WorksheetsSupply Chain Management Key Terms and Concepts
Total questions: 55
Worksheet time: 28mins
What is the definition of 'Order Winner'?
Must-haves (baseline requirements)
Optional features (nice to have)
Features that are not required
Irrelevant characteristics
What is the definition of 'Order Qualifier'?
Differentiators (what secures the sale)
Basic criteria that permit the firm's products to be considered for purchase
The process of fulfilling customer orders
A measure of product quality
What is the definition of 'Supply Chain'?
Entire network of organizations, people, activities, information, and resources involved in moving product/service from raw materials to the final customer.
A process of only manufacturing goods within a single factory.
A system for tracking employee attendance in a company.
A method for advertising products to potential customers.
What does 'Logistics' focus on?
Detailed planning and execution of moving and storing goods (Transportation, warehousing, inventory management, order fulfillment).
Designing marketing campaigns for products and services.
Developing new product prototypes and conducting research.
Managing employee payroll and benefits.
What is Supply Chain Mapping?
Process of visually documenting/analyzing all organizations, activities, and flows of materials, info, and finances.
A method for forecasting future sales based on historical data.
A technique for reducing production costs by outsourcing.
A process of hiring new employees for logistics operations.
Which of the following is NOT a tier of suppliers?
A) Companies that supply directly to firm
B) Companies that supply to tier 1
C) Companies that supply to tier 2
D) Companies that supply to tier 3 (not mentioned in the text)
What is a strategic trade-off in supply chain management?
Choice companies must make between competing priorities (cost, speed).
A method to eliminate all risks in the supply chain.
A process of automating every supply chain activity.
A way to avoid making any decisions in supply chain operations.
What does 'Demand' refer to in supply chain management?
Customers' desire/willingness to purchase product/service at given time/price.
The amount of inventory stored in a warehouse.
The process of transporting goods from supplier to retailer.
The cost incurred in manufacturing a product.
What is Demand Planning?
Process of forecasting/managing customers demand to ensure products are available.
A method for reducing product prices in the market.
A strategy for increasing employee satisfaction.
A process for designing new product packaging.
What are demand fluctuations caused by?
Seasonality, trends/fashion, economic conditions, price changes/promotions, unexpected events.
Only government regulations and taxes.
The color of the product packaging.
The number of employees in a company.
What is the Bullwhip Effect?
Tiny shifts in demand whip up into larger fluctuations as they move up the supply chain.
A method for reducing inventory costs in retail stores.
A pricing strategy used to increase profit margins.
A technique for improving employee productivity.
Which of the following is NOT a law of forecasting?
Forecasts are always wrong
Forecasts are more accurate for groups of products than for individual items
Forecasts are more accurate for longer time horizons than shorter ones
Forecasts are more accurate for shorter time horizons than longer ones
What is independent demand?
Customer demand for finished product that is not tied to demand for other item.
Demand for raw materials used in production.
Demand that depends on the sales of another product.
Supplier demand for components.
What is dependent demand?
Demand for items that depend on demand of other product.
Demand that is independent of any other product.
Demand that is always constant over time.
Demand that is determined by market trends only.
What is qualitative forecasting?
Forecasting based on expert judgement, opinions, market research (used when there is little/no historical data).
Forecasting using only mathematical and statistical models based on historical data.
Forecasting that relies solely on computer-generated algorithms without human input.
Forecasting that uses only quantitative data from financial statements.
What is quantitative forecasting?
Uses historical numerical data/mathematical models to predict future demand.
Relies solely on expert opinions and intuition.
Focuses on qualitative analysis of customer feedback.
Predicts future demand based on random guessing.
Which forecasting technique assigns more weight to recent periods, reflecting importance, best for demands that slowly change/has slight trends?
Moving average
Weighted moving average
Exponential smoothing
Seasonal forecasting
What is the formula for moving average?
AVERAGE(B2:B11)
SUM(B2:B11)
MAX(B2:B11)
COUNT(B2:B11)
What is the formula for exponential smoothing?
=FORECAST=a*(last period) + (1-a)*(forecast last period)
=AVERAGE(last period, forecast last period)
=SUM(last period, forecast last period)/2
=last period - a*(forecast last period)
What does forecast error measure?
The difference between actual demand and the forecast demand. (Forecast error = actual demand - forecasted demand)
The total sales over a period of time.
The average inventory level in a warehouse.
The percentage increase in production costs.
What does S&OP stand for and what is its purpose?
Sales and Operations Planning; aligns company's sales with its production, inventory, and supply plans to ensure right products are available at right time while balancing demand, supply, and financial goals.
Sales and Organizational Planning; focuses on employee scheduling and resource allocation for HR purposes.
Supply and Operations Process; manages only the logistics and warehousing aspects of a business.
Sales and Output Planning; is used solely for forecasting sales numbers without considering supply or inventory.
What are the steps in the S&OP process?
1) Forecast demand (sales plan), 2) Align production & inventory (operations plan), 3) Review & adjust with cross functional teams, 4) Make decisions to balance supply & demand.
1) Develop marketing campaigns, 2) Launch new products, 3) Analyze customer feedback, 4) Increase sales targets.
1) Hire new staff, 2) Reduce production, 3) Increase prices, 4) Expand distribution channels.
1) Conduct financial audit, 2) Set annual budget, 3) Approve capital expenditures, 4) Review shareholder returns.
What is an order cycle?
Total time it takes from when customer places order to when they receive product.
The process of manufacturing goods in a factory.
The time taken to deliver raw materials to a warehouse.
The period between two consecutive sales promotions.
What are the elements of an order cycle?
Order placement, processing, production, delivery.
Order cancellation, refund, feedback, review.
Order design, marketing, sales, support.
Order inquiry, negotiation, contract, payment.
What is strategic sourcing?
Process of evaluating, selecting, and managing suppliers to acquire goods & services in most cost effective way.
A method of increasing product prices to maximize profit.
A process of hiring employees for managerial positions.
A technique for advertising products on social media platforms.
What does 'Needed assessment' involve?
Cost, quality, capacity, reliability, risk sustainability & compliance assessments
Only financial analysis of a project
Assessment of employee satisfaction only
Reviewing marketing strategies exclusively
What is single sourcing, multiple sourcing, global sourcing, local sourcing, nearshoring, and outsourcing examples of?
Sourcing strategies
Financial strategies
Marketing strategies
Production techniques
What is the process of evaluating and comparing options based on criteria, assigning weight to each criterion, rating each supplier, multiplying rating by weight for each criterion, and summing totals called?
Weighted decision matrix
Pareto analysis
SWOT analysis
Cost-benefit analysis
What is the process of building and maintaining strong relationships with suppliers called?
Supplier Relationship Management
Demand Forecasting
Inventory Valuation
Product Lifecycle Management
What does it mean when suppliers, manufacturers, distributors, and sales items are aligned and have shared understanding of goals and plans?
SAME page
Different goals
Random alignment
No communication
What matrix categorizes company purchases/suppliers based on risk and profit impact?
Kralicks matrix
SWOT matrix
Ansoff matrix
BCG matrix
What is the process of categorizing suppliers into groups based on criteria such as strategic importance, risk, performance, or the value of their products/services called?
Segment suppliers
Supplier negotiation
Supplier onboarding
Supplier auditing
What is the process where suppliers share understanding of goals, expectations, and strategies between company and its suppliers called?
Alignment with suppliers
Supplier negotiation
Inventory management
Order fulfillment
What is the complete cost of acquiring, operating, and maintaining a product or service over its entire life cycle called?
Total cost of ownership
Net present value
Depreciation cost
Operating expense
What is the total cost of product once it arrives at the buyer's location called?
Landed cost
Invoice price
FOB cost
Retail price
What are uncertainties or potential disruptions that can negatively affect flow of goods called?
Risks & trade-offs
Supply chain benefits
Inventory surpluses
Logistics optimizations
Which negotiation style is described as 'win-lose', hard bargaining on price, short-term?
Competitive (distribution) negotiation
Collaborative (integrative) negotiation
Accommodative negotiation
Compromising negotiation
Which negotiation style is described as 'win-win', open communication, long-term?
Collaborative (integrative) negotiation
Competitive (distributive) negotiation
Avoiding negotiation
Accommodating negotiation
Which negotiation style involves middle ground, quick, limited time?
Compromising
Avoiding
Competing
Accommodating
Which negotiation style involves postponing decisions, minimizing interaction, and low-stake issues?
Avoiding
Competing
Collaborating
Accommodating
Which negotiation style is described as 'lose-win', where other parties' needs come first, preserving loyalty with key supplier/customer?
Accommodating
Competing
Collaborating
Avoiding
What type of negotiation involves transparency of supplier cost structure and agreement on fair margin above actual cost, strategic, long term?
Cost based negotiation
Competitive negotiation
Auction based negotiation
Volume based negotiation
What type of negotiation involves multiple suppliers competing to offer the lowest price, driving down cost through competition for non-critical items?
Competitive bidding (price based)
Collaborative negotiation
Single-source negotiation
Long-term partnership negotiation
What type of negotiation involves both parties working to expand value, lower total cost, and long term?
Win-win/collaborative negotiation
Distributive negotiation
Competitive negotiation
Adversarial negotiation
What type of negotiation involves one party gaining at the expense of the other, short-term, transactional?
Win-lose/distributive negotiation
Win-win/integrative negotiation
Collaborative negotiation
Principled negotiation
What type of negotiation strategy involves building trust, aligning incentives, and is high-risk, high-reward?
Partnership/relationship-based strategy
Competitive/win-lose strategy
Distributive/bargaining strategy
Avoidance/passive strategy
What type of negotiation involves agreeing on how risks are shared to protect both sides in a volatile market?
Risk sharing negotiation
Price fixing negotiation
Win-lose negotiation
Interest rate negotiation
What is the range of outcomes in negotiation where both buyer and supplier needs overlap called?
ZOPA
BATNA
Reservation Price
Anchor Point
What is the process of procuring goods, materials, or services from suppliers in different countries called?
Global sourcing
Local distribution
Domestic procurement
Internal auditing
What is the process of sourcing goods or services from suppliers close to company operations called?
Local sourcing
Global sourcing
Outsourcing
Offshoring
What is the first step in calculating MAD (Mean Absolute Deviation)?
Get actual demand & forecasted demand
Calculate the squared differences
Find the median of the data
Multiply all values together
What is the second step in calculating MAD (Mean Absolute Deviation)?
Find error for each period (error = actual - forecast)
Calculate the average of the actual values
Multiply each error by the forecasted value
Square each error value
What is the third step in calculating MAD (Mean Absolute Deviation)?
Take absolute value for each error (make positive)
Square each error
Multiply each error by the mean
Add the mean to each data point
What is the fourth step in calculating MAD (Mean Absolute Deviation)?
Find average of absolute errors (MAD = sum of abs. Err / # of periods)
Multiply each error by the forecasted value
Square each error and sum them up
Divide the sum of errors by the number of forecasts
What is the final step in calculating MAD (Mean Absolute Deviation)?
Simplify
Multiply by the mean
Square the deviations
Divide by the number of data points
