Supply Chain Management Midterm - T/F

A channel of distribution is controlled by the marketing department, which selects the physical structures and intermediaries through which the product(s) flow.

False

According to the Factor Endowment Theory, a country that lacks one or more of the four major production factors—land, labor, capital, and entrepreneurship—will not be able to successfully participate in global trade.

False

Advancements in technology and the growth of transportation services have prevented many smaller, less developed countries from participating in global supply chains.

False

As a firm spends more on transportation service, cost of lost sales increases.

False

Beginning in the late 1970s and into the 1980s, the US transportation industry was deregulated. The net result was a less competitive environment.

False

Best-in-class companies have developed a more flexible production schedule that allows for making inventory adjustments in 48 to 72 hours.

False

Globalization has had little effect on consumers

False

In a logistics system, warehousing should be optimized at the expense of related logistics activities, such as transportation and procurement.

False

In terms of volume of exports, the United States is the world's leader in global trade flow.

False

Logistics facilities and their locations are relatively variable and easily modified in the short term.

False

Outsourcing is a fairly new concept.

False

Staples frequently sells its office supplies direct to other businesses (B2B) through its online ordering and delivery services, and it typically sells office supplies direct to consumers (B2C) through its stores. This is what's known as "multi-channel" capabilities.

False

Strategies such as compression and lean supply chains take the same amount of work to achieve in the global environment as in the domestic environment.

False

Supply and demand has become less volatile as managers have become more adept at controlling the elements.

False

The Customs Trade Partnership Against Terrorism (C-TPAT) was put in place to assess the vulnerability of U.S. ports and to deny entry to ships from countries that do not meet U.S. security standards

False

The Regional Trade Agreements (RTAs), the establishment of the General Agreement on Tariffs and Trade (GATT), and its 1995 successor, the World Trade Organization (WTO), have together led to multilateral trade promotion and lowered barriers to international business transactions.

False

The Trade Act of 2002 requires exporters to electronically submit shipping documents to U.S. Customs 24 hours before delivery to a port or 24 hours before vessel departure.

False

The central theme behind the theory of comparative advantage is that if one country has an advantage (lower cost) in the production of two products, they should focus on the production of both so that they gain the greatest advantage in trade when compared to other countries that may have a lesser advantage.

False

The first step in the supply chain network design process is to perform a supply chain audit.

False

The grid technique determines the highest cost facility location in an area.

False

The grid technique will evaluate all transportation rates equally.

False

The quality of life locational determinant is most important to companies that must attract and retain an unskilled, static work force

False

The trend toward "pull" systems where the product is "pulled" in response to demand (as opposed to being "pushed" in advance of demand) increases inventory levels, which can increase total logistics costs even though production costs may decrease.

False

The utility created through the basic marketing activities is known as place utility.

False

To hold down distribution cost, the lowest cost carrier should always be used.

False

U.S. ports play a major role in global supply chains since over 50 percent of global trade passes through them.

False

An organization practicing sustainable supply chain management expects its suppliers to conform to the same sustainability standards it holds.

True

An organization's omni-channel strategy must align with its "go to market" strategy, which dictates how consumers will be able to gain access to the firm's products or services.

True

As the dollar value of a product decreases, its inventory value decreases.

True

From a customer service perspective, one of the four important characteristics for global market and strategy is that technology companies counteract short product lifecycle with continual upgrades and new products.

True

From a customer service perspective, one of the four important characteristics for global markets and strategy is that companies need to attempt to standardize to reduce complexity, but they have to recognize that global markets need some customization.

True

Given the importance of global trade to the United States, a delicate balance exists between security and the efficient flow of global commerce.

True

In a commercial zone, the same transportation rate is applied from an origin to any point in the zone.

True

It is predicted that social networks such as Facebook and Twitter will influence supply chains because of their impact on customer demand and the speed of information transfer.

True

Labor-intensive industries place significant emphasis on the availability and cost of labor.

True

Many countries hope to improve trade by engaging in Regional Trade Agreements (RTAs), the best-known example of an RTA is the European Union (EU).

True

One could argue that the external role of technology in recent years has moved ahead of globalization as an agent or driver of change.

True

Operating globally has become easier to accomplish for even individuals and small companies, because of the advances in information/communications technology.

True

Reduced order cycle time has become an important part of supply chain management since it can lead to lower inventory levels for customers, improved cash flow, lower current assets, and accounts receivable.

True

Sustainability reporting is a growing practice, either mandatory or voluntarily, due to the demand for transparency in the supply chains.

True

The efficiency and effectiveness of a logistics/supply chain operation are constrained by the location of plants and warehouses in its overall network.

True

The first decade of the twenty-first century was a period of rapid change for organizations, especially businesses.

True

The inverse relationship that exists between the cost of lost sales and inventory costs is the inventory effect.

True

The network of activities, facilities, and personnel required to organize, schedule, and deploy the resources to stage the Olympics is an example of event logistics.

True

The time that elapses from when a customer places an order until the customer receives the order is referred to as order lead time.

True

The underlying logic of Adam Smith's theory was used to advance the rationalization that he called specialization of labor.

True

Water desalinization and fracking for oil and gas production are examples of technologies that can unleash resources and contribute to economic advantage.

True