Supply Chain Operations & Optimization Flashcards

Which supply chain design strategy holds minimal finished goods inventory and instead postpones final product configuration until a customer order is received?

Answer: Postponement (delayed differentiation)

Postponement defers value-added activities until demand is known, reducing finished goods variety and inventory risk.

A supply chain's 'cash-to-cash cycle time' is calculated as:

Answer: Days Inventory Outstanding (DIO) + DSO − DPO

Cash-to-cash = DIO + DSO − DPO; it measures how many days cash is tied up in the operating cycle.

Demand sensing uses which type of data to generate short-term forecasts more accurately than traditional statistical models?

Answer: Point-of-sale and real-time consumption signals

Demand sensing uses granular, real-time POS data and other consumption signals to detect actual demand patterns as they emerge.

When a manufacturer allows a retailer to trigger replenishment orders automatically based on agreed inventory levels, this is known as:

Answer: Vendor-managed inventory (VMI)

In VMI, the supplier takes responsibility for monitoring and replenishing the customer's stock within agreed parameters.

Which lean principle focuses on producing only what is needed, when it is needed, and in the amount needed?

Answer: Just-in-Time (JIT)

JIT aims to eliminate waste by synchronizing production and delivery precisely with actual demand.

In the SCOR (Supply Chain Operations Reference) model, 'Source' refers to:

Answer: Procuring goods and services to meet planned or actual demand

The SCOR 'Source' process covers all activities related to ordering, receiving, and managing incoming goods from suppliers.

A company uses ABC analysis to classify inventory. 'A' items typically represent:

Answer: A small number of SKUs that account for the majority of total inventory value

ABC analysis assigns 'A' status to roughly 20% of items that represent approximately 80% of total inventory value.