SCM 300 Exam 1 Questions and Answers
3 branches of supply chain - ✅✅procurement (purchasing), operation, logistics,
reverse
Procurement (purchasing) - ✅✅the branch of supply chain where deals
happen, negotiations for the best price on materials, equipment, goods, and
services. acquiring materials and placing orders.
Operations - ✅✅the branch responsible for making business processes
effective and efficient (help create high quality products/services using fewest
resources possible).
Logistics - ✅✅is concerned with transportation, finding the right partners or
best ways to get the product or service from origin to consumption.
Key variable in elementary inventory calculations - ✅✅Q - lot size
D - annual demand
C - cost to purchase one unite
H - cost to hold on unit of inventory in one year
S - cost to place a single order
Annual cost to purchase inventory - ✅✅DC
Annual Holding Cost (AHC) - ✅✅(Q/2)*H
, Annual Ordering Cost (AOC) - ✅✅(D/Q)S
Equation for total cost - ✅✅DC + AHC + AOC
Economic Order Quantity (EOQ) - ✅✅the lot size that minimizes total annual
inventory holding and ordering costs, making it the optimal lot size
= SQRT (2DS/H)
if a manager is looking to minimize inventory costs and maximize total annual
savings then he would calculate optimal lot size through this formula.
Cycle time - ✅✅the pace at which product must move through the assembly
line in order for the assembly line to keep pace with demand.
= Operating Time/D
Theoretical Minimum number of workstations calculations (TM) - ✅✅total task
time / cycle time
3 Supply Chain Flows - ✅✅Money, material, information
downstream supply chain - ✅✅the direction that points towards the end
customer
Ex: delivering goods from a manufacturer to a distributor. main suppliers s1
working to get parts prepared in time for manufacturer.
Upstream Supply Chain - ✅✅going backwards, moving towards the supplier.
3 branches of supply chain - ✅✅procurement (purchasing), operation, logistics,
reverse
Procurement (purchasing) - ✅✅the branch of supply chain where deals
happen, negotiations for the best price on materials, equipment, goods, and
services. acquiring materials and placing orders.
Operations - ✅✅the branch responsible for making business processes
effective and efficient (help create high quality products/services using fewest
resources possible).
Logistics - ✅✅is concerned with transportation, finding the right partners or
best ways to get the product or service from origin to consumption.
Key variable in elementary inventory calculations - ✅✅Q - lot size
D - annual demand
C - cost to purchase one unite
H - cost to hold on unit of inventory in one year
S - cost to place a single order
Annual cost to purchase inventory - ✅✅DC
Annual Holding Cost (AHC) - ✅✅(Q/2)*H
, Annual Ordering Cost (AOC) - ✅✅(D/Q)S
Equation for total cost - ✅✅DC + AHC + AOC
Economic Order Quantity (EOQ) - ✅✅the lot size that minimizes total annual
inventory holding and ordering costs, making it the optimal lot size
= SQRT (2DS/H)
if a manager is looking to minimize inventory costs and maximize total annual
savings then he would calculate optimal lot size through this formula.
Cycle time - ✅✅the pace at which product must move through the assembly
line in order for the assembly line to keep pace with demand.
= Operating Time/D
Theoretical Minimum number of workstations calculations (TM) - ✅✅total task
time / cycle time
3 Supply Chain Flows - ✅✅Money, material, information
downstream supply chain - ✅✅the direction that points towards the end
customer
Ex: delivering goods from a manufacturer to a distributor. main suppliers s1
working to get parts prepared in time for manufacturer.
Upstream Supply Chain - ✅✅going backwards, moving towards the supplier.
