Supply Chain Management & Planning Flashcards

In logistics network design, which factor most significantly influences the number of distribution centers a company should operate?

Answer: Trade-off between transportation costs and inventory/facility costs

Network design optimizes the trade-off between transportation costs (reduced by more DCs close to customers) and inventory/facility costs (reduced by fewer DCs).

What is 'demand sensing' in modern supply chain management?

Answer: Using real-time, high-frequency data signals to detect near-term demand shifts

Demand sensing uses real-time POS, weather, social media, and other signals to detect demand shifts days or weeks before traditional forecasting systems.

Which inventory classification system prioritizes management attention by grouping items based on their annual consumption value?

Answer: ABC analysis

ABC analysis classifies inventory into A (high value), B (medium value), and C (low value) groups based on annual consumption value, focusing management effort accordingly.

A retailer's distribution center receives full truckloads from suppliers and immediately transfers product to outbound trucks for store delivery without putting items into storage. This practice is called:

Answer: Cross-docking

Cross-docking transfers inbound shipments directly to outbound vehicles with minimal or no storage time, reducing handling costs and cycle time.

In supply chain risk management, 'single-source' suppliers present which primary risk?

Answer: Complete supply disruption if that one supplier fails

Single-source suppliers create concentration risk — if the supplier experiences disruption, the buyer has no alternative source and faces complete supply stoppage.

Which supply chain collaboration model involves a manufacturer sharing production planning data with key suppliers so they can align their own capacity and materials planning?

Answer: Collaborative Planning, Forecasting, and Replenishment (CPFR)

CPFR is a structured collaboration framework where trading partners share planning data, forecasts, and replenishment signals to synchronize supply chains.

What is the key difference between 'strategic sourcing' and 'tactical purchasing' in supply chain management?

Answer: Strategic sourcing focuses on long-term value and supplier relationships; tactical purchasing addresses immediate, transactional needs

Strategic sourcing takes a long-term, value-driven approach to supplier selection and relationship development, while tactical purchasing focuses on immediate transaction execution.