6 Data-Driven Supply Chain Decisions Free Online FlashCards

Why distinguish customer demand from shipments?

Shipments can be constrained by stockouts, allocation, or promotions, so they may not reflect underlying customer demand.

What is a forecast in supply chain planning?

A forecast is an estimate, not a commitment; it should inform planning rather than be treated as guaranteed demand.

What does mean absolute error measure?

Mean absolute error is the average absolute difference between actual and forecast demand.

What inventory risks can forecast bias create?

Persistent overforecasting can create excess stock, while underforecasting can contribute to shortages.

How is a basic continuous-review reorder point calculated?

The reorder point is expected demand during lead time plus safety stock: $\text{reorder point}=\text{expected lead-time demand}+\text{safety stock}$.

What trade-off does a higher service-level target create?

Safety stock buffers uncertainty in demand and replenishment time. A higher target service level generally requires more buffer stock and raises holding cost.

What makes up inventory position?

Inventory position is on-hand stock plus confirmed inbound orders minus unfilled demand.

Why assess supply chain performance with a balanced scorecard?

A balanced scorecard prevents decisions from optimizing one measure while harming others, such as cutting inventory at the expense of service.

What does perfect-order or on-time-in-full performance assess?

Perfect-order or on-time-in-full performance measures whether orders arrive on time, complete, and correctly documented.

What makes a logistics metric actionable and consistent?

A metric needs a clear definition, data owner, review frequency, and link to an action. Its definition should specify the denominator, event dates, and treatment of partial shipments or cancellations.

What does optimization do in supply chain planning?

Optimization selects the best feasible plan for a stated objective while respecting constraints such as supplier or warehouse capacity.

Which scenarios should a practical supply chain analysis compare?

Compare base, high-demand, low-demand, and disruption cases, then assess service, total cost, inventory, capacity, and operational feasibility.