D471 Global Supply Chain Management - Set 5 - Part 1

Correct Answer: The distortion of demand information as it moves up the supply chain

The bullwhip effect refers to the increasing variability in demand as one moves up the supply chain, often caused by inadequate communication between supply chain partners.

Correct Answer: Enhancing decision-making based on insights from large data sets

Big data analytics allows companies to analyze vast amounts of data to uncover patterns and trends, leading to better decision-making and improved supply chain performance.

Correct Answer: A process for translating customer requirements into product specifications

QFD is used to convert customer needs and expectations into specific technical requirements, ensuring products meet market demands.

Correct Answer: A location that supplies the local market while meeting local regulations

A server facility is established to meet market demands in a specific area while adhering to local regulations and logistical needs.

Correct Answer: Performing operations at the lowest possible cost

Efficiency in supply chain management focuses on optimizing resources to minimize costs while maintaining operational effectiveness.

Correct Answer: Finished goods inventory

Finished goods inventory consists of completed products that are ready to be shipped to customers, representing the final stage of production.

Correct Answer: Bringing previously outsourced activities back in-house

Insourcing involves returning certain business functions or processes to be managed internally after having previously outsourced them to external vendors.

Correct Answer: To determine the production capacity required to meet demand

Capacity planning assesses the resources needed to produce goods or services in alignment with expected demand, ensuring adequate output levels.

Correct Answer: Coordinating production, inventory, and workforce levels to meet fluctuating demand

Aggregate planning focuses on aligning production and operations with fluctuating demand over a specific timeframe, balancing resources effectively.

Correct Answer: A strategy for determining optimal production quantities considering production rates

EPQ helps organizations determine the most cost-effective quantity to produce, accounting for both production rates and holding costs.

Correct Answer: To select suppliers that meet quality and cost criteria

Sourcing involves identifying and engaging suppliers that can provide the necessary materials or services at acceptable quality and price points.

Correct Answer: The amount of inventory needed during the lead time period

Lead time demand refers to the expected amount of inventory required to meet customer needs during the time it takes to receive new stock.

Correct Answer: A signaling system to control inventory levels

Kanban is a visual tool used in inventory management to signal the need for more stock, facilitating efficient replenishment processes.

Correct Answer: The customer informing the retailer of their purchase intentions

Customer order entry is the initial step where a customer communicates their purchase request, enabling the retailer to allocate the necessary product.

Correct Answer: A layout where the product remains stationary during production

Fixed position layouts are typically used for large, heavy items or projects, where resources and workers come to the product's location for assembly or construction.

Correct Answer: Just-in-time (JIT) inventory

JIT inventory minimizes holding costs by ensuring that inventory arrives only as it is needed in the production process, reducing excess stock.

Correct Answer: To maximize total profits while meeting customer demand

Effective supply chain network design seeks to align facility locations, capacities, and roles to enhance profitability while satisfying customer needs.

Correct Answer: Costs associated with inventory, transportation, and facility operations

Total logistics cost includes all expenses related to inventory management, transportation, and facility maintenance in the supply chain.

Correct Answer: Finished goods are produced in anticipation of customer demand

Make-to-stock production involves manufacturing goods ahead of demand, allowing for immediate delivery to customers.

Correct Answer: 80% of outcomes result from 20% of causes

The Pareto principle highlights the significance of focusing on the critical few factors that contribute most to results, often applied in inventory and quality management.