Supply Chain & Vendor Management Flashcards

Which supply chain strategy focuses on maintaining minimal inventory levels by receiving goods only as they are needed in the production process?

Answer: Just-In-Time (JIT)

Just-In-Time (JIT) is a strategy that aligns raw-material orders with production schedules to reduce inventory holding costs.

A vendor scorecard is primarily used by a general manager to:

Answer: Evaluate and track supplier performance against defined KPIs

Vendor scorecards measure supplier performance across metrics like quality, delivery, price, and responsiveness to drive continuous improvement.

What is the primary purpose of a Request for Proposal (RFP) in vendor selection?

Answer: To solicit detailed bids and solutions from multiple potential suppliers

An RFP invites multiple vendors to submit detailed proposals, allowing the organization to compare solutions, pricing, and capabilities before selecting a supplier.

Single-sourcing a critical component from one vendor presents the greatest risk of:

Answer: Supply disruption if the vendor faces production issues

Relying on a single supplier creates vulnerability; any disruption at that vendor—such as a natural disaster or financial failure—halts your supply chain.

Which contract type places the most financial risk on the buyer?

Answer: Cost-Plus-Fixed-Fee Contract

In a cost-plus-fixed-fee contract, the buyer reimburses all allowable costs plus a fixed fee, giving the vendor little incentive to control expenses.

The bullwhip effect in supply chains refers to:

Answer: Increasing demand variability as orders move upstream from retailer to manufacturer

The bullwhip effect describes how small fluctuations in consumer demand amplify into larger order swings further up the supply chain, causing excess inventory or shortages.

Lead time in supply chain management is best defined as:

Answer: The total time from placing a purchase order to receiving the goods

Lead time measures the elapsed time between initiating an order and its fulfillment, which directly affects inventory planning and customer service levels.