Supply Chain Management Overview
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Supply Chain Management Overview

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Questions and Answers

What does the supply chain primarily connect to produce and distribute products?

  • Companies and their suppliers (correct)
  • Retailers and consumers
  • Internal departments within a company
  • Logistics providers and carriers

    • Which of the following is NOT a step in the order fulfillment process?

  • Customer billing (correct)
  • Receiving inventory shipments
  • Inventory storage
  • Returns processing

    • What is a key characteristic of Just-in-Time manufacturing?

  • It decreases efficiency to manage costs
  • It increases inventory levels
  • It eliminates the need for suppliers
  • It relies on accurate demand forecasting (correct)

    • What does FIFO stand for in inventory management?

    <p>First In, First Out</p> Signup and view all the answers

    Which term describes the total cost of ownership of an item?

    <p>Landed cost</p> Signup and view all the answers

    What is the main function of back ordering?

    <p>To place a purchase order for out-of-stock items</p> Signup and view all the answers

    Which of the following best describes LIFO in inventory management?

    <p>Most recently purchased items are sold first</p> Signup and view all the answers

    What is the primary advantage of the Toyota Production System?

    <p>Enhanced efficiency and reduced waste</p> Signup and view all the answers

    What is a Bill of Lading primarily used for?

    <p>To act as a legal receipt of payment</p> Signup and view all the answers

    In the Ex Works (EXW) term, what is the seller's obligation?

    <p>Placing goods on their premises for pickup</p> Signup and view all the answers

    What does the term Carriage Paid To (CPT) signify for the seller?

    <p>The seller must pay for the transportation costs to a specified location</p> Signup and view all the answers

    Which Incoterm requires the seller to deliver goods at a terminal and unload them?

    <p>DAT</p> Signup and view all the answers

    What does Delivered Duty Paid (DDP) entail for the seller?

    <p>The seller must pay duties for importing or exporting the goods</p> Signup and view all the answers

    Under the Free Carrier (FCA) term, what is the seller required to do?

    <p>Deliver goods to the carrier on seller's premises</p> Signup and view all the answers

    Which of the following Incoterms involves the seller paying for insurance?

    <p>CIP</p> Signup and view all the answers

    What does the term Cross docking refer to?

    <p>Shipping goods with minimal to no storage time</p> Signup and view all the answers

    What is the primary purpose of inventory storage in the supply chain process?

    <p>To prevent stockouts</p> Signup and view all the answers

    Which of the following accurately describes Just-in-Time manufacturing?

    <p>It requires accurate demand forecasting.</p> Signup and view all the answers

    What distinguishes FIFO from LIFO in inventory management?

    <p>FIFO sells the oldest inventory first.</p> Signup and view all the answers

    What is the main goal of back ordering in inventory management?

    <p>To secure customer orders for out-of-stock items.</p> Signup and view all the answers

    What type of cost does Landed Cost represent?

    <p>All expenses incurred until the product reaches the buyer.</p> Signup and view all the answers

    In the context of order fulfillment, which sequence is correct?

    <p>Receiving inventory shipments, inventory storage, order processing.</p> Signup and view all the answers

    Which of the following is a critical component of supply chain management?

    <p>Creating a network between the company and suppliers.</p> Signup and view all the answers

    What characteristic distinguishes the Toyota Production System (TPS)?

    <p>Emphasizes efficiency and waste reduction.</p> Signup and view all the answers

    What essential function does a Bill of Lading serve in the shipping process?

    <p>Serves as a receipt of payment and details of the shipment</p> Signup and view all the answers

    Which Incoterm places the minimum obligation on the seller?

    <p>EXW</p> Signup and view all the answers

    What does the term Carriage and Insurance Paid To (CIP) require from the seller?

    <p>To cover insurance for only the minimum required coverage</p> Signup and view all the answers

    In the Delivered Duty Paid (DDP) Incoterm, what responsibility does the seller have?

    <p>Transport goods, clear customs, and pay duties</p> Signup and view all the answers

    What is the primary objective of Cross Docking in logistics?

    <p>To minimize storage time and facilitate quick shipping</p> Signup and view all the answers

    Which Incoterm involves the seller unloading goods at the terminal for the buyer?

    <p>DAT</p> Signup and view all the answers

    Under the Free Carrier (FCA) term, what must the seller do?

    <p>Deliver goods to the buyer’s designated carrier at their premises</p> Signup and view all the answers

    What key feature distinguishes the Carriage Paid To (CPT) term?

    <p>The seller pays for transportation to an agreed location</p> Signup and view all the answers

    Study Notes

    Supply Chain Management

    • A network between a company and its suppliers to produce and distribute a specific product to the end consumer.
    • It encompasses various activities, people, entities, information, and resources.

    Work-flow of Supply Chain at TSM

    • A visual representation of the steps involved in the supply chain at TSM.

    Supply Chain Processes

    • Various processes that occur within a supply chain.

    Scope of Supply Chain in a Firm

    • Explains the different aspects of a firm's operations that are impacted by the supply chain.

    Key Activities in Macro Processes Under Supply Chain Management

    • Highlights the major activities that are essential for effective supply chain management.

    Order Generation and Fulfillment

    • The process of fulfilling orders from customers, consisting of:
      • Receiving inventory shipments
      • Inventory storage
      • Order processing
      • Shipping
      • Returns processing

    Important Concepts in Supply Chain

    • Just-in-time (JIT) Manufacturing
      • Also known as the Toyota Production System.
      • Aims to increase efficiency and reduce waste by receiving goods just when needed.
      • Reduces inventory costs.
      • Requires accurate demand forecasting.
    • FIFO and LIFO
      • FIFO (First in, first out) assigns costs to inventory based on the oldest items first.
      • LIFO (Last in, first out) assigns costs to inventory based on the newest items first.
    • Landed Cost
      • Represents the total cost of ownership for an item, including purchase price, shipping, duties, taxes, and other expenses.
    • Back Ordering
      • A practice of fulfilling orders for products currently out of stock by placing a purchase order with the supplier. Often used during periods of high demand or for slow-moving products that experience a sudden demand surge.
    • Bill of Lading
      • A shipping document outlining the type, quantity, and destination of goods.
      • Required for transporting goods by land, sea, or air.
      • Serves as a legal receipt of payment and needs to be signed by the seller/shipper, carrier, and buyer/receiver.
    • Cross Docking
      • A method of shipping goods received from vendors directly to customers without extended storage time.

    Different Incoterms in Supply Chain

    • Incoterms are internationally recognized guidelines that define the responsibilities of sellers and buyers in export transactions.
    • EXW (Ex Works)
      • The seller fulfills their obligation by making goods available at their premises for the buyer to collect.
    • FCA (Free Carrier)
      • The seller delivers goods to the carrier (or the person designated by the buyer) on the seller's premises.
    • CPT (Carriage Paid To)
      • The seller delivers goods to the carrier (or the person designated by the buyer) at an agreed upon location. The seller bears the cost of transporting goods to that location.
    • CIP (Carriage and Insurance Paid To)
      • An extension of CPT, where the seller agrees to pay for insurance to protect against buyer's risk of loss or damage during transit to the agreed upon place.
      • The seller only needs to obtain minimum insurance coverage; buyers may opt for additional protection.
    • DAT (Delivered At Terminal)
      • The seller is responsible for delivering and unloading goods at a designated terminal (e.g., quay, warehouse, shipping yard).
    • DAP (Delivered At Place)
      • An extension of DAT, where the seller delivers and unloads goods at the buyer's disposal at a named destination.
    • DDP (Delivered Duty Paid)
      • The seller transports goods to the destination, clears them for import, and pays import/export duties.
    • FAS (Free Alongside Ship)
      • The seller delivers goods alongside the ship at the port of shipment, where the buyer is responsible for loading and all subsequent costs.

    Supply Chain Definition

    • A network connecting a company with its suppliers, collaborating to produce and distribute a specific product to the final buyer.
    • Includes various activities, individuals, entities, information, and resources.

    Supply Chain Workflow at TSM

    • Represents the sequence of actions and tasks involved in managing the flow of goods and services.

    Supply Chain Processes

    • Encompass the various stages and operations within the supply chain, including sourcing, production, distribution, and customer service.

    Scope of Supply Chain within a Firm

    • Determines the extent to which the supply chain functions are integrated within the organizational structure and operations.

    Key Activities in Macro Process Under Supply Chain Management

    • Represents the high-level processes that drive the overall supply chain, such as planning, sourcing, production, distribution, and customer service.

    Order Generation and Fulfillment

    • Comprises of five steps:
      • Receiving Inventory Shipments: Accepting deliveries of raw materials or finished goods.
      • Inventory Storage: Storing and managing inventory to ensure availability for production or delivery.
      • Order Processing: Managing customer orders, including order entry, verification, and confirmation.
      • Shipping: Dispatching goods to customers based on order specifications.
      • Returns Processing: Handling returns, exchanges, or refunds.

    Important Concepts in Supply Chain

    • Just-in-Time Manufacturing

      • Also known as Toyota Production System (TPS).
      • Increases efficiency and reduces waste by receiving materials just in time for production.
      • Requires accurate demand forecasting.
      • Reduces inventory costs.

    • FIFO & LIFO

      • FIFO (First in, First Out): Oldest items are sold first.
      • LIFO (Last in, First Out): Newest items are sold first.

    • Landed Cost

      • Represents the total cost of an item, including:
        • Purchase Price
        • Shipping Charges
        • Custom Duties
        • Taxes
        • Other Charges

    • Back Ordering

      • Placing a purchase order for a product that's out of stock.
      • Typically used during high demand periods or for slow-moving products.

    • Bill of Lading

      • A document that lists the type of goods, their quantity, and the destination address, serving as a receipt of payment and a legal document.

    • Cross Docking

      • A method where goods are directly shipped from vendors to customers with minimal storage time, minimizing inventory holding costs.

    Incoterms in Supply Chain

    • Internationally recognized rules defining the responsibilities of sellers and buyers in export transactions.

    • EXW - Ex Works:

      • Seller fulfills their obligation when goods are ready for pickup by the buyer at the seller's premises.

    • FCA - Free Carrier:

      • Seller delivers goods to the carrier at the seller's premises.

    • CPT - Carriage Paid To:

      • Seller bears the cost of transporting goods to an agreed location.

    • CIP - Carriage and Insurance Paid To:

      • An expansion of CPT, where the seller also pays for insurance to protect against loss or damage during transit.

    • DAT - Delivered At Terminal:

      • Seller delivers goods to the buyer's terminal, where they're unloaded.

    • DAP - Delivered At Place:

      • Seller delivers and unloads goods at the buyer's specified location.

    • DDP - Delivered Duty Paid:

      • Seller transports goods to the destination, clearing them for import and paying any duties or tariffs.

    • FAS - Free Alongside Ship:

      • Seller delivers goods alongside the ship at the named port of shipment.

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    Description

    This quiz covers the fundamentals of Supply Chain Management, detailing the processes and key activities involved in efficient supply chain operations. It highlights the workflow at TSM and the impact of supply chain on a company's operations. Test your knowledge on concepts such as order generation, fulfillment, and essential macro processes.

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