Supply Chain Management Quizzes
Which of the following is not a technology disrupter? Autonomous vehicle. "Want it now" Alternative fuels. "Uberization"
"Want it now"
Suppose demand is 25 units a month and average inventory is 30 units and unit cost is $10. What is the annual inventory turnover? Multiple Choice 100 10 .83333 83.333
10 Inventory Turnover=Sales/Average Inventory=25×12×$1030×$10=10 turns
If the average daily demand is 25 units, average replenishment lead time is 5 days, standard deviation of lead time is 1, and the calculated safety stock is 20 units, the reorder point will be ______. Multiple Choice 32 units 145 units 125 units 20 units
145 Units
Cooper Company has average demand of 50 units per day. Lead time from the supplier averages 20 days. The combined standard deviation of demand during lead time is 20 units. The item costs $75 and inventory carrying cost is 24%. Answers to the next two questions are based on this information. 1 standard deviation covers 84.13% 1.04 standard deviations covers 85% 1.28 standard deviations covers 90% 1.65 standard deviations covers 95% 1.96 standard deviations covers 97.5% 2 standard deviations covers 97.72% 2.33 standard deviations covers 99% 3 standard deviations covers 99.86% 6 standard deviations covers 99.99966% Suppose you tell management at Cooper Company (in the above two questions) it should raise safety stock to the six sigma level. If Cooper decides to do this, it will incur an additional inventory carrying cost of approximately how much? Multiple Choice $2,160 $234 cannot be determined $1,566
1566 The six sigma level requires six standard deviations of safety stock (20x6=120 units). The carrying cost of this safety stock is Carrying Cost=Stock×Value×Inventory Carrying Cost%=120×$75×0.24=$2,160.Carrying Cost=Stock×Value×Inventory Carrying Cost%=120×$75×0.24=$2,160. Compared to the 95% level of safety stock (33 units), this is a difference of $1,566.00.
The 80/20 rule, often called the Pareto principle means: ______. 80% of the time you should focus on 20% of costs 20% of the time you should focus on 80% of costs 20% of the SKU base will drive 80% of the demand the Pareto principle doesn't exist
20% of the SKU base will drive 80% of the demand
Which of the following types of service providers is most likely to provide a client firm with the most strategic expertise? Multiple Choice Carrier Freight forwarder 3PL 4PL or Logistics integrator
4PL or Logistics integrator
Jingle Corporation received an order from a customer for 100 units of bells, 200 units of whistles, and 200 units of dingers. The customer received from Jingle Corporation 90 units of bells, 190 units of whistles, and 200 units of dingers. Jingle's item fill rate was: Multiple Choice 90% 95% 33.33% 96%
96% Item Fill fate = (number of items delivered to customers/number of items ordered by customers) = (90+190+20)/(100+200+200)
In this manufacturing approach, typically many different end items are made by combining standard components in inventory into many different products. MTS (Make to Stock) ATO (Assemble to Order) ETO (Engineer to Order) JIT (Just in Time)
ATO (Assemble to Order)
Which of the following modules is/are not included in Enterprise Operations? Accounts receivable and payable. Inventory deployment. Manufacturing. Customer relationship management.
Accounts receivable and payable
Firms that work with key supply chain partners to improve the operation of the integrated supply chain do which of the following? Exclude potential suppliers. Increase profits. Achieve competitive advantage. Lose sight of quality over quantity.
Achieve competitive advantage.
Which of the following modes of transportation has low fixed and high variable costs? Multiple Choice Rail. Motor. Air. Water. Pipeline.
Air
Logistics is ______. the process that links supply chain participants into integrated operations the catalyst of activity between different supply chain functional areas such as procurement and warehousing a critical component to supply chain success concerned with getting the right product to the right place at the right time, at minimum cost All of the above
All of the above
Facility network design is concerned with which of the following? How many buildings. The location of the buildings. The ownership structure of the buildings. All of the answers
All of the answers
Development and maintenance costs include which of the following? Hardware and software Communications All of the answers. Human resources
All of these answers
Economic profit is influenced by ______. revenue expenses asset utilization All of these answers.
All of these answers
Suppose the firm in the above Strategic Profit Model undertakes a supply chain improvement project. It improves its service level to customers by opening more warehouses which means it will be able to delivery more quickly to customers. The result is a 10% increase in sales. Assume cost of goods sold increases by 6%.. The new warehouse requires additional new asset investment of $40,000. Fixed expenses increase by $1,000 because of the expense of operating the warehouses. Assume other variables do not change. Answer the following three questions based on this information.
Asset turnover=Sales/Current assets+Fixed assets=250,000×1.1/20,000+(105,000+40,000)=1.67 turns
Which manufacturing process can produce many different product varieties but has a long customer experience time? Line flow. Repetitive flow. Continuous flow. Batch operation.
Batch operation.
Suppose the firm in the above Strategic Profit Model undertakes a supply chain improvement project. It improves its service level to customers by opening more warehouses which means it will be able to delivery more quickly to customers. The result is a 10% increase in sales. Assume cost of goods sold increases by 6%.. The new warehouse requires additional new asset investment of $40,000. Fixed expenses increase by $1,000 because of the expense of operating the warehouses. Assume other variables do not change. Answer the following three questions based on this information.
COGS=150,000×1.06=159,000COGS=150,000×1.06=159,000 Gross margin=Sales−COGS=275,000−159,000=116,000.Gross margin=Sales-COGS=275,000-159,000=116,000. Total expenses=Variable expenses+Fixed expenses=25,000+(35,000+1,000)=61,000.Total expenses=Variable expenses+Fixed expenses=25,000+(35,000+1,000)=61,000. Net profit margin=Net profit/Sales=Gross margin−Total expenses/Sales=116,000−61,000/275,000=0.20
An integrated supply chain requires ______. sharing secret information working with competitors collaboration with partners questionable legal relationships
Collaboration with Partners
Which of the following is not a stage in the S&OP maturity model? Reacting. Anticipating. Competing. Orchestrating.
Competing.
Promotions such as "buy one get one free" are somewhat risky in terms of forecasting. Why? Increases likelihood of competition. Could decrease future sales. Decreases perceived value of regular-price items. Gives the impression of a struggling company.
Could decrease future sales.
Market based Assembly To Order (ATO) is a form of: Manufacturing justified warehousing Procurement justified warehousing Customer justified warehousing None of the above.
Customer justified warehousing
Which customer accommodation approach requires a comprehensive, future-oriented supply chain perspective on the part of executives? Customer success. Customer satisfaction. Customer service. All of these answers.
Customer success.
A performance cycle is related to which of the following inventory elements? Multiple Choice Safety stock. Cycle stock. Transit stock. Obsolete stock.
Cycle stock.
All of the following are benefits of blockchain EXCEPT Increased innovation Decreased scalability Enhanced transparency Better security
Decreased scalability
John Jones told his friend that his VCR is over 20 years old while most VCRs only last about 10 years. He is focusing on which aspect of quality? Features. Reliability. Performance. Durability.
Durability.
Declining transport rates as the quantity shipped increases represents: Multiple Choice The Tapering Principle Economy of Distance Economy of Energy Economy of Scale
Economy of Scale
Which of the following is not a distribution channel member? Raw material providers. Manufacturers. Retailers. End consumers.
End consumers.
The middle of supply chain information systems (SCIS) framework is which of the following? Enterprise planning and monitoring. Financial operations and reporting. Enterprise resource planning. Enterprise integration and administration.
Enterprise planning and monitoring
Contracting as a form of supply chain collaborative relationship generally involves greater information sharing and dependency than administered relationships.
False
The relationship between uncertainty and inventory is called the square root rule.
False
When searching for a supply chain management professional, hiring executives should expect that candidates meet all the desired criteria
False
Which of the following is not a demand planning requirement? Provide reporting analysis and other metrics. Allow exception alerts and resolution. Handle time fences. Track promotion activity.
Handle time fences.
What is a characteristic of supply base reduction (volume consolidation)? Has potential benefits for suppliers as well as for buyers. Involves early supplier involvement in product design. Places the buyer at a negotiating disadvantage. Has little potential for savings for buyers.
Has potential benefits for suppliers as well as for buyers.
Which of the following problems is not appropriate for a transportation analysis tool? Which routes should be assigned to which vehicle types? How should deliveries be grouped together to form routes? What delivery sequence should be used to accommodate customer time restrictions? How many distribution centers should there be to best serve customers?
How many distribution centers should there be to best serve customers?
Which of the following modules is included in enterprise integration and administration? Supply chain compliance. Customer accommodation. Human resources. Logistics.
Human resources
In procurement, Total Cost of Ownership includes all of the following except: field failures of purchased items consideration of the impact of supplier quantity discounts cost of order placement In fact, total cost of ownership includes all of the above.
In fact, total cost of ownership includes all of the above.
The primary benefits of low product complexity include all of the following except: Increased revenue Improved product quality and reliability Improved product development Decreased sales support cost
Increased revenue
Which of the following supply chain information systems modules provide the interface between capacity and transaction volume? Inventory control. Manufacturing resource planning. Inventory management. Order entry.
Inventory Management
Which of the following supply chain information system modules has a major influence on supply chain system capacity? Order entry. Inventory planning. Transportation. Warehousing.
Inventory Planning
Which of the following is not true about CPFR? It can make products more consistent. It is time consuming. It aids in forecasting accuracy. It is good for low-volume items.
It is good for low-volume items.
When calculating a Reorder Point (ROP), which of the following factors WOULD NOT affect the calculation? Multiple Choice Item's EOQ Delivery lead time. Demand during the delivery lead time. Standard deviation of demand during delivery lead time.
Item's EOQ
Which of the following is NOT one of the supply chain processes? Demand planning responsiveness. Order fulfillment/service delivery. Logistics.
Logistics
Which of the following do NOT illustrate the economy of scale advantages of inventory? Multiple Choice Maintaining supply sources. Manufacturing advantages. Transportation advantages. Purchasing advantages.
Maintaining supply sources.
Financial cost and asset measurement are included in which level of Supply Chain Information System Functionality? Decision analysis Management control Strategic planning Transaction system
Management control
Jones Company decided it would only deliver to each geographic market it serves once each week. This strategy is called: Multiple Choice Market area consolidation Scheduled delivery consolidation Pooled Delivery Phantom freight
Market area consolidation
Which type of flexibility uses modular or adjustable product building blocks? Robust operation. Fast lean launch. Volume response. Mass customization.
Mass customization.
Which of the following is not one of the objectives of supply chain integration? Transportation consolidation. Reduced duplication and redundancy. Quality and life cycle support. Minimum purchase price.
Minimum purchase price
In the above "Strategic Profit Model" what is the hypothetical firm's net profit margin?
Net Profit Margin = Net profit / sales = (Gross margin - Total Expenses)/(Sales) = 100,000-60,000/250,000 = 0.16
Which of the following types of inventory are typically outside the control of supply chain operation? Transit inventory. Obsolete inventory. Cycle inventory. Safety stock inventory.
Obsolete inventory.
The greatest element of the inventory carrying cost percentage? Opportunity cost. Inventory risk. Storage. Obsolescence.
Opportunity cost.
A transaction system is characterized by all of the following except: Performance measurement and reporting A large volume of transactions Formalized rules, procedures, and standardized communications An operational, day-to-day focus
Performance measurement and reporting
The human resources module of the ERP systems tracks Personnel profiles and their activity levels The supply chain's ability to measure, monitor and report cost The functions for invoice collection The timing and location of supply chain value-added processes
Personnel profiles and their activity levels
A large, multinational company may have how many different logistics performance cycles? Every firm ultimately only has 1 logistics performance cycle. Less than 10. Greater than 10. Potentially thousands.
Potentially thousands.
Which of the following is not one of the "service outputs" of a supply chain? Lot size. Waiting time. Price Spatial convenience.
Price
Which of the following supply chains has a primary focus on increasing volume and economies of scale? Talent supply chain. Product supply chain. Recycling supply chain. Construction supply chain.
Product Supply Chain
Which of the following would help to improve supply chain planning system performance? Increase the number of forecasts used in an organization. Increase marketing. Reduce the number of forecasts used in an organization. Reduce marketing.
Reduce the number of forecasts used in an organization.
Cost prevention benefits: Represent a one-time reduction in financial or managerial resources required to operate the logistics system Represent reduced out-of-pocket or variable expenses Represent initiatives to reduce sales volumes Represent initiatives to reduce activities in areas where cost drivers are increasing
Represent initiatives to reduce activities in areas where cost drivers are increasing
In the above Strategic Profit Model what is the hypothetical firm's ROA?
Return on assets=Net profit margin×Asset turnover=Net profit/Sales × Sales/Total assets=Gross margin−Total expenses/Sales × Sales/Current assets + Fixed assets=(100,000−60,000/250,000)×(250,000)/(20,000+105,000)=0.16×2=0.32
Suppose the firm in the above Strategic Profit Model undertakes a supply chain improvement project. It improves its service level to customers by opening more warehouses which means it will be able to delivery more quickly to customers. The result is a 10% increase in sales. Assume cost of goods sold increases by 6%.. The new warehouse requires additional new asset investment of $40,000. Fixed expenses increase by $1,000 because of the expense of operating the warehouses. Assume other variables do not change. Answer the following three questions based on this information.
Sales=250,000×1.1=275,000.Sales=250,000×1.1=275,000. COGS=150,000×1.06=159,000COGS=150,000×1.06=159,000 Gross margin=Sales−COGS=275,000−159,000=116,000.Gross margin=Sales-COGS=275,000-159,000=116,000. Total expenses=Variable expenses+Fixed expenses=25,000+(35,000+1,000)=61,000.Total expenses=Variable expenses+Fixed expenses=25,000+(35,000+1,000)=61,000. Net profit margin=Net profit/Sales=Gross margin−Total expenses/Sales=116,000−61,000/275,000=0.20 Net profit margin=Net profit/Sales=Gross margin-Total expenses/Sales=116,000-61,000/275,000=0.20 Asset turnover=Sales/Current assets+Fixed assets=250,000×1.1/20,000+(105,000+40,000)=1.67 turns Return on assets=Net profit margin×Asset turnover=0.20×1.67=0.3333
The concept of postponement: Involves two organizations working together to delay delivery Involves strategic delay of the delivery Seeks to reduce the risk of delivery Seeks to reduce the risk of anticipation
Seeks to reduce the risk of anticipation
Which of the following is a basic service element? Service reliability. Shipping. Ordering. Customer logistics.
Service reliability.
Which of the following suppliers would a firm benefit from working with? Suppliers that don't think strategically. Suppliers who focus on the end-to-end process. Suppliers who have little knowledge of possibilities. Suppliers with limited skill sets.
Suppliers who focus on the end-to-end process.
Which of the following supply chain comprehensive metrics is likely the most difficult to actually quantify? supply chain response time inventory days of supply dwell time cash-to-cash conversion
Supply chain response time
Which of the following sets of conditions does NOT support reactive logic? Multiple Choice Cycle time uncertainty. Supply uncertainty. Demand uncertainty. Destination capacity limitations.
Supply uncertainty.
Local Presence is considered an obsolete paradigm because: Local presence was replaced by regional warehousing Having inventory immediately available is no longer required Customers are willing to wait for delivery The advent of timely and consistent transportation
The advent of timely and consistent transportation
The threshold if service level is The level of service associated with the least cost system design The level of service only associated with an optimum system design The level of service existing in a system prior to redesign None of the above
The level of service associated with the least cost system design
Dwell time is: A key component of system design The ratio of asset idle time to total time required to complete a mission The total time inventory is waiting to be processed. A key concept in manufacturing efficiency
The ratio of asset idle time to total time required to complete a mission
Geographic postponement is characterized by ______. timely manufacturing timely delivery timely commitment to design None of these answers.
Timely Delivery
Which of the following is not an example of transportation safety regulation? Multiple Choice Transitioning from stage three to stage four diesel engines to reduce emissions. Changing the hours of service. Modifying the braking and lighting systems on trucks. Changing the length of transportation vehicles.
Transitioning from stage three to stage four diesel engines to reduce emissions.
A product with low gross margin can provide a higher return on its direct investment than a product with a high gross margin
True
Employees who are being groomed for supply chain managerial positions should not be in rotation programs that are developed and controlled by a single leader.
True
Logistics cost has declined as a percent of GDP over the past 25 years
True
Transit stock inventory can be available to promise.
True
Which one of these concepts is not part of logistical integration objectives? Variance reduction. Inventory reduction. Using less parcel shipping. Responsiveness.
Using less parcel shipping.
Echelon logistics operating arrangements accomplish which of the following? Utilize warehouses to create inventory assortments and achieve consolidation economies. Focus on reducing transportation cost. Require at least 2 warehouse locations. Are only used in the grocery industry.
Utilize warehouses to create inventory assortments and achieve consolidation economies.
Which of the following are not environmental initiatives being used by firms in their supply chains Reduced packaging Product recycling after useful life Waste electrical and electronic equipment Supply chain redesign to minimize carbon
Waste electrical and electronic equipment
Generally the least costly method of moving product that is not gaseous, liquid, or slurry is: Multiple Choice Air Water Truck Rail
Water
Total Cost Logistics Model takes into consideration ______. all of the transportation cost all of the handling cost all of the inventory carrying cost all expenditures necessary to perform logistical requirements
all expenditures necessary to perform logistical requirements
Accurate forecasting is most critical; when lead times are long when there are high economies of scale in manufacturing when there are high economies of scale in transportation all of the above
all of the above
Initial implementation of successful supply chain collaborative relationships seems to require: compatible information systems identical organizational cultures common organizational vision all of the above
common organizational vision
Jones Company makes every effort to consistently meet the expectations of all of its customers. It is clear that Jones company is focused on: customer service customer satisfaction customer happiness customer success
customer satisfaction
The difference between a "customer success" focus and a "customer satisfaction" focus is that ______. customer satisfaction is more difficult to achieve customer success deals with expectations of customers; satisfaction deals with their requirements customer satisfaction deals with expectations; customer success deals with requirements there really isn't any difference
customer satisfaction deals with expectations; customer success deals with requirements
Providing perfect orders to a customer would be a key aspect of which customer accommodation focus? customer service customer satisfaction customer success customer happiness
customer service
Jones Company consistently delivers on-time as promised to customers. This type of performance is critical to: developing character based trust developing reliability based trust developing power in a supply chain none of the above
developing reliability based trust
Joe Jones has put in place a new set of performance metrics for the Logistics Department at his firm. He is convinced that these will give him better information about the department's performance, but is concerned that he doesn't know what type of behavior the new measurement system will encourage in his employees. Joe seems to be concerned about which objective of performance measurement? monitoring directing controlling measuring
directing
Declining transport rates per unit of weight as the weight shipped increases represents ______. Multiple Choice the tapering principle economy of distance economy of energy economy of scale
economy of scale
Which of the following is not considered a barrier to achieving process integration? measurement and reward systems organization structure knowledge hoarding financial resources
financial resources
International transportation consolidation and expertise is a service generally provided by ______. Multiple Choice carrier freight forwarder 3PL 4PL or logistics integrator
freight forwarder
All other factors being held constant, increasing the replenishment order quantity will ______. Increased service level decrease service level have no impact on service level Cannot be determined.
increase service level
As a forecasting technique, moving average: is useful when only base and irregular demand components exist is never useful is useful when demand patterns repeat with cyclic, trend, or seasonal components is useful when there is a strong relationship between demand and certain independent variables
is useful when only base and irregular demand components exist
Not all firms include the same activities in supply chain management. Which of the following is often excluded? Manufacturing. Logistics. Procurement. Planning.
manufacturing
Alpha Company has a performance standard of 97 percent fill rate. Last month it achieved a 94 percent fill rate. This is an example of ______. knowledge gap (Gap 1) standard gap (Gap 2) performance gap (Gap 3) perception gap (Gap 5)
performance gap (Gap 3)
A key characteristic of high performance supply chains is to ______. take maximum advantage of economies of scale by providing standardized service to all customers provide total flexibility in service to all customers provide targeted service capabilities to key customer segments minimize total supply chain cost
provide targeted service capabilities to key customer segments
From a strategic perspective, companies should strive to: provide customer success to all customers realize different customer accommodation approaches may be appropriate for different customers decern/be aware that all customers desire close customer success types of relationships never refuse to do business with a customer
realize different customer accommodation approaches may be appropriate for different customers
In the promotional material for its GG2330 portable bar code scanner, the Yanda Company states that the mean time between failures for the scanner is 400 operating hours. Which of the following dimensions of quality does this indicate? functionality. durability. performance reliability.
reliability.
Over the last several decades, power in supply chains has increasingly been shifting to: manufacturers third party logistics providers retailers wholesalers
retailers
Which of the following is not a time series technique of forecasting? simulation exponential smoothing moving average adaptive smoothing
simulation
The ability to include demand, capacity, material requirements, and constraints in defining alternatives is referred to as ______. visibility simultaneous resource consideration resource utilization planning
simultaneous resource consideration
The work of procurement involves ______. order processing, inventory, and manufacturing production planning, shop scheduling, and production transportation, inventory, order processing, warehousing, and facility network design soliciting quotations, contracting, acquisitions, and materials receipt
soliciting quotations, contracting, acquisitions, and materials receipt
The allocation module of an advanced planning and scheduling (APS) system ______. develops the requirement projections for the planning horizon defines and coordinates supply chain system resources and constraints is the computational engine of the supply chain planning system specifies the inventory and resource assignments and communicates them to the ERP system
specifies the inventory and resource assignments and communicates them to the ERP system
Inventory that accommodates elapsed time between inventory availability (manufacturing, growing, or extraction) and consumption is called ______. geographical specialization decoupling supply/demand balancing buffering uncertainty
supply/demand balancing
The goal of logistics is to ______. support procurement, manufacturing, and customer accommodation support product delivery support procurement and manufacturing reduce total cost
support procurement, manufacturing, and customer accommodation
At the prototype testing stage of new product development ______. there is high flexibility and low cost there is high cost and low flexibility the relationship cannot be determined both cost and flexibility are moderate
there is high cost and low flexibility
If you want the consignee to be responsible for goods while they are in-transit you should ship products ______. Multiple Choice to FOB destination to FOB origin using delivered pricing using single zone pricing
to FOB origin