SCM Exam #1 Questions with Verified
Answers
1. Define a Primary Task - ANSWER-- purpose of the company
- the company's line of business
- should not be defined too narrowly
2 Objectives of S&OP - ANSWER-1. To establish a company-wide game plan for
allocating resources
2. To develop an economics strategy for meeting demand
2. Assess Core Competencies - ANSWER-- what the company does better than anyone
else
- refers to the company's distinctive competence
- competencies can be gained or lost over time
3 Inconvenient Truths of SCM - ANSWER-1. Every organization must make a product
or provide a service that has VALUE to someone
2. Most organizations are part of larger supply chains
3. Organizations must carefully manage their operations to prosper can survive
3 Primary Objectives of O&SC Strategy - ANSWER-1. Help management choose the
right mix of structural and infrastructural elements
2. Ensure that the company's choices are strategically aligned with the company's
business strategy
3. Support the development of core competencies in the company's operations and
supply chains
3. Determine Order Winners and Order Qualifiers - ANSWER-- what you do must be
important to your customer
4 Performance Dimensions - ANSWER-1. Quality
2. Time
3. Flexibility
4. Cost
4 Process Cycles - ANSWER-1. Customer Order Cycle
2. Replenishment Cycle
3. Manufacturing Cycle
,4. Procurement Cycle
4 Steps Done in Collaboration with Supply Chain Partners - ANSWER-- Market planning
- Demand and resource planning
- Execution
- Analysis
4. Position the Company - ANSWER-- determine how your company will compete
- choose 1 or 2 things and do them very well
- can compete on *cost, speed, quality, and flexibility*
5 Steps of S&OP Planning Progress - ANSWER-Step 1: End-of-month reports (run
forecasting model)
Step 2: Demand planning (first pass sales plan)
Step 3: Supply planning (first pass operations plan)
Step 4: Pre-S&OP meeting (explore alternatives and what-ifs; reach consensus)
Step 5: Executive S&OP meeting (develop company game plan)
5 Steps of Strategy Formulation - ANSWER-1. Define a primary task
2. Assess core competencies
3. Determine order winners and order qualifiers
4. Position the company
5. Deploy your strategy
5. Deploy Your Strategy - ANSWER-- must consider how your strategy is relevant to the
workers implementing it
- make sure strategy is understandable
- endure that departments know how to interpret your strategy correctly
6 Drivers of Supply Chain - ANSWER-- Facilities
- Inventory
- Transportation
- Information
- Sourcing
- Pricing
Adjusted Exponential Smoothing Model - ANSWER-- expanded version of the
exponential smoothing model
- this version includes a *trend adjustment factor*
> this model does a better job of picking up on the upward trend in the data than does
the unadjusted model
,Aggregate Planning - ANSWER-how you determine the quantity and timing of
production over an intermediate time
Aggregate Planning for Production Costs - ANSWER-- holding inventory
- regular production (average labor and benefits)
- overtime and undertime
- hiring (firing, acquiring, and training new employees)
- fire/layoff costs (separation packages)
- backorder/lost sales
- subcontracting (unit cost and loss of control)
Aggregate Planning for Services - ANSWER-(differs from planning for products in the
following ways)
- most services cannot be inventoried
- demand for services difficult to predict
- capacity can be difficult to predict
- service capacity must be provided at appropriate place and time
- labor usually the most containing resource
American Society for Quality (ASQ) - ANSWER-- leader in education and all aspects of
quality improvement, including ISO 9000
Analysis - ANSWER-- monitoring execution and key performance metrics
- identifying opportunities for future improvement
Assemble-To-Order (ATO) Products - ANSWER-- customized only at the very end of
the manufacturing process
- before assembly/finishing
Association for Operations Management (APICS) - ANSWER-- professional society for
people interested in operations and SCM
- has more than 67,000 members and 250 chapters
Average Capacity Strategy - ANSWER-expanding capacity to coincide with the average
expected demand (moderate strategy)
Back Room - ANSWER-part of the service operation that is completed without direct
customer contact
Backlog - ANSWER-accumulated customer orders to be completed at a later date
Backordering - ANSWER-ordering an item that is temporarily out of stock
, Backstage Activities - ANSWER-do not involve direct interaction with the customer, but
*DO* occur in response to specific customer actions
Basic Time Series Models - ANSWER-"history will repeat itself, or at least will explain
what is going to happen next"
Batch Manufacturing - ANSWER-kind of manufacturing process in which items are
moved through different manufacturing steps in batches
Batch Manufacturing Properties - ANSWER-- products made in batches
- not in a continuous stream
- used most often when you have products with moderate levels of volume/variety
- dominant flow patterns
- some common inputs
- may require high setup times
- requires moderately flexible employees/equipment
- best of both world
- ex: manufacturing plant that makes several different model/types of computer monitors
Benchmarking - ANSWER-process of identifying, understanding, and adapting
outstanding practices from within the same company or from other companies to help
improve performance
Best Operating Level - ANSWER-percent of capacity utilization that minimizes your unit
costs
Build-Up Forecast - ANSWER-- qualitative method
- individuals familiar with specific market segments estimate the demand within their
segment
- the individual segment forecasts are combined to create and overall forecast
Business Strategy - ANSWER-- strategy that identifies a company's targeted customers
and identifies time frames and performance objectives
Capacity - ANSWER-- measure of the company's ability to meet demand for its products
> time and volume
Capacity Cushion - ANSWER-percent of capacity you hold in reserve for the
unexpected
Capacity Lag Strategy - ANSWER-increasing capacity after you document an increase
in demand (conservative strategy)
Capacity Lead Strategy - ANSWER-expanding capacity in anticipation of demand
growth (aggressive strategy)
Answers
1. Define a Primary Task - ANSWER-- purpose of the company
- the company's line of business
- should not be defined too narrowly
2 Objectives of S&OP - ANSWER-1. To establish a company-wide game plan for
allocating resources
2. To develop an economics strategy for meeting demand
2. Assess Core Competencies - ANSWER-- what the company does better than anyone
else
- refers to the company's distinctive competence
- competencies can be gained or lost over time
3 Inconvenient Truths of SCM - ANSWER-1. Every organization must make a product
or provide a service that has VALUE to someone
2. Most organizations are part of larger supply chains
3. Organizations must carefully manage their operations to prosper can survive
3 Primary Objectives of O&SC Strategy - ANSWER-1. Help management choose the
right mix of structural and infrastructural elements
2. Ensure that the company's choices are strategically aligned with the company's
business strategy
3. Support the development of core competencies in the company's operations and
supply chains
3. Determine Order Winners and Order Qualifiers - ANSWER-- what you do must be
important to your customer
4 Performance Dimensions - ANSWER-1. Quality
2. Time
3. Flexibility
4. Cost
4 Process Cycles - ANSWER-1. Customer Order Cycle
2. Replenishment Cycle
3. Manufacturing Cycle
,4. Procurement Cycle
4 Steps Done in Collaboration with Supply Chain Partners - ANSWER-- Market planning
- Demand and resource planning
- Execution
- Analysis
4. Position the Company - ANSWER-- determine how your company will compete
- choose 1 or 2 things and do them very well
- can compete on *cost, speed, quality, and flexibility*
5 Steps of S&OP Planning Progress - ANSWER-Step 1: End-of-month reports (run
forecasting model)
Step 2: Demand planning (first pass sales plan)
Step 3: Supply planning (first pass operations plan)
Step 4: Pre-S&OP meeting (explore alternatives and what-ifs; reach consensus)
Step 5: Executive S&OP meeting (develop company game plan)
5 Steps of Strategy Formulation - ANSWER-1. Define a primary task
2. Assess core competencies
3. Determine order winners and order qualifiers
4. Position the company
5. Deploy your strategy
5. Deploy Your Strategy - ANSWER-- must consider how your strategy is relevant to the
workers implementing it
- make sure strategy is understandable
- endure that departments know how to interpret your strategy correctly
6 Drivers of Supply Chain - ANSWER-- Facilities
- Inventory
- Transportation
- Information
- Sourcing
- Pricing
Adjusted Exponential Smoothing Model - ANSWER-- expanded version of the
exponential smoothing model
- this version includes a *trend adjustment factor*
> this model does a better job of picking up on the upward trend in the data than does
the unadjusted model
,Aggregate Planning - ANSWER-how you determine the quantity and timing of
production over an intermediate time
Aggregate Planning for Production Costs - ANSWER-- holding inventory
- regular production (average labor and benefits)
- overtime and undertime
- hiring (firing, acquiring, and training new employees)
- fire/layoff costs (separation packages)
- backorder/lost sales
- subcontracting (unit cost and loss of control)
Aggregate Planning for Services - ANSWER-(differs from planning for products in the
following ways)
- most services cannot be inventoried
- demand for services difficult to predict
- capacity can be difficult to predict
- service capacity must be provided at appropriate place and time
- labor usually the most containing resource
American Society for Quality (ASQ) - ANSWER-- leader in education and all aspects of
quality improvement, including ISO 9000
Analysis - ANSWER-- monitoring execution and key performance metrics
- identifying opportunities for future improvement
Assemble-To-Order (ATO) Products - ANSWER-- customized only at the very end of
the manufacturing process
- before assembly/finishing
Association for Operations Management (APICS) - ANSWER-- professional society for
people interested in operations and SCM
- has more than 67,000 members and 250 chapters
Average Capacity Strategy - ANSWER-expanding capacity to coincide with the average
expected demand (moderate strategy)
Back Room - ANSWER-part of the service operation that is completed without direct
customer contact
Backlog - ANSWER-accumulated customer orders to be completed at a later date
Backordering - ANSWER-ordering an item that is temporarily out of stock
, Backstage Activities - ANSWER-do not involve direct interaction with the customer, but
*DO* occur in response to specific customer actions
Basic Time Series Models - ANSWER-"history will repeat itself, or at least will explain
what is going to happen next"
Batch Manufacturing - ANSWER-kind of manufacturing process in which items are
moved through different manufacturing steps in batches
Batch Manufacturing Properties - ANSWER-- products made in batches
- not in a continuous stream
- used most often when you have products with moderate levels of volume/variety
- dominant flow patterns
- some common inputs
- may require high setup times
- requires moderately flexible employees/equipment
- best of both world
- ex: manufacturing plant that makes several different model/types of computer monitors
Benchmarking - ANSWER-process of identifying, understanding, and adapting
outstanding practices from within the same company or from other companies to help
improve performance
Best Operating Level - ANSWER-percent of capacity utilization that minimizes your unit
costs
Build-Up Forecast - ANSWER-- qualitative method
- individuals familiar with specific market segments estimate the demand within their
segment
- the individual segment forecasts are combined to create and overall forecast
Business Strategy - ANSWER-- strategy that identifies a company's targeted customers
and identifies time frames and performance objectives
Capacity - ANSWER-- measure of the company's ability to meet demand for its products
> time and volume
Capacity Cushion - ANSWER-percent of capacity you hold in reserve for the
unexpected
Capacity Lag Strategy - ANSWER-increasing capacity after you document an increase
in demand (conservative strategy)
Capacity Lead Strategy - ANSWER-expanding capacity in anticipation of demand
growth (aggressive strategy)
