Global Supply Chain Ch.15

A contract that allows a retailer to return unsold inventory up to a specified amount, at an agreed upon price is A. buyback or returns contract B. revenue-sharing contract C. quantity flexibility contract D. quantity discount contract

A. buyback or returns contract

A downside to which contract is that it leads to surplus in inventory that must be salvaged or disposed? A. buyback or returns contract B. revenue-sharing contract C. quantity flexibility contract D. hybrid contract

A. buyback or returns contract

A third party can increase the supply chain surplus by aggregating demand across multiple firms and gaining production economies of scale that no single firm can on its own. This is called A. capacity aggregation B. inventory aggregation C. warehouse aggregation D. relationship aggregation

A. capacity aggregation

Single sourcing for a product is used to A. guarantee the supplier sufficient business when the supplier has to make a significant buyer-specific investment B. ensure a degree of competition C. ensure the possibility of a backup should a source fail to deliver D. control all possible sources of supply in the market

A. guarantee the supplier sufficient business when the supplier has to make a significant buyer-specific investment

Effective sourcing processes within a firm can A. improve profits for the firm and total supply chain surplus B. reduce profits for the firm and total supply chain surplus C. reduce total supply chain surplus D. reduce profits for the firm

A. improve profits for the firm and total supply chain surplus

Using a third party requires a firm to share demand information and in some cases intellectual property. This risk would be described as A. leakage of sensitive data and information B. underestimation of the cost of coordination C. reduced customer/supplier contract D. loss of internal capability

A. leakage of sensitive data

The process by which companies acquire raw materials, components, products services, and other resources from supplier to execute their operation is A. procurement B. sourcing C. supplier scoring and assessment D. supplier selection

A. procurement

A third party can increase the supply chain surplus if it has a lower collection of cost than the firm. This is called A. receivables aggregation B. procurement aggregation C. information aggregation D. relationship aggregation

A. receivables aggregation

Good design collaboration for manufacturability and supply chain can A. reduce product cost B. increase required inventories C. increase transportation cost D. decrease manufactruability

A. reduce product cost

Supplier performance must be rated on many different factors because a. the factors impact the total supply chain cost b. the factors minimize the supply chain involvement c. the factors reduce the impact of price d. the factors maximize the supply chain price

A. the factors impact the total supply chain cost

The role of sourcing and planning and analysis is A. to analyze spending across various suppliers and component categories to identify opportunities for decreasing the total cost B. to analyze spending across various suppliers and component categories to identify opportunities for increasing the total cost C. to enable orders to be placed and delivered on schedule at the lowest possible overall cost D. to enable order to be placed and delivered on schedule regardless of cost

A. to analyze spending across various suppliers and component categories to identify opportunities for decreasing the total cost

Quantity discounts lower the unit cost A. but tend to increase the required batch size and as a result, reduce the cycle inventory B. but tend to increase the required batch size and as a result the cycle inventory C. but tend to reduce the required batch size and as a result the cycle inventory D. and tend to reduce the required batch size and as a result, increase the cycle inventory

B. but tend to increase the required batch size and as a result the cycle inventory

To create a win-win negotiation, the two parties must A. guarantee each other an agreed upon level of business B. identify more than one issue to negotiate C. identify an impartial mediator to oversee the negotiations D. possess an equivalent level of power

B. identify more than one issue to negotiate

Which of the following is a traditional logistics driver of sourcing? A. pricing B. inventory C. sourcing D. information

B. inventory

An intermediary can increase the supply chain surplus by aggregating inventories across large numbers of customers. This is called A. capacity aggregation B. inventory aggregation C. warehouse aggregation D. relationship aggregation

B. inventory aggregation

Supplier performance should be compared based on A. purchase price alone B. its impact on total cost C. the supplier' quality of material D. the ability of the supplier to coordinate forecasting and planning

B. its impact on total cost

The decision to have a third party perform a supply chain function is called A. insourcing B. outsourcing C. offshoring D. onshoring

B. outsourcing

A third party increases the supply chain surplus if it aggregates the sourcing for many small players and facilitates economies of scale in ordering, inbound transportation and production. This is called A. capacity aggregation B. procurement aggregation C. information aggregation D. relationship aggregation

B. procurement aggregation

The viability of supplier is especially important for suppliers who A. provide mission-critical products that would be easy to replace B. provide mission-critical products that would be difficult to replace C. provide non-critical products that would be difficult to replace D. provide non-critical products that would be easy to replace

B. provide mission-critical products that would be difficult to replace

A contract where the buyer pays a minimal amount for each unit purchased from the supplier but shares a fraction of the revenue for each unit sold is a A. buyback or returns contract B. revenue-sharing contract C. quantity flexibility contract D. quantity discount contract

B. revenue-sharing contract

The entire set of business processes required to purchase goods and services is A. procurement B. sourcing C. supplier scoring and assessment D. supplier selection

B. sourcing

The selection of suppliers, design of supplier contracts, product design collaboration, procurement of material, and evaluation of supplier performance are a part of A. procurement B. sourcing c. supplier scoring and assessment D. supplier selection

B. sourcing

A contract that allows the buyer to modify the order (within limits agreed to a by the supplier) as demand visibility increases closer to the point of sale is a A. buyback or returns contract B. revenue-sharing contract C. quantity flexibility contract D. quantity discount contract

C quantity flexibility contract

The difference between the values of the buyer and seller is referred to as the A. value discrepancy B. spread C. bargaining surplus D. negotiation gap

C. bargaining surplus

Craigslist and eBay are examples of A. receivables aggregation B. inventory aggregation C. information aggregation D. relationship aggregation

C. information aggregation

The decision to move a production facility outside of domestic boundaries and still maintain ownership is called A. insourcing B. outsourcing C. offshoring D. onshoring

C. offshoring

Price has traditionally been the only dimension that suppliers have been compared on during the process of A. procurement B. sourcing C. supplier scoring and assessment D. supplier selection

C. supplier scoring and assessment

Consider the factors influencing total cost and supplier performance. Which of the following is the LEAST quantifiable factor? A. supplier price B. supplier terms C. support D. warehousing cost

C. support

Cost of Goods Sold represents A. less than 20% of sales for most major manufacturers B. less than 50% of sales for most major manufacturers C. well over 50% of sales for most major manufacturers D. well over 80% of sales for most major manufacturers

C. well over 50% of sales for most major manufacturers

When designing a sourcing strategy, it is important for a firm to A. develop process that will procure materials at the lowest possible cost B. maintain a record of all contracts, receipts, issues and other transactions in the event of lawsuits C. maximize the profitability of the distributors within the supply chain D. be clear on the factors that have the greatest influence on performance and target improvements in those areas

D. be clear on the factors that have the greatest influence on performance and target improvements in those areas

Sourcing a product overseas may have A. higher product cost and will generally incur a higher inbound transportation cost B. higher product cost but will generally incur a lower inbox transportation cost C. lower product cost and will generally incur a lower inbound transportation cost D. lower product cost and will generally incur higher inbound transportation cost

D. lower product cost but will generally incur a higher inbound transportation cost

A contract that decreases overall costs buy leads to higher lot sizes and thus higher levels of inventory in the supply chain is a A. buyback or returns contract B. revenue-sharing contract C. quantity flexibility contract D. quantity discount contract

D. quantity discount contract

An intermediary can increase the supply chain surplus by decreasing the number of relationships required between multiple buyers and sellers. This is called A. capacity aggregation B. inventory aggregation C. warehouse aggregation D. relationship aggregation

D. relationship aggregation

A contract that is used to induce performance improvement from a supplier along dimensions, such as lead time, where the benefit of improvement accrues primarily to the buyer, whereas the effort for improvement comes primarily from the supplier is a A. buyback or returns contract B. revenue-sharing contract C. quantity flexibility contract D. shared savings contract

D. shared savings contract

Using the output from supplier scoring and assessment to identify the appropriate supplier(s) is A. procurement B. sourcing c. supplier scoring and assessment D. supplier selection

D. supplier selection

Scoring the performance of suppliers in terms of replenishment lead time thus allows a firm to evaluate the impact each supplier has on A. the cost of holding cycle inventory B. the cost of holding replacement inventory C. the purchase price of material D. the cost of holding safety inventory

D. the cost of holding safety inventory

Which contract increases the margin for the dealer as sales cross certain levels? A. buyback or returns contract B. revenue-sharing contract C. quantity flexibility contract D. threshold contract

D. threshold contract

W.W. Grainger and McMaster Carr stock products from more than a thousand manufacturers each to sell to hundreds of thousands of customers and are sterling examples of A. transportation aggregation by transportation intermediaries B. inventory aggregation C. warehouse aggregation D. transportation aggregation by storage intermediaries

D. transportation aggregation by storage intermediaries

Which type of contract is used when agents act on behalf of a principal and the dealer's margin is set to be the same as the supply chain margin, and the dealer exerts the right amount of effort? A. buyback or returns contract B. revenue-sharing contract C. quantity flexibility contract D. two-part tariffs

D. two-part tariffs

T/F: A good supplier scoring and assessment process will primarily track performance along the price dimension when evaluating a supplier.

False

T/F: As the replenishment lead time from a supplier grows, the amount of safety inventory that needs to be held by the buyer also grows in direct proportion to the replenishment lead time.

False

T/F: Quantity discounts lower the unit cost and tend to increase the required batch size.

False

T/F: Revenue-sharing contracts counter double marginalization by decreasing the cost per unit charged to the retailer, thus effectively decreasing the cost of under stocking.

False

T/F: Supplier performance analysis should be used to build a portfolio of suppliers with similar strengths

False

T/F: Supplier viability can be especially important if the supplier is providing mission-critical products and it would be easy to find a replacement for them.

False

T/F: To improve overall profits, the supplier must design a contract that requires the buyer to share in some of the supplier's demand uncertainty.

False

T/F: A reliable supplier has low variability of lead time, whereas an unreliable supplier has high variability.

True

T/F: As the replenishment lot size grows, the cycle inventory at the firm forms, thus increasing the cost of holding inventory.

True

T/F: Buyback contracts counter double marginalization by lowering the cost of overstocking for the retailer.

True

T/F: Design collaboration ensures that any design changes are communicated effectively to all parties involved with designing and manufacturing the product

True

T/F: Effective sourcing processes within a firm can improve profits for the firm and total supply chain surplus in a variety of ways/

True

T/F: Having multiple sources ensures a degree of competition and also the possibility of a backup, should a source fail to deliver.

True

T/F: Quantity flexibility contracts counter double marginalization by giving the retailer the ability to modify the order based on improved forecasts closer to the point of sale.

True

T/F: Sourcing processes include the selection of suppliers, design of supplier contracts, product design collaboration, procurement of material, and evaluation of supplier performance.

True

T/F: The goal of procurement is to enable orders to be placed and delivered on schedule at the lowest possible price.

True

T/F: The procurement process for indirect materials should focus on decreasing the transaction cost for each order.

True

T/F: The value of better info coordination will be inked to the amount of variability introduced into the supply chain as a result of the bullwhip effect.

True

T/F: Two-part tariffs and threshold contracts can be used to counter double marginalization and increase agent effort in a supply chain.

True

T/F: Unless adding a supplier with a unique and valuable capability clearly adds to total cost, the firm's supply base may be too small.

True

The goal of procurement is A. to analyze spending across various suppliers and component categories to identify opportunities for decreasing the total cost B. to analyze spending across various suppliers and component categories to identify opportunities for increasing the total cost C. to enable orders to be placed and delivered on schedule at the lowest possible overall cost D to enable orders to be placed and delivered on schedule regardless of cost

c. to enable orders to be placed and delivered on schedule at the lowest possible overall cost

A third party may increase the supply chain surplus by aggregating warehousing needs over several firms. This is called A. capacity aggregation B. inventory aggregation C. warehouse aggregation D. relationship aggregation

c. warehouse aggregation