Ch. 5 Order fulfillment1. What is the Order Cycle?a. Elapsed time from recognition of need until product is available for use or resale.2. What is the buyer’s side of the order cycle?a. Recognize needb. Order preparationc. Order transmittal3. What is the seller’s side of the order cycle?a. Order receipt/processingb. Order fulfillmentc. Order shipmentd. Invoice and billinge. Service and supportf. Order complete4. What are the three Fulfillment Decision Rules?a. What should we produce or purchase?b. How much should we produce or purchase?c. Where should we position the product?5. What are the four things we should consider when talking about the fulfillment decision rules?a. Inventory BOH (Balance on Hand)b. Forecast for next periodc. Service level policyd. Quantities & lead times6. What is Anticipatory Fulfillment?a. Demand that is supported by deploying inventory in anticipation of projected sales levels and location.7. What are the steps in anticipatory fulfillment?a. Anticipatory forecastb. Orderc. Inventory deploymentd. Actual demande. Inventory replenishment or reclamation8. Is anticipatory fulfillment a “push” or “pull” system and why?a. Pushb. Because you are pushing the goods to the store without knowing the EXACT demand. It is product based more than it is customer based.9. In the Mast General Store, what is an example of a product that uses anticipatory fulfillment?a. Seasonal productsb. Specifically Christmas10. What does the Economic Order Quantity Model (EOQ) balance and what are the two lines included on the chart?a. Balances fixed order costs against inventory carrying costs to determine least-costs order frequency to determine optimum order quantity.b. Straight upward sloping line: Inventory Carrying Costsc. Downward curved line: Order or Set-up Costs11. What does the EOQ Model ignore?a. Supply and Demand Variance12. What is the “Naïve” Reorder Point (Saw tooth Inventory) Model and why is it considered “naïve”?a. The conventional approach to fulfilling ordersb. It’s considered naïve because it ignores variance13. What is the Reorder Point and how do you calculate it on the “Naïve” Reorder Point (Saw-tooth Inventory) Model?a. The amount ordered based on EOQb. ROP=Average Lead Time* Average Daily Demand14. What is the impact of variability on a company’s inventory?a. With more variability, the more extra inventory companies will end up with15. What is the EOQ Inventory Model with Variance and what does it include?a. An approach to fulfilling order but takes supply and demand variance into accountb. It includes Safety Stock16. What is Safety Stock?a. Safeguard against demand or variations in lead time17. How do you calculate the Reorder Point in this model?a. ROP= LT * DD + SS18. What is the basic operation of Anticipatory Order Fulfillment?a. Demand fluctuation and lengthy lead times cause by large lot, low frequency ordering are covered by maintaining large stock.b. This results in increased capital investment and reduced customer service.19. What is Lean Fulfillment?a. Reducing uncertainty my managing demand and order cycle time variance20. What are the steps in the lean fulfillment process?a. Collaborative planb. Orderc. Small inventory deploymentd. Actual demande. Flexible, Rapid Response21. What are the factors that set lean fulfillment apart from the other two types?a. Synchronization of activities through shared informationb. Process reengineeringc. Supplier partnerships/delivery lead time and variance reduction, quality improvementd. Reduce process and network complexitye. Performance cycle acceleration and postponementf. Use appropriate metrics22. The EOQ Model for lean fulfillment shows a reduction in what which causes a reduction in what other factor?a. Shows a reduction in Order or Set-up Costsb. Which causes a reduction in the Size of Order Quantity23. In the Reduced Cycle Stock Model with Safety Stock, why would one want to reduce cycle stock?a. Because orders with less inventory will hopefully mean there will be less supply variance than orders with a lot of inventoryb. Supply Variance- When suppliers deviate from expectations; Early delivery, late delivery, more/less than expected quantity, etc.24. In the Reduced Cycle Stock Model with Safety Stock, why would one want to reduce safety stock?a. With smaller, more frequent orders, one would hope to be able to predict demand better thus having less demand varianceb. Demand Variance- When buying patterns are more/less than what is the normal pattern25. To optimize fulfillment, what two things must you lower and how do you lower them?a. Cycle Stock: reduce average lead timeb. Safety Stock: reduce demand and supply variances26. What is the basic lean order fulfillment operation?a. Shrink total order cycle time to reduce cycle stock and improve responsiveness to demand and manage variation to reduce safety stock27. In the Mast General Store, what is an example of a product that uses lean fulfillment?a. All the candy in the “Candy Wonderland”28. What is Agile Fulfillment?a. Eliminate uncertainty by postponing form and/or time and place utility until order is received and rapidly respond when order is received29. What are the steps in agile fulfillment?a. Collaborative planb. Capacityc. Flexible, rapid responsed. Actual demand30. What are the factors that set agile fulfillment apart from the other two types?a. Customer Focus vs. Product Focusb. Cross-functional and cross-organizational process integrationc. Leveraging relationshipsd. Information visibility31. Is agile fulfillment a “push” or “pull” system and why?a. Pullb. Because the demand is ONLY when a customer specifically orders, they don’t have multiple ones ready the exact moment they want it. c. Customer based because the products are more customized than standard products32. Why does the move from lean to agile require a paradigm shift from a push demand management philosophy to a pull management?a. Lean- The suppliers push the inventory you ordered that is projected to meet demand and you store them in your inventory. Then when you see the customers are buying the stuff on the shelf, you pull the inventory from the back and waits for customers to buy it.b. Agile- you are pulling from the suppliers for the specialized product to meet customer demand. (Pull all the way)33. What is the basic operation of agile order fulfillment?a. Postpone some steps in the total SC order cycle until actual demand occurs,