chapter 13

Select the true statements about the balanced scorecard method for decision making.

- Measurable outcomes on a balanced scorecard include financial, internal business processes, learning and growth, and customers. - In order to get the information they need to create a balanced scorecard, managers rely on output provided from executive support systems (ESS). - The balanced scorecard framework was developed by Robert Kaplan and David Norton and is used to structure an organization's strategic plan and goals using measurable outcomes of organizational performance.

Which are the two main financial reports of a business enterprise?

Balance sheets Income statement

While benchmarking performance metrics has become a fairly standard practice, what are many firms not doing?

Benchmarking

Which dimension reflects a fundamental strategic choice between responsive logistics and efficient logistics performance?

Competitive basis

Which of the following is not one of the elements of basic logistics service?

Coordination

The achievement of logistical integration requires the establishment of which of the following?

Cost-revenue

What are the three approaches of measuring customer relationships?

Customer satisfaction Absolute performance Perfect orders

The focus is on who is purchasing products or services. Measurable outcomes include customer satisfaction and retention, product/service delivery, and product/service performance.

Customers

In what way is quality measured?

Damage frequency

The firm's overall integrated logistical performance is a result of a perfect order of which aspect of measure?

Effectiveness

The fact that total supply chain cost is the aggregate of costs across all firms in the supply chain, is opposed to which of the following?

Individual organization

This investigates the culture of the organization. Measurable outcomes include employee training, retention, satisfaction, gender and ethnic ratios, and compensation.

Innovation and Learning

Total supply chain inventory is a measure, when adopted by all members of a supply chain, that provides the focus on which specific type of operation?

Integrated

These outcomes measure how efficiently a business is operating. It also measures if customer's needs and wants are being met.

Internal Operations

Measurement systems must enable_____ managers to link supply chain performance directly to financial results.

Logistics

How often should an organization perform a detailed review of the measurement system and ask a series of questions concerning each metric?

Periodically

Which are the two ways of viewing ROI?

Return on net worth Return on assets

Individual firm metrics related to fill rates at warehouses provide little assurance that products are available for consumer selection when the consumer is partaking in what action?

Shopping

Which are the critical tools for financial assessments used by logistics managers?

Strategic profit model Cost-revenue analysis

How is cost performance typically measured?

Total dollars spent

Which of the following are specific to integrated measures?

Total supply chain cost Supply chain response time Cash-to-cash cycle time Dwell time Supply chain inventory days of supply On-shelf in-stock percentage

Which of the following is not a deficiency in the traditional method of accounting as it relates to logistics costs?

Traditional accounting practice fails to specify and assign the cost of goods sold.

How is warehouse labor productivity measured?

Units received Units shipped Labor dollar Labor hour

Section 404 of SOX requires that a company file an internal control report at the same time it files its corporate_____ report

annual

What does dwell time manage, by reflecting on the overall supply chain performance?

assets

A pure contribution approach requires that all costs be identified as fixed or variable according to the cost_____

behavior

The cash-to-cash time is a measure of an organization's effective use of which asset?

cash

Free ____ _____ is the concept of reducing overall assets committed to supply chain performance.

cash spin

One propose a framework is built on three dimensions: the _____ basis, measurement focus, and measurement frequency.

competitive

Order cycle_____ is measured over a large number of order cycles and compares actual with planned performance.

consistency

If the objective in supply chain management is to reduce total ______ , it is reasonable to assume that one organization may actually experience increased cost as others in the supply chain experience reductions.

cost

The most direct reflection of logistics performance is the actual_____ incurred to accomplish specific operations.

cost

The most direct reflection of logistics performance is the actual______ incurred to accomplish specific operations.

cost

Who is impacted by the absolute approach that provides a better indication of a firm's logistical performance?

customers

The ratio of total sales_____ by total assets is asset turnover, which measures the efficiency of management in utilizing assets.

divided

Contribution margin and full-costing methodologies have been supplemented by the use of activity-based costing as the most promising way to identify and control logistics____

expenses

A perfect order measures whether an order proceeds flawlessly through every step-order entry, credit clearance, inventory availability, accurate picking, on-time delivery, correct invoicing and payment without deductions-of the order management process without_____

fault

One of the primary benefits of the SPM is that it shows very clearly that a key ______ objective of the firm is to achieve and increase ROA.

financial

There are a number of financial outcomes that are measured. These outcomes include revenue, expenses, return on investment (ROI), net income, cash flow, and return on equity.

financial

How many different classifications of functional measures exist?

five

Which are the costs that do not directly change with volume of activity?

fixed

What type of perspective does a system for logistics performance first require?

functional

Typical labor productivity measures in transportation include units shipped or delivered per employee, labor dollar, and labor_____

hour

Which asset is important to many firms because it is typically one of the largest areas of asset investment?

inventpry

While costing and profitability assessment are important aspects of financial controllership, the most critical measure of strategic success is return on_____

investment

Without integrated measures, managers in different functions and in different firms may have different perspectives concerning actual_____ performance

logistical

Benchmarking is a critical aspect of performance measurement that makes _____ aware of state-of-the-art business practice.

management

Customer success, the ultimate in customer relationships, has no specific metrics but remains the goal for firms committed to supply chain_____

management

Advancements in information technology have greatly enhanced the ability of organizations to track and ______ logistics performance metrics.

monitor

Performance metric reviews of this type can help the organization maintain a performance measurement system that is relevant to accomplishing the appropriate monitoring, control, and______ performance

motivational

Which of the following is the net profit margin formula?

net profit divided by net sales

The net profit approach to financial assessment of segments requires that all operating costs be charged or allocated to an _____ segment.

operating

Operational performance is typically measured by average _____ cycle time.

order

Most basic service and quality measures, and even perfect order measures, are aggregated over many_____ and over a period of time.

orders

The cash spin concept is to reduce overall assets committed to supply chain_____

performance

The order fill rate, also known as orders shipped complete, is the most stringent measure of a firm's_____ relative to product availability.

performance

Ultimately, a key objective of all participants in a supply chain is to have _______available when and where end customers are ready to buy.

products

Logistics functional measures include five categories: cost, customer service,_____ , productivity, and asset management.

quality

Performance relative to service reliability is generally reflected in an organization's measurement of logistics____

quality

Inventory dwell time is the______of the days inventory sits idle in the supply chain to the days it is being productively used or positioned.

ratio

How soon does Information provided by applications, give managers the ability to take the needed corrective actions?

real-time

In addition to basic functional performance, improved methods for measurement of customer ______ are receiving increased attention in many organizations.

relationships

In addition to basic functional performance, improved methods for measurement of customer_____ are receiving increased attention in many organizations.

relationships

Cash-to-cash cycle time is the time required to convert a dollar spent on inventory into a dollar collected from sales______

revenue

Net profit margin actually measures the proportion of each _____ dollar that is kept by the firm as net profit.

sales

Supply chain inventory days of supply is focused on total inventory at all locations and is typically defined as the total finished goods inventory at all plants, warehouses, wholesalers, and retailers expressed as the calander days of______ available based on recent sales_____

sales / activity

In many firms, what happens to most costs in these firms?

shared

The income statement reflects the revenues and costs associated with specific operations over a_____period of time.

specified

The organizational approach to performance management that integrates strategic perspectives is known as

the balanced scorecard

A deficiency with traditional accounting is that many products are purchased on a delivered price basis, which includes ______cost, masking the ability to break it out separately.

transportation

Every firm covered by the Sarbanes-Oxley Act must have internal measurement capabilities that comply with SEC requirements.

true

The basic idea of the balanced scorecard approach to performance management is that managers are encouraged to go beyond meeting the traditional financial targets and recognize and simultaneously monitor the progress of other important goals such as customer and employee satisfaction.

true