SCM 300 EXAM 2 ASU DAVILA (ACTUAL 2025)
QUESTIONS AND VERIFIED ANSWERS.
Brick-and-Mortar Business
a business that operates in a physical store without an internet
presence
Online or E-tailing
All products and services are sold to customers through an
online website. Example: Amazon.com
Brick and Clicks
Companies that use both a physical store and the Web to sell
their products and services.
Clicks and Calls
In addition to taking orders via the company website, some
companies will also offer sales via the phone. Examples:
Lands' End and L.L. Bean
,Order size required=(Actual Demand)/(Proportion of
Acceptable Product per Order)
Shrinkage Calculation. Must be performed at every stage of
the supply chain in upstream direction (customer back to
manufacturer)
Consumer demands 300 units. Retail store allows 2% theft
shrinkage
300/(1-.002)=300/.98=306.12 or 300/(100%-2%)=300/98%,
always round up, in this case 307
Inventory future= inventory present[(√warehouse
future)/(√warehouse present)]
Square Root Rule
bullwhip effect
the phenomenon in supply chains whereby ordering patterns
experience increasing variance as you proceed upstream in the
chain
Causes of Bullwhip Effect
,order batching, forward buying, rationing, shortage gaming
Everyday Low Pricing (EDLP)
When suppliers resist the urge to have sales promotions and
instead offer their lowest prices each day, buyers do not see an
advantage to buying in bulk
vendor managed inventory system (VMI)
Buyers share inventory information with suppliers. Suppliers
in turn take on the responsibility of managing inventory levels
for buyer by placing deliveries
Push System
A system in which consumer demand is known and expected.
As a result a supply chain will preemptively buy materials,
manufacture finished goods, and even deliver them to a store
or a picking and packing facility where consumers can buy
them at a later date. Inventory is "pushed" toward the
consumer in anticipation of consumer demand.
Characteristics of push system
, • A desire for finished goods to be immediately and readily
available
• Opportunities to take advantage of quantity discount
• End item are standardize with little opportunity for
customization
• Vulnerable to obsolescence of inventory, high holding cost,
and poor demand forecasts that may result in stock outs or
massive overstocks
Pull System
A system that is activated by consumer demand. As a result a
supply chain will not make and store finished goods
inventory. Instead, the supply chain will wait for the
consumer to place a specific order and only then will the
supply chain react by perhaps buying raw materials and/or
parts, and then assembling the desired goods, before quickly
delivering them to the consumer. Inventory is "pulled" by the
consumer by communicating a specific desire to those in the
supply chain.
Characteristics of pull system
• High raw materials inventory readily available to produce a
specific consumer order
• End items very likely offer a range of customization options
QUESTIONS AND VERIFIED ANSWERS.
Brick-and-Mortar Business
a business that operates in a physical store without an internet
presence
Online or E-tailing
All products and services are sold to customers through an
online website. Example: Amazon.com
Brick and Clicks
Companies that use both a physical store and the Web to sell
their products and services.
Clicks and Calls
In addition to taking orders via the company website, some
companies will also offer sales via the phone. Examples:
Lands' End and L.L. Bean
,Order size required=(Actual Demand)/(Proportion of
Acceptable Product per Order)
Shrinkage Calculation. Must be performed at every stage of
the supply chain in upstream direction (customer back to
manufacturer)
Consumer demands 300 units. Retail store allows 2% theft
shrinkage
300/(1-.002)=300/.98=306.12 or 300/(100%-2%)=300/98%,
always round up, in this case 307
Inventory future= inventory present[(√warehouse
future)/(√warehouse present)]
Square Root Rule
bullwhip effect
the phenomenon in supply chains whereby ordering patterns
experience increasing variance as you proceed upstream in the
chain
Causes of Bullwhip Effect
,order batching, forward buying, rationing, shortage gaming
Everyday Low Pricing (EDLP)
When suppliers resist the urge to have sales promotions and
instead offer their lowest prices each day, buyers do not see an
advantage to buying in bulk
vendor managed inventory system (VMI)
Buyers share inventory information with suppliers. Suppliers
in turn take on the responsibility of managing inventory levels
for buyer by placing deliveries
Push System
A system in which consumer demand is known and expected.
As a result a supply chain will preemptively buy materials,
manufacture finished goods, and even deliver them to a store
or a picking and packing facility where consumers can buy
them at a later date. Inventory is "pushed" toward the
consumer in anticipation of consumer demand.
Characteristics of push system
, • A desire for finished goods to be immediately and readily
available
• Opportunities to take advantage of quantity discount
• End item are standardize with little opportunity for
customization
• Vulnerable to obsolescence of inventory, high holding cost,
and poor demand forecasts that may result in stock outs or
massive overstocks
Pull System
A system that is activated by consumer demand. As a result a
supply chain will not make and store finished goods
inventory. Instead, the supply chain will wait for the
consumer to place a specific order and only then will the
supply chain react by perhaps buying raw materials and/or
parts, and then assembling the desired goods, before quickly
delivering them to the consumer. Inventory is "pulled" by the
consumer by communicating a specific desire to those in the
supply chain.
Characteristics of pull system
• High raw materials inventory readily available to produce a
specific consumer order
• End items very likely offer a range of customization options
