SCMT 2103 EXAM 1 QUESTIONS AND
ANSWERS
Logistics - Correct Answers -Management, flow, storage, total costs, customer service
Supply Chain Management - Correct Answers -the management of upstream and
downstream relationships with suppliers and customers in order to deliver superior
customer value at less cost to the supply chain as a whole.
Connection between purchasing and logistics
Ultimate Goal of SCMT - Correct Answers -Fulfill consumer demand by ensuring
uninterrupted flow of materials, products, and services in the most efficient manner.
Order Cycle - Correct Answers -(Most Important)(Demand)
Starts when you buy something (Rate at which you buy something)
Replenish Cycle - Correct Answers -Rate at which a retailer purchases stock.
Procurement Cycle - Correct Answers -Rate at which manufacturer needs to buy
supplies to make product.
Cost/Service Tradeoff - Correct Answers -You can increase service but may be at
higher cost.
Optimal - Correct Answers -Entire cost is lowest.
Economies of Scale - Correct Answers -Factors that cause a producer's average cost
per unit to fall as output rises
Process Improvement v. Process Redesign - Correct Answers -Process Improvement:
Improves on a component of a process
Process Redesign: Add, remove, or edit a process component
Outsourcing of Logistics Activities - Correct Answers -3rd Party Logistics, Risk, Cost,
Asset, Performance, Maintain competence
, Transportation Inventory Tradeoff - Correct Answers -One of the most significant
tradeoffs
Lead Time - Correct Answers -Amount of time that transpires between the time that a
customer places an order and receives an order.
Slow Modes of Transportation - Correct Answers -Slower transportation = Slower lead
time, but lower cost
Faster/More expensive Transportation - Correct Answers -Ability to hold LESS inventory
Processes - Correct Answers -Inputs, Outputs, Controls, Mechanisms
Inputs - Correct Answers -Things that feed your processes
Outputs - Correct Answers -Results of your processes
Controls - Correct Answers -Parameters that you put around your processes. Could be
your capacity.
Mechanisms - Correct Answers -Method for the process
3rd Party Logistics - Correct Answers -A company that will manage your logistics for
you
Inventory Turns - Correct Answers -How many times you deplete your inventory
Sales or GOGS/inventory
Ex. $42/$7= 6 turns/year
Cycle Stock - Correct Answers -Stock you regularly use.
Inventory Holding Cost - Correct Answers -Space, Risk, Obsolete, Damage,
Deterioration, Expiration, Stolen, Opportunity cost of capital, and Tradeoffs
These costs are often invisible and hard to put a dollar amount on.
Space - Correct Answers -There is an opportunity cost when putting an item on your
shelf
Risk - Correct Answers -Risk of fire, theft, or that the product will go obsolete
Inventory Carrying Cost - Correct Answers -Percentage of a cost of inventory
JIT - Correct Answers -Just in Time
ANSWERS
Logistics - Correct Answers -Management, flow, storage, total costs, customer service
Supply Chain Management - Correct Answers -the management of upstream and
downstream relationships with suppliers and customers in order to deliver superior
customer value at less cost to the supply chain as a whole.
Connection between purchasing and logistics
Ultimate Goal of SCMT - Correct Answers -Fulfill consumer demand by ensuring
uninterrupted flow of materials, products, and services in the most efficient manner.
Order Cycle - Correct Answers -(Most Important)(Demand)
Starts when you buy something (Rate at which you buy something)
Replenish Cycle - Correct Answers -Rate at which a retailer purchases stock.
Procurement Cycle - Correct Answers -Rate at which manufacturer needs to buy
supplies to make product.
Cost/Service Tradeoff - Correct Answers -You can increase service but may be at
higher cost.
Optimal - Correct Answers -Entire cost is lowest.
Economies of Scale - Correct Answers -Factors that cause a producer's average cost
per unit to fall as output rises
Process Improvement v. Process Redesign - Correct Answers -Process Improvement:
Improves on a component of a process
Process Redesign: Add, remove, or edit a process component
Outsourcing of Logistics Activities - Correct Answers -3rd Party Logistics, Risk, Cost,
Asset, Performance, Maintain competence
, Transportation Inventory Tradeoff - Correct Answers -One of the most significant
tradeoffs
Lead Time - Correct Answers -Amount of time that transpires between the time that a
customer places an order and receives an order.
Slow Modes of Transportation - Correct Answers -Slower transportation = Slower lead
time, but lower cost
Faster/More expensive Transportation - Correct Answers -Ability to hold LESS inventory
Processes - Correct Answers -Inputs, Outputs, Controls, Mechanisms
Inputs - Correct Answers -Things that feed your processes
Outputs - Correct Answers -Results of your processes
Controls - Correct Answers -Parameters that you put around your processes. Could be
your capacity.
Mechanisms - Correct Answers -Method for the process
3rd Party Logistics - Correct Answers -A company that will manage your logistics for
you
Inventory Turns - Correct Answers -How many times you deplete your inventory
Sales or GOGS/inventory
Ex. $42/$7= 6 turns/year
Cycle Stock - Correct Answers -Stock you regularly use.
Inventory Holding Cost - Correct Answers -Space, Risk, Obsolete, Damage,
Deterioration, Expiration, Stolen, Opportunity cost of capital, and Tradeoffs
These costs are often invisible and hard to put a dollar amount on.
Space - Correct Answers -There is an opportunity cost when putting an item on your
shelf
Risk - Correct Answers -Risk of fire, theft, or that the product will go obsolete
Inventory Carrying Cost - Correct Answers -Percentage of a cost of inventory
JIT - Correct Answers -Just in Time
