SCM Exam 3
Performance cycle uncertainty has the following trait: ______. Multiple Choice the larger the variance to desired goal, the bigger the impact numerous inputs lead to poor performance the more firms involved, the poorer the performance manufacturing is always the leading or first indicator
A
A successful supply chain management strategy integrates: Multiple Choice processes and systems within and across organizations. processes and systems within the organization. the flow of materials within an organization. the flow of information within the buying organization.
A
Echelon logistics operating arrangements accomplish which of the following? Multiple Choice 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.
A
Logistical operations have two main flows: ______. Multiple Choice inventory and information inventory and materials inventory and warehousing materials and customer accommodation
A
Noncore competencies of an organization are typically: Multiple Choice the first things to be outsourced to access supplier expertise. the same for companies in the same industry. dependent on the staff performing the tasks. seldom outsourced because they contribute to competitive advantage. flexible and easily changed depending on who is in charge.
A
On average, the dollars spent with suppliers as a percent of revenues: Multiple Choice is greater in manufacturing organizations than in service organizations. is about equal in service and manufacturing organizations. is greater in service organizations than in manufacturing organizations. depends on the type of manufacturing process.
A
Supply strategies that are based on changes in demand and supply are known as: Multiple Choice assurance-of-supply strategies. risk-management strategies. cost-reduction strategies. environmental-change strategies. supply chain support strategies.
A
The three factors fundamental to transportation performance are ______. Multiple Choice cost, speed, and consistency cost, cost, and cost cost, volume, and modality cost, speed, and frequency
A
A request for quotation (RFQ): Multiple Choice signals the purchaser has identified a supplier as a potential source of supply and asks for information. asks the supplier to declare at what price and what terms they are prepared to supply. permits the supplier to fit the specifications for supply to its strengths. signals the purchaser has identified a supplier as a potential source of supply and asks for information, and asks the supplier to declare at what price and what terms they are prepared to supply. asks the supplier to declare at what price and what terms they are prepared to supply and permits the supplier to fit the specifications for supply to its strengths.
B
Decision trees: Multiple Choice may be useful in making effective supplier selection decisions the first-time a buying decision is made, but not on repetitive purchases. may be useful in making effective supplier selection decisions if probabilities of success and failure are assessed for each option. may be useful in making effective supplier selection decisions when making repetitive purchases, but not special, one-time purchases. are of limited value because options can only be evaluated qualitatively, not quantitatively. cannot reflect past decisions so they are useless as a decision tool when making repetitive purchases.
B
Interest in the supply function as a managerial activity began: Multiple Choice before 1900 when railroads recognized it as an important function. during World Wars I and II because of global materials shortages. in the 1970s during a period of high inflation. in the early 1980s with high interest rates and the costs of financing inventory. more recently with the rise of e-commerce.
B
The decision to make or buy a good or service is: Multiple Choice a one-time decision never to be reconsidered. a decision of strategic importance that deserves careful evaluation. primarily an operational decision. the same as deciding to insource or outsource. typically made by the chief supply officer and his or her executive team.
B
A supplier's references: Multiple Choice should always be in the same industry as the buying organization. should be ask closed-ended (yes-no) questions. may be useful if they are of similar size and objectives as the buyer's organization. are never completely trustworthy and therefore of little use. are useful only to confirm factual information.
C
Direct logistics operating arrangement accomplish which of the following? Multiple Choice Place product in warehouses for consolidation. Focus on reducing transportation cost. Ship products direct to the consumers destination from one or more locations. Utilizes lowest possible transportation costs.
C
In the outsourcing decisions in many organizations, supply has had: Multiple Choice no involvement. virtually no involvement. relatively moderate involvement. extensive involvement. a leadership role.
C
SA8000 certification is for: Multiple Choice quality management. logistics management. social sustainability. environmental sustainability. management of innovation.
C
Supply has the potential to contribute to: Multiple Choice financial performance. financial performance and competitive position. profitability, competitive position and sustainability performance. competitive position and sustainability performance. financial performance, competitive position and sustainability performance.
C
A zero defects quality strategy emphasizes: Multiple Choice "it is the process, not the people." "quality is free." "conformance to specification." "do it right the first time." "six sigma."
D
Company image may be directly influenced by: Multiple Choice treating suppliers in a fair and equitable manner. complying with regulatory requirements. sustainability practices of suppliers. treating suppliers in a fair and equitable manner, complying with regulatory requirements and sustainability practices of suppliers. complying with regulatory requirements and sustainability practices of suppliers.
D
Facility network design is concerned with which of the following? Multiple Choice How many buildings. The location of the buildings. The ownership structure of the buildings. All of the answers
D
In manufacturing organizations, the dollars spent with suppliers fall into what range as a percent of revenues? Multiple Choice 25 to 35 30 to 60 45 to 75 50 to 80
D
Outsourcing is: Multiple Choice a low risk venture because global suppliers have almost unlimited capabilities. a low risk venture because the costs of reversing the decision are low. a moderate risk venture because it is easy to determine core competencies. a high risk venture because the costs of reversing the decision are often high. a high risk venture because the decision makers' reputations are at stake.
D
Subcontracting refers to the practice of: Multiple Choice an organization hiring a contractor to perform a task it has been doing in house. an organization hiring substitute labor to cover for a supplier's labor shortage. a prime contractor bidding on another contractor's incomplete jobs. a prime contractor bidding out part of a job to another contractor. a prime contractor hiring substitute labor during a strike.
D
Evaluation of the supply function's contribution to organizational goals and strategies can be viewed in the context of: Multiple Choice operational and strategic. strategic and transactional. direct and indirect. both a and b above. both a and c above.
E
Small suppliers: Multiple Choice are most suited for large dollar value "A" requirements. usually represent very low risk to the purchaser. tend to have a strong financial base. tend to have an extensive management structure. often provide the greatest responsiveness and flexibility.
E
Strategies designed to make available the knowledge and capabilities of supply chain members to others in the buying organization are called: Multiple Choice environmental-change strategies. assurance-of-supply strategies. risk-management strategies. cost-reduction strategies. supply-chain-support strategies.
E
Supply can influence risk management in which area(s)? Multiple Choice financial operational reputation financial and operational financial, operational and reputation
E
One of the most fundamental and critical decisions in any organization is, should we: Multiple Choice make or buy the needed good or service? have a single source or multiple sources for a specific purchase? order small quantities to avoid carrying costs or large quantities for volume discounts? source locally or globally?
A
Supply management's role in environmental sustainability is: Multiple Choice expanding because suppliers can influence the ability to achieve the goal of zero environmental impact. expanding because purchasing has primary responsibility for specification writing. limited because environmental issues have little impact on the acquisition cycle. limited by the product design developed by design engineers. limited to compliance with government laws and regulations.
A
Supply managers believe they can add the most value to the outsourcing decision by: Multiple Choice providing a comprehensive, competitive process. advising the outsourcing team on relevant contractual terms and conditions. reviewing the analysis conducted by the outsourcing team. being available if the internal users want their assistance. managing the contract once the decision has been implemented.
A
Supply strategies that are designed to anticipate and recognize shifts in the economy, organization, people, legal, government regulations and controls, and technologies are: Multiple Choice environmental change strategies. change management strategies. total cost strategies. internal management strategies. supply assurance strategies.
A
Sustainability is: Multiple Choice the combination of environmental and social performance. the ability to sustain economic prosperity through long-term relationships with key suppliers. the ability to sustain long term bottom line growth with a stable supply base. a supply base that meets requirements and protects the natural environment. the achievement of economic prosperity for the company and its shareholders, while avoiding environmental litigation.
A
The design and management of seamless, value-added processes across organizational boundaries to meet the needs of the end customer is called: Multiple Choice supply chain management. strategic sourcing. value management. customer relationship management. strategic process management.
A
The goal of logistics is to ______. Multiple Choice support procurement, manufacturing, and customer accommodation support product delivery support procurement and manufacturing reduce total cost
A
The traditional supplier evaluation criteria are: Multiple Choice quality, quantity, delivery, price and service. quality, quantity, delivery, price and sustainability. price and quality. price, quality and delivery. price, quality, delivery and sustainability.
A
When a supply-related risk exists, the supply management team should: Multiple Choice identify and classify risks, assess possible impact, develop a mitigation strategy, inform the chief supply officer, await instructions, and implement the directive. seek input from other functional areas, compile the ideas, and submit them to senior management. review the existing risk mitigation plan, suggest revisions, and await instructions. confer with relevant parties, provide requested data, and implement senior management's mitigation strategy.
A
Assessment of a potential supplier's financial situation: Multiple Choice is best left to the finance department which will alert supply to any issues that might adversely affect a pending deal. may yield substantial opportunities for negotiating favorable terms for both buying and selling organizations. seldom relies on financial information provided by the supplier. is always necessary and follows a strict protocol no matter what type of purchase or dollar value. is usually unnecessary because it is highly unlikely that a supplier will go out of business, and, even if they do, it is relatively easy to replace a supplier.
B
Outsourcing: Multiple Choice occurs primarily in large manufacturing firms in the private sector, but is rarely practiced in public purchasing. may reduce operating costs, improve focus on core competencies, and gain access to world-class capabilities. decisions are based on cost-benefit analysis. usually results in increased hiring to attain expertise that the organization does not already possess.
B
Privatization is: Multiple Choice a term used in the private sector for a make decision. the term for outsourcing used in the public sector. used interchangeably with outsourcing in both the public and private sectors. the term used when entire operations are outsourced. the term used when entire operations are insourced.
B
Subcontracts can only occur: Multiple Choice in government procurement. if there is a prime contractor bidding out part of a job. when a lead contractor is behind schedule. if substitution is required after the specification has been set. when purchasing a good, not a service.
B
Supply chain synchronization attempts to achieve which of the following? Multiple Choice Make sure all parties are operating in the same time zone. Coordinate multiple firms activities across the supply chain Coordinate activities within a single firm. Reduce total cost.
B
Supply strategies that are designed to exploit market opportunities and organizational strengths to give the buying organization an advantage in the marketplace are known as: Multiple Choice risk-management strategies. competitive-edge strategies. assurance-of-supply strategies. cost-reduction strategies. supply chain support strategies.
B
The logistics activities most frequently outsourced are: Multiple Choice core competencies of the buying organization. transactional, operational and repetitive. analytical, strategic, and non-repetitive. both strategic and operational. analytical, strategic and repetitive.
B
Three major challenges facing supply executives when setting supply strategies and objectives are: Multiple Choice (1) How can we simultaneously provide uninterrupted supply and minimize inventory? (2) How can we improve quality while reducing our supply base? and, (3) How can we increase our involvement in outsourcing decisions? (1) What is the effective interpretation of corporate objectives and supply objectives? (2) What is the appropriate action plan or strategy to achieve the desired objectives? and, (3) How can supply issues be identified and integrated into organizational objectives and strategies? (1) Should we have a centralized or decentralized purchasing structure? (2) Should we hire managers trained in supply management or in technical fields? and, (3) Should we outsource any or all of the purchasing function? (1) Should we pre-certify suppliers? (2) Should we allow internal users to purchase certain categories of purchases? and, (3) Should we increase or decrease the number of suppliers in our supply base? (1) How many suppliers should we do business with? (2) Which suppliers should we select? and, (3) What type of relationship should we have with these suppliers?
B
A strategy is: Multiple Choice an action plan to maximize rewards in the current period in return for big risks. a procedure for allocating resources among functions in the organization. an action plan to achieve specific long-term goals and objectives. an action plan to achieve specific operational and tactical goals. a vision of the future of an organization.
C
Linking current and future needs with current and future markets is the primary focus of: Multiple Choice internal users of purchased goods and services. each individual buyer. an effective supply strategy. an effective marketing strategy. an effective organizational strategy.
C
Make or buy and insourcing or outsourcing decisions are: Multiple Choice routine decisions with low levels of uncertainty. routine decisions with high levels of certainty. key strategic decisions. key operational decisions.
C
Normally, most organizational objectives can be summarized as: marketing, management, finance, and operations. leadership, market share, earnings per share, and return on investment. survival, growth, financial, and sustainability. profitability, return on investment, liquidity, and shareholder value. growth, maintenance, new products, and asset management.
C
Reverse marketing: Multiple Choice is when the buying organization has decided to stop making something in-house and identifies a supplier from its existing supply base. is an aggressive, marketing-initiated, approach to finding and developing world class suppliers. is encouraged by the rapid rate of technological change, growth in international trade, and the need to extract competitive advantage from supply chains. requires that the marketing department in the buyer's organization fully understand the needs of supply. is most appropriate when the product is fairly standard and available from multiple local suppliers.
C
The more significant the service ______ impact upon a customer's business, the greater the priority placed on error free logistical performance. Multiple Choice cost complexity failure growth
C
The work of logistics involves ______. Multiple Choice 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
C
Which one of these concepts is not part of logistical integration objectives? Multiple Choice Variance reduction. Inventory reduction. Using less parcel shipping. Responsiveness.
C
Reverse marketing is: Multiple Choice when the buying organization has decided to stop making something in-house and identifies a supplier from its existing supply base. when the supply department sells internal users on a specific supplier that the user was opposed to initially. when the marketing department tries to convince the supply department to stop buying from a specific supplier. an aggressive, purchaser-initiated approach to finding and developing world class suppliers. an aggressive, marketing-initiated approach to finding and developing world class suppliers.
D
The impact of supply management actions on the balance sheet is measured by the: Multiple Choice return on investment effect. return on inventory effect. inventory turnover effect. return on assets effect. profit leverage effect.
D
The return on assets effect (ROA) quantifies and measures: Multiple Choice the indirect contribution of supply management to profitability. any increase in sales that occurs at a greater rate than the cost of assets. reduction in the allocations to the operating budget of the supply department. the impact of supply actions on inventory and the balance sheet. the effect on profitability of reduced spend compared to a sales increase.
D
The use of the concepts of purchasing, procurement, supply, and supply chain management will vary from organization to organization depending on: Multiple Choice the organization's stage of development and/or sophistication. the industry in which they operate. the organization's competitive position. the organization's stage of development and/or sophistication, the industry in which they operate and the organization's competitive position. the organization's stage of development and/or sophistication and the industry in which they operate.
D
Total Cost Logistics Model takes into consideration ______. Multiple Choice all of the transportation cost all of the handling cost all of the inventory carrying cost all expenditures necessary to perform logistical requirements
D
When a team decides that a task or function currently performed by company employees is a noncore competency, the team is likely to recommend: Multiple Choice insourcing. continuing to make. privatizing. outsourcing. continuing to buy.
D
When developing strategies related to "how to buy," decisions must be made about: Multiple Choice make or buy. size of inventories. insource or outsource. systems and processes.
D
Which of the following statements supports single sourcing: Multiple Choice there is a high probability of a devastating natural disaster. concerns exist about supplier capacity for future volume. there is a need to reduce dependence on a supplier. the use of just-in-time production, stockless buying, or systems contracting. there is volatility in the supplier market.
D
Evidence of the growth and influence of supply management in an organization includes: Multiple Choice fewer activities under the management or span of control of supply. meaningful involvement at the operational level. involvement in strategic planning. executive status of the chief supply officer. involvement in strategic planning and executive status of the chief supply officer.
E
For an organization with revenue of $100 million, purchases of $60 million, and profit of $8 million before tax, a 10 percent reduction in purchase spend would result in an increase in profit of: Multiple Choice 10 percent. 36 percent. 57 percent. 60 percent. 75 percent.
E
In the portfolio matrix, characteristics of goods and services in the leverage quadrant are: Multiple Choice few suppliers with adequate capability so substitution and switching are difficult. item substitution is possible, switching is difficult, many suppliers are available. item substitution and supplier switching are possible, but few suppliers are capable. competitive supply market, substitution is possible, total cost is a primary focus. competitive supply market, substitution is possible, price per unit is important.
E
Logistics is ______. Multiple Choice 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 an amazing career to pursue All of the answers
E
Outsourcing of services is: Multiple Choice unrealistic because of the difficulty in measuring service providers' performance. realistic because of the ease in measuring service providers' performance. increasing because it is easy to define service requirements and measure quality. decreasing because buyers are dissatisfied with most third party service providers. realistic if service requirements and quality expectations can be clearly defined.
E
The question: "How can supply and the supply chain contribute effectively to organizational objectives and strategy?" is a key question in: Multiple Choice supplier relationship management. strategic sourcing. supplier network management. supply chain management. strategic supply management.
E
The supply area is a good training ground for managers because it provides exposure to: Multiple Choice accounting systems. pressure of decision making under uncertainty. various levels and functions in the organization. accounting systems, pressure of decision making under uncertainty, and various levels and functions in the organization. pressure of decision making under uncertainty and various levels and functions in the organization.
E
To avoid risk, a buyer can: Multiple Choice hedge in a commodities market. require bid or performance bonds. decide not to do business in certain countries. hedge in a commodities market and require bid or performance bonds. hedge in a commodities market, require bid or performance bonds and decide not to do business in certain countries.
E
When developing supply strategies, the supply manager must determine: what to make or buy. when to buy. how much to buy. how it should be ordered. what to make or buy, when to buy, how much to buy and how it should be ordered.
E