SCMT 2103, EXAM 5 QUESTIONS AND
ANSWERS
what is the bullwhip effect? - Correct Answers -small changes in demand that can
produce a whip-like effect upstream
What are the results of the bullwhip effect? - Correct Answers -- companies at different
stages have different market demands
- breakdown in coordination
- create product shortages and lead to product excess
what are factors that lead to the bullwhip effect? - Correct Answers -- demand
forecasting
- order batching
- product rationing
- performance incentives
What is demand forecasting? - Correct Answers -- bullwhip effect
- use end-user demand data
- if based on orders, it will more become inaccurate as you move up the chain
How to counteract demand forecasting issues? - Correct Answers -share a common set
of demand data for forecasting, close to the end-user data
What is order batching? - Correct Answers -occurs when companies order periodically
in amounts to minimize order-processing & transportation costs (orders vary from actual
demand)
How to counteract order batching? - Correct Answers -- find ways to reduce order-
processing & transportation cost
- reduce EOQ lot size & order more frequently
what is product rationing? - Correct Answers -- more demand than supply
- who gets what product?
what is the one approach for product rationing? - Correct Answers -allocate the supply
based on number received
, how to counteract product rationing? - Correct Answers -- ration based on historical
demand patterns
- alert customers in advance
What is product pricing? - Correct Answers -- price fluctuation cases distortions in
demand
- creates wave of demand instead of smooth flow
how to counteract product pricing? - Correct Answers -EDLP
EDLP - Correct Answers -Everyday Low Prices
what is performance incentives? - Correct Answers -- different for companies &
individuals in the chain
- viewed in isolation
how do you counteract performance incentives? - Correct Answers -- align incentives
- using accurate ABC data
- identify the impact of conflicting internal performance incentives
- test new incentive plan to support chain efficiency
ABC data - Correct Answers -Activity Based Costing data
what is the theory of constraint? - Correct Answers -- All systems have at least one
constraint/ bottleneck
- better to manage than eliminate
- define goal and decide measurement of progress
5 steps towards goal (Theory of Constraint) - Correct Answers -1. Identify
2. Decide
3. Subordinate
4. Elevate
5. if broken go back to step 1
Ways to increase/improve coordination - Correct Answers -- product data
standardization
- product classification
- CPFR
- Measure bullwhip effect
- S&OP
what are ways to standardize product data? - Correct Answers -- use EPC numbers
- GDSN
why are companies pursing sustainability? - Correct Answers -- regulations
- risk
ANSWERS
what is the bullwhip effect? - Correct Answers -small changes in demand that can
produce a whip-like effect upstream
What are the results of the bullwhip effect? - Correct Answers -- companies at different
stages have different market demands
- breakdown in coordination
- create product shortages and lead to product excess
what are factors that lead to the bullwhip effect? - Correct Answers -- demand
forecasting
- order batching
- product rationing
- performance incentives
What is demand forecasting? - Correct Answers -- bullwhip effect
- use end-user demand data
- if based on orders, it will more become inaccurate as you move up the chain
How to counteract demand forecasting issues? - Correct Answers -share a common set
of demand data for forecasting, close to the end-user data
What is order batching? - Correct Answers -occurs when companies order periodically
in amounts to minimize order-processing & transportation costs (orders vary from actual
demand)
How to counteract order batching? - Correct Answers -- find ways to reduce order-
processing & transportation cost
- reduce EOQ lot size & order more frequently
what is product rationing? - Correct Answers -- more demand than supply
- who gets what product?
what is the one approach for product rationing? - Correct Answers -allocate the supply
based on number received
, how to counteract product rationing? - Correct Answers -- ration based on historical
demand patterns
- alert customers in advance
What is product pricing? - Correct Answers -- price fluctuation cases distortions in
demand
- creates wave of demand instead of smooth flow
how to counteract product pricing? - Correct Answers -EDLP
EDLP - Correct Answers -Everyday Low Prices
what is performance incentives? - Correct Answers -- different for companies &
individuals in the chain
- viewed in isolation
how do you counteract performance incentives? - Correct Answers -- align incentives
- using accurate ABC data
- identify the impact of conflicting internal performance incentives
- test new incentive plan to support chain efficiency
ABC data - Correct Answers -Activity Based Costing data
what is the theory of constraint? - Correct Answers -- All systems have at least one
constraint/ bottleneck
- better to manage than eliminate
- define goal and decide measurement of progress
5 steps towards goal (Theory of Constraint) - Correct Answers -1. Identify
2. Decide
3. Subordinate
4. Elevate
5. if broken go back to step 1
Ways to increase/improve coordination - Correct Answers -- product data
standardization
- product classification
- CPFR
- Measure bullwhip effect
- S&OP
what are ways to standardize product data? - Correct Answers -- use EPC numbers
- GDSN
why are companies pursing sustainability? - Correct Answers -- regulations
- risk
