CPSM INTE Reddit Questions

Inventory turnover analysis is part of assessing financial efficiency. It measures how effectively a company uses its inventory and resources, indicating how well inventory is managed relative to sales, thus reflecting operational efficiency.

The bullwhip effect describes the phenomenon where order variability increases as it moves up the supply chain. In this case, XYZ Company's unpredictable order patterns cause Supplier A to maintain higher safety stock. This is due to demand fluctuations amplified by XYZ's overordering to compensate for stockouts, leading to inefficiencies and increased costs throughout the supply chain.

Using the exponential smoothing formula, Ft=Ft−1+α(At−1−Ft−1)F_t = F_{t-1} + \alpha (A_{t-1} - F_{t-1})Ft=Ft−1+α(At−1−Ft−1), where FtF_tFt is the forecast, α\alphaα is the smoothing constant (0.2), At−1A_{t-1}At−1 is actual demand (140), and Ft−1F_{t-1}Ft−1 is the previous forecast (125). Calculation: 125+0.2×(140−125)=128+2=130125 + 0.2 \times (140 - 125) = 128 + 2 = 130125+0.2×(140−125)=128+2=130. Reference: Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation.

FOB Origin, Freight Collect ensures that the supplier holds liability for damaged products and is responsible for claims with the shipper, while the buying firm pays the shipping costs directly to the carrier. This arrangement clearly delineates responsibilities and liabilities as required.