APICS Basics of Supply Chain Management – Exam Practice

First In, first out (FIFO)
The accounting method for valuing inventory where the oldest inventory is the first to be used.
Make-or buy decision
When a company is debating whether to add additional production capacity or outsource the additional volume.
Bottleneck
When a facility, function, department, or resource whose capacity is less than the demand placed upon it.
Uniform plant loading
In a Lean Production Environment, a method of balancing the distribution of work between work stations so that the time required for each station to complete all tasks is as close to equal as possible.
Intermodal transport
When shipments are moved by different types of equipment combining the best features of each mode
Feature
A distinctive characteristic of a good or service, where the characteristic may be provided by an option, accessory, or attachment.
Last in, first out (LIFO)
An accounting method for valuing inventory where the most recently received is the first to be used or sold.
Repetitive Process
A repetitive manufacturer is a process dedicated to a single or small range of products, where products are passed through the same sequence of operations. (Example: a vehicle assembly plant)
A disadvantage of centralized distribution
The inability to react to local demand
Purchase requisition
An authorization to the purchasing department to purchase specified quantities within a specified time.
Lead-time offset
A technique used in material requirements planning where a planned order receipt in one time period will require the release of that order in an earlier time period based on the lead time for the item.
Water transportation
The most useful form of transportation for moving low-value, bulky cargo over long distances.
Forecasts usually are what?
Incorrect
Sales differ from demand because…
Sales implies what is actually sold and demand shows the need for the item
When are orders for products in an (ATO) assemble-to-order received?
Before the product can be assembled and made available for sale.
(ERP) Enterprise Resource Planning
A computer system developed for supply chains to integrate knowledge and decision making.
Physical distribution
The movement and storage of finished goods from the end of production to consumers.
Cross-docking
The concept of packing products on incoming shipments so they can be easily sorted at intermediate warehouses or for outgoing shipments based on final destination.
When should forecast data be collected?
In the same schedule as the forecast.
(TCO) Total cost of ownership
This is a critical for buyers to consider before making a final sourcing decision as global supply chains open sourcing up around the globe.
Total cost of ownership
Provides insight and understanding that the acquisition cost is often a very small portion of the supply chain’s total cost.
Trend Forecasting Model
Used for forecasting sales data when a definite upward or downward pattern exists.
Rough-cut capacity planning
The process of validating the Master Production Schedule (MPS) against available demonstrated capacity.
Project production environment
An environment in which each unit or small group of units is managed by a team created especially for that purpose.
Sales & Operations planning
Is focussed on brining together all plans for the business (sales, marketing, development, manufacturing, sourcing, and financial) into one integrated set of plans.
Seasonality
A repetitive pattern of demand from year to year with some periods considerably higher than others.
Product differentiation
A strategy of making a product distinct from the competition on a nonprice basis such as availability, durability, quality, or reliability.
First step in the Purchasing Cycle
Receiving and analyzing purchase requisitions
Reverse logistics
A complete supply chain dedicated to the opposite flow of products and materials for the purpose of returns, repair, re manufacture, and/or recycling.
Moving Average
A forecasting technique which uses an average of a certain number of observations, with each new observation added, and the oldest observation dropped.
Level of service
Refers to a measure of satisfying demand through inventory or by the current production schedule in time to satisfy the customers’ requested delivery dates and quantities.
Value analysis
A term associated with the systematic use of techniques that identify a required function, establish a value for that function, and finally provide that function at the lowest overall cost.
Drop shipping
Shipping purchased product directly from the supplier to the customer
Process of an Order Entry
Accepting and translating what a customer wants into terms used by the manufacturer or distributor
Kanban
A term that refers to a pull system in which work centres signal that they wish to withdraw parts from feeding operations or suppliers.
Critical Ratio
A dispatching rule that calculates a priority index number by dividing the time to due date remaining by the expected elapse time to finish the job – used for Priority planning
Queue Ratio
Is the ratio of hours of slack within a job to the queue originally scheduled – used for Priority planning
Breakeven point
When total revenue equals total costs
Cost of poor quality
The cost associated with providing defective or sub-standard products or services
Final assembly schedule
The schedule typically prepared after receipt of a customer order to schedule the operations required to complete the product.
Landed cost
The cost that includes the product plus the costs of logistics, such as warehousing, transportation, and handling fees.
(CRM) Customer Relationship Management
The software-enabled process that collects and seeks to understand customer needs based on previous orders.
The plan that bridges strategic and business plans with the master production schedule and execution plan is what?
Sales and Operations
What step completes the purchasing cycle?
Approving supplier’s invoice for payment
What is the next step once a constraint is no longer a constraint when applying the Theory of Constraints?
Repeat the five focusing steps again
ABC classification of inventory
Represents a group of items in decreasing order of annual monetary volume (price x projected volume) or other criteria. This array is split into three classes called A, B, and C. – part of Pareto’s Law
Repetitive process
A mass production shop with a continuous layout where products follow the same process is an example.
Intermittent process
A form of manufacturing in which the jobs pass through the functional departments in lots, and each lot may have a different routing is an example.
Distribution Inventory
Used to describe inventory in a network of warehouse, in-transit between warehouses and the consumer.