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Product becomes finished good when entering demand network. (Exceptions might be putting software on a computer; Dell specializes in _)
Anticipatory – taking liquid money and investing in inventory; opportunities and threats; manufacturing in advance of _
Responsive – Starbucks gift card/vol card (no _) – quick enough to retain customer base… risk lies in “buying components and materials”
Forecast is based on reality if at all possible (_); plan/goal are what you hope will happen; a forecast is a realistic scenario.
Converge – Hallmark forecasts high if previous data is low… _ with goals (which you want to be high)… Forecasting is full of ‘politics’ (company could lose stock, jobs if you forecast correctly and its low) – Minimization of error
Forecasting is a process that is never ending and is always ongoing.
Forecasting is only a tool once its done, like giving _. (if you don’t forecast well you don’t understand your customer)
Stock Keeping Unit by Location (There should be # of dasani bottles at location X for this time period)
Brand = Dasani
Family = would be bottled drinks
More random variation in # of specific bottles than of _ untis
Min. amount of forecast is the _ _ _. (you can’t change anything if you forecast less than that) – Most forecasts will be between 7-91 days.
Demand Planning – have product in stores (finished goods)
Inventory Planning – forecast inventory to acquire and build (_ planning)
Financial Planning – need to know how / where were using money in a period of time (dollars, pound, yen, etc.)
Express forecast in _ because prices change.
needs to know which products to put on discounts, what to advertise, put on sale.
need to know which products are going to be available, and which are going to receive bonuses
transportation and storage – if the warehouses are all full and a product in manufacturing looks like it won’t sale they need more warehouses
Hershey customer base (the world) versus Boeing customer base (300)
_ – forecast is systematically always wrong in one particular direction
Takes naïve forecasts and aggregates them over periods of time.
Takes out of play anything that only happened in the last month.
Simple Moving Average Forecast
_ _ _ makes assumptions based on assumptions. Only works for one period.
Using Moving Average with model C is stupid.
MA considers all numbers equally…
Use different models and predict past future to determine which one works the best for the particular product.
Allows us to predict something based on something else. (_– Temperature, humidity, pressure)
Y hat (some outcome) = probability of something occurring (b1x) + probability it doesn’t occur (b0)
Only one explanatory variable is used & is similar to the previous trend model. The difference is that the x variable is no longer time but an explanatory variable.
Y is determined by all the other simultaneous predictors
Makes MAD a percentage error of the forecast itself. (I.E. 140 of 1,000 would not be that big of a miss, compared to 140 of 240)
_% - _% misses are generally acceptable/good standard.
analogous to variance, large forecast errors are heavily penalized
Moving manufacturing jobs overseas (companies are making money but Americans aren’t getting the money – high DJIR and high _)
Unexpected rise in demand for manufactured products overseas – China gaining $$$ - base labor rate goes up – making it _ to manufacture in China.
BRIC rising – governments are hesitant to bring in American products when they can ...
So now looking to other potential markets
Political – what if foreign governments _ your industry after you built it and then sent you away (Castro in Cuba)
You get taxed based on where your world headquarters is; Computer company moved HQ to Ireland but kept 95% of assets in the US. Really only an Irish company on _.
Ghemawat's book _ – took Friedman's prescriptions and applied data to them to see if they were true. Very little of what he was saying was actually true. Cross border communications and shipments really are not all that common.
_-_ – taking advantage of convenient relationships across borders
There’s no single area in the world in the long term that will sustain cheap labor – wage rates go up
Movement to ‘_’ – low cost manufacturing and consumer areas will rotate around
I.E. in the EU – GDP maps of Europe show eastern Europe as a viable market as opposed to 20 years ago.
Career critical question – being able to build a supply chain that’s global – For the iBook it had supply in it from _ countries.
Necessary for working supply chain – have to be able to score and compare countries based on these criteria (works in Europe)… Statistically predictive of supply chain performance
Not just where you are but geographically countries that are near it (I.E. _ – sitting in middle of entire continent of poor)
Very easy to go into _ and do business
Are taxes favorable and are workers highly productive?
Stability of currency?
Low and growing – economically favorable (_, and countries right below BRIC nations)
Huge population – China actually has the same % of _ _ as the united states because of their huge population.
Is the _ enforceable between nations – San Fran and Stockholm – where do you sue someone for breaking contract? US law can’t force a Swedish company to pay… If you’re not Swedish you don’t have standing to sue there. No binding world court = risk.
Bribes are part of the cost (add on costs to be paid in Bribes in other countries)
Agricultural food leases – South Korea has 2,000 hectors of land lease in Madagascar and Sudan
Japan is leasing enough land in US to feed entire state of Iowa
China has land leases all over the world
Composite measure of education and capability; hierarchy of needs
Places you want to go need high human development – some places don’t even understand hierarchical structure of business
Ethical Policies should include –
_-_ – Occurs when customers are sold additional products as the result of an initial purchase.The specific purchase allows the seller to segment the customer
in _ _, customers choose to be placed on (opt-in) and then taken off (opt-out) of e-mail or traditional mailing lists for information about goods and services
Predicting Customer Behaviors:
Using _-_ software and customer behavior _ allows firms to predict which products customers are likely to purchase next and how much they would pay for it
Sheldon Gilbert created _ which is a behavior-predicting software
Customer Defection Analysis – Reducing customer _ or customer _ is a necessary component of managing long-term profitable customer relationships
Customer Value Determination:
Customer Value = Customer _
Top 4 reasons for defection are rude employees/poor attitudes, overall poor service, employees socializing and not paying attention to customers, and _ _
Unless a firm has knowledge of _ _, they may be dumping money into unprofitable customers
Clickstream – How a customer navigates a website (Can be used to personalize and tailor a message towards this customer)
_ software can measure this
Event-Based marketing – offer the right products and services to customers at the right time... I.E. when entertainment venues ask for a customers _ _ they can offer discounts in the future for likely celebrations.
Sales Force Automation system (SFA) – products are used for documenting field activities, communicating with the home office, and retrieval of sales history and other company-specific documents in the field.
When field sales personnel have access to the latest _, _, _ _, and _ _ it allows for more accurate timely decisions to be made in the field.
Sales Activity Management:
These standardized sales process steps assure that the proper sales activities are performed and also put forth a uniform _ _ across the entire organization
It reduces _, improves sales force _ and boosts customer _
Allows sales managers to obtain current information and reporting capabilities regarding each salesperson’s activities on each customer’s account, total sales in general for each sales representative, their sales territories and any ongoing sales initiatives
When sales and other skilled personnel leave an organization, years of accumulated knowledge walk out the door with them, unless a system is in place to capture this information for others to use. A _ _ _ gives the organization this capability
Seven Rs Rule – The seven Rs stand for having the right product, in the right, quantity, in the right condition, at the right place, at the right time, for the right customer at the right cost
A _ _ occurs when all 7 Rs are satisfied
Call centers or customer contact centers systems can categorize calls, determine average _ _ and forecast future _ _
Website self-service capabilities can further reduce the need for _ _ staffers, while adequately handling most customer queries
Designing and Implementing a Successful CRM Program
1st Question the firm must answer: ?
_ customer information is a legal and ethical responsibility for any company collecting, processing and transmitting sensitive customer data
There is growing concern about customers’ personal information becoming compromised or being shared with other companies in order to generate _
Social media sites are no longer banned but are becoming popular use for companies
Social media sites such as _'s Facebook page can backfire and hurt a company’s reputation
On-Demand Computing began with Mark Benioff and it offered online basic CRM applications, low costs, quick implementation and good results
These are also referred to as software-as-a-service model or SaaS model
Today these are more often referred to as cloud computing because...
a. Lexicographicsemi-order= treat close values as equal (treat attributes as discreterather than continuous) and move to the next attribute
Companies today integrate transportation into supply chain activities to optimize efficiency
Growth of outsourcing, mainly offshore manufacturing
Higher _times account for higher inventory levels
“_ _”- provides an opportunity to leverage low labor costs without the risk and expense of transporting goods a far distance
Customers want _-_ and _-_ orders causing a shift to smaller more frequent deliveries limiting the ability of organizations to move economic truckload or container load quantities.
Shrinking _ _ requirements which results in higher costs for faster delivery and longer fulfillment operation hours
MOST motor freight are _ goods
Shippers rely on motor freight because they are _ sensitive and need high _ in transit
Imbalance of International Trade
Most economical form of transportation with the lowest cost per ton
Jointly owned Pipelines- two companies share the pipeline to reduce _ costs
LOW VARIABLE COSTS + HIGH FIXED COSTS
LOW VARIABLE COSTS + HIGH FIXED COSTS
3 types of pipelines: _ _ _ - carry from refineries to large fuel terminals and storage tanks
Overall Cost _
Intermodal Transportation Facilities
Standardized _ - Same size _ that are compatible with 2 or more types of carriers
_ Freight- goods that are handled and transferred between trans. Equipment multiple times, handling charges.
Better Transportation MGMT can lead to
Improve _ _
Enhance _ _
Reduce _ _
_ - the mode’s ability to reach origin and destination facilities over the specified route in question
_ _- total elapsed time it takes to move goods from the point of origin to destination
_ - consistency of transit time
_ _- no damaged freight
_ - price willing to pay
Product size, durability, product value
Modal selection involves 6 primary options
Carrier selection may involve fewer options or MANY more
_ selection involves more constant engagement it changes constantly
_ Service- immediate point to point flow of goods (faster)
_ Service- requires stops to transfer freight between equipment (lower cost)
Fewer carriers is more beneficial to build relationships and also to provide _
80 % of commercial freight moves under _ rates
Steps to minimize transportation costs
Maintain a corporate transportation routing guide- documents that provide instructions for carton and shipment labels, billing requirements
Strategy behind routing guides is to promote supply chain success
Also help maintain centralized control and avoid off contract or “_” buying of transportation
Specific contractual volume commitments are reached
You can put multiple orders to the same location in one _ to be cost effective
_ BOL – you can transfer title of the goods and reroute shipping cargo
_-_ BOL- goes directly where it was signed to go
Types of Bill of Lading
Inland - _ use
_ - goods go to a specific market overseas
_ - does domestic and international to a specified point for specified cargo
Air Waybill- domestic or international through the Air
_ _ - carriers invoice for the fees the carrier charges to move a shipment
Difference of Freight bill and BOL is the Freight bill sets forth the _ to the shipment and the BOL sets forth the _ of the shipment and is a document of title
_ basis- freight bill submitted by carrier when freight picked up by carrier
_ basis- freight bill submitted by carrier when the freight is delivered
Freight _ _- document buyer files with carrier when the carrier couldn’t properly protect the freight
Critical Transaction documents- record of a transaction between _ and _
Certificate of _ - authenticates country of origin of the goods being shipped
Goal of _ - provide the location and status of shipments at all times
KPI- Key performance Indicators
Evaluate current performance verse _ results, _ goals, and carrier _(s)
_ is the single LARGEST logistics expense
Asset utilization is a critical aspect of transportation _ _
_ utilization KPIs help buyers work toward more effective freight deployment
_ ( _ _ _ )- Software tools related to the movement of goods across the supply chain…… Information technologies used to plan, optimize, and execute transportation operations
TMS PLANNING APPLICATIONS
_ and _
Routing and Scheduling
_ _ - TMS determines which carriers are eligible and then tenders the freight to the best carrier
_ _ - TMS helps us track as it goes through the Supply chain any time we want
_ _ - TMS automates the scheduling function to make it more accurate and run smoother
2 Useful analytical Applications
_ _ and score carding - TMS tools automate data, measurements of KPIs and then puts them in reports. This gives us timely information to decide for the future
_ _ _- TMS will hold our contracts and will catch any discrepancies
Seven Basic Standards: Unsafe Driving, Fatigued Driving, Driver Fitness, Drugs and Alcohol, Vehicle Maintenance, Cargo Related and Crash Indicator - Including Driver Specific Information
Railroad industry remains the most highly _ transportation mode, but complete rate deregulation exists over certain types of rail traffic (ie. Intermodal freight)
The _ _ of 1984 initiated the economic deregulation of the ocean shipping industry. Removed requirement of FMC approval rates and conference agreements.
OSRA changed tariff-filing rules so that contract rates are not made public.
These revisions have hastened the economic _ of ocean shipping.
However, there are no federal economic controls over the rates or services provided by these two intermediaries. Only 10k surety bond to ensure carrier will receive payment from the _
A _ _ is considered a carrier and is held liable for freight damage, whereas the broker is not.
Established in 1966, U.S. _ of _ was charged with providing the US with a national transportation policy aimed at improving the safety and efficiency of the transportation system.
effects motor carrier industry. Makes highways safe/ up to date.
Conducts safety research, aimed at reducing the frequency of crashes, pollution, and traffic congestion.
Provides financial and technical support to states constructing, improving, and preserving US highway system.
The Federal Motor Carrier Safety Administration (FMCSA) was established as separate entity from FHWA in the _ _ _ _Act of 1999.
Major responsibilities include regulation of air safety, promotion of air commerce, and monitoring of air space.
Responsibilities focus on the enforcement of railroad safety issues.
FRA operations practices division makes sure they follow carrier operating rules, employee qualification, carrier training and testing rules in compliance with Railroad Safety Act of 1970, railroad safety and health standards, Hours of Service Act, and accident and personal injury reporting requirements.
responsible for promoting and operating the U.S. merchant marine. Their mission is to strengthen the U.S. maritime transportation system. (infrastructure, industry, and labor)In times of war, US depends greatly on water carriage to deliver supplies.
_ and _ costs also increase the problem of using service cost as a basis for rates. The carrier incurs common and joint costs when producing multiple units of output. They cannot directly allocate such costs to a particular production unit.
_ of _ pricing considers the demand side of pricing. (“charging what the traffic will bear”). This basis considers the transported product’s ability to withstand transportation costs. (places an upper limit on shipping rate)
Rates usually vary with respect to distance. However, certain rates do not relate to exact point-to-point distance. One example is a _ rate or _ rate
A _ rate does not increase as distance increases; the rate remains the same for all points in the blanket area the carrier designates. Postage stamp rate is an extreme example of blanket rate.
_ rate applies to this within predestinated zones such as city’s commercial zone, a given state, region, or number of states.While transportation rates increase as distance increases, the increase is not directly proportional to distance.
The rate structure tapers because carriers spread terminal costs over a greater mileage base. These terminal costs do not vary with distance. As the shipment’s movement distance increases, the terminal cost per mile decreases.
Carriers charge a lower rate for volume shipments and higher rate for _-_-_ quantities.
One exception to this is the _-_ rate, which bears no relationship to volume shipped.
refers to how the product being shipped will affect the space utilization in the container. (some products waste space when must be separated or require methods of storing that use excess space).
– The more a product must be handled, the greater the cost to the carrier. (packing, repacking, specialized handling requirements).
Carriers must also assess their potential liabilities when developing rates. The more susceptible a shipment is to loss, damage, or theft, the greater the carrier’s risk. (also fragile or easily damaged goods)
Another critical factor in transportation ratemaking is the service requirements of the freight buyer.
Service levels could be: Next day air early am, Next day air, Next day air saver, 2nd Day air, UPS Ground. All priced differently and delivered faster for a higher price.
_ rates for more valuable products and delicate products to offset the financial risk of moving them.
_ rates for sturdy products (wood flooring) that aren’t likely to be damaged or stolen.
A pricing tool that provides a comparison of commoditites moving in interstate, intrastate, and foreign commerce.
Groups commodities into 1 of 18 classes based on an evaluation of the four transportation characteristics discussed above.
Rates vary for even a few hours time difference.
Cost-reducing opportunities such as limiting product handling, consolidating facilities, and _ inventories must be leverage for supply chains to be competitive
Overcome these issues by establishing distribution operations (distribution centers), warehouses, cross-docks, and retail stores
Overcome these issues by establishing distribution operations (distribution centers), warehouses, cross-docks, and retail stores help to create a _ and _ utility
incentives to purchase product in larger quantities
reduce costs via long run productions or if outputs need time to age ie wine
fully utilizing container capacity and moving product in larger quantities is less expensive per unit than shipping smaller quantities at a time
focuses on assembling like products together for storage in the distribution facility or for transfer to customers; goods are segmented according to their key characteristics
Organizations may benefit substantially from the establishment of one or several warehouses to reduce transportation costs
Comes a point where you build too many warehouses and _ _ increase
Too many facilities= increase in operating and transportation costs (too many _s)
inhibits adoption of risk pooling strategy; must evaluate tradeoff between smaller inventories versus more facilities
Tradeoff between distribution operations and customer service
More distribution facilities in the supply chain create better service for customers (closer proximity to customers)
Tradeoff between primary resources available (space, equipment, people)
_ are most critical distribution resource- play multiple roles in the facility over different schedules
Space vs Equipment- larger the facility, the more space used for operations, more _ needed to leverage space use and product travel time
Equipment vs People- greater use of automated equipment means lower _ requirements; more manual operation needed the more people are needed
People vs Space- larger the facility workforce, the larger the facility size and operation possible; difficult for a small team to handle a large operation with automated machines; critical to _ and _ enough labor to effectively use facility and serve customers
Demand for faster order _ _ or _ _= need for larger workforce and materials handling equipment
High safety stock requirements = more facility _ needed to handle additional inventory
Increased order accuracy requirements = more promotion for _
_ is a people intensive activity; becoming harder to find labor