Supply Chain Management and Logistics Review

A comprehensive set of vocabulary flashcards covering supply chain strategies, risk mitigation, performance analytics, and logistics management based on the lecture notes.

Objective of SCM

To structure the supply chain to maximize competitive advantage and benefits to the ultimate consumer.

Make-or-Buy Decisions

Choosing between obtaining products/services externally or producing them internally.

Outsourcing

Transferring traditional internal activities to outside vendors to focus on core competencies and eJiciency through specialization.

Many Suppliers

A sourcing strategy used for commodities where the focus is on price competition.

Few Suppliers

A sourcing strategy involving long-term “partnering” relationships where value is created through economies scale and learning.

Vertical Integration

Developing the ability to produce goods previously purchased; can be backward (toward suppliers) or forward (toward customers).

Joint Ventures

Formal Collaborations to enhance skills, secure supply, or reduce costs.

Keiretsu Networks

A middle ground sourcing strategy where suppliers become part of a company coalition, often with financial support.

Virtual Companies

Companies that rely on various supplier relationships to provide services on demand; they are highly flexible with low capital investment.

Super-event (S)

In disaster risk calculation, the probability that all suppliers fail simultaneously.

Unique event (U)

In disaster risk calculation, the probability that one specific supplier fails.

Disaster Risk Formula P(n)

$$P(n)= S+(1-S) U^n$$

Bullwhip EJect

The tendency for order size fluctuations to increase as they move through the supply chain.

Causes of the Bullwhip EJect

Demand forecast error, order batching, price fluctuations, and shortage gaming.

Bullwhip Measure

$$\frac{\text{variance of orders}}{\text{variance of demand}}$$

Bullwhip Measure > 1

Indicates variance amplification (Bullwhip present).

Vendor Managed Inventory (VMI)

A system where the supplier maintains the inventory for the buyer.

Collaborative Planning, Forecasting, and Replenishment (CPFR)

Shared information throughout the supply chain.

Postponement

Withholding modification of products as long as possible, such as final coloring or packaging.

Drop Shipping

Bypassing the seller to ship directly from the supplier to the customer.

Trucking

A shipping system used for most manufactured goods that is highly flexible.

Railroads

A shipping system used for large loads with low flexibility.

Airfreight

A shipping system that is fast and flexible but expensive.

Waterways

A shipping system for bulky, low-value cargo that focuses on cost over speed.

Channel Assembly

A warehousing function where distributors act as manufacturing partners.

Distribution Trade-oJs

Increasing facilities improves response time but increases inventory and facility costs.

Total Score (Factor-weighting)

$$\sum (\text{Weight} \times \text{Score})$$

% Invested in Inventory

$$\frac{\text{invested Investment}}{\text{Total Assets}} \times 100$$

Inventory Turnover

$$\frac{\text{cost of goods sold}}{\text{average inventory investment}}$$

Weeks of supply

$$\frac{\text{inventory investment}}{\text{Annual COGS} / 52\,\text{weeks}}$$