SCM 300 EXAM PREP UPDATED
QUESTIONS AND ACCURATE ANSWERS
FULL STUDY MATERIAL
●● Procurement (purchasing)
Answer: 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
Answer: the branch responsible for making business processes effective
and efficient (help create high quality products/services using fewest
resources possible).
●● Logistics
Answer: 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
Answer: 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
Answer: DC
●● Annual Holding Cost (AHC)
Answer: (Q/2)*H
●● Annual Ordering Cost (AOC)
Answer: (D/Q)S
●● Equation for total cost
Answer: DC + AHC + AOC
●● Economic Order Quantity (EOQ)
Answer: 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
, Answer: 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)
Answer: total task time / cycle time
●● 3 Supply Chain Flows
Answer: Money, material, information
●● downstream supply chain
Answer: 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
Answer: going backwards, moving towards the supplier.
ex: finding ways to maximize efficiency coming back. see if all the
boxes that have arrived at the retailer are empty and not damaged to send
them beck for reuse. developing relationships with the companies first
tier supplier to enhance and better communication.
●● Supply chain competitive priorities
QUESTIONS AND ACCURATE ANSWERS
FULL STUDY MATERIAL
●● Procurement (purchasing)
Answer: 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
Answer: the branch responsible for making business processes effective
and efficient (help create high quality products/services using fewest
resources possible).
●● Logistics
Answer: 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
Answer: 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
Answer: DC
●● Annual Holding Cost (AHC)
Answer: (Q/2)*H
●● Annual Ordering Cost (AOC)
Answer: (D/Q)S
●● Equation for total cost
Answer: DC + AHC + AOC
●● Economic Order Quantity (EOQ)
Answer: 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
, Answer: 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)
Answer: total task time / cycle time
●● 3 Supply Chain Flows
Answer: Money, material, information
●● downstream supply chain
Answer: 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
Answer: going backwards, moving towards the supplier.
ex: finding ways to maximize efficiency coming back. see if all the
boxes that have arrived at the retailer are empty and not damaged to send
them beck for reuse. developing relationships with the companies first
tier supplier to enhance and better communication.
●● Supply chain competitive priorities
