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Demand Planning
Forecasting and managing customer demand to achieve operational and financial goals.
Demand Forecasting
Predicting future customer demand.
Demand Management
Influencing the pattern or consistency of demand.
Forecast Error
Unexplained component of demand; inherently random.
Autocorrelation
Relationship between past and current demand.
Stable Demand Pattern
A consistent level of demand over time.
Seasonal Demand Pattern
Variations in demand that occur at specific times of the year.
Trend Demand Pattern
A long-term increase or decrease in demand.
Step Change Demand Pattern
A sudden shift in demand levels.
Steps in Forecasting
Identify users, gather data, select techniques, document, and monitor performance.
Judgement-based Forecasting
Forecasting based on estimates and opinions.
Grassroots Forecasting
Input from individuals close to the product or customers.
Executive Judgment
Insights contributed by experienced individuals.
Historical Analogy
Assumption that past demand reflects future trends.
Marketing Research
Analyzes current customer patterns for forecasting.
Delphi Method
Structured communication technique for gathering expert input.
Time Series Analysis
Utilizes historical data chronologically for forecasting.
Causal Studies
Analysis of cause-and-effect relationships among variables.
Simulation Models
Evaluate various business scenarios in forecasting.
Focused Forecasting
Combines computer simulation and expert input.
Exponential Smoothing
Method applying more weight on recent data than older data.
Moving Average
Simple average of demand over a specified number of past periods.
Weighted Moving Average
Assigns different weights to each period’s demand based on importance.
Simple Linear Regression
Predicting outcomes based on independent and dependent variables.
Seasonal Index
Adjustment factor for seasonal demand changes.
Mean Forecast Error (MFE)
Average forecast error over multiple periods.
Mean Absolute Deviation (MAD)
Average of forecast errors disregarding direction.
Mean Absolute Percentage Error (MAPE)
MAD adjusted for comparative size relative to actual demand.
Supply Management
Identification, acquisition, and management of inputs and supplier relationships.
Total Cost of Ownership (TCO)
The comprehensive cost associated with acquiring and using a product.
Supply Risk
Probability of unplanned negative events impacting supply.
Building Supply Chain Resilience
Strategies to enhance resilience in supply chains.
Sustainable Procurement
Adopting sustainable practices for better financial and social outcomes.
Economic Order Quantity (EOQ)
Minimizes total acquisition costs by equalizing holding costs with ordering costs.
Inventory Turnover
Ratio of average inventory to level of sales.
Stockout Costs
Consequences of not having enough inventory to meet demand.
Demand Classifications
Independent Demand is out of control; Dependent Demand is driven by another item's demand.
Continuous Review Model
Constantly monitors inventory levels for optimization.
Safety Stock
Extra inventory held to guard against uncertainty in supply and demand.
Buffer Stock
Additional inventory kept to absorb fluctuations in demand.
Cycle Stocks
Inventory produced or ordered to meet ongoing demand.
Transit Stock
Inventory that is currently in motion from one location to another.
Geographic Specialization
Adjusting inventory distribution based on geographic demand differences.
Supplier Relationship Management
Managing interactions and relationships with suppliers.
Certification and Performance Measurement
Tracking supplier performance and ensuring quality standards.
Customer Service Impact on Lifetime Value
Customer service significantly affects revenue and vendor trust.
Customer Satisfaction Criteria
Reliability, Responsiveness, Access, Communication, Credibility.
Lead Time
Time between the start and end of an activity.
Product Availability Metrics
Measures such as fill rate that impact stock availability.
Perfect Order
Order that is complete, on time, damage-free, and with correct documentation.
Omni-Channel Business
Multiple customer touchpoints for orders and deliveries.
CRM (Customer Relationship Management)
Technology used to gather customer data and foster long-term relationships.
ABC Analysis
Classification of inventory based on importance.
Bullwhip Effect
Increased variation upstream in the supply chain due to demand fluctuations.
Supplier-Managed Inventory (SMI)
Supplier takes over inventory management for better efficiency.
Blockchain Technology
Role of blockchain in enhancing transparency and data visibility.
Postponable Product Concept
Product designed to be completed quickly after demand confirmation.
Artificial Intelligence in Forecasting
Utilizes learning algorithms for better decision-making.
Focus on Collaboration
Importance of collaboration in better planning and forecast accuracy.
Service Reliability
The consistency of delivering correct service to customers.
Sustainability Practices
Practices that improve financial performance, quality, and customer loyalty.
Strategic Sourcing Process
Analyzing needs, identifying suppliers, and managing relationships.
Supplier Optimization Strategies
Balancing supplier base to enhance supply management.
Factors Influencing Supplier Selection
Consider proximity, trade barriers, and market access.
Information Systems in Inventory
Systems like GTIN for accurate inventory tracking.
Service Level Policy
Establishes acceptable stockout risk levels.
Long-term Customer Relationships
Maintain relationships by understanding customer needs.
Customer desires
Meeting or exceeding customer expectations for satisfaction.
Risk Assessment in Sourcing Decisions
Evaluating risks and supplier capabilities before sourcing.
Product Recalls
Costs associated with product defects or unsafe products.
Customer Loyalty Issues
Problems arising due to poor service impacting customer retention.
