Studied by 12 peopleTransportation Advantage
Add inbound and outbound costs, whoever has the lowest amount has the transportation advantage
Customer Order Cycle Time
Date it is delivered - Date of order received = days
Order to Cash Cycle Time
How many days from date of order received to when you receive payment
Perfect Order Index
(Total Orders - Orders with Errors) / Total orders received * 100
On Time % Delivery
Orders delivered on time / Total orders received * 100
In-Full % Delivery
(Total Orders Delivered - Incorrect or incomplete orders) / Total Orders Received *100
Naïve Forecasting Method
Equal to the actual value observed during the last period
Simple Mean Forecasting Method
The average of all available data
Moving Average Forecasting Method
The average value over a set time period
Weighted Moving Average Forecasting Method
Use the weights and multiple it by its corresponding actual demand for the amount of periods stated.
Exponential Smoothing Formula
Ft+1 = aAt + (1-a)Ft
Exponential Smoothing data meaning
-Last periods forecast (Ft) -Last periods actual value (At) -Select value of smoothing coefficient, a, between 0 and 1.0
Economic Order Quantity Goal
Minimize the total cost when considering ordering costs and holding costs
Economic Order Quantity Formula
EOQ = the square root of 2(annual usage in units) (Order cost)/(Annual carrying cost per unit)
Q = √2RA/VW
What are supply chains
They encompass the group of companies needed to design, make, deliver, and use a product or service
6 things that make up the Score Model
Source, Plan, Make, Deliver, Return, and Enable
Effectiveness deals with
Customers
Efficiency deals with
Cost
What is the goal of supply chain management
Achieve both efficiency and effectiveness
What is the objective of supply chain management
Supply Chain strategy and design must focus on reducing costs while improving customer service
What is the intended outcome of supply chain management
Good supply chain management can lead to firm competitive advantage
Higher Service Levels characterstics
-More product means higher carrying cost -More warehouses mean higher carrying costs + operating cost -More stores mean higher carrying costs + operating costs
Improved Operations characteristics
-Less product means lower carrying costs (customer) -Less warehouses means lower carrying costs and operating costs -Less stores means lower carrying costs and operating costs
What are the 5 supply chain drivers
Production, Inventory, Transportation, Location, and Information
How can a company the 5 supply chain drivers to operate a responsive versus efficient supply chain?
The right combination of responsiveness and efficiency in each of these drivers allows a supply chain to "increase throughput while simultaneously reducing inventory and operating expense."
Three logistics strategies
-Cost Reduction -Capital Reduction
Service Improvement
There are spatial relationships because
-Places are separated by distance -Transportation costs increase with distance -Distance could impact the amount of warehouses/inventory
Cost Reduction description and sample issues
-Minimizing the variable costs associated with movement and storage
-Choosing among different warehouse locations or evaluating alternative transport modes
Capital Reduction description and sample issues
-Minimizing the level of investment in the logistics system and maximizing the return on logistics assets
-Shipping direct to customers to avoid warehousing -Choosing public warehouses over privately owned -Selecting a just-in-time supply approach rather than stocking inventory
Service improvement description and Sample issues
-Recognizing that revenues depend on the level of logistics services provided
-Provide different and better services than the competition
Demand planning
the process of forecasting demand for a product (or service) and executing an operational plan to serve that demand
Demand forecasting
The process of predicting consumer demand or predicting sales
4 Variables in Forecasting
-Supply -Demand -Product Characteristics -Competitive Environment
What is the relationship between number of suppliers, lead times and supply predictability?
-More producers of a product, shorter lead times and more predictable supply is -Fewer suppliers means longer lead time and increased potential for uncertainty
What is the relationship between supply chain forecasts’ coverage and lead times?
Supply Chain forecasts must cover a time period that encompasses the combined lead times of all components that go into the creation of the final product
What is the relationship between forecast difficulty and product historical data?
Products and markets for which there is little historical data and lots of variability are the most difficult to forecast for
What is the relationship between forecast periods and product maturity?
Forecasts for mature products can cover longer timeframes than forecasts for products that are developing quickly
What are the forecasting implications for competing or complementary products?
Products that compete with or complement each other should be forecasted together
What are the forecasting implications for both companies and their competitors when products are planned to be included in future promotional or sales events?
Forecasts should consider events that are planned for in the upcoming period like promotions and sales specials for both an organization and its competitors
Qualitative forecasting method
-Primarily subjective -rely on judgement
Time Series Forecasting Method
-Use historical demand only -best with stable demand
Causal Forecasting Method
Relationship between demand and some other factor
Simulation Forecasting Method
Imitate consumer choices that give rise to demand
Order Cost Definition
Cost of placing order which may have both fixed and variable components
Setup Costs Definition
Expenses incurred each time an organization modifies a production or assembly line to produce a different item for inventory
Note
Flashcard