

Everyday low prices

 

...a consistent price is always offered, instead of running special deals, which in turn cause a spike in demand.

Term
What is Vendor Managed Inventory?
Definition
When a vendor/supplier manages their inventory in YOUR store. They control the reordering, and can be penalized if they do not supply accurate inventory.
Term
Explain the difference between INTERNAL and EXTERNAL supply chains:
Definition

INTERNAL: Within your organization

EXTERNAL: Upstream and Downstream suppliers/Distributors

Term
Name some trends in SCM:
Definition

Supply chains have gotten:

Complex

Longer

Increased partnerships

Faster responsiveness

Term

U.S. firms are expanding partnerships by breadth and depth by building facilities in foreign markets.

 

Explain breadth vs. depth.

Definition

Breadth = foreign manufacturing, offices, retail sites, suppliers and customers.

 

Depth = Multi-tiered suppliers and customers

Term
In order to continuously improve, supply chains must ________, or...
Definition
Benchmark, compete with increasing industry performance levels
Term
"Greening" of supply chains:
Definition
Recycling and conservation are a growing alternative in response to high cost of natural resources
Term
What are 4 ways to reduce supply chain costs?
Definition

Reduce:

  • Purchasing costs
  • Waste
  • Excess inventory
  • Non-value-added activities
Term
Define Purchasing:
Definition
Purchasing: key business function for acquiring materials, services, and equipment
Term
Define Contracting:
Definition
Contracting: term used for the acquisition of services
Term
Define Supply Management:
Definition

Supply Management: encompasses ALL acquisition activities;

 

Identificaiton, acquisition, access, positioning, and management of resources an organization needs in the attainment of its strategic objectives.

Term
What is the role of Purchasing in an organization?
Definition

1) Ensure uninterrupted flows of materials at lowest cost

2) Improve quality of the finished goods

3) Optimize customer satisfaction

Term
What is a Purchase Order?
Definition

the buyer's offer, becomes a binding contract when accepted by the supplier.

 

Only a Sales Order when initiated by the supplier.

Term
Why is e-Procurement important?
Definition
  • Reduces transaction costs
  • Reduces headcount
  • Automates process
Term
Firms subcontract, or outsource some supply, due to...
Definition
Insufficient Capacity.
Term
Make vs. Buy Analysis:
Definition

Cost to MAKE   =   Cost to BUY

FC + VC(Q)  =  FC + VC(Q)

Use algebra to solve for Q.

You are indifferent between MAKE v. BUY when demand = Q

Term
What is the foundation of SCM?
Definition
Supplier Management!
Term
Many firms are developing long-term alliances with fewer supplier resulting in a...
Definition
Smaller Supply Base
Term
What encompasses Total Cost of Ownership?
Definition

Costs:

Unit

Ordering

Logistics

Inventory

Maintenance

etc.

Term
Supplier Scorecard:
Definition

Performance Measure - Rating - X - Weight =  Final Value

        |                                  |                 |                   |
Technology--------------------70 ----X----.10---  =       7.00

Quality--------------------------95----X----.25---  =       23.75

Responsiveness---------------90-----X----.15---  =       13.50

...etc...--------------------

Term
What is the main key to successful partnerships?
Definition
Performance Metrics! You can't improve what you can't measure!
Term
Explain Third-Party Logistics(3PL):
Definition

An external supplier performs all or parts of a company's logistics functions.

 

(transportation, warehousing, distribution, etc.)

Term
Define Centralized Purchasing:
Definition
One corporate office manages all purchasing
Term
Define Decentralized Purchasing:
Definition
Each individual location makes purchasing decisions
Term

T/F

 

Most companies use a hybrid model of centralized and decentralized purchasing.

Definition
TRUE
Term
What is the difference between seasonal demands and trends?
Definition

Seasonal demands are the various PEAKS that come throughout the year.

 

Trends are the LINEAR view of the forecast.

(SLIDE 45)

Term
Forecast error always starts with...
Definition

Amount delivered - Forecast

 

RSFE tells us this.

Term
Very positive RSFE tells us...
Definition
Forecast is too LOW, SHORTAGE
Term
Very negative RSFE tells us...
Definition
Forecast is too HIGH, SURPLUS
Term

Running Sum of Forecast Errors (RSFE): shows us how high, or low our forecasting is over a period of time.

An IDEAL forecast would have an RSFE of...

Definition
ZERO!
Term
Mean Absolute Deviation (MAD): tells us the absolute forecast error over a period of time, but it doesn't tell you how much you are over or under. An ideal MAD is...
Definition
ZERO! and means there is NO forecasting demand. The higher the demand, the poorer the forecasting.
Term
Mean Absolute Percentage Error (MAPE): tells us the true AVERAGE magnitude of the forecase error. An ideal forecast would have a MAPE of...
Definition
ZERO! A lower MAPE is preferred.
Term
Mean Squared Error (MSE): tells us variance, Large forecast errors are heavily penalized
Definition
MSE = Average of the Squared Errors (not including period 1)
Term
RFSE =
Definition
RSFE = Running total of errors
Term
MAD =
Definition
MAD = Average of Absolute Deviations <--(Equals ABS of Forecast - Demand)
Term
Tracking Signal(TS) =
Definition
TS = RSFE/MAD
Term
Tracking Signal (TS): tells us if forecast is within acceptable control limits. Generally, good TS falls between...
Definition
-4 and +4
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