General Practice Flashcards

A retailer notices that small fluctuations in consumer demand cause progressively larger order swings at the distributor and manufacturer. Which practice would MOST directly reduce this effect?

Answer: Sharing point-of-sale data with upstream partners

Sharing POS data lets upstream partners plan from true end demand, dampening the bullwhip effect.

In a master production schedule, which quantity represents the portion of planned inventory and production not yet committed to customer orders?

Answer: Available-to-promise

Available-to-promise (ATP) is the uncommitted portion of inventory and planned production available for new customer orders.

Which forecast error measure shows whether a forecast is consistently too high or too low?

Answer: Tracking signal

The tracking signal (cumulative error divided by MAD) detects bias in a forecast.

During the sales and operations planning (S&OP) process, what is the main purpose of the executive S&OP meeting?

Answer: To make final decisions and resolve issues left unsettled in earlier steps

The executive meeting authorizes the consensus plan and resolves cross-functional conflicts escalated from the pre-S&OP meeting.

A company produces to a forecast but assembles final products only after receiving customer orders from a stock of common modules. Which production strategy is this?

Answer: Assemble-to-order

Assemble-to-order stocks components or modules and completes final assembly upon receipt of a customer order.

Which of the following is an example of dependent demand?

Answer: Tires needed to build scheduled bicycles

Dependent demand is derived from the production schedule of a higher-level item, such as components in a bill of material.

Collaborative planning, forecasting, and replenishment (CPFR) is BEST described as:

Answer: A business practice in which trading partners jointly plan, forecast, and replenish inventory

CPFR is a collaborative process in which trading partners share forecasts and plans to improve replenishment.