[Chapter 11] Supply Chain Management

Which of the following is usually an extra cost associated with an online retailer versus a traditional retailer?

Cost of shipping goods from the retailer to the customer

The following is a condition making it best to not outsource a product?

Costly to transport; Low labor content

Which is the best definition of delayed differentiation?

Delaying completion of a product as late as possible

the following are ways for supply chain partners to increase the variability in demand...

Failure to deliver the quality needed; Failure to deliver the quantity needed

What are the ways for supply chain partners to increase the variability in demand?

Failure to deliver the quantity needed; Failure to deliver the quality needed

Which of the following is true about the safety factor?

It determines the probability that all demand is satisfied in a period.

What is true of of lead time?

It is the time between when the order is made and when it arrive.

What term is used to describe production that occurs before the demand for that item has been identified?

Make-to-stock

Which firm in a supply chain is likely to be most recognizable to the public?

Manufacturer

Which is an example of delayed differentiation?

Mixing paint pigments with a white base at the point of sale

Which of the following is a benefit of online retailing over traditional retailing?

Reduces inventory held by the retailer

What are two functions of distributors?

Storage of inventory Reducing delivery lead times

These following factors determine the amount of inventory on hand...

The length of the lead time; The amount of demand variability; The safety factor

Which best describes the bullwhip effect?

The tendency for demand to become more variable the further you are from the source of demand

How do price promotions cause the bullwhip effect?

They can influence customers to buy more.

These two are major cost categories associated with a supply chain?

Transportation and Inventory

In which situations is make-to-order not a viable strategy?

When the customer wants immediate delivery

The following is a reason to produce locally...

When the labor content is low relative to the final value of the product

A supply chain involves _________.

a group of manufacturers a group of end users of products a group of suppliers of raw materials brick and mortar retailers

Due to the phenomenon of the ______ effect, variability in demand within the supply chain can be substantially greater than consumer demand variability.

bullwhip

When is make-to-order is a viable strategy?

customers are willing to wait for their product; holding inventory is expensive

To eliminate the bullwhip effect caused by price promotions you can ______ price promotions

eliminate

[T/F] A supply chain begins with raw material and ends with finished goods.

false

[T/F] Functional products typically have a higher frequency of markdowns than innovative products.

false

[T/F] Having retailers receive product from a distributor rather than directly from a manufacturer adds no value.

false

[T/F] The fill rate and the stock out probability measure the same thing.

false

[T/F] The number of stock outs is a measure of inventory availability.

false

[T/F] Variability in level of demand refers to how the total demand gets allocated across various types of the product.

false

The higher the safety factor the _____ the in-stock probability.

higher

Operations often run on a make-to-stock basis when customers are _______.

impatient

A higher in-stock probability...

implies higher amount of inventory; offers better service; means a higher safety factor

A failure to deliver a product on time can ______ the variability in demand.

increase

The amount of inventory on-order...

is also called pipeline inventory

The bullwhip effect...

is the tendency for demand to be less volatile the closer you are to the source (and was observed by P&G in demand for diapers)

What is true of service when the safety factor is higher?

it is improved

The ______ time for an order is the number of periods between when the order is made and it arrives.

lead

Demand variability is often divided into three components: level, variety, and _______.

location

Functional products generally have _________.

low demand forecast uncertainty

The main driver of overseas outsourcing to Asia is ______.

low labor costs

Custom business cards produced by a local print shop are created as a result of a ______ production system.

make-to-order

123-Flowers is a ______ supply chain because it guarantees next-day delivery of floral arrangements in the lower-48 states.

market-responsive

Io is the amount of inventory __-______

on-order

The fill rate is _________.

percent of demand satisfied from inventory

______ provide an assortment of products for consumers.

retailers

The amount of demand variability is measured by the ______ _______ of demand

standard deviation

A _______ decision has an impact on long-term performance.

strategic

A ______ decision impacts short-term performance.

tactical

What term describes a supplier who produces complex assemblies that are used by a manufacturer?

tier 1 supplier

[T/F] In a make-to-order system, an item is produced when its eventual owner is known.

true

[T/F] Adding a distribution center between a manufacturer and retailers can increase the lead time for a retailer to receive an order.

true

[T/F] Purchasing costs are an important cost component associated with supply chains.

true

[T/F] The probability of satisfying all demand during a time interval is one of the ways to measure availability of inventory.

true

[T/F] Variability due to location describes how the total demand is allocated across the locations in the supply chain.

true

Physically efficient supply chains...

typically use slower and cheaper modes of transportation; select suppliers based on the lowest per unit price

Market-responsive supply chains...

use faster modes of transportation