Supply Chain Management Rutgers Notes

Sundar Ramen Rutgers Supply Chain

What comprises a supply chain?

A supply chain includes suppliers, manufacturers, and customers working together to produce and deliver products and services.

What is a node in the supply chain?

Each link in the supply chain is known as a node.

What is a tier 1 supplier?

A supplier who directly supplies your organization.

What do the goals of supply chain management (SCM) aim to achieve?

Increase customer service while reducing inventory and operating expenses.

What does the SCOR model do?

Helps businesses evaluate and improve their supply chain management for reliability, consistency, and efficiency.

Define logistics in the context of supply chain management.

Logistics refers to moving items to the right place at the right time.

What is the difference between a push model and a pull model in supply chains?

A push model focuses on producing a large volume at low cost, while a pull model responds quickly to demand changes.

What is forecasting in supply chain management?

Forecasting estimates future demand for products to ensure they can be purchased or made in time.

What are qualitative forecasting methods?

Methods that include personal insights, group opinions, historical analogies, and customer surveys.

What is the formula for forecast error?

Forecast error (FE) is calculated as the difference between actual demand (A) and forecast demand (F): FE = A - F.

What does MAPE stand for?

Mean Absolute Percentage Error.

What is the bullwhip effect in supply chains?

A small change at one node can cause larger variations in demand further down the supply chain.

Differentiate between independent and dependent demand.

Independent demand does not depend on other products (e.g., bicycles), while dependent demand does rely on the demand for another product (e.g., bike frames).

What are the three categories of supply chain management (SCM)?

Long range, intermediate range, and short range.

What is a business plan in the context of supply chain management?

A long-term focused plan that directs a company's goals and objectives for the next 1-5 years.

Define aggregate production plan (APP).

A hierarchical planning process that translates business plans and forecasts into a production plan for a family of products.

What is the master production schedule (MPS)?

A detailed plan stating what the company plans to produce, including configurations, quantities, and dates.

What is time fencing?

A policy to separate the planning horizon into a firmed time period where no changes can be made and a planned time period where changes can still occur.

What are the basic production strategies?

Level production strategy, chase production strategy, and hybrid production strategy.

What does materials requirements planning (MRP) involve?

Calculating the materials and components needed for manufacturing and their timing.

What is the bill of materials (BOM)?

An inclusive list of all raw materials, component parts, and subassemblies making up the final product.

What is capacity planning in supply chain management?

The process of determining the amount of production capacity needed to meet customer demand.

What is distribution requirements planning (DRP)?

A time-phased plan to replenish inventory of finished goods in the distribution network.

Explain the concept of inventory in supply chain management.

Inventory is an asset but excessive inventory can become a liability due to costs associated with storage and obsolescence.

What are the categories of inventory?

Raw materials, work in process (WIP), finished goods, and maintenance, repair, and operating supplies (MRO).

Why hold inventory in supply chains?

To meet customer demand, buffer against uncertainty, separate supply from demand, and manage dependencies in the supply chain.

What are cyclical stock and safety stock?

Cycle stock meets immediate demand, while safety stock is inventory held as a buffer against variability.

Define total cost of ownership.

The sum of all costs associated with every activity in the supply stream of a product.

What is strategic sourcing?

A comprehensive approach for locating and sourcing key suppliers to leverage purchasing power.

What are the key objectives of strategic sourcing?

Reduce costs, improve quality, and achieve a faster time to market.

What defines a sole-sourced supplier?

A supplier that a company has no choice but to use.

What is the purpose of spend analysis in sourcing?

To categorize and analyze expenditure data to lower costs and improve efficiency.

What is the difference between a collaborative negotiation and a distributive negotiation?

Collaborative negotiation aims for a win-win outcome; distributive negotiation is focused on self-interested results.