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37 Cards in this Set
- Front
- Back
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What are the 7 steps of buying? (In order) |
1. Demand Forecasting 2. Lead Time Forecasting 3. Order Policy Analysis 4. Service Level Analysis 5. Replenishment 6. Special Order Analysis 7. Order Validity Analysis |
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What is Demand Forecasting and its goal? |
To accurately calculate/predict how an item is going to sell
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What is Lead Time Forecasting and its goal? |
To accurately predict the number of days between placing an order with a vendor and have the merchandise available to sell. |
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What is Order Policy Analysis? |
To Determine the most profitable order cycle by balancing acquisition cost and carrying cost. |
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What is Service Level Analysis? |
To ensure that you provide the proper amount of stock at the item/location based on unit demand, sales demand, & profitability. |
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What is Special Order Analysis? |
To determine what additional merchandise you must purchase to meet any special needs. |
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What is Order Validity Analysis? |
The system validates the order. (minimum order requirements, full truckloads, ect..)
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What do the first 4 steps of buying equal and what do they determine? |
Replenishment - Determine when an order is placed and how much will be bought |
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What two steps make up Item/Exception Management? |
Special Order Analysis & Order Validity Analysis |
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Historical Demand is made up of what 3 components? |
Sales, Lost Sales, and Promotional Sales |
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What is the definition of MADP? |
Mean Absolute Deviation Percentage |
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What are the 4 forecasting techniques of MADP and the levels of variations? |
Low MADP 0-25 High MADP 26-50 Trending 50+ (Erratic) High Trend/Seasonal |
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List the 3 values that are used in the reforecasting formula |
Track (or Trend) Most recent period of demand Old forecast |
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What does Track determine? |
What percentage of weight is given to the most recent history at the end of the period. |
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The forecast is made up of what two components? |
Demand and Profile |
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Demand tells you ___________ an item will sell. Profile determines ___________ an item will sell. |
Demand tells how much an item will sell. Profile determines when an item will sell. |
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When does an order become due? |
When the Service Level is in jeopardy. |
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When should a manual forecast change be made? |
Analyst should make adjustments when there is something about the expected demand the system can not predict (change in business trends, selling patter, inaccurate history). |
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Top slope: Order up to level (OUTL), Item Order Point (IOP). Bottom line: Order Cycle, Lead Time, Safety Stock. |
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What is the formula for Demand? |
Sales + Lost Sales - Promotional Sales |
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What is the formula for Item order Point |
Safety Stock + Lead Time |
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What is the formula for Order Up To Level |
OUTL= Safety Stock + Lead Time + Effective Order Cycle |
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What component determines the Lead Time on a PO |
Lead Time Quoted |
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What does the recalculate button do? |
Simulates the nightly processing |
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When should you run an OPA? |
When initiating a vendor line. Significant addition or subtraction of items. New discounts or minimums are introduced. When changing times to manual or discontinued. When expecting an increase or decrease in business. At least every 6 months. |
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What value must be set to identify the min/max in a bracket? |
The Unit Code value must be set to identify the min or max |
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A 95% service Level Goal Means? |
You are willing to be out of stock 5% of the time. |
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7 key components of safety stock |
Demand Forecasting MADP Lead Time Lead Time Variance Service Level Goal Min Qty's & Buying Multiples Order Cycle |
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What is the most important requirement for your success and what % does it represent? |
70% of your success will come from proper Vendor/Item set up |
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What are the buyer class codes? |
Manual, Discontinued, Regular |
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What are the system class codes? |
Uninitialized, Lumpy, Slow |
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How do you add days to an order? |
Rebuild 2 days function |
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What is the final step under source set up? |
Run OPA |
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How do you change multiple components? |
Recalculate |
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What is a super vendor? |
A single vendor that is used to combine two or more vendor/locations (member vendors). |
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What is a sub-vendor? |
One vendor where there is a need to separate items into separate vendor records. |
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What are the biggest contributors to safety stock? |
Service Level & MADP |
