SCM EXAM 2

Balking

When a customer sees a line and decides not to join.

Reneging

When a customer joins a line but leaves before receiving service.

Jockeying

When customers switch between multiple lines.

Finite Pool

A system with few potential customers; each arrival significantly decreases the chance of another arriving.

Infinite Pool

A system with many potential customers; odds are barely affected by new arrivals

Planograms

Layouts that determine product locations based on profit motivation or customer convenience.

Scan-Based Trading

Goods belong to the vendor while sitting on the retail shelf; the store pays the vendor only after the consumer purchases the item.

VMI (Vendor Managed Inventory)

An arrangement where the vendor monitors and restocks inventory, reducing costs for the retailer.

λ

The mean arrival rate of customers.

μ

The mean service rate

ρ=λ/μ

Service utilization factor (the percentage of time a server is busy).

ns

The average number of customers in the system.

nl

The average number of customers in the queue (waiting line).

ts

The average time spent in the system.

tl

The average time spent in the queue (waiting line).

pn

The probability of exactly n customers in a single-server system.

Push System

A high-inventory system driven by forecasts that takes advantage of quantity discounts and lowers ordering costs.

Pull System

A low-inventory, demand-driven system that minimizes waste and allows for flexible manufacturing.

Postponement

 A hybrid strategy combining push (for standardized portions of manufacturing) and pull (delaying final assembly for customized options).

Lean Systems

A continuous improvement philosophy that views inventory as an "evil" to be minimized and treats suppliers as collaborative partners.

Order Batching

A strategy of intentionally placing large orders, which contributes to the bullwhip effect.

Rationing:

When a buyer receives only a partial order from a supplier due to a shortage.

Shortage Gaming

When retailers artificially inflate their order sizes in an attempt to counteract expected rationing.

EMS (Electronic Manufacturing Services)

Companies that take on numerous primary supply chain responsibilities for assembling electronic components.

Offshoring:

Manufacturing a product abroad, but keeping it within the same company.

Outsourcing:

 Having an outside company manufacture the product.

In-Sourcing

Manufacturing a product locally and within your own company.

3PL (Third Party Logistics):

An outside organization that manages a specific logistics function on behalf of another company.

Freight Forwarders

“Travel agents" on the U.S. side of exports that find the most efficient and cost-effective itineraries.

Customs House Brokers:

Intermediaries that help items clear foreign customs and process tariffs.

Duty Drawback

A strategy used to get a return on a tariff when an item is imported and then re-exported.

FTZ (Free Trade Zones):

Areas where acceptable items can enter a country duty-free for storage, manufacturing, or assembly before being re-exported.

CTPAT:

A voluntary program where corporations assume responsibility for their supply chains to increase port security and potentially earn "Green Lane" fast-tracking.

Metric:

A single performance measurement used to evaluate or motivate (e.g., GPA).

System of Metrics

A collection of measurements used to evaluate a process from multiple perspectives (e.g., GPA, test scores, years to degree).

Descriptive Analytics

Answers "What happened?" (e.g., 12% shipments late) .

Diagnostic Analytics

Answers "Why did that happen?" (e.g., 2 broken trucks) .

Predictive Analytics

Answers "What might happen next?" (e.g., sales will increase) .

Prescriptive Analytics

Answers "What should we do next?" (e.g., buy more trucks) .

Cognitive Analytics

 Utilizing Big Data and AI to learn and decide quickly in real-time.

Digital Twins

Supply chain simulations used for process improvement.

Supply Chain Finance:

A system where financial institutions pay suppliers early, giving the buyer more time to pay off their invoices while keeping the supplier stable.