What is ABC Analysis designed to do?
Classify inventory items based on their value and usage
Helps companies prioritize management efforts.
What is the purpose of Safety Stock?
Add a reserve of inventory for unforeseen spikes in demand or supply interruptions
Ensures availability during unexpected situations.
What does inventory turnover indicate?
The efficiency of inventory usage and replenishment
A higher turnover rate suggests effective inventory management.
What is the Reorder point?
A specific inventory level that triggers a reorder to replenish stock
Critical for maintaining adequate inventory levels.
What are carrying costs?
Expenses related to storing inventory
Can be substantial, particularly for large or perishable items.
What are supply chain disruptions?
Delays, quality concerns, or supplier bankruptcies that hinder inventory flow
Can significantly impact overall supply chain efficiency.
What are the consequences of stockouts?
Missed sales opportunities and customer dissatisfaction
Can harm a company’s reputation and revenue.
What does demand uncertainty refer to?
The difficulty of predicting customer needs for new or seasonal products
Affects inventory planning and management.
What are rapid technological changes?
Products that quickly become outdated, especially in fast-paced industries
Examples include electronics or fashion.
Who are manufacturers?
Businesses that convert raw materials or components into finished products
Play a crucial role in the supply chain.
What is the role of retailers?
Businesses that sell products directly to consumers
They serve as the final link in the supply chain.
What do suppliers do?
Furnish raw materials, components, or services to other groups
Essential for the production process.
What is the function of distributors?
Transporting and storing products to ensure they reach retailers or customers
Vital for maintaining supply chain efficiency.
What does quantitative forecasting analyze?
Historical and statistical data
Helps in making data-driven predictions.
What is regression analysis used for?
To predict a dependent variable based on independent variables
A common statistical method in forecasting.
What does qualitative forecasting rely on?
Expert opinion and surveys
Useful when historical data is limited.
What is the Delphi method?
A technique to gather insights from a panel of industry experts
Helps in making informed predictions.
What is a challenge of forecasting known as data noise?
Occurs when a model incorrectly assumes a short-term spike is part of a long-term trend
Can lead to inaccurate forecasts.
What does overfitting refer to in forecasting?
When a complex model performs well on past data but fails to predict future trends
A common pitfall in model development.
What is demand planning?
Accurately forecasting future product or service demand
Ensures supply aligns with market needs.
What is the goal of supplier relationship management?
Working closely with suppliers for timely delivery of high-quality components
Aims to maintain competitive costs.
What is demand shaping?
Proactive actions like launching a limited-time flavor or introducing a loyalty program
Helps influence consumer preferences.
What is a key objective of project management?
Satisfying stakeholders
Missed satisfaction can undermine project success.
What does increased efficiency in project management achieve?
Streamlining processes and optimizing resource allocation
Leads to improved productivity.
