Sustainability - (correct answer) is defined broadly in operations and supply chain
management as the ethical issues an organization faces to balance financial
performance while maintaining social responsibility standards and a responsible
environmental profile.
VIRAL - (correct answer) Acronym scene as a framework for competitive advantage.
Viral,Inimitable,Rare,Aptitude, Lifespan. The advantage must provide Value to
consumers; it should be Inimitable (not easily imitated), Rare, and an organization must
have the Aptitude (capability) and Lifespan (sustainability) to earn appropriate returns
on the advantage.
Productivity - (correct answer) is a mathematical calculation; it is the ratio of the
outputs achieved divided by the inputs consumed to achieve those outputs.
6 Types of Inventory - (correct answer) Raw Materials, Work In Progress, Finished
Goods, Replacement parts inventory, Supplies and Transportation.
Raw Materials - (correct answer) These parts and materials are obtained from
suppliers and are used in the production process.
Work-in-process (WIP) - (correct answer) These are partly finished parts,
components, sub-assemblies, or modules.
Finished Goods - (correct answer) Items are ready to ship to the customer. No more
work is required.
Replacement parts inventory - (correct answer) These are maintained to replace
other parts in machinery or equipment as those parts wear out
Supplies - (correct answer) Parts or materials are used to support the production
process but not usually a component of the product. These items, such as lubricant and
cutting tools, are consumed in the production process.
Transportation (pipeline): - (correct answer) The portion of inventory that is in the
process of being shipped through the distribution system.
4 Types of Demand - (correct answer) Peak, Seasonal, Unexpected and Chase
, Peak Demand - (correct answer) Demand which occurs in response to planned
events such as advertising, publicity or promotion. The release of a popular game
franchise's latest version often causes peak demand for a few days or weeks.
Seasonal Demand - (correct answer) Demand as shoppers adjust their purchase
velocity in line with holidays, especially Christmas. But Halloween, Thanksgiving and
even St. Patrick's Day also create seasonal demand for certain kinds of merchandise.
Unexpected Demand - (correct answer) Demand which occurs due to a usually-
unexpected event. For example, an underdog school may upset a favorite during the
NCAA's basketball tournament, causing a run on their merchandise.
Chase Demand - (correct answer) Demand that occurs when a company has to
adjust production by rates to match demand by varying the workforce and using
overtime. Companies vary the workforce by adding or reducing the number of
employees on duty at any given time. And they may choose to provide overtime by
asking workers to stay on the job beyond their normally scheduled time.
Safety Stock - (correct answer) A cushion of inventory to protect against unexpected
demand. In this way, they can continue to meet customer demand without delays.
Stock Out - (correct answer) occurs when inventory is depleted.
Perpetual Inventory System - (correct answer) continuously monitors inventory
levels and is also called continuous review system. Requires human input (i.e. cashier)
and the ordering of more inventory is triggered by reorder point.
Requires an exact inventory balance at all times
Best for big businesses, retail stores or banks
High value and high volume
Expensive to implement and maintain
Periodic Inventory System - (correct answer) randomly monitors inventory levels
and is also called the fixed order interval system.
Requires a physical count periodically,
Used when a supplier will only deliver at specific time intervals
Low value and volume
Small Businesses
Inexpensive to implement and maintain
ABC analysis - (correct answer) has been developed to determine which inventory
items should receive the highest level of control. By multiplying the dollar value of each
item by its annual usage, a dollar usage value can be obtained. Dollar usage follows the
Pareto Principle in that frequently, only 20% of all the items account for 80% of the total
dollar usage, while the remaining items frequently account for only 20% of the dollar
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