Week 3 Guidance – Supply Chain Management & Models and ForecastingChapter 5– Supply Chain ManagementVideo: https://youtu.be/w1_ZWtxPABYIt is important to know that Supply Chain Management involves the entire range of production and distribution processes. Students need to understand the tradeoffs involved in supply chain function related to JIT, inventory management purchasing and delivery lead times and quality. Supply Chain Management requires a broad view of the entire flow from purchasing to final delivery to the customer. Supply Chain Management is becoming increasingly more important due to the following factors:1. Implementation of JIT systems.2. Emphasis in reduction in inventories.3. Emphasis in reduced order cycles and reduced lead times.4. Continuous and rapid change in products and product designs (shorter product life cycles).5. Shorter product introduction and product development times.The importance of Supply Chain Management cannot be underestimated because it ensures that the right materials are at the right place at the right time at a minimal cost and maximum quantity. In addition, supply chain management requires very careful coordination of activities between various business organizations on the chain. Integration of databases and sharing key pieces of information among the different business organizations on the supply chain not only provides timely and valuable information to companies on the supply chain, but also assists in improving the trust and the overall relationship between suppliers and their customers.The termsupply chain managementhas emerged in the mid-1980s and gained popularity in the 1990s. In the new millennium, it is continuing to gain interest at a rapid rate. Even though the term, supply chain management (SCM) is fairly new, the concepts and problems involved in SCM are not. However, many of these problems and their solutions are integrated within and between firms in the context of managing the flow of products and related information. Thus, supply chain management involves efficient integration of suppliers, manufacturers, distributors and customers in the production and distribution of goods and services.Purchasing is the process of obtaining products, parts, supplies and materials from an outside source of supply. Recently, due to increased emphasis of outsourcing, the importance of purchasing has substantially increased. The purchasing function includes identifying the supply pool, negotiating prices and terms of the purchase, placing and receiving orders, quality assurance, material handling and storage of received shipments. One of the very important responsibilities of purchasers is communication and coordination with suppliers and possibly suppliers’ suppliers—especially in the areas of scheduling and forecasting to reduce the chance of excess inventories, stock outs and late deliveries. In addition, purchasing works closely with production planning and control and sales to ensure that the desired product is available at the right location at the right time in the right quantity.Chapter 6– Models and ForecastingVideo: https://youtu.be/98K7AG32qv8It is important to take an intuitive approach to forecasting, with frequent reference to the importance of plotting the data to assist the decision-maker in determining which forecasting technique may be more appropriate to use.In operations management, we forecast a wide range of future events, which could significantly affect the long-term success of the firm. Most often the basic need for forecasting arises in estimating customer demand for a firm’s products and services. However, we may need aggregate estimates of demand as well as estimates for individual products. In most cases, a firm will need a long-term estimate of overall demand as well as a shorter-run estimate of demand for each individual product or service. Short-term demand estimates for individual products are necessary to determine daily or weekly management of the firm’s activities such as scheduling personnel and ordering materials. On the other hand, long-term estimates of overall or aggregate demand can be used in determining company strategy, planning long-term capacity and establishing facility location needs of the firm.There is a very important difference betweenforecasting and planning. Planning is oftenin responseto a forecast. A passive response would be to reduce output because of a predicted decrease in demand, while an active response would be to advertise in an effort to offset the predicted decrease in demand.P. S.TIP: Please outline your final paper and start looking for scholarly readings.