BMGT43290 Building Sustainable SC Advantage Practice Questions Vocabulary

Vocabulary flashcards for BMGT43290 Building Sustainable SC Advantage Practice Questions

Product Availability and Margin

Products with higher profit margins should maintain higher availability levels because the financial consequences of a lost sale are greater.

Little’s Law

A principle stating that the average number of items in a system (WIP) is equal to the average arrival rate (throughput) multiplied by the average time an item spends in the system (flow time): WIP = Throughput * Flow Time

Inventory Turnover Rate

The number of times inventory is sold or used in a time period; calculated as Cost of Goods Sold (COGS) divided by Average Inventory Value.

Bottleneck

A constraint in a process that limits overall throughput or capacity.

Moving Average

A forecasting method that uses the average of a specified number of the most recent data points to predict future values.

Exponential Smoothing

A forecasting method where the forecast is updated with each new observation, using a smoothing constant (alpha) to weight recent data more heavily.

Mean Squared Error (MSE)

The average of the squared differences between the forecasted and actual values; measures the accuracy of a forecast.

Mean Absolute Deviation (MAD)

The average of the absolute differences between the forecasted and actual values; measures the accuracy of a forecast.

Economic Order Quantity (EOQ)

The optimal order quantity that minimizes the total inventory costs, including ordering costs and holding costs.

Reorder Point

The level of inventory at which a new order should be placed to replenish stock before it runs out.

Safety Stock

Extra inventory held to protect against fluctuations in demand or supply lead time.

Periodic Review System

A system where inventory levels are reviewed at fixed intervals, and orders are placed to bring inventory up to a target level.

Continuous Review System

A system where inventory levels are continuously monitored, and an order is placed when the inventory reaches a specific reorder point.

Service Level

The desired probability of not stocking out during the next inventory cycle.