BA 360 (Showghi)- Chapter 11

For which corporate strategy(ies) should supply chain inventory be minimized? A) low cost B) response C) differentiation D) low cost and response E) low cost and differentiation

E

Which of the following would NOT typically be considered as part of a manufacturing firm's supply chain? A) suppliers B) distributors C) wholesalers D) retailers E) landscaping contractors

E

A firm that employs a response strategy should minimize inventory throughout the supply chain.

False

As the number of facilities increases, total logistics costs tend to follow a curve that first rises, then declines.

False

Because service firms do not acquire goods and services externally, their supply chain management issues are insignificant.

False

Because the supply chain has become so electronic and automated, opportunities for unethical behavior have been greatly reduced.

False

Cross-sourcing describes the practice of having two suppliers provide every component.

False

Designing distribution networks to meet customer expectations suggests three criteria: (1) rapid response, (2) cost, and (3) service.

False

Even though a firm may have a low cost strategy, supply-chain strategy can select suppliers primarily on response or differentiation.

False

Improvements in security, especially regarding the millions of shipping containers that enter the U.S. each year, are being held back by the lack of technological advances.

False

Keiretsu refers to a company coalition that is part collaboration, part purchasing from many suppliers, and part vertical integration.

False

Once revenue and total logistics costs are considered together, the optimal number of facilities in a distribution network may decrease compared to the optimal number of facilities based on total logistics costs only.

False

Supply chain decisions are not generally strategic in nature, because purchasing is not a large expense for most firms.

False

The new model of a tight, fast, low-inventory supply chain, operating across political and cultural boundaries, has reduced the overall level of supply chain risk.

False

The supply chain for a brewery would include raw ingredients such as hops and barley but not the manufactured goods such as bottles and cans.

False

The supply chain management opportunity called postponement involves delaying deliveries to avoid accumulation of inventory at the customer's site.

False

Vertical integration, whether forward or backward, requires the firm to become more specialized.

False

Waterways are an attractive distribution system when speed is more important than shipping cost.

False

When using the low-cost strategy for supply chain management, a firm should use buffer stocks to ensure speedy supply.

False

With the "many suppliers" sourcing strategy, the order usually goes to the supplier that offers the highest quality.

False

Use of a diversified supply base represents one of the most common supply chain risk reduction tactics for several different supply chain risk categories.

True

While the prices that consumers pay are often inflexible, a significant number of final prices paid in business-to-business transactions are negotiated.

True

In most manufacturing industries, which of the following would likely represent the largest cost to the firm? A) transportation B) purchasing C) insurance D) financing E) advertising

B

Which of the following characteristics is NOT common to all four of Darden Restaurants' supply channels? A) supplier qualification B) product tracking C) independent audits D) refrigeration E) just-in-time delivery

D

Which of the following is a primary supplier selection criterion for a firm pursuing a differentiation strategy? A) product development skills B) cost C) capacity D) speed E) flexibility

A

Among which of the following industries are purchasing costs the LOWEST percentage of sales? A) automobiles B) petroleum C) restaurants D) lumber E) chemicals

C

Which of the following statements is true regarding the leverage of supply chain savings? A) Supply chain leverage is about the same for all industries. B) Supply chain savings exert more leverage as the firm's purchases are a smaller percent of sales. C) Supply chain savings exert more leverage as the firm's net profit margin decreases. D) Supply chain leverage depends only upon the percent of sales spent in the supply chain. E) None of the above is true.

C

A blanket order is a long-term purchase commitment to a supplier for items that are to be delivered against short-term releases to ship.

True

A fast-food retailer that acquired a spice manufacturer would be practicing backward integration.

True

Benchmark firms have driven down costs of supply-chain performance.

True

Channel assembly, which sends components and modules to be assembled by a distributor, treats these distributors as manufacturing partners.

True

Drop shipping results in time and shipping cost savings.

True

Logistics management can provide a competitive advantage through improved customer service.

True

One classic type of negotiation strategy is the market-based price model.

True

Operations managers are finding online auctions a fertile area for disposing of discontinued inventory.

True

Outsourcing is a form of specialization that allows the outsourcing firm to focus on its key success factors.

True

Outsourcing refers to transferring a firm's activities that have traditionally been internal to external suppliers.

True

Savings in the supply chain exert more leverage as the firm's net profit margin decreases.

True

The bullwhip effect refers to the increasing fluctuations in orders that often occur as orders move through the supply chain.

True

The objective of the make-or-buy decision is to help identify the products and services that can be obtained externally.

True