Supply Chain Basics Quiz

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Questions and Answers

What is the ultimate goal of a supply chain?

  • To create a sustainable and ethical network of producers and consumers.
  • To maximize profit for individual businesses within the chain.
  • To minimize the cost of production and delivery.
  • To deliver products and services to the end user or customer. (correct)

Which of the following is NOT a core function within a supply chain?

  • Marketing and Sales (correct)
  • Customer Service Operations
  • Transportation Operations
  • Inventory Management

What is the crucial link between Demand Planning and Supply Management?

  • Production capacity
  • Inventory levels
  • Customer feedback
  • Procurement purchase requisitions (correct)

Why is it considered dangerous to business health to manufacture a product without a demand plan?

<p>All of the above. (D)</p> Signup and view all the answers

Which of the following accurately describes the relationship between Demand Planning and Procurement?

<p>Demand Planning influences Procurement by dictating the quantity and timing of materials needed. (B)</p> Signup and view all the answers

What is the role of a food processor in a supply chain for tomato sauce?

<p>They convert raw tomatoes into various products like sauce, juice, and ketchup. (D)</p> Signup and view all the answers

What is the significance of suppliers in the tomato sauce supply chain?

<p>They ensure that the food processors have access to all necessary raw materials and packaging. (B)</p> Signup and view all the answers

Why were supply chains historically important during World War I and World War II?

<p>They ensured the efficient and timely delivery of essential materials and resources to support wartime efforts. (A)</p> Signup and view all the answers

What is the primary function of demand planning in manufacturing?

<p>To determine required equipment and staffing (D)</p> Signup and view all the answers

What is a major risk of having too much inventory?

<p>Higher costs and obsolescence risk (D)</p> Signup and view all the answers

How does the demand plan affect procurement organization?

<p>It signals what and when to procure (C)</p> Signup and view all the answers

What document authorizes a company's financial commitment to purchase products?

<p>Purchase order (D)</p> Signup and view all the answers

Which consideration is NOT mentioned as a factor for procurement personnel when dealing with suppliers?

<p>Supplier's reputation (C)</p> Signup and view all the answers

What is a key role of procurement personnel when processing purchase requisitions?

<p>To negotiate for best value (D)</p> Signup and view all the answers

What is the primary focus of inbound logistics in transportation operations?

<p>Support the procurement of materials (D)</p> Signup and view all the answers

Which mode of transportation is NOT included in the definition of intermodal transportation?

<p>Containers (A)</p> Signup and view all the answers

What is essential for ensuring that procurement knows what to buy?

<p>Linkage to the demand plan (C)</p> Signup and view all the answers

What challenges must procurement personnel manage when working with international suppliers?

<p>Cultural differences and supplier disruptions (A)</p> Signup and view all the answers

Which of the following accurately describes reverse logistics?

<p>It supports waste disposal and recycling. (D)</p> Signup and view all the answers

What role does demand planning play in manufacturing?

<p>It schedules assembly work based on anticipated need. (B)</p> Signup and view all the answers

In the context of transportation operations, what does outbound logistics primarily support?

<p>The distribution of goods to customer locations. (B)</p> Signup and view all the answers

Which aspect of manufacturing is primarily handled by service operations personnel?

<p>Routine maintenance and repairs (D)</p> Signup and view all the answers

What is a primary function of transportation within a company's supply chain?

<p>To physically relocate inventory and facilitate distribution (C)</p> Signup and view all the answers

What differentiates service operations from manufacturing operations?

<p>Service operations focus on repairs and maintenance rather than production. (A)</p> Signup and view all the answers

What is primarily defined by sales forecasting within the demand planning process?

<p>The company’s future sales and customer purchases (A)</p> Signup and view all the answers

Which of the following best describes demand planning?

<p>Planning goods and resources needed to support a sales forecast (B)</p> Signup and view all the answers

In the context of demand planning, what are 'semi-finished products'?

<p>Products that require more manufacturing steps to become finished (D)</p> Signup and view all the answers

What aspect is an integral part of the supply chain management process?

<p>Integration of major functions like demand planning (B)</p> Signup and view all the answers

What does demand forecasting form the basis for?

<p>A credible demand plan (A)</p> Signup and view all the answers

What is one of the first steps in the demand planning process?

<p>Defining general requirements by the sales department (C)</p> Signup and view all the answers

What resource needs are defined by the demand planning function?

<p>Inventory and resources needed for sales forecast support (A)</p> Signup and view all the answers

Which of the following best illustrates a completed demand plan for a bakery?

<p>Ingredients, equipment, and labor needed for production (D)</p> Signup and view all the answers

What is the primary goal of inventory management?

<p>To maximize efficiency and profitability (B)</p> Signup and view all the answers

Which of the following processes does inventory management NOT directly involve?

<p>Supplier negotiations (C)</p> Signup and view all the answers

Why do companies strive to reduce their inventory levels?

<p>To reduce operating costs and increase competitiveness (D)</p> Signup and view all the answers

What must be accurate for products to be fabricated in a manufacturing organization?

<p>Sales forecast converted into a demand plan (D)</p> Signup and view all the answers

What role does the company-wide ERP system play in inventory management?

<p>It monitors inventory availability at all levels (D)</p> Signup and view all the answers

What can happen if procurement does not purchase materials on time?

<p>The manufacturing process may fail (C)</p> Signup and view all the answers

What is a critical factor in the conversion or manufacturing process?

<p>High-quality execution of processes (A)</p> Signup and view all the answers

What module is not typically included in a company-wide ERP system for inventory management?

<p>Financial auditing (B)</p> Signup and view all the answers

What is a key consideration in a supply chain for laptops purchased online?

<p>Ensuring high-quality packaging for safe and effective delivery. (C)</p> Signup and view all the answers

How does reverse logistics play a role in the online laptop supply chain?

<p>Facilitating the return of defective or unwanted laptops. (B)</p> Signup and view all the answers

What is the purpose of a return material authorization (RMA) in the context of a laptop supply chain?

<p>Granting permission for returning a laptop based on specific reasons. (B)</p> Signup and view all the answers

Which of these is NOT a direct function of supply chain management in the laptop example?

<p>Designing a website for online laptop sales. (B)</p> Signup and view all the answers

What is the primary goal of supply chain management (SCM) in the context of the online laptop purchase?

<p>Ensuring customer satisfaction through timely and efficient delivery. (A)</p> Signup and view all the answers

Which of these is a key element of SCM in the online laptop supply chain?

<p>Integrating various functions like demand planning and inventory control. (D)</p> Signup and view all the answers

How does live chat contribute to the laptop supply chain?

<p>It provides real-time assistance to customers during the online purchase process. (B)</p> Signup and view all the answers

What role does customer service play in the online laptop supply chain?

<p>Managing product returns and resolving customer issues. (B)</p> Signup and view all the answers

Flashcards

Annual Sales Forecast

Estimation of how many laptops will be sold in a year.

Demand Plan

Strategy to procure components needed to meet forecasted demand.

Value-Added Facility

Location where the final assembly of laptops takes place.

Inventory Control System

System to manage and track the inventory of components.

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Customer Service Representatives

Team responsible for taking orders and assisting customers.

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Packaging for Transport

Ensuring laptops are securely packaged for delivery.

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Reverse Logistics

Process of returning products through the supply chain.

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Supply Chain Management (SCM)

Comprehensive management of data, materials, and services in supply chains.

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Supply Chain

A network of people, processes, resources, and technologies that produce products and services.

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Demand Planning

The process of forecasting customer demand to ensure product availability while minimizing excess inventory.

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Supply Management and Procurement

Acquiring goods and services needed for production while managing supplier relationships.

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Inventory Management

The supervision of supply levels to ensure that enough stock is available to meet demand without overstocking.

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Warehousing Operations

The processes related to storing and managing inventory in a warehouse until it is needed.

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Manufacturing and Service Operations

The activities involved in converting raw materials into finished products or providing services to customers.

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Transportation Operations

The movement of goods from one location to another within the supply chain.

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Customer Service Operations

The processes that ensure customer satisfaction through support and service after purchase.

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Demand Planning Function

Defines resources necessary for manufacturing including equipment and staffing.

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Procurement Organization

Dependent on requisitions from demand planning to purchase necessary items.

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ERP System

System that transmits procurement requirements based on the demand plan.

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Supplier's Lead Time

Time required for a supplier to deliver goods after placing a purchase order (PO).

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Purchase Requisitions

Documents created to solicit procurement for required products.

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Purchase Orders (POs)

Authorizing documents and financial commitments to purchase items.

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Global Supplier Interactions

Engagements with suppliers across different countries to secure best value.

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Supplier Risk Management

Managing risks associated with global suppliers, like natural disasters or currency fluctuations.

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Enterprise Resource Planning (ERP)

Integrated management of core business processes, often in real-time.

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Demand Forecasting

Estimation of future customer demand used to prepare a demand plan.

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Sales Forecast

A prediction of how much of a product customers will purchase over a period.

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Interdependencies in SCM

How different functions within SCM are linked and rely on each other.

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Raw Material Requirements

The necessary ingredients and materials needed for production based on forecasts.

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Procurement Requisitions

Requests generated for obtaining necessary materials based on demand planning.

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Procurement

The process of acquiring goods and services needed for production.

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Manufacturing Process

Converts raw materials into final products for delivery to customers.

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Quality Control

Ensuring high-quality standards during the manufacturing process to avoid defects.

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Inventory Costs

Costs associated with storing and managing inventory, often significant in organizations.

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Manufacturing Dependence

Manufacturing relies on demand planning, procurement, warehousing, and inventory management.

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Service Operations

Responsible for maintenance, repairs, and warranty issues after product sales.

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Supply Chain Links

Transport connects customers, suppliers, and distribution centers geographically.

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Intermodal Transportation

Using multiple transport modes to achieve delivery requirements.

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Inbound Logistics

Supports the procurement of materials from suppliers to manufacturers.

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Outbound Logistics

Supports the distribution of goods from manufacturer to customer.

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Study Notes

Supply Chain Basics

  • A supply chain is a network of people, processes, resources, and technologies that work together to produce goods and services for customers.
  • Supply chains have existed for centuries, evolving from early trade routes to today's complex global networks.
  • Modern supply chains involve multi-national companies cooperating to create products and services.

What is a Supply Chain?

  • A supply chain is a series of interconnected functions within an organization.
  • It starts with strategic planning and ends with product delivery to the customer.
  • Key functions include demand planning, supply management/procurement, warehousing, manufacturing/service operations, transportation, and customer service.
  • Demand planning ensures that inventory is available when needed to meet customer demand.
  • Procurement acquires raw materials and components.
  • Warehousing stores and manages inventory.
  • Manufacturing/service operations create the final product or service.
  • Transportation moves products to customers.
  • Customer service deals with customer inquiries and issues.

Examples of Supply Chains in Use

  • Supply chains are present in various industries and involve many stages to bring a product to a customer.
  • Example: A customer purchasing laundry detergent at Walmart involves a supply chain that starts with predicting sales demand, then sourcing the needed raw materials, packaging, and shipping the detergent throughout the supply chain and into a retailer's inventory.
  • Another example: A customer buying a computer online, involves the supply chain to define how many computers need to be produced, managing inventory, and delivering the product, to the retailer and/or customer.

Supply Chain Management (SCM)

  • SCM is a comprehensive approach to manage the entire flow of data, information, materials, and services across all supply chain functions.
  • SCM integrates various business processes and functions.
  • The Council of Supply Chain Management Professionals (CSCMP) defines SCM as the planning and management of all activities involved in sourcing, procurement, production, logistics, and coordination with various partners
  • SCM integrates and coordinates various functions to ensure efficiency and effectiveness.
  • SCM activities include sourcing, manufacturing, warehousing, delivering to customers, and managing customer relationships.

Modern Supply Chains

  • Modern supply chains are global and highly interconnected.
  • Factors like intense competition, technological advances (computers, the internet, personal technology), and changing consumer expectations influence modern supply chains.
  • Companies today often work with global partners throughout the supply chain, to meet the increasing demands and expectations of their customers.
  • Collaboration and integration between various companies and their suppliers is critical for efficiency in the modern supply chain.

Demand Planning

  • Demand forecasting estimates future demand to plan inventory and resource requirements.
  • Demand planning is usually done annually, estimating how much inventory needs to be created and purchased to meet the expected sales projections.

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