1) What is Fill rate?

A fill rate is a measure of the depth of demand that was satisfied by inventory on hand.
2) List five stages of Procurement value chain.
3) What is decoupling inventory?
Since it is not possible to carry out supply chain operations with just one decision maker, it is divided
among various decision making units. These decision making is carried out at both organizational
level and departmental level. So decoupling inventory provides the flexibility to make decisions to
manage its operations independently and optimize its performance.
4) Describe the relationship between safety stock and service levels.
In inventory management, service level is expected to not be stock out during next replenishment or
not losing of sales. It is determined by level of stocks in company.
Safety stock must be present in the company in order to satisfy the customers demand. Stocks must
be present not as much high that company loses the money because of high carrying cost.
Therefore, safety stock and service levels having exponential relationship.
5) With reference to the equation Q* = {(2*A*D)/H}^(1/2) where A= ordering cost, D= Annual
demand, H= Holding cost/year and Q* = Optimum qty to order. When annual demand
increases by 64x times , how does it mpact order quantity, inventory turnover and asset
turnover ?
6) What levers are used in chase strategy and level strategy in aggrgate planning?
Chase Strategy: Production rate is synchronized with demand by varying machine capacity and
laying or hiring of workers as the demand rate varies. Cost will be high if varying capacity is high.
Should be used hen inventory holding cost are high and costs of changing capacity is low.
Level Strategy: Maintain stable machine capacity and workforce levels with constant output rate.
Shortages and surpluses results in fluctuations in inventory levels. Better for worker morale. Should
be used when inventory holding and backlog cost are relatively low.
7) What characterizes strategic outsourced products under portfolio approach ? (Respones
not to exceed 4 words)
8) Define cycle service level.
9) Define EOQ.
10) List cost elements under the total inventory cost.
11) Define cycle inventory.
The inventory resulting from production or purchase of in batches is called cycle stock. Companies
have a choice of ordering frequently and incurring large ordering cost or less ordering cost results in
significant inventory cost. This is called as Cycle inventory.
12) What is reverse auction? Why and when do you use this method?
13) List the two methods used for identifying core processes.
14) List the salient features of Toyota's education style.( Not exceeding 15 words).
15) What is the difference between PUSH strategy and PULL strategy ?
A push-model supply chain is one where projected demand determines what enters the process.
Example, warm jackets get pushed to clothing retailers as summer ends and the fall and winter
seasons start. Under a push system, companies have predictability in their supply chains since they
know what will come when long before it actually arrives. This also allows them to plan production to
meet their needs and gives them time to prepare a place to store the stock they receive.
A pull strategy is related to the just-in-time school of inventory management that minimizes stock on
hand. Under these strategies, products enter the supply chain when customer demand justifies it.
One example of an industry that operates under this strategy is a direct computer seller that waits
until it receives an order to actually build a custom computer for the consumer. With a pull strategy,
companies avoid the cost of carrying inventory that may not sell.
16) Why do you need safety stock ? (answer not to exceed 5 words)
17) What drives pipeline stock ?
Since production & transportation activities take certain finite time, firms need to carry pipeline
inventory. It consists of materials actually being moved from one location to another in the chain. It
calculates both process time or transport time and the usage rate of the item. Alternative mode is
used for shipping the items.
18) List the impact of GST on Supply chain performance.
Before implication of GST there were many taxes on goods which was to be shifted from one place
to another. Which was a burden to both supplier and customer.With GST now having replaced the
multiple state taxes, there is no longer the long-prevalent need to install a hub across all states.
Companies can remodel their supply chains and consolidate their hub operations to benefit from
large-scale operations. It will also help them to use efficient practices like bulk breaking and cross-
docking through a centralised location.
The GST impact on supply chain, it must be understood that supply chain management is vital for
the running of business organisations producing and distributing merchandise. Each business has
standards for inventory turnaround, and these must be diligently adhered to in order to ensure
optimum profit for the organisation. A loss of inventory at any point will result in a loss of value.
19) Write down the meaning of following Japanese terms.
1.Kyohoka
2.Genchi Gembutsu
3.Anshin
4.Obeya
5.Jishuken
6.Jikon
7.Kaizen
1. Obeya: form of project management used in Asian companies (including Toyota) and is a
component of lean manufacturing and in particular the Toyota Production System.
2. Kaizen: a Japanese business philosophy of continuous improvement of working practices,
personal efficiency
3. Jikon: automation with a human touch
4. Jishuken: It is a "management-driven kaizen activity where management members identify areas
in need of continuous improvement and spread information through the organization to stimulate
kaizen activity
5. Genchi Gembutsu: means "Go and See” and it is a key principle of the Toyota Production System
6. Kyohoka: Toyota's supplier association.
7. Anshin: Security
20) How to manage stock out cost or shortage cost in inventory cost management. (Answer
not to exceed 15 words)
It is the cost of having a shortage and not being able to meet demand from stock.
21) List four elements of customer service.
1. Order delivery lead time
2. Responsiveness
3. Delivery reliability
4. Product variety
22) What are the key elements of SCOR model and how it is helpful to measure SC
performance?
23) How does economies of scale impact make or buy decision?
24) Write a mathematical equation which acts as a driver for outsourcing decision.
25) What is Inventory velocity ? How it impacts SC performance?
26) What is the difference between Vertical Keiretsu and Horizontal Keiretsu?
It is most distinctive form of network organizations and most critical to understand the economy of
japan. The clusters of financial and industrial corporations known as Keiretsu.
The mixture covering several industries linked by cross-shareholding, intra group financing and high
level management by a central body of directors is called as Horizontal Keiretsu.
Many groups forming one big manufacture and consist of a multi layered system of suppliers
focusing on the core company is called as Vertical Keiretsu.
27) Identify four companies under each strategy : MTS, MTO & CTO.
MTS: ASIAN paints, Cycle brand agarbattis, Parle-G, NIVEA
MTO: BHIMA jewellers, KALYAN jewellers, Lalitha jewellers, MALABAR Golds & Diamonds
CTO: Dominoz pizza, DELL, APPLE, FUJITSU
28) What is the difference between supply chain leadtime and order delivery leadtime ?
29) How Porter's value chain framework is leveraged in sourcing decision?
The idea of the value chain is based on the process view of organisations, the idea is seeing a
manufacturing organisation as a system, made up of subsystems each with inputs, transformation
processes and outputs. Inputs, transformation processes, and outputs involve the acquisition and
consumption of resources - money, labour, materials, equipment, buildings, land, administration and
management. We can see how value chain activities are carried out determines costs and affects
profits.Most organisations engage in hundreds, even thousands, of activities in the process of
converting inputs to outputs.
According to porter, the primary activities are: Inbound logistics, outbound logistics, operations,
marketing and sales, service.
Secondary activities: procurement, human resource management, technology, infrastructure.
30) Differentiate VIRTUAL INTEGRATION from VERTICAL INTEGRATION.
31) How does inventory turn over ratio impact supply chain perofrmance?
Inventory management is important in supply chain performance of a firm. The inventory turnover
ratio measures the number of times a company sells its inventory during the year. A high inventory
turnover ratio indicated how best the firm is operating economically in selling its products. Inventory
turnover is a measure of management's ability to use resources effectively and efficiently. Precise
control and safeguarding of inventory is an essential task for a successful and well organized
company. Business requires timely and accurate information on inventory location, movement and
valuation. In order, to improve its performance, companies must focus on inventory turn ratio as a
means of improving its supply chain performance.
32) Define AGENCY COST.
33) Define the relation betweee SC cost and SC service level.
34) Define the relationship between SC leadtime and Order delivery leadtime for following SC
configurations: MTS, MTO and CTO.
35) What is the primary obejctive of Supply chain management ?
SCM consists of manufacturer, marketer, suppliers, transporters, warehouses, retailers and even
customers involving directly or indirectly in order to fulfill customers demand. The main objective is to
improve overall company’s performance and customer satisfaction by improving product quality and
service delivery to customers. In order to maximize the overall value generated, to look for sources
of revenue & cost, cost quality improvement, shortening time to order, to achieve world class
performance, greater labor efficiency, equipment and space efficiency etc.