MGT 4790 - Final Exam

What does in-house production provide?

1. better integration between design and production 2. control over centralized supply chain 3. ability to capture profits of intermediaries

What does outsourcing provide?

1. specialization and access to advanced technology for complex products 2. flexibility of product and volume 3. greater variety at lower capital investment

Expansion of supplier capabilities in South Africa is most closely associated with?

Adaptability

Increasing purchasing power in Thailand is most closely associated with?

Adaptability

What are economies of scale?

Cost advantages associated with large operations

What is one way that Kimberly-Clark combatted the TP crisis?

Cut SKUs in half

What is ECR?

Efficient Consumer Response focuses on the needs of the consumer and seeks to optimize the entire supply chain to improve efficiency.

Which Triple A is alignment most closely associated with?

Equitable risk/reward sharing and Collaborative problem solving

Do the 'Ten Guiding Principles' suggest any of the following? 1. organizational interests should be the primary driver of supply chain activity 2. role shifting should be avoided 3. all suppliers should be treated alike

No - all are false

Which Triple A is adaptability most closely associated with?

Product/process redesign and Evaluation of market trends

Which Triple A is agility most closely associated with?

Sudden demand surge and Strategic placement of inventories

How was Crocs' able to reduce inventory and lower overhead?

They adopted the principle of keep it simple and reduced SKUs, distribution channels, and stores.

What type of strategy did Crocs use to create value through customization?

They used a postponement strategy (accessories)

What are the primary goals of supply chain integration?

To improve communication and trust.

What is the underlying principle of postponement?

To reduce time between order and product completion by producing as much as is common of a product in advance of demand.

all shipping relies on

a balance of trade in both directions

Which of the following are causes of the bullwhip effect? a. frequent price changes b. reductions in delivery lead times c. supplier performance incentives d. all of the above

a. frequent price changes

change in trade policy is most closely associated with?

adaptability

While early in the pandemic pipeline inventory was ________, once it reached points of demand and was consumed __________ resulted. Subsequent shortages of ________ due to shutdown and social distancing further limited supply.

adequate supply shortages shipping containers

Labor strike is most closely associated with?

agility

Surprise drop in competitor price is most closely associated with?

agility

fire at supplier factory is most closely associated with?

agility

Which of the following is not an element of effective supply chain management principle highlighted by the puzzle simulation? a. communication b. goal clarity c. cost minimization d. incentives

c. cost minimization

Which of the following statements is true? a. a supplier not having the skills to meet a buyer's needs is an example of structural risk b. a supplier that fails to meet delivery commitments to a customer because it has diverted resources to better serve other customers is an example of operational risk c. processes with low levels of both operational and structural risk are candidates for offshoring d. processes with high levels of both operational and structural risk are candidates for outsourcing

c. processes with low levels of both operational and structural risk are candidates for offshoring.

Which of the following was not a factor in Crocs decision to locate manufacturing in Italy? a. proximity to customers in Europe b. existence of compounding facility in Italy c. tax breaks from the Italian government d. none of the above

c. tax breaks from the Italian government

What are external suppliers?

companies that may be chosen as outsourcing partners

The medical supply chain highlights the risks of increasing ___________ of production in ___________ locations in recent years. This impacts companies that source ___________ from places like China. It also highlights the tradeoffs between _______ and ________ in global supply.

concentration low cost directly and indirectly lead time cost

What does CSR stand for?

corporate social responsibility risks

most procurement activities are centered around:

cost savings - obtaining supplies at the lowest cost possible, provided they fall within specified quality parameters.

What did the changes Crocs' made allow them to do?

create customer value and create a stronger brand

The cell phone simulation illustrates that: a. a need exists to balance efficiency with flexibility b. physical costs are more important than market mediation costs c. forecasting and production planning are synonymous d. none of the above

d. none of the above

Which of the following is a result of increased competition? a. decreasing product variety, which leads to increased demand uncertainty b. increasing product variety, which leads to decreased demand uncertainty c. decreasing product variety, which leads to decreased demand uncertainty d. none of the above

d. none of the above

order batching _______ the propagation of demand signals in the supply chain.

delays

What does the EOQ model describe?

describes the total cost of fulfilling demand per unit time as a sum of fixed ordering costs and variable inventory holding costs. those two cost components trade off against each other. as the order batch size increases, fixed ordering cost decreases, but inventory holding cost increases. states that this tradeoff determines the order batch size that minimizes the total fulfillment cost.

physically efficient supply chains tend to be?

differentiated

it is important not only to develop existing suppliers, but also to

discover new suppliers

In response to lessons learned from the pandemic, supply chains in the future may use more ____________, _____________, and ____________ sources to better respond to ___________. This is motivated by increasing _________ and _________ costs when sourcing from China, and improvements in ____________ that may reduce ____________ and ____________ costs with domestic sourcing.

domestic, alternate low cost, and mature change labor and transportation technology production labor

The economic rationale for order batching is explained by the

economic order quantity (EOQ) model

What is an EDI and what is it used for?

electronic data interchange. used to mitigate the effect of demand forecast updating by easily sharing demand and inventory information. increases transparency and discipline. does not reduce order batching, but reduces uncertainty in planning.

Which type of customers drive supply chain activity

end customers

Market mediation costs includes the costs of

end of season markdowns and lost sales

The intent of supply chain mapping is to build ______________ awareness of how _________ can be created, and to use this to identify ___________ opportunities.

end to end value improvement

flexibility is

expensive

what was one of the factors that caused a shortage in TP?

forward-buying and panic buying.

Toilet paper is a _________ product.

functional

What did the accessories that Crocs introduced do for them?

improved product variety and customer value, requiring no underlying change in the design of the supply chain for Crocs themselves.

A direct result of the pandemic was that while they wanted to, producers were limited in their ability in the short term to ________ or _________. A takeaway for them is that in the future they may ___________ and ____________.

increase utilization or adjust product configuration adjust distribution processes and change SKU strategy

What did backlogs lead to with the shortages caused by COVID?

increased orders

The rate of new product introduction has

increased steadily.

products with short life cycles are

increasingly common

Keeping it simple suggests reevaluating ___________ forcing ____________ to reduce ____________. This will allow for more effective ______________ and allow _____________ to be reduced or removed. The intent is to drive a more __________ approach to how a supply chain functions.

internally and externally processes complexity resource deployment waste strategic

What is the main alternative to multisourcing?

investing in key supplier relationships

What does outsourcing production of low and mid-range phones let LG do?

it allows them to focus on strategic items where their distinctive design and innovation capabilities let them compete on technology.

The value of customer focus can be maximized by _______ customer needs, and communicating this as appropriate to all _________ suppliers. The goal is to improve _________ and the likelihood that decisions align with the expectations of ________ customers that drive supply chain activity.

knowing upstream responsiveness end

reduction of what leads to huge benefits to the mitigation of the bullwhip effect in the supply chain?

lead times

a company typically places replenishment orders with its suppliers ________ frequently than it receives demand from its customers.

less - called order batching and is when they maintain inventory and order more only when inventory runs low.

In general, when a company multi-sources it is

less likely to be the first to access supplier innovations.

A firm generally must project demand for _________ lead time, causing ________.

nonzero lead time causing the bullwhip effect

Are the assets unique or not unique to suppliers' ability to supply LG?

not unique

Demand for functional products tends to be _________ and profit margins _________. As a result, supply chain design emphasizes keeping _____________ and ______________ low and _______________ high.

predictable low excess inventory and price increases utilization

What type of processes shouldn't be offshored?

processes that are important for the creation of value

transportation costs are often included in

procurement costs

what are the pros and cons to having a closer proximity to customers?

pros: shortens lead times, improves responsiveness, and reduces inventory holding costs. cons: higher production costs, limits a firm's sources of supply

What is the primary goal of market-responsive is to?

quickly react to changes in demand

Crocs' performance issues resulted from ______ and lack of ________.

rapid growth focus

what is the primary goal of supplier qualification screening?

reduce the likelihood of supplier non-performance and to ensure that the supplier will be a responsible and responsive partner in the day-to-day business relationship with the buyer.

In the context of agility, the common thread in managing information flow, collaboration, and crisis management is to

reduce the time to act and facilitate effective communication

Read-react capability: what does splitting the season into 2 do?

reduces inventory requirements and allows the firm to respond to demand volatility.

What are the benefits of using a supply base?

reduces qualification screening costs and allows for development of standardized contracts, terms and conditions for pre-qualified suppliers, thereby streamlining administrative processes involved in contracting.

What does effective integration do?

reduces response times and reduces gaps between expectations and outcomes, while building alignment around objectives and accountability.

recency bias

rely too heavily on recent demand observations

To better align its _______________ supply chain with the market, Crocs refocused around ___________, and __________ products with ___________.

responsive core products and low volume high margin potential

What type of products are LG's low and mid-range phones?

routine

There are ___________ phone producers that ________- the assets and expertise to produce for LG.

several already have

What are valuable capabilities for market-responsive supply chains?

short production times and flexibility

LG's low and mid-range phones compete in a market with what type of competition?

significant choice and price based

Which companies were particularly vulnerable and why (Covid)?

small upstream companies were particularly vulnerable due to cash flow and capacity constraints. Some had to prioritize customers when making order fulfillment decisions.

Elements of mapping include critically assessing drivers of _________ and __________, and recognizing potential shifts in ____________ and ____________ that can inform changes in _____________.

success and cost value creating roles and technology supply chain design

a firm may achieve flexibility in its supply base by nurturing a portfolio of

suppliers

What are pre-qualified suppliers?

suppliers who have passed the qualification requirements and are eligible for contract

anticipated demand often exceeds manufacturing capacity during

the launch of a new successful product or when demand is increasing and capacity expansion is costly and time-consuming.

finding a new supplier is challenging mainly due to

the need to verify the supplier's ability to meet the buyer's myriad requirements.

a successful outsourcing relationship often includes

the sharing of savings from productivity improvements. - both parties have an incentive to collaborate.

Why are lean product methods implemented?

to reduce inventory and capacity and increase product availability.

why do most companies outsource?

to save money

What is just in time production?

type of lean production system that brings together all materials at the precise time they are required at each production stage

The use of ___________ suppliers highlights the impact of _________ protections in the supply chains for some products. This and _______ inspections highlight the importance of _________ mechanisms that provide safeguards in the supply chain.

unapproved regulatory quality control

The effect of COVID on the bullwhip effect was particularly large on what part of the supply chain?

upstream

What is multisourcing?

using more than one vendor to supply specific items.

what is another name for undifferentiated products?

vanilla boxes

VMI

vendor managed inventory - supplier has visibility and control over over the inventory at the warehouses of its downstream (retail) customer.

What does postponement mean for work in process and materials inventory levels as well as finished goods inventory levels?

work in process and materials inventory levels may increase, but finished goods inventory levels will likely go down.