AGEC 340 - Chapter 15: Supply Chain Management Flashcards

This set covers vocabulary and core concepts from AGEC 340 - Chapter 15 on Supply Chain Management, including production planning strategies, inventory types, and distribution systems.

Supply Chain Management

The planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities.

Efficient Consumer Response (ECR)

A responsive, accurate, information-based system that links food manufacturers and distributors with retail supermarkets.

Cycle-time-to-market

The goal to reduce the time it takes for a product to go from an idea to a finished product in the customer’s hands.

Forecasting Demand

Part of the marketing process affected by general economic conditions, seasonal demand, unpredictable weather, volatile market prices, and an evolving market.

Aggregate Production Planning

The process of developing specific production quantities/rates and workforce sizes/rates while balancing customer requirements and plant/equipment capacity limitations.

Master Production Schedule (MPS)

A detailed schedule of final quantities of stock keeping units (SKUs) that are to be made in specific blocks of time.

Projected Inventory at End of this Week (Formula)

$$\text{Inventory On-Hand at End of Last Week} + ext{New Production Due at Start of this Week} - ext{Projected Requirements this Week} = ext{Projected Inventory at End of this Week}$$

Make-to-stock Strategy

A strategy where the firm produces for inventory, and production occurs before the actual sale is made.

Assemble-to-order Strategy

A strategy where a firm assembles available components only when an order is placed.

Make-to-order Strategy

A strategy where the firm builds products specifically to the customer's order.

Purchasing

The task of procuring the inputs necessary to meet the requirements of the production schedule once the MPS is complete.

Purchase Requisition

The document that triggers the first activity in the purchasing process to receive a request for materials.

Production Control

The responsibility for controlling raw materials, work-in-process, and finished goods inventory, as well as providing detailed production scheduling information.

Material Requirements Planning (MRP)

A computerized information system for managing production operations to ensure materials and components are available in the right quantities at the right time.

Just-In-Time (JIT)

A system where the goal is to produce or deliver goods just as they are needed, attempting to completely eliminate inventories.

Inventory Asset Value

A component that can represent $35 ext{--}50 ext{\%}$ of current assets in an agribusiness.

Shrinkage Costs

Cost factors related to inventory including obsolescence and pilferage.

Raw Material

A category of inventory consisting of products used for further processing or used directly in the firm's final products.

Work-in-progress (WIP)

A category of inventory consisting of products currently being transformed in the production process.

Finished Goods

A category of inventory consisting of completed products ready to be distributed to customers.

Pipeline Inventories

A type of inventory linked to lead time, representing products that are currently in transit or between production steps.

Safety Stock (or Buffer Inventories)

Inventories held to protect against variations or uncertainties in demand and supply.

Anticipation (or Seasonal Inventories)

Inventories held specifically to cover predictable seasonal spikes in demand.

Periodic Inventory

A system involving an actual physical count of stock on hand conducted at regular intervals.

Continuous Inventory

A system involving the constant monitoring of stock on hand.

Physical Distribution Systems (PDS)

Marketing channels through which parts, products, and finished inventory are stored and moved from suppliers to consumers.

Physical Distribution Cost Percentage

An expense category often estimated to be as much as $30 ext{--}40 ext{\%}$ of total costs.

Warehousing

The category of physical distribution systems focused on the locations where finished goods will be stored.

Transportation

The category of physical distribution systems focused on the methods of how goods will be moved.

Carrier

The category of physical distribution systems involving the scheduling, routing, and selection of the transportation provider.