Exam 3 Supply Chain

Demand Management

The process of estimating and managing customer demand to guide operational decisions and improve collaboration throughout the supply chain.

Effective Demand Management

Unifying channel members to achieve common goals of satisfying customers and addressing their needs.

Independent Demand

The demand for primary items that is known as base demand.

Dependent Demand

The demand that is directly influenced by the demand for an independent item.

Random Fluctuation

Unanticipated demand variations that may cause safety stocks to be held.

Seasonal Fluctuation

Patterns that repeat at regular intervals throughout the year.

Weighted Moving Average

A forecasting technique that assigns different weights to previous periods, emphasizing more recent data.

Sales Force Composite

A forecasting method based on salespeople's opinions regarding future sales.

Delphi Method

A forecasting technique that uses panels of experts who are individually questioned for long-range predictions.

Customer Relationship Management (CRM)

A strategy that aligns a supplier's resources with customers to enhance satisfaction and profitability.

Activity Based Costing

A methodology that measures the cost and performance of activities related to resources, aiming for accurate resource allocation.

Service Recovery

Processes put in place by an organization to address service failures and recover customer satisfaction.

Economic Order Quantity (EOQ)

The most cost-effective amount to order at one time, considering fixed order quantities.

Just-in-Time (JIT)

An approach aimed at delivering materials exactly when needed, thereby minimizing inventory costs.

Materials Requirements Planning (MRP)

A system that determines requirements for independent demand items and manages component needs based on end-product demand.

Vendor Managed Inventory (VMI)

A system where suppliers monitor and manage inventory levels within a customer's distribution centers.

ABC Analysis

An inventory classification technique that categorizes items into three groups based on their relative importance.

Pareto’s Law

Also known as the “80–20” rule, it suggests that a small percentage of items can account for a large percentage of overall value.

Quadrant Model

A method of classifying inventory based on value contribution to profit and the risk of not having the item when needed.

Perfect Order Rate

The percentage of orders that are fulfilled completely, accurately, and delivered on time.

Supply Chain Management

The oversight and management of a product's lifecycle from production to consumption, encompassing procurement, logistics, and distribution.

Lead Time

The time taken from the initiation of a process until its completion, crucial for planning and inventory management.

Order Fulfillment

The complete process from the point of sales inquiry to the delivery of the product to the customer.

Safety Stock

Extra inventory held to prevent stockouts caused by fluctuations in demand or supply.

Just-in-Case (JIC)

Inventory strategy that involves holding extra stock as a buffer against unexpected demand or supply chain disruptions.

Cycle Counting

An inventory management technique that involves counting a subset of inventory on a regular basis to ensure accuracy.

Stock Keeping Unit (SKU)

A unique identifier for each distinct product and service that can be purchased.

Supplier Relationship Management (SRM)

The process of managing how an organization interacts with its suppliers to maximize the value of those interactions.

Collaborative Planning, Forecasting and Replenishment (CPFR)

A business practice that combines the intelligence of multiple trading partners in the planning and fulfillment of customer demand.

Total Cost of Ownership (TCO)

An approach that calculates the total costs of purchasing, maintaining, and disposing of a product throughout its lifecycle.

Forecast Accuracy

A measure of how closely a forecast matches the actual demand, used to enhance forecasting processes.

Supply Chain Visibility

The ability to track and monitor all components within the supply chain, providing better control and communication.

Lean Inventory

An inventory strategy focused on reducing waste and minimizing holding costs while meeting customer needs.

Batch Production

A manufacturing technique where products are produced in groups or batches rather than in a continuous stream.

Channel Strategy

A plan that outlines how a company will deliver its products and services through various sales channels.

Inventory Turnover

A ratio that shows how many times inventory is sold and replaced over a period, indicating efficiency in inventory management.

Lead Time Reduction

Strategies aimed at shortening the time from order placement to delivery, improving responsiveness to customer demand.

Supply Chain Risk Management

The process of identifying, assessing, and mitigating risks that may disrupt the supply chain operations.

Cross-Docking

A logistics practice where products are directly transferred from incoming to outgoing transport, minimizing storage time.

Omni-Channel Retailing

A sales approach that provides customers with an integrated shopping experience across various channels, including online and offline.

Distribution Center

A warehouse or storage facility that holds goods for short periods before distributing them to retailers or customers.

Total Quality Management (TQM)

A management approach aimed at embedding awareness of quality in all organizational processes to ensure customer satisfaction.

Kanban System

A scheduling system that helps determine what to produce, when to produce it, and how much to produce.

Sourcing Strategy

A plan for identifying and procuring goods and services from suppliers to achieve business objectives.

Cycle Stock

The portion of inventory that is managed as part of regular sales or production cycles, distinct from safety stock.

Returns Management

The process that handles the return of goods from customers, including processing returns and restocking items.

Inventory Aging

The practice of monitoring inventory based on how long it has been in stock, helping to manage stock levels effectively.

Sales and Operations Planning (S&OP)

A process to align supply and demand planning strategies with financial goals.

Collaborative Logistics

Working together with partners to optimize logistics services and reduce costs throughout the supply chain.

Demand Forecasting

The process of estimating future customer demand using historical data and market analysis.

E-procurement

The use of electronic methods in the procurement process to improve efficiency and reduce costs.

Cold Chain Management

The management of temperature-controlled supply chains to preserve product quality during transportation.