Supply Chain Management FBLA Questions and Answers correct

Supply Chain Management FBLA Questions and Answers correct 4 Channels of Distribution 1. Wholesaler 2. Retailer 3. Distributor 4. Ecommerce 5 Qualities of a Supply Chain Manager 1. math skills combined with strong analytical and statistical capabilities to understand supply and demand issues. 2. ability to use data to track orders and shipments, sales trends, demand and any weaknesses and inefficiencies 3. understanding of technology—artificial intelligence, machine learning, Internet of Things, analytics software and apps 4. soft skills to negotiate and build relationships with suppliers, customers and team members 5. attention to detail to understand the business and the environment in which it operates Logistics Operations The processes of moving finished goods, including from the manufacturer a distribution center, and then to the end user. The entire logistics process consists of managing inventory, fulfilling orders, and shipping packages. Inventory Management Helps companies identify which and how much stock to order at what time. It tracks inventory from purchase to the sale of goods. The practice identifies and responds to trends to ensure there's always enough stock to fulfill customer orders and proper warning of a shortage Warehousing The process of storing physical inventory for sale or distribution Inventory Tracking The process of a business continuously monitoring all of the inventory that it owns Stockouts A situation in which an item is out of stock. Backorder A retailer's order for a product that is temporarily out of stock with the supplier --> Will get the product once it is in stock Carrying Costs various costs a business pays for holding inventory in stock Inventory Forecasting the practice of using past data, trends and known upcoming events to predict needed inventory levels for a future period Shipping the act of physically transporting goods or materials between locations Business Analyst Collects and analyzes data to help improve an organization's supply chain operations, reporting to department heads or upper management. They make sure supply meets the business demand of a company and work to make the process smoother. Commodity Specialist Oversees inventory purchases for a company. As a commodity specialist, you research market costs of supplies, identify the best suppliers for the company's needs, and negotiate pricing and contracts with those suppliers. Demand Planning Manager oversee the daily operations of the planning department as they analyze customer and vendor demand along the supply chain and develop ways to forecast future demand. Director of Global Procurement Bullwhip Effect How small fluctuations in demand at the retail level can cause progressively larger fluctuations in demand at the wholesale, distributor, manufacturer and raw material supplier levels What factors can contribute to demand fluctuations (bullwhip effect)? - Distribution Order Lead Times - Order Batching - Lack of Communication in the Supply Chain - Inaccurate Forecasting Solutions to Bullwhip Effect 1. Improve inventory planning 2. Review safety stock levels 3. Evaluate order batching 4. Stabilize price fluctuations 5. Improve forecast accuracy Order Batching A type of inventory control that occurs when small orders are combined into one large order. This amplifies demand variability and adds to the use of safety stock, creating the bullwhip effect. Solutions to problems in the supply chain -make actual demand data available to suppliers -vendor-managed inventory Ex: Pepsi stocks their own products -reduce the length of the supply chain -rationing gaming...trade deals offered by manufactures to wholesalers -Reduce lead times from order to delivery External Drivers of Change -globalization -increasing customer expectations -product proliferation -shorter product life cycles -new technologies -environmental issues Current Trends in SCM -increasing supply chain responsiveness -the supply chain greening effect Supply Chain Greening Effect The operational management method and optimization approach to reduce the environmental impact along the life cycle of the green product, from the raw material to the end product Primary goals of purchasing 1. Uninterrupted flows of raw materials at low costs 2. Quality of finished goods 3. Optimize customer satisfaction Outsourcing Buying materials and components from suppliers instead of making them in house Backward Integration When a company buys another company that supplies the products or services needed for production. ex: bakery business bought a wheat processor and wheat farm. Forward Integration A company to move forward in the supply chain, increasing its overall ownership of the industry Ex. a farmer sells his/her crops at the local market rather than to a distribution center Reasons for Buying or Outsourcing Cost advantage Insufficient capacity Lack of expertise Quality Reasons for Making Lower costs Break even point Total cost to make = Total cost to buy Preferred suppliers provide what? - Early supplier involvement - Information on the supply market - Capacity for meeting unexpected demand - Cost efficiency due to economies of scale Cost of a product - Unit cost - Ordering cost - Logistics cost - Inventory cost - Maintenance cost Third Party Logistics Provider -An external supplier that performs all or part of a companies logistics functions -Many include transportation, warehousing, distribution, related financial services, vendor managed inventory TCO total cost of ownership Single-Sourcing The business practice of buying a particular product from only one supplier Multi-Sourcing Purchasing a good or service from more than one supplier. Companies may use multi-sourcing to create competition between suppliers in order to achieve higher quality and lower price. Single-Sourcing Advantages 1. Lower pricing due to consolidation of all requirements with one supplier. 2. More consistent quality. 3. Lower purchasing workload due to communication with fewer suppliers. 4. Easier to manage supplier performance because you are tracking fewer suppliers. 5. Easier to track down the source of problems as well as affected products in the event of a quality investigation/recall. Multi-Sourcing Advantages 1. less reliance on any one supplier providing a safety net if a supplier runs into difficulties 2. more flexibility to cope with unexpected events that could jeopardize capacity 3. fewer bottlenecks as more suppliers are able to meet peak demand 4. competition often provides an incentive for suppliers to improve cost and service 5. competition between suppliers also often provides the buyer with more bargaining power Multi-Sourcing Disadvantages 1. information sharing may become more complex higher costs for contract negotiation, management, and process execution 2. lower order volumes reduce bargaining power the ability to save through economies of scale in reduced 3. challenges can come up in terms of quality control and efficacy