Econ exam 2 multiple choice final

Forecasting

Process used in supply chain management to predict future demand, helping organizations plan production, inventory, and resources.

Independent Demand

Demand for finished goods that is not dependent on the demand for other items.

Dependent Demand

Demand that relies on the demand for another product or component, such as parts used in assembly.

Qualitative Forecasting

Forecasting method that relies on expert judgment, opinions, or market research when historical data is limited or unreliable.

Quantitative Forecasting

Forecasting method that uses mathematical models and historical data to predict future demand.

Time Series Model

Forecasting model using past demand patterns over time to predict future demand.

Causal Models

Forecasting models that use statistical relationships between demand and other variables, like price or promotions.

Naive Forecast

Forecasting approach assuming next period’s demand equals the most recent period’s actual demand.

Moving Average

Quantitative forecasting technique that averages demand over a set number of past periods to smooth fluctuations.

Weighted Moving Average

Forecasting method similar to moving average but assigns more weight to recent data.

Exponential Smoothing

Forecasting model that applies a smoothing constant to balance recent and past demand data for updated predictions.

MAD (Mean Absolute Deviation)

Forecasting accuracy measure calculating the average of absolute forecast errors.

Mean Squared Error (MSE)

Forecasting accuracy measure emphasizing larger errors by squaring the difference between actual and forecast values.

MAPE (Mean Absolute Percentage Error)

Forecasting measure expressing forecast error as a percentage of actual demand.

Forecast Bias

Forecasting issue where estimates consistently over- or under-predict demand.

Tracking Signal

Forecasting tool comparing forecast errors over time to detect bias or model inaccuracy.

CPFR (Collaborative Planning, Forecasting and Replenishment)

Forecasting and coordination process where supply-chain partners share data to improve demand accuracy.

S&OP (Sales and Operations Planning)

Forecasting and planning process aligning production and inventory with demand and business goals.

Aggregate Planning

Operations-planning process determining production, inventory, and workforce levels over a medium-term horizon.

Delphi Method

Qualitative forecasting method that gathers expert opinions anonymously in rounds to reach consensus.

Regression Analysis

Statistical forecasting method identifying relationships between dependent and independent variables.

Seasonality

Pattern in demand that repeats at regular intervals, influencing forecasting models.

Trend

Forecasting concept referring to long-term increase or decrease in data over time.

Cycle

Forecasting term for economic or business fluctuations that repeat but are irregular in duration.

Random Variation

Unpredictable fluctuations in demand not explained by trend or seasonality.

Supply Chain Integration

Management approach that coordinates internal and external processes among supply-chain partners for efficiency.

Internal Integration

Coordination of information and activities across departments within a company.

External Integration

Coordination of processes and information with outside suppliers and customers.

ERP (Enterprise Resource Planning)

Technology system integrating all major business functions into a unified database for better decision-making.

Visibility

Integration goal providing real-time information about inventory, orders, and shipments across the network.

Data Synchronization

Integration practice ensuring consistent and accurate data across systems and partners.

Change Management

Organizational process used during supply-chain system implementation to manage people, culture, and workflow adjustments.

EDI (Electronic Data Interchange)

Integration technology enabling electronic exchange of standardized business documents between companies.

Cloud Computing

Technology platform allowing scalable, real-time access to data and applications across the supply chain.

RFID (Radio Frequency Identification)

Tracking technology using radio waves to identify and monitor inventory and shipments.

Barcodes

Basic automatic-identification technology encoding item information for quick scanning and tracking.

IoT (Internet of Things)

Integration technology linking physical devices that share real-time operational data across supply-chain systems.

Blockchain

Digital ledger technology improving transparency and traceability of transactions in the supply chain.

Artificial Intelligence (AI)

Integration technology using algorithms to automate analysis, forecasting, and decision-making in logistics and operations.

Machine Learning

Subset of AI that improves forecasting and process optimization by learning from historical supply-chain data.

Big Data Analytics

Analytical process using large, complex datasets to identify patterns and improve supply-chain decisions.

CRM (Customer Relationship Management)

Technology tool managing interactions with customers to enhance satisfaction and retention.

SRM (Supplier Relationship Management)

Integration system managing supplier performance, risk, and collaboration.

SCM Software

Technology platform that manages planning, sourcing, production, and logistics functions across the supply chain.

Performance Metrics

Quantitative measures (KPIs) used to evaluate integration success and supply-chain efficiency.

Benchmarking

Process of comparing performance metrics with industry best practices to identify improvement areas.

Sustainability Integration

Incorporating environmental and social responsibility into supply-chain operations.

Data Governance

Policy framework ensuring data accuracy, security, and compliance in integrated systems.

Risk Management

Supply-chain process identifying and mitigating potential disruptions across operations.

Inventory

All raw materials, work-in-process, and finished goods a company holds to meet customer demand.

Cycle Stock

Inventory management concept referring to regular stock used to meet average demand between replenishments.

Safety Stock

Extra inventory kept on hand to protect against demand or supply uncertainty.

Pipeline Inventory

Goods currently in transit between locations within the supply chain.

ABC Classification

Inventory control technique that categorizes items by importance or usage value (A = most important).

EOQ (Economic Order Quantity)

Inventory management model determining optimal order size to minimize total ordering and holding costs.

EMQ (Economic Manufacturing Quantity)

Inventory control model used for production settings to minimize setup and holding costs.

Continuous Review System

Inventory system that continuously monitors stock levels and triggers orders when reaching reorder point.

Periodic Review System

Inventory system reviewing stock at fixed intervals(periods) to determine replenishment needs.

Reorder Point

Inventory management trigger level where a new order should be placed to prevent stockouts.

Carrying Cost

Cost of holding inventory, including storage, insurance, and depreciation.

Ordering Cost

Expenses related to placing and receiving inventory orders.

Stockout Cost

Cost incurred when demand cannot be met due to insufficient inventory.

Inventory Turnover

Performance metric showing how many times inventory is sold or used in a given period.

Service Level

Measure of how effectively customer demand is met without stockouts.

Demand Variability

Uncertainty in demand affecting inventory levels and replenishment decisions.

Lead Time

Time between placing an order and receiving the goods.

Bullwhip Effect

Inventory phenomenon where small demand changes amplify upstream in the supply chain.

Just-In-Time (JIT)

Lean inventory strategy minimizing stock by producing or ordering only what’s needed when needed.

Kanban System

Lean visual inventory-control system signaling replenishment needs using cards or digital cues.

VMI (Vendor-Managed Inventory)

Inventory partnership where supplier monitors and replenishes buyer’s inventory directly.

Materials Requirements Planning (MRP)

Inventory-planning system determining material needs based on production schedules.

DRP (Distribution Requirements Planning)

Inventory-planning method determining replenishment needs across distribution networks.

Inventory Accuracy

Degree to which recorded inventory matches physical stock.

Cycle Counting

Inventory audit technique verifying counts periodically to maintain accuracy.

Quality

Degree to which a product or service meets or exceeds customer expectations.

Total Quality Management (TQM)

Quality management philosophy emphasizing continuous improvement and customer satisfaction across all functions.

Six Sigma

Quality improvement methodology focused on reducing process variation and defects to near-zero levels.

Lean

Operations philosophy aimed at eliminating waste and improving process flow and value.

Kaizen

Lean quality-improvement concept emphasizing continuous small changes for long-term efficiency.

DMAIC

Six Sigma process framework — Define, Measure, Analyze, Improve, Control — used for structured problem-solving.

Benchmarking (Quality)

Quality-management practice comparing processes to industry best standards to identify improvement opportunities.

Pareto Analysis

Quality-control tool identifying the most frequent causes of problems (80/20 rule).

Cause-and-Effect Diagram (Ishikawa)

Quality analysis tool mapping possible causes of a problem to find root issues.

Check Sheet

Simple data-collection tool used to record frequency of defects or issues.

Histogram

Quality-control chart showing frequency distribution of data to detect process variation.

Control Chart

Statistical-process-control tool monitoring performance and signaling when variation exceeds limits.

Process Capability

Measure of a process’s ability to produce output within specification limits.

Poka-Yoke

Lean quality concept meaning “mistake-proofing,” preventing errors through design or process setup.

Value-Stream Mapping

Lean tool visualizing process steps to identify waste and inefficiencies.

5S System

Lean workplace-organization method — Sort, Set in Order, Shine, Standardize, Sustain — improving efficiency and safety.

Waste (Muda)

Lean concept referring to any activity that consumes resources but adds no value.

Root Cause Analysis

Quality problem-solving method identifying the main source of defects.

Continuous Improvement (CI)

Philosophy of regularly evaluating and refining processes to enhance quality and performance.

Benchmarking (Lean)

Lean practice of learning from best-in-class companies to reduce waste and improve flow.

Logistics

Process of planning, implementing, and controlling efficient movement and storage of goods from origin to consumption.

Transportation Management

Logistics function responsible for selecting modes, routing, and scheduling of shipments.

Intermodal Transportation

Logistics approach combining multiple modes (truck, rail, ship, air) to move goods efficiently.

Multimodal Shipping

Logistics practice using two or more modes of transport under one contract.

Freight Consolidation

Logistics strategy combining smaller shipments to lower transportation costs.