SCM Final Exam Questions And Answers

Competitive Priorities - ANS Cost - Material costs, production costs (machine and labor), Packaging, transportation, storage costs, Quality costs- (returns, warranties, repairs, rework, errors, time), Customer service costs, other organization costs (marketing, finance, technology, waste disposal, rent, insurance, legal, human resources). Quality- Design quality (Toyota), Material & Production quality, Quality level delivered, Consistent quality (McDonalds), Service quality (IPad). Speed/Time- Delivery time, On-time delivery Flexibility- Product or Customization Flexibility, Volume flexibility, Mass Customization (Both Customization and Volume) For example Oreganos vs. Little Caesars. Others: Design Flexibility, Materials/parts flexibility, facility flexibility, Tools/Machinery Flexibility, employee flexibility, Service flexibility. Red Robins vs. Mcdonalds Productivity and Value - ANS Productivity- Organizational Perspective, What did I make (Outputs)/What was the cost (Inputs) Value- Customer perspective, What do I get? (Quantity, quality, size..)/what is the price? (Money, waiting time, warranty...) Ex: Two cans of corns, price might not be the deciding factor. Supply Chain - ANS Supply Chain Management is the Efficient Integration of suppliers, transporters, manufacturers, warehouses, retailers, and all other parties associated with the delivery of the final product. Operations Management - ANS Design, operation, and improvement of the productions systems the efficiently transform INPUTS into Finished Goods & Services, maximizing productivity. Examples of duties: Process management, plant management, capacity planning, scheduling jobs/people, waiting line management, process improvement projects. Logistics - ANS Is the COORDINATED Planning and Execution of the following: Preparation of Packaged Product Movement Itinerary (Transport) Storage Itinerary (Warehousing) Product distribution throughout the Supply Chain Examples of duties: Distribution/Warehousing Infrastructure Mgmt. Packaging, containerization, transportation, Management and communication Procurement - ANS The process of obtaining services, supplies, and equipment in conformance with corporate regulations. Examples of duties: Supplier selection Purchasing regulations Managing supplier relationships - Motivation, Development Materials/Inventory Management Upstream - ANS In supply chain, the direction that points toward the suppliers. Is to the left. Explained: In a company an executive that works in upstream supply chain management might be responsible for: ensuring that empty boxes at the retail level are returned to the distributor for reuse, developing relationships with a company's first tear suppliers in order to better communicate the needs of the present and the future. Downstream - ANS In a supply chain, the direction that points toward the end customer. The downstream direction is to the right. In a company an executive that works in downstream supply chain management finds ways to get goods and services closer to the customer in an effective and efficient manner. Reverse Logistics - ANS The management of products that flow backward in the supply chain, away from the consumer and back in the direction of manufacturers. (The management of materials moving upstream in the supply chain) 1st and 2nd tier suppliers - ANS 1st tier- A company's direct suppliers. A firm that directly provides goods and/or services to a company. 2nd tier- A firm that provides goods and/or services to a company's first tear supplier. Safety Stock - ANS (buffer stock) Inventory kept to account for variation/uncertainty of demand. (Example: 100 shovels are sold per week Sunday to Saturday. Shipments arrive Sunday morning. Stores always wants to start Sunday with 125 units of inventory. The additional 25 units are safety stock. Pipeline Inventory - ANS Inventory in transit between two points. Those two points establish the pipeline. So the inventory does not necessarily need to be on a truck or train. The pipeline should have enough inventory to account for the demand for the period of time it takes a product to move from point A to point B-lead time. The required pipeline inventory is typically calculated as: =periodic demand * Lead time Vertical Integration - ANS The act of a company taking additional supply chain responsibilities that were formerly done by outside parties. There are two classes of vertical integration: Forward Integration: Taking over supply chain responsibilities formerly performed by downstream supply chain partners. Backward Integration: Taking over supply chain responsibilities formerly performed by upstream supply chain partners. Benefits of high and low inventory levels/purchases - ANS Pros of high inventory levels- Higher levels of customer service, quantity discounts may be possible, fewer orders will need to be placed, greater security against unexpected demand variability. Pros of Low inventory levels- Less storage space required, lower chance of inventory obsolescence and shrinkage, less inventory typically means less materials handling requirements. Less money invested in inventory means more money available for investment opportunities.