Test Study Guide:

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.