1. Define supply chain
It’s the thread from suppliers supplier to the customers customer. Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies. It is said that the ultimate goal of any effective supply chain management system is to reduce inventory
2. What is Bull Whip effect
This is caused because of forecasting errors or unpredictability. The deviation from the actual goes on increasing like a Bull whip towards the end of the chain, and there would be large stocks of supply demand GAP and inconsistency.
3. What is the practical error percentage acceptable in forecasting the demand?
Practically acceptable range is 15%
4. What are the various methods used for forecasting.
- Mean average forecasting method, Averaging for a period of 3 months, averaging on monthly basis, averaging on yearly basis etc
- Extrapolation from history
- Delphi Method
5. Who are the alpha consumers.
Alpha Consumer is someone that plays a key role in connecting with the concept behind a product, then adopting that product, and finally validating it for the rest of society. These are the customers who boast for being the first few privileged to know the products. Their feedback defines the success of the product to large extent.
6. What do you understand by the term Delphi technique, where is it used.
The Delphi method is a systematic, interactive forecasting method which relies on a panel of experts. The experts answer questionnaires in two or more rounds. After each round, a facilitator provides an anonymous summary of the experts’ forecasts from the previous round as well as the reasons they provided for their judgments. Thus, experts are encouraged to revise their earlier answers in light of the replies of other members of their panel. It is believed that during this process the range of the answers will decrease and the group will converge towards the "correct" answer. Finally, the process is stopped after a pre-defined stop criterion (e.g. number of rounds, achievement of consensus, and stability of results) and the mean or median scores of the final rounds determine the results.
7. What is ABC Analysis?
ABC analysis is a business term used to define an inventory categorization technique often used in materials management. It is also known as Selective Inventory Control.
ABC analysis provides a mechanism for identifying items which will have a significant impact on overall inventory cost whilst also providing a mechanism for identifying different categories of stock that will require different management and controls
8. What does ABC codes stands for.
ABC Analysis, "A class" group account for a large proportion of the overall value but a small percentage of the overall volume of inventory.
-"A class" inventory will typically contain items that account for 80% of total value, or 20% of total items.
-"B class" inventory will have around 15% of total value, or 30% of total items.
- C class" inventory will account for the remaining 5%, or 50% of total items
9. What is 80-20 rule?
The rule states that as a thumb rule roughly 80% of the effects come from 20% of the causes.
10. What’s the principle underlying 80-20 rule
The Pareto principle is also known as the 80-20 rule, the law of the vital few, and the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes.
