Taking over the role of your supplier. Example: We're not going to buy bread for our
sandwiches, we'll make the bread ourselves from now on. - ️️Backward Integration
Anticipation Inventory - ️️Used to absorb uneven rates of demand or supply
perhaps caused by seasonal demand, holidays, qu...
SCM 300 Exam 1 Modules 1-4 (Davila)
Taking over the role of your supplier. Example: We're not going to buy bread for our
sandwiches, we'll make the bread ourselves from now on. - ✔️✔️Backward Integration
Anticipation Inventory - ✔️✔️Used to absorb uneven rates of demand or supply
perhaps caused by seasonal demand, holidays, quantity discounts, economic
production runs
EX: Snowblowers
Taking over the role of companies closer to the customer. Example: We will no longer
sell Coca-Cola through our distributors, from now on, we'll only sell Coke out of Coca-
Cola stores. - ✔️✔️Forward Integration
Supply Chain Management - ✔️✔️the management of the chain of supplies
buy it -> make it -> move it -> sell it -> service it - ✔️✔️SCM Flows/Strategy
Procurement (buy it) - ✔️✔️process of obtaining services, supplies, and equipment in
conformance with corporate regulations
Operations (make it) - ✔️✔️makes business processes effective and efficient. They
help the organization create high quality products/ services using the fewest resources
Logistics (move it) - ✔️✔️developing the transportation itinerary and finding reliable
transportation and storage partners, to be able to navigate the flow of materials to the
final destination
, purchasing -> production -> distribution -> retail sales - ✔️✔️The Supply Chain
The efficient integration of the Supply Chain - ✔️✔️SCM Def
satisfy the customer, satisfy the company, consider the future - ✔️✔️Successful SC
Manager
sustainable long term profits and maimize ROI - ✔️✔️Corporation Goals
Reverse Logistics - ✔️✔️reuse of production and materials
1st Tier Suppliers - ✔️✔️a company's direct supplier. A firm that directly provides
goods and/ or services to a company
2nd Tier Suppliers - ✔️✔️a firm provides goods and/ or services to a company's first-
tier supplier
Downstream - ✔️✔️direction in which products flow towards an end consumer.
Direction is the right.
Storage and consolidation/sorting
picking and packing, labeling
Upstream - ✔️✔️direction from customers to suppliers. Direction is the left
central return center AKA reverse logistics activities
Business model - ✔️✔️planning to purchase, transform, deliver, and sell products with
intent on making a profit
Supply Chain Visibility - ✔️✔️ability to see what is happening with inventory up and
down a supply chain
Profit - ✔️✔️Formula: profit = revenue - cost. If supply chain creates a damaged
product no one will buy it for a premium price, that's why it's important for the supply
chain to deliver the best products
ROI - ✔️✔️Formula: total profit/ total invest money. Return on investment- an economic
measure that helps evaluate the return of money. Scenario 1: 10/1,000 = 0.01 Scenario
2: 10/1 = 10 (good investment).
total profit/ total invest money - ✔️✔️ROI Formula
profit= revenue - cost - ✔️✔️Profits Formula
Delivery time - ✔️✔️from order placement to order fulfillment
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