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Logistics Exam 1 (Ch 1 - 4) with correct
answers
Supply Chain Management - correct answer -Consists of firms collaborating to leverage strategic positioning and to improve operating efficiency Supply Chain Strategy - correct answer -Is a channel and business organizational arrangement, based on acknowledge dependency, and collaboration Business Logistics - correct answer -Coordination of projected requirement, procurement, physical movement, and storage of components, parts, raw materials, and semi-finished and finished goods, to achieve the optimum service level at minimal cost primary logistics activities - correct answer -- basic functions that have to be performed in any logistics system
- are all interrelated, and a change in one will likely create a ripple effect of change throughout the entire system the 5 primary logistics activities - correct answer -- inventory
- facility network
- communication & information
- material handling
- transportation inventory (primary logistics activity) - correct answer -- purchasing
- ordering policies
- stock levels facility network (primary logistics activity) - correct answer -- warehouse planning
- warehouse management
- site selection communication & information (primary logistics activity) - correct answer -- demand forecasting
- production scheduling
- order processing material handling (primary logistics activity) - correct answer -- handling methods
- handling materials
- packaging transportation (primary logistics activity) - correct answer -- inbound/outbound
- mode selection
- carrier selection the basic logistics system - correct answer -- begins with a customer placing an order with the org
- a product is then either produced, or shipped from inventory to the customer
- as more products are sold, more raw materials must be acquired from suppliers, and more products to fill demand or replenish inventory customer service - correct answer -the output of the logistics system challenge for the logistics expert is: - correct answer -to design a system that delivers a desired level of customer service at the lowest total cost
- cost cutting, while important must be balanced with the need to provide optimum levels of customer service and satisfaction Integrative Management - correct answer -integration of the overall business process creates value
supply chains are generally described as _________________, i.e., from your suppliers-suppliers on one end, through your internal operations, and out to your customers-customers on the other end - correct answer -spanning from end-to-end basic model of supply chain - correct answer -plan -> source -> make -> deliver <- return Integrative Management Requires Simultaneous Achievement of 8 Processes - correct answer -- demand planning responsiveness
- customer relationship collaboration
- order fulfillment/service delivery
- product/service development launch
- manufacturing customization
- supplier relationship collaboration
- life cycle support
- reverse logistics Focus of integrated management? - correct answer -lowest total process cost
- this differs from lowest cost of each function in the process what is necessary to achieve integrated management - correct answer -- collaboration of operating information, technology, and risk across the end-to-end supply chain
- includes expanded managerial influence and control beyond traditional ownership boundaries of a single enterprise
- integrated service providers (ISP) offer a range of logistics services to accommodate customers, ranging from order entry to product delivery elements of supply chain information system (SCIS) - correct answer -- strategic planning
- decision analysis
- management control
- transaction system
strategic planning - correct answer -- strategic alliance formulation
- development and refinement of capabilities and opportunities
- focused/profit-based customer service analysis
- most sophisticated
- mostly utilized by elite companies
- high risk and extensive options
- justified by competitive advantage decision analysis - correct answer -- Vehicle routing and scheduling
- Inventory levels and management
- Network/facility location and integration
- Vertical integration vs. third-party/outsourcing
- 3rd level, right under the top of the pyramid
- analysis/evaluation
- significant user expense and training
- effectiveness-driven activity focus
- justified by identification and evaluation of competitive alternatives management control - correct answer -- financial measurement: cost asset management
- customer service management
- productivity measurement
- quality measurement
- financial and operations reporting Enterprise Resource Planning (ERP) - correct answer -- the backbone of a company's logistical information system
- an integrated database of current and historical data
- processes most (if not all) transactions across all business functions
- most common/widely used ERP software packages are SAP and Oracle
- example transactions include: order entry, order management, inventory assignment, receiving, and shipping enterprise integration and adminstration - correct answer -- general administration
- accounts receivable and payable
- financial inventory accounting
- general ledger
- human resources Enterprise planning and monitoring - correct answer -modules facilitate the exchange of planning information modules are:
- sales and operations planning (S & OP) -> act as senior management tool to run the business
- supply chain compliance -> act as regulatory
- supply chain visibility and event management (EMS) -> act as control towers of an airport enterprise operations - correct answer -support day-to-day supply chain operations
modules are:
- customer relationship management
- logistics
- manufacturing
- purchasing
- inventory deployment basic supply chain capabilities models - correct answer -1. understand the requirements of your customers
- define core competencies and the role your company will play to serve your customers
- develop supply chain capabilities to support the role your company has chosen
- included efficient model and responsive model efficient supply chain - correct answer -supply chain and processes are designed to minimize cost
- predictable supply & low cost
- low cost production & highly utilized capacity
- high inventory turns
- ideal for function products Functional Products - correct answer -- Staples that people buy everywhere
- Don't change much over time
- Stable predictable demand responsive supply chain - correct answer -supply chain designed to respond quickly to market demand
- excess capacity / flexible processing
- inventory of parts
- short lead time (& quick changeovers)
disadvantage of anticipatory business model - correct answer -- high inventories (& capital tied up in inventory)
- long lead times
- dependency on forecasting
- forecasting error creates non-value adding time
- inefficiencies
- obsolenscence
- shortages
- additional cost Responsive Business Model (pull) - correct answer -- sell products to customer
- create supply plan
- buy materials to produce products
- manufacture products
- deliver to customers make to order / assemble to order - correct answer -producing stock in response to actual demand
- part of pull model advantages of responsive business model - correct answer -high levels of customer service through responsiveness and flexibility to meet uncertain customer demand
- short lead times
- reduced dependency on forecasting
- use short & flexible production runs
- store very low inventories
- reduce waste
- provide opportunities for customization
- improve cash flow disadvantages of responsive business model - correct answer -every order is basically a rush order and any problems will lead to customer dissatisfaction
- highly dependent on customer relationship
- reduced ability to take advantage of economies of scale
- require fast, responsive, flexible, robust, & integrated systems and processes
- resource issues will have significant & immediate impact Postponement - correct answer -provide the greatest opportunity for supply chain professions to minimize the risks of stock outs and excess inventory by leaving the final configuration of a produce to the last possible moment and moving those operations closer to the customer goal: supply desirable products to customers at a relativity low cost and in a responsive way
- work to reduce the risk of a supply chain performance issue
- provides more options to customers w/out increasing costs benefits of postponement - correct answer -- minimize wrong inventory
- expedited shipping costs
- obsolete & markdown products
- designed to overcome disadvantages of push and pull models (postponement is a hybrid of both) --> early stages of product assembly are done in a push manner --> final product assembly is done based on customer demand pull for specific product configurations Postponement strategies - correct answer -- manufacturing postponement
- assembly postponement
- packaging postponement
example: IKEA furniture packaging postponement - correct answer -when goods that might be offered in different packages are not packaged until the last moment
- this practice allows for the storage of finished products unpacked and minimizes risks of excessive stock example: pharm drugs labeling postponement - correct answer -when product differentiation takes place only by putting the labels on the package
- is useful when companies use different markets example: private labels; best before... time postponement - correct answer -where a fully stocked inventory is maintained at one or only a few strategic locations advantages: manufacturing economies of scale & responsiveness to customer
- often used for critical, high cost parts and assemblies hub-and-spoke warehouse network - correct answer -time postponement example
- a centralized warehouse (the hub) holds most of the inventory
combines postponement - correct answer -in combination, manufacturing and time postponement involves keeping the basic products centralized and performing the final product customization at the destination distributor, rather than at the manufacturing site example: computer customization barriers to implementing responsive systems - correct answer -- The need for publicly held corporations to maintain planned quarterly profits --> Expectations of continued financial results often drive promotional and pricing strategies to "load the channel" with inventory, i.e., "Channel Stuffing"
- The need to establish collaborative relationships with trading partners for responsive systems to work --> Most business managers do not have training or experience in development of collaborative arrangements financial measurement of time-based supply chains - correct answer -- cash-to-cash conversion
- dwell time
- cash spin Cash-to-Cash Conversion - correct answer -the time required to convert raw materials or inventory purchases into sales revenue
- measure of how efficient your supply chain is at generating revenue
- the calculation of the time between the outlay of cash and the recovery of cash dwell time - correct answer -ratio of time that an asset sits idle to the time required to satisfy its designated supply chain mission Dwell Time Minimization - correct answer -to reduce dwell time, firms collaborating in a supply chain need to be willing to eliminate duplicate and non-value-added work
- timely arrival and continuous inventory flow between supply chain partners
Location Analysis Flow of Actions - correct answer -1. Cost of inbound transportation of materials and outbound transportation of finished products- proximity to suppliers and customers
- Availability and type of land
- Availability of secondary resources, infrastructure, etc
- Availability of desired manpower and labor costs
- Governmental regulation and taxation Location Analysis Important Factors - correct answer -- Cost of operations as a percentage of sales
- Type and shelf life of product Inventory Management - correct answer -1. On hand inventory analysis
- Communicating the quantity, quality, and timing of required material or finished products with the supply points
- Achieving the right quantity, right quality, and right time Inventory Management - correct answer -- Cost of materials
- Lead time- time it takes to get inventory in/out
- Inventory control measures Inventory Management - correct answer -- Forecasting using statistical tools
- Fixed order interval system
- Economic order quantity with ROP
- Distribution Requirements Planning (DRP)- warehousing Warehousing Flow of Actions - correct answer -1. Location of warehouse(s)- how many?
- Inventory level at the warehouse- same? varied? different types of inventory?
- Storage requirements of the product- refrigerated?
- Packaging and repackaging requirement of the product
- Shelf life of product
Warehousing Important Factors - correct answer -- Availability of space
- Availability of material handling systems
- Strategic location(s)
- Packing and repacking facilities
- Information and associated services Warehousing Techniques - correct answer -- Third party logistics
- Third party warehousing Material Handling Flow of Actions - correct answer -1. Classify the type of material- raw material, finished goods, etc
- Handling requirements of the material- flammable, fragile, cold, etc
- Cost ratio of material handling to material cost
- Material default location, identification, and traceability Material Handling Important Factors - correct answer -- Material breakage
- Theft
- Cost of material handling
- Number of handling occurrences (less is better) Material Handling Techniques - correct answer -- Operations research
- Material flow analysis
- Computerized material retrieval systems
- ASRS (automated service and retrieval system) Packaging Flow of Actions - correct answer -1. Determine material packaging requirements- bottle? box? bag?
- Primary packaging
Transportation Important Factors - correct answer -- Urgency of product
- Cost of product
- Availability of material handling systems
- Strategic location
- Packing and repacking facilities
- Information and associated services Transportation Techniques - correct answer -- Containerized transportation
- Intermodal transportation
- Cross docking
- Direct shipment
- Cold chain transportation Customer Service Flow of Actions - correct answer -1. Contractual services offered to the customer
- Type of customer service required for the product
- Location of service center
- Service level at the service center
- Cost of service vs replacement Customer Service Important Factors - correct answer -- Contractual requirements of customer service- what did you agree to?
- Service quality
- Reverse logistics Customer Service Techniques - correct answer -- CRM (customer relationship management)
- Call center/ "800" number
- Guarantees and warranties
- Annual maintenance contracts
Logistics Planning - correct answer -Attempts to answer questions of what/when/how
- Takes place at 3 different levels --> strategic --> tactical --> operational Strategic Planning - correct answer -Long range where time horizon is longer than 1 year Tactical Planning - correct answer -- Intermediate time horizon
- Usually less than a year Operational Planning - correct answer -- Short range
- Decision frequently made on an hourly/daily basis Logistics is Necessary to - correct answer -- Move goods/materials from suppliers to buyers (inbound)
- Move goods/materials between sites (internal and external)
- Move finished goods to the customer Products have little value to the customer until they are moved to the customer's point of consumption- delivered at right time to desired location Logistical Value Proposition - correct answer -Consists of a commitment to key customer expectations and requirements at minimal cost 2 elements of logistical value proposition - correct answer -service benefit & cost minimization
- Firms must appropriate tradeoffs between service and cost for each of their key customers
- Tradeoff different by customer- bulk/massive quantity vs. small parcel, frequency, customer value
