midterm 3 review part 2 (operation management)

true or false: with the growth of just-in-time practices, railroads have made large gains in the share of the nation's transport that they haul

false

true or false: with the many-suppliers strategy, the order usually goes to the supplier that offers the best quality

false

a rice mill in south Louisiana purchases the trucking firm that transports packaged rice to distributors. This is an example of

forward integration

true or false: vertical integration, whether forward or backward, requires the firm to become more specialized

false

true or false: waterways are an attractive distribution system when speed is more important than shipping cost

false

few suppliers

- buyer forms longer term relationships with fewer suppliers - create value through economies of scale and learning curve improvements - suppliers more willing to participate in JIT programs and contribute design and technological expertise - cost of changing suppliers is huge - trade secrets and other alliances

many suppliers

- commonly used for commodity products - purchasing is typically based on price - suppliers compete with one another - supplier is responsible for technology, expertise, forecasting, cost, quality, and delivery

competition is no longer between __________, it is between __________

- companies - supply chains

what are the 2 types of integration

- forward: towards the customer - backward: toward the supplier

the "bullwhip" effect

- occurs as orders are relayed from retailers to wholesalers - results in increasing fluctuations at each step of the sequence - increases the costs associated with inventory in the supply chain - occurs because of distortions in information in the supply chain

what is not a supply chain strategy?

- short-term relationships with few suppliers

outsourcing

- transfers traditional internal activities to outside vendors - utilizes the efficiency which comes with specialization - lets the outsourcing firm focus on its critical success factors

define Keiretsu

a Japanese term that describes suppliers who become part of a company coalition

define make-or-buy

a choice between producing a comments or service in-house or purchasing it from an outside source

vertical integration appears particularly advantageous when the organization has

a large market share

multiple choice: which distribution system is the fastest growing mode of shipping? a) railroads b) trucks c) airfreight d) waterways e) pipelines

airfreight

multiple choice: which of the following distribution systems offers quickness and reliability when emergency supplies are needed overseas? a) trucking b) railroads c) airfreight d) waterways e) pipelines

airfreight

a fried chicken fast-food chain that acquired feed mills and poultry farms has performed

backward integration

the three major variations of online catalogs are

catalogs by vendors, catalogs by intermediaries, and exchanges provided by buyers

what is an opportunity for effective management in the supply chain?

channel assembly

define virtual companies

companies that rely on a variety of supplier relationships to provide services on demand

the three classic types of negotiation strategies are

cost-based price model, market-based price model, and competitive bidding

define vertical integration

developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor

a carpet manufacturer has delivered carpet directly to the end consumer rather than to the carpet dealer. The carpet manufacturer is practicing

drop shipping

multiple choice: a furniture maker has delivered a dining set directly to the end consumer rather than to the furniture store. The furniture maker is practicing a) postponement b) drop shipping c) channel assembly d) passing the buck e) float reduction

drop shipping

true or false: developing long-term, "partnering" relationships with a few suppliers is a long-standing American purchasing strategy

false

true or false: the key to effective supply chain management is to get many suppliers to compete with each other, in order to drive down prices

false

true or false: the supply chain management opportunity called postponement involves delaying deliveries to avoid accumulation of inventory at the customer's site

false

true or false: the supply chain or a brewery would include raw ingredients such as hops and barley but not the manufactured goods such as bottles and cans

false

e-procurement

is the same thing as Internet purchasing

Japanese manufacturers often take a middle ground between purchasing from a few suppliers and vertical integration. This approach is

keiretsu

the Japanese concept of a company coalition of suppliers is

keiretsu

multiple choice: all of the following are "opportunities" for supply chain management except a) postponement b) drop shipment c) blanket orders d) channel assembly e) line balancing

line balancing

what is not an opportunity for effective management in the supply chain?

local optimization

what supply chain strategies creates value by allowing suppliers to have economies of scale?

long-term partnering with a few suppliers

which of the following is not a concern of the supply chain?

maintenance scheduling

the purchasing approach that holds the suppliers responsible for maintaining the necessary technology, expertise, and forecasting ability plus cost, quality, and delivery competencies is

many suppliers

drop shipment

means the supplier will ship directly to the end consumer, rather than to the seller

visibility throughout the supply chain is a requirement among supply chain members for

mutual trust

local optimization is a supply chain complication best described as

optimizing one's local area without full knowledge of organizational needs

Hewlett-Packard withholds customization of its laser printers as long as possible. This is an example of

postponement

keeping a product generic as long as possible before customizing is known as

postponement

multiple choice: by which distribution system is 90 percent of the nation's coal shipped? a) railroads b) trucks c) waterways d) pipelines e) none of the above

railroads

multiple choice: with the growth of JIT, which of the following distribution systems has been the biggest loser? a) trucking b) railroads c) airfreight d) waterways e) pipelines

railroads

multiple choice: which of the following is an advantage of the postponement technique? a) reduction in automation b) early customization of the product c) better quality of the product d) reduction in training costs e) reduction in inventory investment

reduction in inventory investment

what is not a condition that favors the success of vertical integration?

small market share

define supply chain management

the coordination of all supply chain activities involved in enhancing customer value

a disadvantage of the "few suppliers" strategy is

the high cost of changing partners

define the bullwhip effect

the increasing fluctuations in orders that often occurs as orders move through the supply chain

what term is used to describe the outsourcing of logistics?

third-party logistics

what best describes vertical integration?

to produce goods or services previously purchased

what is the objective of supply chain management?

to structure the supply chain to maximize its competitive advantage and benefits to the ultimate consumer

what is not an advantage of a virtual company?

total control over every aspect of the organization

define outsourcing

transferring a firm's activities that have traditionally been internal to external suppliers

true or false: Keiretsus offer a middle ground between few suppliers and vertical integration

true

true or false: a fast-food retailer that acquired a spice manufacturer would be practicing backward integration

true

true or false: benchmark firms have driven down costs of supply chain performance

true

true or false: drop shipping results in time and shipping cost savings

true

true or false: outsourcing is a form of specialization that allows the outsourcing firm to focus on its critical success factors

true

true or false: outsourcing refers to transferring a firm's activities that have traditionally been internal to external suppliers

true

true or false: purchasing has an impact on the quality of the goods and services sold

true

true or false: the bullwhip effect refers to the increasing fluctuations in orders that often occur as orders move through the supply chain

true

true or false: the objective of the make-or-buy decision is to help identify the products and services that can be obtained externally

true

true or false: vendor managed inventory is a form of outsourcing

true

the three stages of vendor selection, in order, are

vendor evaluation, vendor development, and negotiations

what is not an advantage of the "few suppliers" concept?

vulnerability of trade secrets

one dollar saved in purchasing is

worth even more than a dollar earned in sales revenue