SCM 486 Final Exam
Over recent decades, firms within the supply chain have begun to realize the advantages enjoyed from sharing of technology, information, and planning with other firms. Even competitors, and many modern business thinkers will claim that not only is a more open and relational attitude advantageous, but actually essential and inevitable in maintaining ___________________. strategic advantage a lead over the competition a competitive advantage control of the market an improved market share
A competitive advantage
The specification is ____________________, including specific characteristics such as weights and measurements that enable the product to work in a manner acceptable to the ___________. a governmental document / inspector a state mandate / auditor a plan / buyer a description of the required output / consumer program / client
A description of the required output/consumer
Despite the differences in opinions about the size of the supplier base, the major issue remains that a closer relationship with suppliers facilitates a reduced number of sales representatives improved performance of all involved a closer bond with supply firms a reduced number of suppliers JIT deliveries of needed supplies
A reduced number of suppliers
Some supply managers argue that implementation of many new manufacturing techniques necessitates _______________________. a reduction in the number of suppliers choosing suppliers more carefully switching to multiple supply sources negotiating delivery terms more favorable to the company negotiating delivery terms more favorable to the company
A reduction in the number of suppliers
Perhaps the most important factor associated with the purchasing decision is the _____________ and the ______________ between the buying and supplying firms. business environment / power imbalance economy / relationship economy / power relationship economic environment / power relationship business economy / power imbalance
Business environment / power imbalance
And like supply chain management, _____________ extends beyond a simple interfirm relationship to involve integration of confidential and vital processes such as strategy formation, planning, information flow, and operations. purchasing management buyer-seller management buyer-supplier partnering buyer-seller partnering purchaser-seller relations
Buyer-supplier partnering
___________ is nothing more than a form of compliance as well as identification and _________. Commitment / feelings Involvement / feelings Involvement / cooperation Cooperation / involvement Commitment / involvement
Commitment/involvement
___________ components are those components not defined as strategic components. Composite OEM Structural Commodity-based Common
Commodity-based
__________ is action without inherent desire, and, thus, _________ remains a relatively easy factor to measure since it implies action, not feeling. Involvement / involvement Cooperation / cooperation Compliance / compliance Commitment / commitment Response / response
Compliance/compliance
Given the complexity of the buying decision, the purchasing professional must be prepared to analyze each significant buying situation on the basis of the ___________________ of various buying decisions technological impacts conceptual and the economic impacts competitive impacts economic and competitive impacts productivity and economic impacts
Conceptual and the economic impacts
Implementing TQM also requires the following: Negotiating __________ requirements. Developing a supplier specification that details ___________ requirements and expectations. Determining the necessary activities required to fulfill those requirements and ____________. product / supplier / goals labor / labor / standards customer / customer / expectations project / employees / responsibilities supplier / sellers / goals
Customer/customer/expectations
Ideally, the end result for both firms should be _____________, yielding greater control of costs, cycle times, inventory, quality, and, ultimately, customer satisfaction. decreased uncertainty improved customer satisfaction decreased customer complaints increased certainty
Decreased uncertainty
There are major quality awards that ensure that suppliers are TQM effective. The most universally known quality awards are the ____________ and the ________________ National Quality Award. American Productivity Center Award / Master Malcolm Deming Award / Malcolm Baldridge National Productivity Center Award / Department of Commerce Department of Commerce Award / Master Baldridge Deming Productivity Center Award / Deming-Baldridge
Deming Award / Malcolm Baldridge
With its many benefits, supply chain partnerships retain several inherent risks that can be potentially damaging to participants. First and foremost, heavy reliance on one partner can be disastrous if the partner _____________. changes the specifications does not deliver on time fails to produce quality products does not meet expectations increases the price of his materials
Does not meet expectations
_____________________ is known as the father of the Japanese post-war industrial revival and was regarded by many as the leading quality guru in the United States. Dr. Malcolm Baldridge Dr. Samuel E. Edwards Dr. Malcolm Deming Dr. Thomas Edison Dr. W. Edwards Deming
Dr. W. Edwards Deming
The final step in the partnering process includes the maintenance of the relationship to ______________________________. improve communications and processes foster good communications and relationships either enhance its development or bring about its dissolution develop unified goals and objectives develop unified goals and objectives
Either enhance its development or bring about its dissolution
Recognizing partnerships between buyer and supplier, as a fundamental driver for the success of the Pacific Rim supply chain processes, American firms have begun to _______________. become more competitive operate like Pacific Rim companies use the same processes emulate these supplier alliances improve relationships with suppliers
Emulate these supplier alliances
Performance may be defined as the ability to ________________. execute intentions and goals meet goals and objectives attain goals and meet expectations meet expectations and execute strategies execute plans and meet profit goals
Execute intentions and goals
A cost-based approach cannot succeed in a competitive market if the product does not remain acceptable to the Department of Commerce. True False
False
Before firms can enjoy the benefits of a buyer supplier partnership, they must first develop and design the partnership implementation process. A supplier partnership involves a significant attitudinal as well as structural change from traditional supply arrangements, so the allying firms must be meticulous to ensure that a true win-win partnership is developed. True False
False
Customer expectations include 1) fabrication, 2) appearance, 3) maintainability, and 4) reliability. True False
False
MBO is an innovative way of thinking that affects the culture, the strategy, and the technology of a company. True False
False
The ability to identify errors before they occur recycles scrap material, improves downstream inspections, and will promote profitability. True False
False
Two factors driven by power and critical to the partnership dyad are commitment and trust. Trust may be defined as the perception of being emotionally impelled. True False
False
Ultimate dissolution of the partnership may be necessary if the firms are able to successfully work through the critical steps of partnership formation or synergies can be recognized. True False
False
A rule of thumb must be developed that can be used to decide whether or not a partnership _____________. has sufficient potential is appropriate would work for both parties would be a good opportunity for all involved would not have any potential for success
Has sufficient potential
_________ is a set of standards that document the implementation of a quality program. In order to be certified, suppliers need to provide documentation to an external examiner that they meet the ________ requirements. Once a firm is certified, it will be listed in a directory so that all of its potential customers can know which firms have been certified and to what level. USO 9500 / USO 9500 PSO 9000 / PSO 9000 ASO 9600 / ASO 9600 ESO 9000 / ESO 9000 ISO 9001 / ISO 9001
ISO 9001 / ISO 9001
Six-sigma suppliers focus on all of the items listed below with one exception. Which one is the exception? Defects per million as a standard metric Provision of extensive employee training Improvement of profit margins The reduction of non-value-added activities
Improvement of profit margins
In general, price is important; however, remember __________ of many variables that go into purchasing decisions. it is the single most important quality is the most important it is only one delivery is the most important quantity standards are the most important
It is only one
The ______ suppliers usually get the long-run demand forecast and are involved in the manufacturer s product development. backup key preferred local national
Key
A Harvard Business School study concluded that a key driver in the decline of U.S. competitiveness in the international marketplace has originated from investing _______________, such as supplier relations. more in tangible benefits less in tangible benefits less in intangible benefits more in intangible benefits none of the above
Less in intangible benefits
Implementing TQM requires the following: Defining the _______. Identifying systems ________. Identifying systems ________. vision / inputs / suppliers objectives / processes / clients mission / output / customers vision / weaknesses / stakeholders goals / strengths / shareholders
Mission/output/customers
Though ___________ has received abundant recognition over the last few decades from both researchers and practitioners alike, the concept of a __________ is perhaps as old as or even older than business itself. buyer relations / partnering partnering / relationships partnering / partnership strategic partners / buyer-seller relations strategic partners / buyer-seller relations
Partnering/partnership
One of the most important and complex decisions a firm has to make is how much to _____________________. buy for its production lint charge for its products and services pay for its items and services pay its employees
Pay for its items and services
A final point on the effects of power concerns the ultimate ______________ of the supply chain members as well as the supply chain itself. profitability performance and subsequent profitability cost reductions and subsequent profitability productivity and profitability performance
Performance and subsequent profitability
The ___________ evaluation is an assessment of the supplier s actual performance on a variety of criteria, such as delivery reliability, cost, quality defect rate, etc. productivity-based customer service-based customer relations-based effectiveness-based performance-based
Performance based
Exploration of the effects of _______ on factors of the supplier buyer alliance provides the key to understanding the concept of the power-partnership link... politics power negotiations processes persuasion
Power
The relationship between _______________ is dependent upon the origins of the commitment. power and commitment involvement and commitment power and politics power and involvement power and involvement
Power and commitment
________ is a direct result of dependence, and the extent of dependence is directly induced by _____________ of power. Power politics / the sources Politics / the targets Power / perceptions Power / sources Power politics / the illusions
Power/perceptions
Extremely complex in nature, ________ serves as a composite relationship-oriented variable, affecting both the ______________ in many transparent as well as concealed ways. organizational science / buyers and sellers power science / buyers and sellers a partnership / target and source power / target and source a partnership / buyers and suppliers
Power/target and source
The notion of ______ in an interfirm relationship implies _______ dependence on the source; otherwise the _______ would not need to subject itself to the unbalanced relationship. politics / some / seller politics / heavy / source power politics / seller / seller power politics / target / source power / target / target
Power/target/target
The buyer s evaluation of the supplier s performance is a catalyst for the supplier development activities. There are two main categories for the supplier evaluation. Identify the two correct evaluations. promotional-based evaluations and productivity-based evaluations production-based evaluations and effectiveness-based evaluations specification-based evaluations and goal attainment based evaluations customer service-based evaluations and customer relations-based evaluations process-based evaluations and performance-based evaluations
Process-based evaluations and performance-based evaluations
______________ (QFD) focuses on how businesses develop high quality products for (their) customers. QFD is driven by cross functional market research. This is the process of understanding customer expectations, and how well providers of products address these expectations. Quality Fabrication and Development Quantity Functional Development Quality Function Deployment Quick Functional Development Quick Fabrication and Development
Quality Function Deployment
_______________ (QFD) is a methodology for collecting customer information to drive product development. Quality Function Deployment Quantity Functional Development Quick Functional Development Quality Fabrication and Development Quick Fabrication and Development
Quality Function Deployment
The suppliers ___________ systems must be consistent with the in-house quality requirements of the __________. information management/seller manufacturing/client IT/customer quality assurance/customer internal/buyer
Quality assurance/customer
Without high-quality raw materials or component parts from suppliers, a (n) _____________ program will not be successful. quality management strategic management organizational development production management operations management
Quality management
A healthy long-term relationship between suppliers and manufacturers is becoming more and more important and can result in ___________________. improved customer service improved product margins improved profit margins better quality products reduced transaction costs
Reduced transaction costs
Intensive price competition and information technology have led to the implementation of a ______________ procurement approach for commodity components. reverse auction progressive standardized staple multiple source
Reverse auction
Guides to the implementation process are summarized below, with one exception. Which one is not one of the steps? Establish strategic need for partnership Develop partner criteria, evaluate suppliers, and select partner Formally establish partnership Maintain and refine partnership (possible reduction or dissolvement Reward partner for superb quality and service
Reward partner for superb quality and service
The first step in the supplier partnership implementation process includes the strategic verification of the need for a supplier partnership. Here, the firm must evaluate the potential ____________ of a partnership in comparison to traditional processes. strengths and weaknesses strengths and benefits strengths and risks duration and strengths risks and benefits
Risks and benefits
Ultimate supply chain partner __________ remains the overriding factor in determining the future of a supply chain partnership. relations service power involvement Satisfaction
Satisfaction
__________ in the supply chain can be defined as the extent of contentment with the relationship. Cooperation Good Service Good supplier relations Dgodd public relations Satisfaction
Satisfaction
________ is a way to measure supplier quality. Supplying firms that follow the core philosophy of _________ will make excellent strategic partners. Eight alpha / eight alpha Sigma nine / sigma nine Six sigma / six sigma One omega / one omega Six epsilon / six epsilon
Six sigma / six sigma
_________ standards can be applied to both manufacturing and service firms using the same methodology. SPC provides input to the _________ approach. Eight alpha / eight alpha Sigma nine / sigma nine One omega / one omega Six epsilon / six epsilon Six-sigma / six-sigma
Six sigma/ six sigma
The notion of interfirm power holds its roots in ______________ literature and has been extensively developed by marketing channel researchers. management science organizational behaviour organizational science social science operations science
Social science
The ____________ is actually the average distance a normal point is from the mean. Thus, the ____________ represents a more tractable measure of the variance. common deviation / common deviation standard deviation / standard deviation quality variance / quality variance enhances fosters
Standard deviation/standard deviation
Although the basic ideas of TM are simple, the ___________ procedures are complex and can be difficult to __________. implementation / understand core / implement basic / understand statistical / understand statistical / implement
Statistical/implement
Although many firms engage in partnering activities, the specific interpretation of a ___________ or partnership is at best vague. strategic relationship buyer-seller alliance buyer-supplier partner buyer-seller relationship strategic alliance
Strategic alliance
Critical to the implementation of purchasing and supply management techniques is the development of _________________. suppliers supply chain partnerships sources long range strategies a business plan
Supply chain partnerships
Abandonment of partners may lead to __________, making future partners _________ to attract. increased production / easier suspicion / difficult greater opportunities / easier a search for new partners / somewhat easier euphoria / exciting
Suspicion / difficult
Effective _____ requires the integration of production planning, marketing, engineering distribution, and field service. MBO OD RAM PODS TQM
TQM
______ reaches much wider than the traditional quality view of incoming inspection and process control it means that the entire organization is working as a team, including top management and each and every employee. TQM MBO TMQ OB PODS
TQM
The ________ method (TM) addresses design and engineering (offline) as well as manufacturing (online) quality. This fundamentally differentiates TM from SPC, which is purely an online quality control method. Tasmania Truk Taguchi Tanner Transactional
Taguchi
The __________ method (TM) nicely complements many of the advantages of SPC. Tanner Taguchi Tupelo Tasmania Transactional
Taguchi
Power essentially attempts to force a _______ to comply with the ________ desires, and, like commitment, the level of compliance and more importantly cooperation are critical to the relationship tenure as well as profitability. seller / buyer s buyer / seller s supplier / buyer s target / seller s target / source s
Target / sources
The most severe penalty for poor quality expectations is (are) ____________. If the quality of the inputs to the productive system is inferior, the final product will be inferior. government sanctions consumer boycotts court cases consumer complaints the loss of sales
The loss of sales
________________ is still one of the hottest topics in the business world today. Management By Objectives (MBO) Theory X and Theory Y Total quality management (TQM) Theory Z Organizational Development (OD)
Total quality management (TQM)
The ____________ approach to manufacturing process control is to select production samples and compare the attributes of the sample to the specifications. progressive current MBO traditional most effective
Traditional
As defined by Maloni and Benton: the power of a supply chain member [is] the ability to control the decision variables in the supply strategy of another member in a given chain at a different level of the supply chain. It should be different from the influenced member s original level of control over their own supply strategy. True False
True
Each buying firm must specify in detail the agreed-upon quality targets. As an example, at a minimum, the following four issues should be addressed in any purchasing contract: PPM target agreement, Field failure and reliability requirements, Warranty agreement, Urgency to solve problems True False
True
In order to qualify for the (Malcolm Baldridge) Award, applicants must address the following categories: 1. Leadership 2. Information and analysis 3. Strategic quality planning 4. Human resource development and management 5. Management of process quality 6. Quality and operational results 7. Customer focus and satisfaction True False
True
Partnerships move beyond special influence transactions by involving efforts of both firms to coordinate functional activities. The three tiers listed below show how partnerships can be segmented based on the intensity and duration of the leadership. Tier I partnerships entail short-term, single-function/division coordination. Tier II partnerships extend coordination to integration and encompass multiple activities over a longer time span. Tier III partnerships dilate into significant levels of operational integration. True False
True
In order to successfully achieve a __________, buying and supplying organizations must continuously improve their processes. zero defect target TQM goal quality award perfection goal or objective productivity goal or objective
Zero defect target
The new or modified part agreement between the buying and the selling firm is usually complete after ________________________ has been _____________. a sample / produced prototype / created and tested an acceptable final test sample / generated and verified production / set up and is in operation the design / approved by engineering
an acceptable final test sample / generated and verified
The analysis phase (of the buying decision) requires the decision maker to investigate _____________ sources of supply. at least two potential at least five potential all potential the best the best three
at least two potentail
If you buy items for one-half the market price without obtaining appropriate quality, delivery, or quantity standards, your firm would _________________. have a competitive advantage suffer the consequences be at a strategic disadvantage be rendered noncompetitive be ahead of the competition
be rendered noncompetitive
In the short term, a firm can sell its products ____________; however, at some point, the firm will be required to _______________. at low prices / make money or close up shop at above average prices / get competitive at high prices / become competitive or lose sales below its total cost / make a profit or quit the business competitive prices / become profitable
below its total cost / make a profit or quit the business
The market approach to pricing is more erratic simply because the supplier, through the use of market research, collects information on its __________ and from their ___________ to determine where the price should be pegged. markets / suppliers customers / research expenses / sales representatives competitors / customers web site / sales representatives
competitors/ customers
SPC uses two control charts to ensure quality in manufacturing: the sample mean (X-bar) chart and the sample range (R) chart. The control chart limits are established for X-bar and R charts based upon tolerances set during the design stage of the product. In most cases, problems are ________________ before any ___________ parts are produced, thus reducing scrap and rework diagnosed and resolved / substandard identified / faulty solved / defective identified / new fixed / defective
diagnosed and resolved/substandard
The buying firm, no matter how powerful, should attempt to obtain a ___________ and good consensus. fair price market price discount price low price standard price
fair price
There are some instances where the supplier will employ short-term strategic pricing in order to _______________. gain a competitive advantage increase market share or increase sales gain a competitive advantage or close out obsolete items close out discontinued items gain market share or dump unwanted items
gain market share or dump unwanted items
Conflict is present in the supply chain when one supply chain member ________ goal attainment and performance of another. Conflict is an omnipresent factor in any supply chain relationship. hinders blocks facilitates enhances fosters
hinders
Conflict can be defined as tension between two or more social entities... which arises from _______________________. mutual distrust between all the parties incompatibility of actual or desired responses a difference of opinions or desires a difference in core values one party taking advantage of the other party
incompatibility of actual or desired responses
The effective buyer in a competitive environment will more than likely obtain purchased goods and services at a __________ given that quality, delivery, and proper quantities are appropriate. market price discount fair price low bargain
market price
Once a partner is selected, the establishment of the actual relationship provides the critical step in which the partners must create a complete sense of awareness about the ______________ of all involved parties. strengths and weaknesses goals and aspirations needs and participation goals and strategies goals and objectives
needs and participation
The major psychological influence in a buyer supplier relationship is __________. It is conceivable that a (n) _________ buyer could force a supplier to eliminate its overhead from the ultimate price. The danger for the buyer is that this so-called good buy may drive the supplier out of business and that this reduction in competition may result in massive price __________ in the long run. prestige / chain store / discounts feelings / strong / decreases credibility / influential / increases power / weak / decreases power / powerful / increases
power/powerful/increases
The customer perception of _______________ is also important when determining market prices. the company value quality and service competition value and quality
quality and service
The objective of a drastically ____________ base precludes an acceptance of supplier partnerships because a firm must accept dependence upon _____________ before they can internalize legitimate forms of supply chain management and supplier partnerships. improved supplier / sales representatives reduced supplier / fewer suppliers increased supplier / fewer sales representatives improved marketing / multiple suppliers improved operations / multiple suppliers
reduced supplier/fewer suppliers
The objective of the purchasing department is to buy the _______ materials from the ______ supplier at the ______ time and at the ______ price. best quality / best / appropriate / lowest best / best / appropriate / best right / right / right / right most / best / best / best right / best / appropriate / lowest
right/right/right/right
Also termed a __________, a supply chain partnership is a relationship formed between two independent entities in supply channels to achieve specific objectives and benefits, and it is these partnerships that form the essential building blocks of _______________ management. supply alliance / operations strategic source / supply and operations strategic alliance / supply chain preferred supplier / strategic alliance preferred partner / strategic
strategic alliance / supply chain
In the end, the buying firm must determine whether the purchase price fits its competitive cost structure. This is called ____________. If the _________ is too low to generate interest from suppliers, it may be necessary for the buyer to consider applying a value analysis approach to the product in question. discount pricing / discount price market pricing / market price competitive pricing / competitive price target pricing / target price cost analysis / discount price
target pricing / target price
While many firms have sought ___________ through acquisition to harness supplier expertise, some argue that _____________ can provide similar benefits without the necessity of ownership and arduous exit barriers. horizontal integration / mergers vertical integration / cooperation horizontal integration / cooperatives stakeholders / stakeholders vertical integration / partnerships
vertical integration / partnerships
The _________ suppliers usually get a small volume of business and do not have a close working relationship with the manufacturer. backup key preferred local national
Backup
Setting the ___________ criteria is usually based on either predetermined standards or basic statistics. return warranty acceptance specification specification
Acceptance
_____________ must be developed to determine the disposition of a lot of raw materials on component parts. If a batch of parts is inferior, it should be rejected and returned to the supplier. Specifications Warranties Guarantees Return policies Acceptance plans
Acceptance plans
______________ is a methodology used to determine whether to accept or reject a batch of non-strategic components or items. TQM MBO Quality Assurance Acceptance sampling Zero-defects
Acceptance sampling
Drivers of satisfaction within supply chain partnerships include relationship-oriented factors such as _________________. planning and mutuality interdependence operational information exchange all of the above A and C only
All of the above
The price of a product or service should be expected to cover cost of _____________, plus a reasonable profit. production promotion distribution all of the above A and B only
All of the above
Within the win-win partnership dyad, buyer and supplier share goals as well as inherent risks through joint planning and control, seeking to create a supply chain with increased information flow and enhanced loyalty. Like the overall goal of supply chain management, such coordination allows for ________________________. improved service technological innovation product design with decreased cost all of the above
All of the above
Supply chain partnerships bridge the barrier between buyer and seller, leading manufacturers to ________________. share more information with their suppliers ally with a reduced supplier base ally with an improved supplier base choose suppliers more wisely choose suppliers more carefully
Ally with a reduced supplier base