SCM - FINAL EXAM COMPLETE QUESTIONS AND
CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |ALREADY GRADED A+||BRAND
NEW!!
smaller inventories - smaller inventory holding cost
-cost of capital
-storage&handling costs
-taxes
-insurance
-shrinkage
larger inventories (retailer like best buy wants) - -better customer service
-smaller ordering cost
-smaller setup cost
-smaller labor & equipment utilization
-smaller transportation costs
-payments to suppliers (cheaper ordering large quantities)
cycle inventory - on hand inventory that varies directly with lot size
avg=Q/2 ... Q=lot size
safety stock inventory - surplus inventory that a company holds to protect
against demand uncertainties.
,-avoid customer service problems & hidden costs of unavailable components
anticipation inventory - to meet predictable spikes in demand
pipeline inventory - goods that have left the firms warehouse but are still in
company's distribution chain as they are yet to be bought by customers
cycle inventory reduction - reduce the lot size
-reduce ordering &setup costs & allow Q to be reduced
-increase repeatability to eliminate changeovers
safety stock inventory reduction - place orders closer to the time when
they must be received
-improve demand forecasts
-cut lead times
-reduce supply uncertainties
-rely more on equipment & labor buffers
anticipation inventory reduction - match demand rate with production
rates
-add new products with different demand cycles
-provide off-season promotional campaigns
-offer seasonal pricing plans
pipeline inventory reduction - reduce lead times
, -find more responsive suppliers & select new carriers
-change Q in those cases where the lead time depends on the lot size
ABC analysis - the process of dividing SKUs into three classes, according to
their dollar usage, so that managers can focus on items that have the highest
dollar value
-A is most valuable, C least valuable
-goal is to distinguish high volume parts from low volume parts
*a company cannot control inventory shrinkage
A items - -tight inventory control
-more secured storage areas & better sales forecasts
-reorders should be frequent
-avoiding stock-outs is a priority
-20% of items, 80% annual usage
B items - -monitoring of potential evolution towards class A or C
-regular review
-30% of items, 15% annual usage
C items - -reordering is less frequent
-typical inventory policy consists of having only one unit on hand, & reordering
only when an actual purchase is made
-this approach leads to stockout situation which is acceptable because low
demand & higher risk of excessive inventory costs
CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |ALREADY GRADED A+||BRAND
NEW!!
smaller inventories - smaller inventory holding cost
-cost of capital
-storage&handling costs
-taxes
-insurance
-shrinkage
larger inventories (retailer like best buy wants) - -better customer service
-smaller ordering cost
-smaller setup cost
-smaller labor & equipment utilization
-smaller transportation costs
-payments to suppliers (cheaper ordering large quantities)
cycle inventory - on hand inventory that varies directly with lot size
avg=Q/2 ... Q=lot size
safety stock inventory - surplus inventory that a company holds to protect
against demand uncertainties.
,-avoid customer service problems & hidden costs of unavailable components
anticipation inventory - to meet predictable spikes in demand
pipeline inventory - goods that have left the firms warehouse but are still in
company's distribution chain as they are yet to be bought by customers
cycle inventory reduction - reduce the lot size
-reduce ordering &setup costs & allow Q to be reduced
-increase repeatability to eliminate changeovers
safety stock inventory reduction - place orders closer to the time when
they must be received
-improve demand forecasts
-cut lead times
-reduce supply uncertainties
-rely more on equipment & labor buffers
anticipation inventory reduction - match demand rate with production
rates
-add new products with different demand cycles
-provide off-season promotional campaigns
-offer seasonal pricing plans
pipeline inventory reduction - reduce lead times
, -find more responsive suppliers & select new carriers
-change Q in those cases where the lead time depends on the lot size
ABC analysis - the process of dividing SKUs into three classes, according to
their dollar usage, so that managers can focus on items that have the highest
dollar value
-A is most valuable, C least valuable
-goal is to distinguish high volume parts from low volume parts
*a company cannot control inventory shrinkage
A items - -tight inventory control
-more secured storage areas & better sales forecasts
-reorders should be frequent
-avoiding stock-outs is a priority
-20% of items, 80% annual usage
B items - -monitoring of potential evolution towards class A or C
-regular review
-30% of items, 15% annual usage
C items - -reordering is less frequent
-typical inventory policy consists of having only one unit on hand, & reordering
only when an actual purchase is made
-this approach leads to stockout situation which is acceptable because low
demand & higher risk of excessive inventory costs
