Supply Chain Test 1

As the number of distribution facilities in your network increases and becomes highly decentralized, what happens to your costs?

Inventory investments go up

The facilities used in a supply chain network are called:

Nodes

The objective of _______________ is to set-up an optimal and easily maintainable supply chain configuration and merchandise flows to enable the supply chain to best support the business objectives.

Network design

What is the advantage of a centralized distribution network?

Greater visibility and control

A key principle of supply chain network design is to create ____________ structures of links and nodes that can serve multiple customer segments.

Adaptable

Why are network design projects so challenging? (3 things)

They are strategic in nature, they are time consuming, and they are multi-dimensional

True or False, Supply chain nodes and links seek to add value to the goods moving through the network. If there’s no value being added by a node in the supply chain, there’s really no point in having that facility or moving goods to it.

True

What role does transportation play in a supply chain network? 

Links

Characteristics of the cross docking fulfillment method include: 

Improved mixing opportunities and moderate handling costs

What is the primary benefit of a direct shipping strategy?

Reduce transportation time

Place the planning methods in the proper sequence of shortest range (days or weeks) to longest range (years).

Production planning, sales & operations planning, demand planning, capacity planning

_____ is the process of determining the output rate that can be achieved. It focuses on the supply chain capabilities needed by an organization to meet changing demands for its products.

Capacity planning

When would it be most effective to use qualitative forecasting tools? 

When you are dealing with new products

Which of the following statements regarding forecasting is TRUE?

The best way to improve forecast accuracy is to sell more goods in the marketplace.

Ultimately, better forecasts result in better customer service, lower costs, and improved relationships. XXX

Ignore the inputs of customers and suppliers into the forecasting process as they are biased.

The sole purpose of forecasting is to understand market trends and demand for finished goods.Ultimately, better forecasts result in better customer service, lower costs, and improved relationships.

What is the initial driver of a sales and operations planning process?

Baseline forecast of future sales

What provides the ability to be proactive rather than reactive in the management of inventory levels, material flow, and production scheduling?

Materials requirements planning

Materials requirements planning software helps you answer each of the following questions EXCEPT: 

How much inventory do we have in stock?

What is the forecast for customer demand? XXX

What is needed to make one unit of product?

What materials do we need and when?

 

Which sequencing priority method tends to manufacture goods or fill orders based on their customer deadlines?

Earliest due date

Proper ____________ occurs when a supplier like Lear Corp. sends car seats to the Hyundai assembly factory in the exact order in which the seats will be installed in vehicles.

Sequencing

What is the process of comparing internal manufacturing versus external manufacturing to understand which organization can more cost-efficiently produce the goods, reliably meet demand, and ensure product availability?

Make or buy analysis

True or False, Every purchase that a company makes should go through a formal 5- or 7-step buying process. 

False

___________ is a process that focuses on buying merchandise or services at the optimum possible total cost in the correct amount and quality for an organization.

Procurement

What type of purchases focus on buying materials that are used in production processes to add value to a product?

Direct materials

An interviewer poses the question: “What is the appropriate financial goal for a company that adopts strategic sourcing?” You should respond:

Reduce the total cost of ownership

The buy process (supply management is important because it can generate a sustainable advantage through: 

Lower cost, higher quality, and better service

The final step in the procurement process focuses on:

Monitoring order status and evaluate supplier performance.

During the second step of the procurement process, what is the procurement team trying to accomplish?

Evaluate the capabilities of potential global suppliers

The appropriate purchasing approach for critical goods is to:

build relationships with strategic suppliers

What creates the need for supply chain resources and activities?

Customer demand

Why is supply chain management an “art” as much as a science? (3 things)

Because there are people and relationships to manage, customers are not purely predictable or rational, and because uncontrollable forces like weather and congestion exist

What is the ultimate goal of aligning all participants in a supply chain?

Synchronization

Supply chain management is important from an efficiency standpoint because:

It drives out costs and waste

When a supply chain is better, faster, and cheaper than the competition, what benefit is achieved?

Greater profitability

Which group is not a primary participant in a supply chain?

Marketing team

True or false, Supply chain is more than just making and moving stuff. It involves strategy, planning, and activities across multiple organizations

True

Why has supply chain management become more important (and more challenging) for companies?

Customers are more demanding

True or false, Whenever possible, companies need to drive supply chain operations from production schedules rather than demand?

False

What type of utility is provided when a company delivers products to customers where the product is needed?

Place utility