D471 Global Supply Chain Management - Set 3 - Part 2

Correct Answer: The optimal order quantity that minimizes total inventory costs

EOQ is a formula that helps businesses determine the most cost-effective quantity of stock to order, balancing ordering costs and holding costs.

Correct Answer: Determining the maximum output achievable by a production system

Capacity planning involves assessing the production capacity needed to meet changing demands for products, ensuring that resources are utilized effectively.

Correct Answer: High flexibility in production processes

A job shop is designed for low-volume production of customized products, allowing for significant flexibility and adaptability to specific customer requirements.

Correct Answer: The total time from order placement to delivery

Lead time encompasses all stages from when a customer places an order to when they receive the product, including processing, manufacturing, and shipping times.

Correct Answer: It reduces waste and improves cash flow.

JIT aims to reduce waste by receiving goods only as they are needed in the production process, leading to lower inventory holding costs and improved cash flow.

Correct Answer: Quantitative methods

Quantitative forecasting methods utilize historical data and statistical techniques to predict future demand, making them effective when reliable past data is available.

Correct Answer: Logistics costs and workforce quality

When selecting production sites, businesses consider logistics costs, which include transportation and warehousing, as well as the skill level and productivity of the local workforce.

Correct Answer: Manufacturing products based on forecasted demand

A push strategy focuses on producing goods in advance based on demand forecasts, which can lead to surplus inventory if forecasts are inaccurate.

Correct Answer: Inventory in transit between locations

Pipeline inventory consists of goods that are currently being transported between suppliers and customers, playing a crucial role in the overall supply chain flow.

Correct Answer: Opportunities to reduce waste and improve efficiency

Value stream mapping is a lean management tool that visually represents the flow of materials and information in a process, helping to identify areas for improvement.

Correct Answer: Higher holding costs and risk of obsolescence

Maintaining high inventory levels can lead to increased costs associated with storage, handling, and the risk of products becoming outdated or unsellable.

Correct Answer: A collaboration between two or more organizations to pursue agreed-upon objectives while remaining independent

Strategic alliances involve long-term collaborations that enhance capabilities and resources while allowing each organization to maintain its independence.

Correct Answer: A tax imposed on imported goods

Tariffs are government-imposed taxes on imported goods designed to protect domestic industries and regulate trade between countries.

Correct Answer: Flexible arrangement suited for a variety of products with low volume

A process-oriented layout groups similar processes together, allowing for flexibility in producing a diverse range of low-volume products.

Correct Answer: The reliability and responsiveness of service delivery

Service quality assesses how well an organization meets customer expectations regarding reliability, responsiveness, assurance, empathy, and tangible aspects of service.

Correct Answer: To optimize the flow of goods, information, and finances throughout the supply chain

Supply chain management seeks to enhance the overall efficiency and effectiveness of the supply chain, ensuring products and information flow smoothly to meet customer needs.

Correct Answer: Customer demand fluctuations

Capacity planning must account for variations in customer demand to ensure that production resources align with market needs effectively.

Correct Answer: Keeping excess inventory to safeguard against uncertainties

The Just-in-Case strategy involves holding additional inventory to protect against supply chain disruptions or unexpected demand spikes.

Correct Answer: All costs associated with acquiring and using a product

TCO considers all costs related to a product throughout its lifecycle, including purchase price, maintenance, and disposal costs.

Correct Answer: The output achievable under normal operating conditions

Effective capacity refers to the realistic production output that a facility can achieve under regular circumstances, taking into account factors like downtime and maintenance.