OPMA 317 Final Exam Review UPDATED
QUESTIONS AND CORRECT ANSWERS
Supply-chain debrief:
What caused people to act the way they did? and what did this lead to? (2) - CORRECT
ANSWER Lack of communication / cooperation , leading to the guessing of customer
demand which led to arbitrary ordering decisions and the result is the bullwhip effect
long lead time, could've been even longer if the supplier had no inventory
what is the "bullwhip" effect? - CORRECT ANSWER information (orders) going back
through the supply chain is distorted and then amplified
Supply-chain debrief:
how does a long lead time affect decision making? - CORRECT ANSWER panic -
when inventory does not instantly arrive and solve your growing backlog, you panic and
order even more
Supply chain debrief:
what are the business implications of the supply chain structure? (5) (or the bullwhip) -
CORRECT ANSWER - stockouts at times (lost profit and potential goodwill)
- excess inventory at times (holding costs, risk of obsolescence)
- overtime costs (50-100% increase in labour costs)
- layoffs / rehiring costs (match staffing levels to fluctuating demands)
- expediting (rush transportations costs)
(debrief)
Incurring higher prices for the supplier throughout the supply chain will do what? -
CORRECT ANSWER Create a higher price for customers
(debrief)
,How can we specifically improve the supply chain? (2) - CORRECT ANSWER 1.
Communication & Cooperation
a) actual consumer demand (IT, avoid lumping constant demand into lot sizes)
b) forecasting (share forecasts, production and distribution schedules, share decision making
too)
2. Shorten lead time
a) admin (ordering) lead time --> IT
b) physical manufacturing ---> just-in-time (very small batches batches = faster production
completion)
c) transportation lead time --> have suppliers geographically close by
(debrief)
How can we encourage cooperation & communication? (2) - CORRECT ANSWER -
incentives to share information (ex. lower unit cost for actual data)
- Vendor Managed Inventory (VMI)
- lower admin cost for the retailer
- vendor sees actual demand
(debrief)
what are the benefits of on-shoring? (5) - CORRECT ANSWER - reduce logistics cost
(improving environmental performance)
- reduces length of lead times
- reduces the variability of lead times
- easier to identify local needs
- "local jobs"
(debrief)
What if you cannot change the supply chain? (ex the lead time) - CORRECT
ANSWER if you understand the structure, you can adapt and manage, even if you
cannot change it ex. you are inherently aware of the lead time, don't panic
, - don't panic - recognize the delays
- systems thinking - before you do anything, analyze how it will impact your supply chain
(debrief)
how can we avoid these supply chain problems? (4) (game lessons) - CORRECT
ANSWER 1) change the supply chain structure if possible
- communication & cooperation
- shorter lead times (admin, manufacturing, distribution)
2) if you cannot change the supply chain structure: adapt! recognize the delays and predict
ordering impacts
3) choose "capable" suppliers (don't focus on cost)
- can they accommodate temporary demand changes (ex fast production, fast delivery)
- are they willing and able to collaborate
4) smooth your supply chain
- promotions (sales), discounts, create "waves of demand"
- "everyday low prices" is ideal for SCM (ex. everyday low with max cap)
what is a supply chain? - CORRECT ANSWER - a network of facilities that procure
raw materials, transform them into intermediate goods and then final products, and deliver
products to customers through a distribution system. it spans procurement, internal
transformation, and distribution.
why do people go globally with suppliers? - CORRECT ANSWER - reduced labour
costs
what are the triple bottom benefits of having a local supplier campus? (3) - CORRECT
ANSWER 1) economic
QUESTIONS AND CORRECT ANSWERS
Supply-chain debrief:
What caused people to act the way they did? and what did this lead to? (2) - CORRECT
ANSWER Lack of communication / cooperation , leading to the guessing of customer
demand which led to arbitrary ordering decisions and the result is the bullwhip effect
long lead time, could've been even longer if the supplier had no inventory
what is the "bullwhip" effect? - CORRECT ANSWER information (orders) going back
through the supply chain is distorted and then amplified
Supply-chain debrief:
how does a long lead time affect decision making? - CORRECT ANSWER panic -
when inventory does not instantly arrive and solve your growing backlog, you panic and
order even more
Supply chain debrief:
what are the business implications of the supply chain structure? (5) (or the bullwhip) -
CORRECT ANSWER - stockouts at times (lost profit and potential goodwill)
- excess inventory at times (holding costs, risk of obsolescence)
- overtime costs (50-100% increase in labour costs)
- layoffs / rehiring costs (match staffing levels to fluctuating demands)
- expediting (rush transportations costs)
(debrief)
Incurring higher prices for the supplier throughout the supply chain will do what? -
CORRECT ANSWER Create a higher price for customers
(debrief)
,How can we specifically improve the supply chain? (2) - CORRECT ANSWER 1.
Communication & Cooperation
a) actual consumer demand (IT, avoid lumping constant demand into lot sizes)
b) forecasting (share forecasts, production and distribution schedules, share decision making
too)
2. Shorten lead time
a) admin (ordering) lead time --> IT
b) physical manufacturing ---> just-in-time (very small batches batches = faster production
completion)
c) transportation lead time --> have suppliers geographically close by
(debrief)
How can we encourage cooperation & communication? (2) - CORRECT ANSWER -
incentives to share information (ex. lower unit cost for actual data)
- Vendor Managed Inventory (VMI)
- lower admin cost for the retailer
- vendor sees actual demand
(debrief)
what are the benefits of on-shoring? (5) - CORRECT ANSWER - reduce logistics cost
(improving environmental performance)
- reduces length of lead times
- reduces the variability of lead times
- easier to identify local needs
- "local jobs"
(debrief)
What if you cannot change the supply chain? (ex the lead time) - CORRECT
ANSWER if you understand the structure, you can adapt and manage, even if you
cannot change it ex. you are inherently aware of the lead time, don't panic
, - don't panic - recognize the delays
- systems thinking - before you do anything, analyze how it will impact your supply chain
(debrief)
how can we avoid these supply chain problems? (4) (game lessons) - CORRECT
ANSWER 1) change the supply chain structure if possible
- communication & cooperation
- shorter lead times (admin, manufacturing, distribution)
2) if you cannot change the supply chain structure: adapt! recognize the delays and predict
ordering impacts
3) choose "capable" suppliers (don't focus on cost)
- can they accommodate temporary demand changes (ex fast production, fast delivery)
- are they willing and able to collaborate
4) smooth your supply chain
- promotions (sales), discounts, create "waves of demand"
- "everyday low prices" is ideal for SCM (ex. everyday low with max cap)
what is a supply chain? - CORRECT ANSWER - a network of facilities that procure
raw materials, transform them into intermediate goods and then final products, and deliver
products to customers through a distribution system. it spans procurement, internal
transformation, and distribution.
why do people go globally with suppliers? - CORRECT ANSWER - reduced labour
costs
what are the triple bottom benefits of having a local supplier campus? (3) - CORRECT
ANSWER 1) economic
