Supply Chain Operations & Optimization Flashcards

Which supply chain strategy positions inventory closer to end customers to reduce lead times and improve responsiveness?

Answer: Forward deployment

Forward deployment places finished goods or components at locations near customers to shorten order fulfillment lead times.

A company's order cycle time is 5 days and demand is 200 units/day. Safety stock covers 2 days of demand. What is the reorder point?

Answer: 1,400 units

Reorder point = (demand rate × lead time) + safety stock = (200 × 5) + (200 × 2) = 1,000 + 400 = 1,400 units.

What is the primary goal of supply chain segmentation?

Answer: Applying differentiated strategies to distinct customer or product groups

Segmentation recognizes that different products or customers require different service levels and supply chain configurations.

In a pull-based supply chain, production or replenishment is triggered by:

Answer: Actual customer orders or consumption

Pull systems respond to real demand signals rather than forecasts, reducing overproduction and excess inventory.

The Total Cost of Ownership (TCO) model in sourcing decisions includes all of the following EXCEPT:

Answer: Supplier's internal R&D budget

TCO captures all costs the buyer incurs over the product lifecycle; a supplier's internal R&D budget is not a buyer-borne cost.

Which metric measures the percentage of customer orders fulfilled completely from available stock without backorders or substitutions?

Answer: Fill rate

Fill rate (or line fill rate) specifically measures the proportion of demand satisfied immediately from on-hand inventory.

A supply chain risk mitigation technique that involves qualifying multiple suppliers for the same component is called:

Answer: Dual or multi-sourcing

Dual or multi-sourcing reduces dependency on any one supplier, providing redundancy if one source is disrupted.