Uark Intro to Supply Chain Exam 2
Spring 2024
1.Purchasing - ANSWER-routine acts related to issuing purchase orders for needed
products
1. direct/ strategic materials
2. maintence, repair, operations (MRO)
2. Consumption Management - ANSWER--how much of what kinds of products are
bought from whom at what prices
-above/ below expectations
3. Vendor Selection - ANSWER--The value of product quality, service level, just-in-time
delivery, technical support.
-narrow (less) the better
4. Contract negotiation - ANSWER--contracts must be negotiated with individual
vendors on the preferred vendor list
- simple= indirect products
- Complex= high tech components
5. Contract Management - ANSWER--Vendor performance against contract must be
measured and managed
-ability to track performance of its suppliers and hold accountable to meet the service
level they agreed to in their contracts
8 best practices for inventory management - ANSWER-1. Know your inventory
2. Daily check on Safety Stock level
3. ID most productive inventory
4. Track distressed inventory
5. Don't let market sway to much
6. complement inv. mgmt with sales/ operations planning
7. use erp software
8. perform root cause analysis
Aggregate Planning - ANSWER-Intermediate-range capacity planning, usually covering
3 to 18 months.
alternatives to procurement - ANSWER-1. Make- Send request to product manager
2. buy- single vs multiple- retail, warehouse, manufacture
Causal forecasting - ANSWER-Assumes that demand is related to some underlying
factor(s) in the environment
, Creating a BATNA - ANSWER--Brainstorm a list of all available alternatives that might
be considered should negotiations fail
-Choose most promising alternatives and expand them into practical and attainable
alternatives
-Identify the best of alternatives and keep as fallback
Credit and Collections - ANSWER--the sourcing process that a company uses to get its
money
-good credit rating and timely invoice payment
-3 categories
demand forecasting - ANSWER-a decision process in which managers predict demand
patterns. 4 variables
distributors/wholesalers - ANSWER-agencies that purchase drugs from the
manufacturing companies
Economic Order Quantity (EOQ) - ANSWER-the optimal order size to minimize the sum
of ordering, carrying, and stockout costs
EOQ= Square root (2*annual usage rate* ordering cost)/ (holding cost per year at % of
unit cost * cost per unit)
Factor of forecasting- Supply - ANSWER-Determined by the number of producers of a
product and by its lead time
Factor of forecasting: competitive environment - ANSWER-the actions of a company
and its competitors
Factor of forecasting: demand - ANSWER-the overall market need for a group of
relative product or service
Factor of forecasting: product characteristics - ANSWER-the features of a product that
influence customer demand for the product
Forecasting Accuracy - ANSWER-Short term is more accurate than long term
Gray section/Book: Sourcing Products out of Country - ANSWER--Strategic sourcing
technology
-ability to analyze many factors simutaneously
-monetary cost transforms into total cost of ownership(TCO)
How to determine importance of buying situation? - ANSWER--Not all purchases are
equal
-Buyers segment purchases
-Peter Kraljic matrix model
Spring 2024
1.Purchasing - ANSWER-routine acts related to issuing purchase orders for needed
products
1. direct/ strategic materials
2. maintence, repair, operations (MRO)
2. Consumption Management - ANSWER--how much of what kinds of products are
bought from whom at what prices
-above/ below expectations
3. Vendor Selection - ANSWER--The value of product quality, service level, just-in-time
delivery, technical support.
-narrow (less) the better
4. Contract negotiation - ANSWER--contracts must be negotiated with individual
vendors on the preferred vendor list
- simple= indirect products
- Complex= high tech components
5. Contract Management - ANSWER--Vendor performance against contract must be
measured and managed
-ability to track performance of its suppliers and hold accountable to meet the service
level they agreed to in their contracts
8 best practices for inventory management - ANSWER-1. Know your inventory
2. Daily check on Safety Stock level
3. ID most productive inventory
4. Track distressed inventory
5. Don't let market sway to much
6. complement inv. mgmt with sales/ operations planning
7. use erp software
8. perform root cause analysis
Aggregate Planning - ANSWER-Intermediate-range capacity planning, usually covering
3 to 18 months.
alternatives to procurement - ANSWER-1. Make- Send request to product manager
2. buy- single vs multiple- retail, warehouse, manufacture
Causal forecasting - ANSWER-Assumes that demand is related to some underlying
factor(s) in the environment
, Creating a BATNA - ANSWER--Brainstorm a list of all available alternatives that might
be considered should negotiations fail
-Choose most promising alternatives and expand them into practical and attainable
alternatives
-Identify the best of alternatives and keep as fallback
Credit and Collections - ANSWER--the sourcing process that a company uses to get its
money
-good credit rating and timely invoice payment
-3 categories
demand forecasting - ANSWER-a decision process in which managers predict demand
patterns. 4 variables
distributors/wholesalers - ANSWER-agencies that purchase drugs from the
manufacturing companies
Economic Order Quantity (EOQ) - ANSWER-the optimal order size to minimize the sum
of ordering, carrying, and stockout costs
EOQ= Square root (2*annual usage rate* ordering cost)/ (holding cost per year at % of
unit cost * cost per unit)
Factor of forecasting- Supply - ANSWER-Determined by the number of producers of a
product and by its lead time
Factor of forecasting: competitive environment - ANSWER-the actions of a company
and its competitors
Factor of forecasting: demand - ANSWER-the overall market need for a group of
relative product or service
Factor of forecasting: product characteristics - ANSWER-the features of a product that
influence customer demand for the product
Forecasting Accuracy - ANSWER-Short term is more accurate than long term
Gray section/Book: Sourcing Products out of Country - ANSWER--Strategic sourcing
technology
-ability to analyze many factors simutaneously
-monetary cost transforms into total cost of ownership(TCO)
How to determine importance of buying situation? - ANSWER--Not all purchases are
equal
-Buyers segment purchases
-Peter Kraljic matrix model
