Supply Chain Management Final

The formula for the forecast error, is calculated by using the equation:

Actual demand for period t minus the forecasted demand for period t

The acronym ERP is short for:

Enterprise Resource Planning

Which of the following is NOT one of the Seven Wastes?

Environmental waste

"Due to the access to global markets and corporate networks, the role of location is less important as a source of competitive advantage."

False

"In general, performance measurement systems are very similar from company to company."

False

"In modern well-managed supply chains, performance measurement systems become less complicated due to the number of relationships and level of trust."

False

A _____ strategy contends that a service can serve a narrow market better than a broad market.

Focus

The Five-Ss refer to:

Industrial housekeeping

All of the following are reasons for the increasing use of ethical and sustainable sourcing practices EXCEPT: a. Legislation requiring corporate ethical and sustainable sourcing b. Increasing environmental awareness c. Consumers' desires for better corporate responsibility d. Global population growth

Legislation requiring corporate ethical and sustainable sourcing

In a bill of materials, items at which level are independent demand items?

Level 0

Information technology advances have made cyber attacks

More Common

Recently-hired hourly employees can choose whether or not to join a union in a:

Right-to-work state

According to the textbook, a supply chain's end customers are the only true source of income for all supply chain organizations

True

According to the textbook, supply chains include raw material suppliers, intermediate component manufacturers, end-product manufacturers, wholesale distributors, retailers and end-product consumers.

True

An effective reverse logistics process can create goodwill and enhance the customer s perception of product quality.

True

An office setting could be an example of a departmental layout that maximizes closeness desirability.

True

Customer relationship management (CRM) refers to building and maintaining profitable long-term customer relationships

True

Customer satisfaction with the service depends not only on the ability of the firm to develop what customers want but also the customers perception of the quality of the service received.

True

Departmental layouts that reduce distances traveled are designed to reduce travel times of customers and servers when moving from one area to another.

True

ERP systems were designed to coordinate the information requirements for purchasing, planning, scheduling and distribution of an organization operating in a complex multi-unit global environment.

True

The EU (European Union) is considered a regional trade agreement.

True

The bullwhip effect causes an amplification of the variation in the demand pattern along the supply chain

True

The development of relationships with suppliers brings about changes that must be managed for a company to stay focused on their core businesses.

True

The goal of a good forecasting technique is to minimize the deviation between actual demand and the forecast.

True

A company using a weighted-criteria evaluation system has established these 3 categories and the appropriate weight in parentheses: Quality(0.30), Delivery(0.40), Cost(0.30).The scores for each category are shown below. Which of the following companies has the highest total score

Company C: Quality(70), Delivery(95), Cost(60

"Once a location is chosen and the facility is occupied, moving to another location is:"

Costly

Benefits derived from implementing e-procurement systems include all of the following EXCEPT: a. Allows buyers to submit bids and suppliers to respond to those bids in real time b. Tracking bids and transactions is easier and faster c. Creates numerous additional job opportunities in the purchasing department d. Increases the accuracy in communication between buyers and suppliers

Creates numerous additional job opportunities in the purchasing department

Online retailer EAbooks has decided to send customers who previously bought John Grisham books an email with suggestions for books with similar themes at a special discounted rate. This is known as:

Cross-selling

Which of the following is a factor in choosing a location?

Currency stability

Companies work very hard to reduce the number of customers who do not return. This often referred to as:

Customer Churn

If lot sizes are reduced by 50 percent, what impact will this have on average inventory levels?

Decrease by 50%

Independent demand is the:

Demand for a firm's end products.

"Since the deregulation of transportation in the U.S., negotiating transportation prices has become less common among business shippers and logistics providers."

False

A low ROA suggests that management is capable of generating large profits with relativiely small investments.

False

A problem with cloud systems is they provide less visibility for global supply chains.

False

As described in the text, a "fair trade product" refers to selling and purchasing products without a cash transaction.

False

Benchmarking is the practice of watching the mistakes other businesses do and trying to avoid the same mistakes.

False

Generally speaking, motor carriers are less expensive than rail carriers to haul goods.

False

ISO 9000 is a family of international standards for environmental management.

False

If a company is effectively focusing on its core competencies, its level of outsourcing is likely to decrease.

False

It is not important for firms to addresses the impact of ethical and sustainable sourcing on other facets of the organization and its trading partners.

False

It is possible to expect 100 percent forecast accuracy most of the time.

False

Lean production is an operating philosophy or mindset that essentially attempts to minimize the impact of system variability and flaws in forecasting through the use of high safety stock inventories.

False

Lean production, JIT, and Six Sigma quality mean the same thing.

False

MRP is the production planning system intended to develop long-range plans (more than a year away) concerning product families manufactured by the organization.

False

Many large firms are moving to in-house vertically integrated structures where they have more control over each business unit.

False

Master Production Schedule is an engineering document that shows an inclusive listing of all component parts and subassemblies making up the end item.

False

Quantitative forecasting methods are based on opinions and intuition, whereas qualitative forecasting methods use mathematical models and relevant historical data to generate forecasts.

False

Radio Frequency Identification (RFID) is beginning to replace bar code inventory tracking, however a weakness is that it requires a direct line of sight for RFID tags to be read.

False

The chase production strategy works well when highly skilled workers are needed, especially in a tight labor market.

False

The creation of the Balanced Scorecard added the perspective of logistics to the previously singular financial perspective.

False

The development of functional silos within an organization is considered a key component in achieving successful supply chain process integration.

False

The four categories of inventory are raw materials, intermediate assemblies, work-in-progress and finished goods.

False

The goal of an efficient queuing system is that customers never have to wait in line.

False

The optimal capacity utilization for an organization would be 100%.

False

Third party logistics (3PL) services cannot assist with customs clearances due to regulations.

False

When businesses cluster in a close proximity to each other the eventual result is decreased competition and innovation.

False

With FOB Origin pricing, a supplier is the legal owner of a product until the product reaches its destination.

False

A company that wants to import components without any tariffs and then assemble them locally to produce a finished product that will then be exported. The company should consider a location that is a(n)

Foreign trade zone

If an available-to-promise (ATP) for any period is negative, the deficit must be subtracted from the:

Most recent positive ATP

______ are the most flexible mode of transportation and accounts for over half of the freight tonnage in the USA.

Motor Carriers

Which of the following statements is TRUE? a. Supply chain management was invented by the auto manufacturing industry b. Service response logistics is the digital distribution of services c. Purchasing is seen as the final and most difficult step in the supply chain

Strategic partnerships are seen as one of the foundations of supply chain managemen

"According to the text, the 'First Rule of Service' is:"

Satisfaction = perception - expectation

What component of a time series has variations in demand which show peaks and valleys that repeat over a consistent interval such as hours, days, weeks, months, or years?

Seasonal Variation

Foreign-trade zones are:

Secure sites within the U.S. where goods and materials can be assembled and exported without being levied domestic duties or excise taxes.

As capacity utilization increases

Service becomes more congested

Which of the following is a difference between goods and services?

Services cannot be inventoried

Failing to see the big picture and acting only in regard to a single department can be called

Silo Mentality

Which one of the following is NOT a type of qualitative forecasting? a. Simple moving average b. Sales force composite c. Consumer survey d. Jury of executive opinion

Simple moving average

What type of firm would be most interested in using a third-party logistics service?

Small firm with no logistics expertise

The total cost of ownership for Supplier A is $2,670,000. The total cost of ownership for Supplier B is $1,750,000. The total cost of ownership for Supplier C is $2,990,000. Using Total Cost Analysis, it will be more cost-effective to use

Supplier B

Which of the following can be defined as "The ability to meet the needs of current supply chain members without hindering the ability to meet the needs of future generations".

Sustainability

Convincing your supplier to cut back on packaging, fuel, or electricity is an example of:

Sustainable sourcing

Which of the following acronyms is NOT paired with its correct "translation?" a. JIT − Just-in-Time b. ERP − Enterprise Resource Planning c. TQM − Total Quality Management d. TLS − Third-party Logistics Services

TLS − Third-party Logistics Services

Spirax Corporation segments customers by demographic information and then markets specifically to those customers who are located in the Los Angeles area. This is an example of:

Target Marketing

Which strategy allows finished goods inventories to accrue and relies on backlogs to handle the demand?

The Level Production Strategy

High tariffs encourage multinational corporations to set up factories to produce locally.

True

Rewarding suppliers for maintaining high levels of performance is an important step used in maintaining a successful strategic alliance program.

True

Safeguarding customer information is a legal responsibility for any company using CRM software

True

Service firms differ from manufacturing firms in the labor content in the end product.

True

Smoother processes, faster cycle times, reduced new product development, and improved time-to-market are possible benefits from the increased visibility that is offered by SRM software.

True

The inventory turnover ratio shows how efficiently a firm is using its inventory to generate revenue.

True

The primary design objective with lean layouts is to reduce wasted movements of workers, customers, and/or work-in-process.

True

The procedures for public procurement differ from the private sector.

True

The purchase order is NOT a legally binding contract until it is accepted by the supplier

True

Two methods for managing supply chain risk include utilizing a supply chain IT system and identifying backup suppliers.

True

Without supply chain trading partners collaborating and exchanging information, the supply chain will always be suboptimal and contain excess inventories, resulting in less-than-maximum supply chain profits.

True

Which of the following is a quality of life factor?

Community Safety

Facility location has a long-term impact on the firm s supply chain.

True

The primary purpose of the basic economic order quantity (EOQ) model is to: a. Calculate the reorder point, so that replenishments take place at the proper time b. Minimize the sum of purchase cost and holding cost c. Maximize the customer service level d. Calculate the optimum safety stock level e. None of the above

. None of the above

The customer arrivals at a bank is 3 customers per hour. The mean inter-arrival time is

20 minutes

Which of the following are intermodal transportation alternatives?

Roll-on-roll-off transports

Which of the following is a vital element in developing a strong supply chain through the practice of process integration? All are correct Partner collaborations on methods to improve processes within the supply chain "Partnerships, which value information sharing and partner collaborations" Developing and implementing a strong information technology system that allows for fast and easy information exchanges between supply chain partners

All are correct

Which of the following is an example of a person that would be considered to provide a Pure Service? All are correct Musical Entertainer Attorney/Lawyer Management Consultant

All are correct

Which of the following would be considered a way to measure Supply Chain Environmental Performance? Percentage of partners that are ISO 14000 certified All are correct Measuring the Supply Chain Carbon Footprint Percentage of partners that have created a director of environmental sustainability position in their company

All are correct

World-class performance measures can be used in different functional areas of a firm to satisfy objectives, enhance the value of the firm's products and services, and increase customer satisfaction by providing measures in which of the following capability area(s)? Cost All are correct Customer Service Quality

All are correct

SRM software should be capable of: a. Automating transactional processes b. Making information flow between partners more visible c. Integration of the supply chain making it possible to monitor multiple departments and processes both internally and externally d. All of these

All of these

The main benefit(s) from benchmarking sourcing practices is/are:

Allows firms to leapfrog the experience-gaining stage by trying things that have worked well for other companies.

Organizations that compete on speed of delivery, like FedEx and UPS, utilize which location determination approach?"

Hub and spoke

"According to the textbook, the initial step in creating an effective performance measurement system is to:"

Identify the firm's strategic objectives

Inaccurate forecasts can result in negative outcomes like:

Imbalances in supply and demand

The benefits of implementing an effective supplier certification program include all of the following EXCEPT: a. Improving responsiveness b. Building long-term beneficial relationships c. Recognizing excellence d. Increasing supplier base

Increasing supplier base

According to the text, key ingredients for developing successful supply partnerships include all of the following EXCEPT Mutual benefits and needs b. Individualized objectives c. Performance metrics d. Personal relationships

Individualized objectives

"____________________ tends to reduce safety stocks among supply chain members, generating even less variability in supply chain orders?"

Information visibility

"Sally, your top sales executive, quits for a job with a competitor. Fortunately, all of her customer contact information, customer notes, and customer sales data have been captured in a:"

Knowledge Management System

Which of the following is an obstacle to successful process integration?

Lack of trust

A firm that utilizes a constant amount of capacity regardless of demand variation is using a

Level demand strategy

"______ creates the efficient flow of goods between supply chain partners, allowing profits and competitive advantage to be

Logistics

Facility location has a ________ impact on the supply chain.

Long-term

Petty cash is being phased out in favor of:

P-card

Some businesses refer to sustainability in terms of supporting the three P's. This stands for:

People, planet, profit

"When utilizing performance standards, the difference between the standard and the actual performance is called the:"

Performance Variance

Companies typically like to design scorecards that fit their business and industry. As a result there are now software applications that can help companies design scorecards that fit their individual needs. These web-based balanced scorecard applications are often referred to as:

Performance dashboards

Paulson Company allows customer to opt-out of receiving email advertising. This is referred to as

Permission Marketing

Costs associated with investigating alternative suppliers and investigating alternative delivery options can be classified as:

Pre-transaction costs

There is a trend in the USA to locate manufacturing facilities in the nonunionized south.

Proximity to market

Reverse logistics can have a positive impact on the environment through activities such as:

Recycling

Which of the following is NOT one of the perspectives of the Balanced Scorecard?

Reliability

Substance disposal and recycling are part of which supply chain business process:

Returns Management

Supply Chain Management Definition

The design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally

Which of the following is a reason that single sourcing is considered risky/bad?

There could be supplier interruptions due to political instability

Which of the following is NOT a reason for supplier recognition programs? a. To select the best suppliers b. To encourage suppliers to be more innovative c. To help suppliers' reputation in the marketplace d. To reward suppliers for excellent performance

To select the best suppliers

"Although low labor costs in underdeveloped countries appear attractive, other factors such as productivity and employee skill may be more important."

True

"In Europe, rail transportation tends to be more prevalent and reliable than it is in the USA due to the fact that European track, facilities, and equipment are newer and better maintained."

True

"Poor logistics management can bring a supply chain to its knees, regardless of the quality of the product."

True

"Pure services offer few, if any, tangible products to customers."

True

"Supply chain strategies should consider the trade-offs between cost, quality, sustainability, and service."

True

"The development of cleaner, more fuel-efficient and affordable energy technologies will have a direct impact on the cost of production of goods and delivery of services."

True

"The most basic security system should include procedures and policies for securing offices, manufacturing plants, warehouses, and other physical facilities."

True

"When demand exceeds a supplier s finished goods available, a supplier may allocate a portion of what customers ordered. This rationing often results in shortage gaming by the customers."

True

"While a company s internet presence may be desirable, touching products and talking face-to-face with company representatives remains an integral part of the customer-supplier interface."

True

"While profit, revenue, and cost-related performance metrics are important, they may give little indication of the underlying causes of financial performance."

True

A service facility has calculated that they can handle the demand rate of 10 customers per hour 70% of the time. This means approximately 30 percent of the time demand will be greater than 10 customers per hour and queues will develop.

True

CRM software can record and analyze the customer s clickstream so website images and ads can be tailored to the needs and desires of that particular customer.

True

Cost savings is an advantage of using an e-procurement system.

True

Customer lifetime value is calculated as the net present value of an annuity.

True

Cycle counting means to physically count inventory on a periodic basis.

True

Decentralized purchasing is the practice where individual, local purchasing departments throughout a single corporation make their own, individual purchasing decisions to fulfill their individual local needs.

True

Demands by customers for companies to become more ethically and environmentally focused have placed added pressures on firms to improve their performance in supply chain management.

True

Deming, Crosby, and Juran are all prominent quality professionals whose ideas were vital to the development of Six Sigma

True

Establishing simple output standards may actually encourage counterproductive employee policies and actions.

True

Which of the following is TRUE? VMI stands for Vertically Managed Inventory b. 3PL stands for Three Point Logistics c. 3PL stands for Third Party Leverage d. VMI stands for Vendor Managed Inventory

VMI stands for Vendor Managed Inventory

Which of the following are among the MOST important elements of the lean production philosophy? a. Large inventories and quality inspections b. Quality inspections and a standardized product line c. Fully automated assembly lines and a large supplier base d. Waste reduction and continuous improvement

Waste reduction and continuous improvement

"Which of the following modes of transportation can be characterized as being the most inexpensive and slow, yet efficient for heavy goods over a long distance?"

Water Carriers

A negotiation where both sides work together to maximize the joint outcome or to create a joint optimal result is referred to as

Win-win negotiations

Which of the following is a disadvantage of carrying too much inventory?

it creates an unnecessary waste of scarce resources.