(Basics of Supply Chain Management) Flashcards

Which supply chain strategy is BEST suited for a product with highly unpredictable demand and short life cycles?

Answer: Agile supply chain

Agile supply chains are designed to respond quickly to unpredictable demand and market volatility.

The 'bullwhip effect' in a supply chain refers to:

Answer: Demand variability that amplifies upstream from retailer to manufacturer

The bullwhip effect describes how small demand fluctuations at the retail level become progressively amplified as orders move upstream through the supply chain.

Which metric measures the percentage of customer orders fulfilled completely from available stock without backorders or lost sales?

Answer: Fill rate

Fill rate measures the proportion of customer demand satisfied immediately from on-hand inventory.

A company that owns and operates its own distribution network rather than outsourcing is using:

Answer: Insourcing/vertical integration

Insourcing or vertical integration means the company retains internal control over logistics functions instead of contracting them out.

In supply chain management, 'postponement' refers to:

Answer: Deferring product differentiation to as late as possible in the process

Postponement delays final product customization until closer to the point of delivery to reduce inventory risk and improve flexibility.

Which of the following BEST describes a 'push' supply chain strategy?

Answer: Production is based on forecasted demand and inventory is pushed to distribution points

A push strategy drives production and inventory based on demand forecasts rather than actual customer orders.

Total supply chain cost includes all of the following EXCEPT:

Answer: Customer's internal product usage costs

Total supply chain cost encompasses costs incurred within the supply chain itself, not the customer's internal costs of using the product.