Supply Chain & Logistics in Manufacturing Flashcards

What is the Economic Order Quantity (EOQ) model used to determine?

Answer: The optimal order size that minimizes total inventory holding and ordering costs

EOQ calculates the order quantity that balances the cost of ordering too frequently against the cost of holding excess inventory.

In supply chain risk management, what is a 'single-source supplier' risk?

Answer: Dependence on one supplier for a critical component, creating vulnerability to supply disruptions

Single-source dependency means that if the sole supplier fails, experiences a disaster, or raises prices dramatically, there is no backup, halting production.

What role does blockchain technology play in modern digital manufacturing supply chains?

Answer: Providing an immutable, transparent ledger for tracking parts, materials, and transactions across the supply chain

Blockchain creates a tamper-proof, shared record of every supply chain transaction, improving traceability, authenticity verification, and trust between parties.

What is 'cross-docking' in supply chain logistics?

Answer: Transferring incoming goods directly from receiving to outbound shipping with minimal or no storage time

Cross-docking eliminates warehouse storage by immediately transferring inbound shipments to outbound transport, reducing handling time and costs.

Which KPI measures how efficiently a company converts its inventory into revenue?

Answer: Inventory turnover ratio

Inventory turnover ratio (Cost of Goods Sold ÷ Average Inventory) shows how many times inventory is sold and replaced in a period.

What is 'postponement strategy' in supply chain management?

Answer: Delaying product differentiation or customization until as late as possible in the supply chain

Postponement keeps products in a generic form as long as possible, adding customization only when specific demand is known, reducing forecast risk.