Ch. 11 OM
A lawnmower assembly plant uses a variety of nuts, bolts, screws, and other fasteners in its operation. Its supplier delivers these items directly to the point of use on the assembly line and ensures that there are always sufficient quantities of fasteners to maintain the production schedule. This is an example of A. single stage control of replenishment. B. vendor-managed inventory. C. e-procurement. D. postponement.
B
What is a long-term purchase commitment to a supplier for items that are to be delivered against short-term releases to ship? A. postponement B. blanket order C. drop shipping D. advanced shipping notice
B
Which of the following is NOT true about reverse logistics as compared to foward logistics? A. Pricing is dependent on many factors. B. Speed is often very important. C. Distribution costs are less directly visible. D. Forecasting is more uncertain.
B
Which of the following mitigation tactics could reduce economic risk? A. subcontractors on retainer B. purchasing contracts that address price fluctuations C. multiple transportation modes and warehouses D. franchising and licensing
B
What is transferring a firm's activities that have traditionally been internal to external suppliers? A. vertical integration B. make-or-buy C. keiretsu network D. outsourcing
D
Supply chain managers outsource logistics to meet three goals: A. drive down inventory investment, lower delivery costs, and improve delivery reliability and speed. B. lower delivery costs, improve delivery reliability and speed, and provide better market response. C. drive down inventory investment, lower delivery costs, and provide better market response. D. drive down inventory investment, improve delivery reliability and speed, and provide better market response.
A
Three criteria for designing distribution networks to meet customer expectations are: A. rapid response, product choice, and service. B. low cost, rapid response and product choice. C. low cost, product choice and service. D. rapid response, low cost, and service.
A
When determining the optimal number of facilities, logistics-related costs do NOT usually include which of the following costs? A. purchasing B. facility C. transportation D. inventory
A
Which of the following industries has the highest supply chain cost as a percentage of sales? A. petroleum B. restaurants C. metals D. automobile
A
Which of the following is the first stage of supplier selection? A. supplier evaluation B. contracting C. negotiations D. supplier development
A
Which of the following statements is NOT true? A. A closed-loop supply chain is a designed to optimize only reverse flows. B. "Closed-loop supply chain" is sometimes used as a synonym for "reverse logistics." C. A closed-loop supply chain prepares for returns prior to product introduction. D. Reverse logistics involves the processes of sending returned products back up the supply chain for resale, repair, reuse, remanufacture, recycling, or disposal.
A
With regard to the cost-based price model negotiation strategy, which of the following is true? A. Prices are based upon supplier costs. B. Prices are based in some way upon market standards agreed to by both supplier and purchaser. C. Prices float based on what the customer is willing to pay. D. Potential suppliers each submit quotations as to price, delivery, and so on.
A
The do-it-yourselfer plucked a gallon can of base paint from the shelf of the local hardware store and handed it to Keith, the cheerful clerk at the paint counter. Their eyes met briefly and the do-it-yourselfer silently handed over sample 150C-1, Musical Mist, to the clerk. It was impractical to keep several gallons of every possible color on the shelves at the hardware store, so the paint manufacturer had created clever workaround. The workaround was a computer-based system that added predetermined quantities of pigments to a gallon can of base paint depending on the desired shade, in this case, Musical Mist. The hardware store now needed to stock only the base paint, this machine, and a small supply of paint pigments in order to create the thousands of colors in its catalog. This scenario is a prime example of A. the bullwhip effect. B. postponement. C. vendor-managed inventory. D. drop shipping.
B
Which negotiation strategy bases price on a published, auction, or index price? A. competitive bidding B. market-based price model C. supply-based price model D. cost-based price model
B
Which of the following statements is NOT true regarding channel assembly? A. Channel assembly treats distributors more as manufacturing partners than as distributors. B. Channel assembly sends individual components, modules, and finished products, to the distributor. C. Channel assembly represents one way to implement postponement. D. Channel assembly postpones final assembly of a product so the distribution channel can assemble it.
B
Which of the following statements is NOT true regarding the bullwhip effect? A. Bullwhip fluctuations in the supply chain increase the costs associated with inventory, transportation, shipping and receiving. B. The bullwhip effect occurs as order are relayed from retails, to distributors, to wholesalers, to manufacturers, with fluctuations decreasing at each step in the sequence. C. Bullwhip fluctuations in the supply chain decrease customer service and profitability. D. Inaccurate information results in distortions and fluctuations, causing what is known as the bullwhip effect.
B
Which of the following statements is NOT true? A. A supply chain includes suppliers; manufacturers and/or service providers; and distributors, wholesalers, and/or retailers who deliver the product and/or service to the final customer. B. An increased sales effort may help a firm reach its profit goals more easily than would effective cost cutting. C. Supply chain management describes the coordination of all supply chain activities, starting with raw materials, and ending with a satisfied customer. D. The objective of supply chain management is to coordinate activities within the supply chain to maximize the supply chain's competitive advantage and benefits to the ultimate consumer.
B
Airfreight A. represents about 10% of the tonnage shipped in the United States. B. is the oldest means of freight transportation. C. is a fast-growing mode of shipping. D. is the best way to transport natural gas.
C
Prior to embarking on supply chain design, operations managers must first consider A. how to manage supply chain inventory. B. what kind of distribution network to have. C. "make-or-buy" and outsourcing decisions. D. how to select suppliers.
C
The advantage of having few suppliers is to A. take advantage of diseconomies of scale. B. look for short-term attributes. C. form a long-term relationship. D. pursue low cost.
C
Trucking A. is the least used transportation mode for manufacturing goods. B. is one of the least flexible transportation modes. C. is increasingly using computers to manage its operations. D. does not play a role in multimodal shipping.
C
What is developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor? A. horizontal integration B. virtual companies C. vertical integration D. outsourcing
C
Which of the following could reduce distribution risk? A. secure IT systems B. cross-country diversification C. careful selection, monitoring and effective contracts with penalties D. use multiple suppliers
C
Which of the following statements is NOT true? A. An effective supplier management program and an effective distribution management program may make the difference between supply chain success and failure. B. Top-notch supply chain performance requires good downstream management, just as it does good upstream management. C. Finding the optimal number of facilities represents a critical and static decision. D. Packaging and logistics are important distribution decisions, because the manufacturer is usually held responsible for breakages and serviceability.
C
Which of the following statements is true regarding cross-sourcing? A. Cross-sourcing describes suppliers who become part of a company coalition. B. Cross-sourcing develops the ability to produce goods or services previously purchased or actually buying a supplier or distributor. C. Cross-sourcing uses one supplier for a component and a second supplier for another component, where each supplier acts as a backup for the other. D. Cross-sourcing enhances technological skills.
C
Which of the following strategies is part collaboration, part purchasing from few suppliers, and part vertical integration? A. virtual companies B. joint ventures C. keiretsu networks D. horizontal integration
C
A supply chain ends with A. manufacturers. B. distributors. C. suppliers. D. a satisfied customer.
D
The advantage of having many potential suppliers is their willingness to A. participate in JIT. B. provide technical expertise. C. provide innovations. D. offer lower prices in the short term.
D
What is a supply chain designed to optimize both forward and reverse flows? A. open-loop supply chain B. bullwhip-loop supply chain C. reverse-loop supply chain D. closed-loop supply chain
D
Which of the following is NOT one of the benefits accrued from a centralized purchasing function? A. Devote more resources to the supplier selection and negotiation process. B. Maintain professional control over the purchasing process. C. Leverage purchase volume for better pricing. D. Increase the duplication of tasks.
D
Which of the following mitigation tactics is NOT designed to reduce the risk of information loss or distortion? A. secure IT systems B. training of supply chain partners on the proper interpretations and use of information C. redundant databases D. alternate sourcing
D
Which of the following statements is NOT generally an implication stemming from an increase in the number of facilities? A. quicker response B. increased facility costs C. increased customer satisfaction D. decreased total logistics cost
D
Which organization has developed principles and standards to be used as guidelines for ethical behavior? A. Institute for Purchasing Management B. Institute for Procurement Management C. Institute for Vendor Management D. Institute for Supply Management
D
