Supply Chain Management Flashcards

Which supply chain strategy is best suited for products with highly unpredictable demand and short life cycles?

Answer: Agile supply chain

An agile supply chain is designed to respond quickly to unpredictable demand and market volatility, making it ideal for short-lifecycle products.

The bullwhip effect in supply chains refers to:

Answer: Amplification of demand variability as orders move upstream

The bullwhip effect describes how small fluctuations in end-customer demand get progressively amplified as they travel upstream through the supply chain.

Which inventory management model uses a fixed reorder quantity triggered when stock falls to a predetermined level?

Answer: Continuous review (Q) model

The continuous review (Q) model places a fixed order quantity whenever inventory drops to the reorder point, allowing variable timing.

Total Cost of Ownership (TCO) in procurement includes which of the following beyond purchase price?

Answer: Acquisition, ownership, and post-ownership costs

TCO captures all costs associated with acquiring, using, and disposing of a product, providing a complete financial picture beyond the sticker price.

A Tier-1 supplier in a supply chain is best described as:

Answer: A supplier that directly supplies the focal firm

Tier-1 suppliers have a direct contractual relationship with the focal (buying) company, whereas Tier-2 suppliers supply to Tier-1.

Which performance metric measures the percentage of customer orders fulfilled completely and on time?

Answer: Perfect order rate

The perfect order rate measures how often orders are delivered complete, on time, undamaged, and with correct documentation.

Vendor Managed Inventory (VMI) transfers inventory replenishment responsibility to:

Answer: The supplier

In VMI, the supplier monitors the buyer's inventory levels and initiates replenishment orders, reducing ordering burden on the buyer.