Global SCM Quic 3 MC
16) Which transportation network design option has the elimination of intermediate warehouses and its simplicity of operation and coordination as its major advantage? A) Direct shipping network B) Direct shipping with milk runs C) All shipments via central DC D) Shipping via DC using milk runs
A
18) A company that uses a more expensive short lead time supplier as a backup for a low cost, long lead time supplier is using A) tailored sourcing. B) quick response. C) postponement. D) improved forecasting.
A
19) Supplier performance must be rated on many different factors because A) they impact the total supply chain cost. B) they minimize the supply chain involvement. C) they reduce the impact of price. D) they maximize the supply chain price.
A
20) The basic trade-off to consider during overbooking is between A) having wasted capacity (or inventory) or a shortage of capacity (or inventory). B) having lost sales or a shortage of capacity (or inventory). C) having wasted capacity (or inventory) or excess capacity (or inventory). D) having high sales or a shortage of capacity (or inventory).
A
21) As lead times decrease, supply chain managers are able to A) better match supply with demand. B) better match demand with supply. C) increase supply chain cost. D) decrease product availability.
A
21) Wasted capacity (or inventory) occurs when A) there are excessive cancellations. B) there are few cancellations. C) an expensive backup needs to be arranged. D) all of the above
A
22) Temporal aggregation A) is the process of combining orders across time. B) increases a firm's responsiveness. C) decreases transportation costs because of economies of scale. D) all of the above
A
24) The cost of a capacity shortage is A) the reduction in margin that results from having to go to a backup source. B) the margin that would have been generated if the capacity had been used for production. C) the productivity increase generated when the capacity is used for production. D) the sales potential of excess capacity kept in reserve for emergency production.
A
26) Good design collaboration for manufacturability and supply chain can A) reduce product cost. B) increase required inventories. C) increase transportation cost. D) decrease manufacturability.
A
27) Shifting demand from peak to off-peak periods is beneficial if the discount given A) during the off-peak period is more than offset by the decrease in cost because of a larger peak. B) during the off-peak period is more than offset by the decrease in cost because of a smaller peak. C) during the peak period is more than offset by the decrease in cost because of a smaller peak. D) during the peak period is more than offset by the decrease in cost because of a larger peak.
A
27) There is a cost associated with postponement because the production cost using postponement is typically A) higher than the production cost without it. B) lower than the production cost without it. C) very stable. D) equal to the production cost without it.
A
27) Which of the following is not a major SRM process? A) Supply Planning B) Buy C) Design Collaboration D) Source
A
29) Single sourcing for a product is used to A) guarantee the supplier sufficient business when the supplier has to make a significant buyer-specific investment. B) ensure a degree of competition. C) ensure the possibility of a backup should a source fail to deliver. D) all of the above
A
3) A high level of product availability requires A) large inventories and tends to raise costs for the supply chain. B) large inventories and tends to reduce costs for the supply chain. C) small inventories and tends to raise costs for the supply chain. D) small inventories and tends to reduce costs for the supply chain.
A
3) The two forms of supply chain assets are A) capacity and inventory. B) capacity and revenue. C) inventory and revenue. D) inventory and warehouse space.
A
30) The ________ is the party that moves or transports the product. A) carrier B) producer C) shipper D) consumer
A
30) The amount reserved for the spot market should be A) such that the expected marginal revenue from the spot market equals the current revenue from a bulk sale. B) such that the expected marginal revenue from the spot market exceeds the current revenue from a bulk sale. C) such that the expected marginal revenue from the spot market is less than the current revenue from a bulk sale. D) equal to the maximum revenue available from the spot.
A
31) If each supplier of a firm does not have a somewhat different role, it is very likely that the firm's supply base is A) too large. B) too small. C) neither too large or too small. D) both too large and too small.
A
32) In tailored sourcing, firms use a combination of two supply sources, A) one focusing on cost but unable to handle uncertainty well, and the other focusing on flexibility to handle uncertainty, but at a higher cost. B) one focusing on cost and able to handle uncertainty well, and the other focusing on flexibility to handle uncertainty, but at a higher cost. C) one focusing on cost but unable to handle uncertainty well, and the other focusing on flexibility to handle uncertainty at a lower cost. D) one focusing on cost and able to handle uncertainty well, and the other focusing on flexibility to handle uncertainty at a lower cost.
A
32) Major infrastructure elements for transportation systems would not include A) air. B) rail. C) canals. D) seaports.
A
33) The forecasting function is A) the foundation of any revenue management system. B) unnecessary for a revenue management system. C) an added plus for any revenue management system. D) likely to create problems for any revenue management system.
A
35) A contract that allows a retailer to return unsold inventory up to a specified amount, at an agreed upon price is a A) buyback or returns contract. B) revenue-sharing contract. C) quantity flexibility contract. D) quantity discount contract.
A
35) A high level of product availability requires ________, which raises supply chain costs. A) large inventories B) increased revenues C) reduced costs D) understocking the product
A
35) ________ carriers offer a very fast and fairly expensive mode of transportation for cargo. A) Air B) Truck C) Rail D) Water
A
36) A manager can reduce demand uncertainty via the following means EXCEPT A) lengthened forecasting window. B) quick response. C) postponement. D) tailored sourcing.
A
36) The key processes under CRM are A) production. B) sales. C) marketing. D) order management.
A
40) A downside to which contract is that it leads to surplus inventory that must be salvaged or disposed? A) buyback or returns contract B) revenue-sharing contract C) quantity flexibility contract D) all of the above
A
40) In volume-based tailored sourcing A) the predictable part of a product's demand is produced at an efficient facility. B) the uncertain portion is produced at an efficient facility. C) the predictable part of a product's demand is produced at a flexible facility. D) the predictable part of a product's demand is outsourced.
A
40) There are 4 major SRM processes. Which of the following is not one of these? A) Sell B) Negotiate C) Source D) Buy
A
42) A high level of product availability requires ________, which raises supply chain costs. A) large inventories B) increased revenues C) reduced costs D) understocking the product
A
42) Which of the following is not listed as an important trend that will affect IT in the supply chain? A) Improved speed of hardware and software B) Growth as software as a service C) Increased availability of real-time data D) Increased use of mobile technology
A
43) A manager can reduce demand uncertainty via the following means EXCEPT A) lengthened forecasting window. B) quick response. C) postponement. D) tailored sourcing.
A
43) The tactic of overbooking or overselling of the available asset is suitable in any situation in which customers are able to cancel orders and the value of the asset drops significantly after a deadline. Which of the following would not be an example of this? A) Computers B) Airlines seats C) Production capacity D) Items designed for a specific holiday
A
47) In volume-based tailored sourcing A) the predictable part of a product's demand is produced at an efficient facility. B) the uncertain portion is produced at an efficient facility. C) the predictable part of a product's demand is produced at a flexible facility. D) the predictable part of a product's demand is outsourced.
A
47) The procurement process for direct materials should focus on A) improving coordination and visibility with the supplier. B) decreasing the transaction cost for each order. C) consolidation of orders to take advantage of economies of scale and quantity discounts. D) all of the above
A
5) Which of the following uses transportation to minimize the total cost (transportation, inventory, information, and facility) while providing an appropriate level of responsiveness to the customer? A) The shipper B) The supplier C) The manufacturer D) The carrier
A
56) The main risks of moving functions to a third party would not include A) rising fuel costs. B) underestimation of the cost of coordination. C) reduced customer/supplier contact. D) loss of internal capability.
A
57) Using a third party requires a firm to share demand information and in some cases intellectual property. This risk would be described as A) leakage of sensitive data and information. B) underestimation of the cost of coordination. C) reduced customer/supplier contact. D) loss of internal capability.
A
7) The loss incurred by a firm for each unsold unit at the end of the selling season is A) the cost of overstocking the product. B) the cost of stocking the product. C) the cost of understocking the product. D) the cost of overselling the product.
A
7) To be of the right kind, information needs to be A) useful. B) irrelevant. C) meaningless. D) B and C only
A
7) To differentiate between the various market segments, the firm must A) create barriers by identifying product or service attributes that the segments value differently. B) eliminate barriers that identify product or service attributes that the segments value differently. C) negotiate separately with different market segments that value product or service attributes differently. D) develop pricing structures based on the volume of various product or service attributes.
A
8) In most instances of differential pricing, demand from the segment paying the lower price A) arises earlier in time than demand from the segment paying the higher price. B) arises later in time than demand from the segment paying the higher price. C) arises about the same time as demand from the segment paying the higher price. D) arises both earlier and later in time than demand from the segment paying the higher price.
A
8) The total amount paid to various carriers for transporting products to customers is A) transportation cost. B) inventory cost. C) facility cost. D) processing cost.
A
Learning Outcome: Describe major approaches to forecasting 34) The goal of optimization in revenue management is to identify a tactic A) using forecasts of customer behavior that will be most effective. B) using linear regression that will maximize revenue. C) using linear regression that will minimize cost. D) that will not have to be altered.
A
10) When the capacity reserved for higher price buyers is wasted because demand from the higher price segment does not materialize, this is A) spill. B) spoilage. C) wastage. D) excess.
B
13) Processes that focus on internal operations within the enterprise are considered A) Customer Relationship Management (CRM). B) Internal Supply Chain Management (ISCM). C) Supplier Relationship Management (SRM). D) Transaction Management Foundation (TMF).
B
13) Which of the following would be a strategy to increase the salvage value of an unsold product? A) Discarding the unused material B) Selling unsold product to an outlet store C) Keeping the product in inventory until it sells D) Reduce the level of cycle inventory
B
14) Which mode of transportation is the dominant form of freight transportation? A) Air B) Truck C) Rail D) Water E) Pipeline
B
14) Which of the following is not a benefit of effective sourcing decisions? A) Appropriate supplier contracts can allow for the sharing of risk, resulting in higher profits for both the supplier and the buyer. B) Better economies of scale can be achieved if orders within a firm are disaggregated. C) Design collaboration can result in products that are easier to manufacture and distribute, resulting in lower overall costs. D) Firms can achieve a lower purchase price by increasing competition through the use of auctions.
B
16) Which of the following is not a factor determining the success of software firms focused on a macro process? A) Functional performance B) Color and images on working screens C) Integration with other macro processes D) Strength of the software firm's ecosystem
B
17) The tactic of varying price over time is suitable for assets A) that do not have a clear date beyond which they lose a lot of their value. B) that have a clear date beyond which they lose a lot of their value. C) where customers are able to cancel orders and the value of the asset drops significantly after a deadline. D) where customers are unable to cancel orders and the value of the asset drops significantly after a deadline.
B
18) Which of the following is not a factor that must be considered when scoring and assessing suppliers? A) Purchase pricing B) Sales performance C) Design collaboration capability D) Exchange rates, taxes, and duties
B
19) An increase in forecast accuracy A) decreases both the overstocked and understocked quantity and decreases a firm's profits. B) decreases both the overstocked and understocked quantity and increases a firm's profits. C) increases both the overstocked and understocked quantity and decreases a firm's profits. D) increases both the overstocked and understocked quantity and increases a firm's profits.
B
2) Revenue management is A) the use of marketing tools to increase revenue. B) the use of pricing to increase the profit generated from a limited supply of supply chain assets. C) a process designed to determine the best use of funds generated through sales. D) the use of accounting tools to monitor cash flow.
B
2) The entire set of business processes required to purchase goods and services is A) procurement. B) sourcing. C) supplier scoring and assessment. D) supplier selection.
B
2) Transportation plays a key role in every supply chain because A) products are normally produced and consumed in the same location. B) products are rarely produced and consumed in the same location. C) the cost of transportation is inconsequential. D) transportation is not a factor in determining profitability.
B
20) Supply chain managers are able to A) increase their forecast accuracy as lead times increase. B) increase their forecast accuracy as lead times decrease. C) decrease their forecast accuracy as lead times decrease. D) decrease their forecast accuracy as lead times increase.
B
21) Which of the following is not a key process under CRM? A) Market B) Demand Planning C) Order Management D) Sell
B
22) A shortage of capacity (or inventory) occurs when A) there are excessive cancellations. B) there are few cancellations. C) an expensive backup needs to be arranged. D) B and C only
B
23) As the total quantity for the season is broken up into multiple smaller orders, the buyer is better able to A) match supply and demand and increase cost. B) match supply and demand and increase profitability. C) match supply and demand and decrease profitability. D) match supply and demand and decrease product availability.
B
23) The cost of wasted capacity is A) the reduction in margin that results from having to go to a backup source. B) the margin that would have been generated if the capacity had been used for production. C) the productivity increase generated when the capacity is used for production. D) the sales potential of excess capacity kept in reserve for emergency production.
B
24) Quantity discounts lower the unit cost A) but tend to increase the required batch size and as a result, reduce the cycle inventory. B) but tend to increase the required batch size and as a result the cycle inventory. C) and tend to reduce the required batch size and as a result the cycle inventory. D) and tend to reduce the required batch size and as a result, increase the cycle inventory.
B
25) Quick response is clearly advantageous to A) a distributor in the supply chain. B) a retailer in the supply chain. C) a manufacturer in the supply chain. D) every step in the supply chain.
B
25) The ISCM processes should have strong integration with the SRM macro process because A) SRM applications have the most data and insight on customer behavior to be used in forecasting. B) supply planning, fulfillment, and field service are all dependent on suppliers. C) order management must integrate closely with fulfillment and be an input for effective demand planning. D) A and B only
B
26) An effective revenue management tactic when faced with seasonal peaks is to charge a A) high price during the peak period and a higher price during off-peak periods. B) higher price during the peak period and a lower price during off-peak periods. C) lower price during the peak period and a higher price during off-peak periods. D) low price during the peak period and a lower price during off-peak periods.
B
26) Quick response results in A) the manufacturer making a lower profit in the long term if all else is unchanged. B) the manufacturer making a lower profit in the short term if all else is unchanged. C) the retailer making a lower profit in the short term if all else is unchanged. D) the distributor making a lower profit in the short term if all else is unchanged.
B
27) Ignoring uncertainty in demand encourages a greater use of A) expensive but flexible transportation modes. B) inexpensive and inflexible transportation modes. C) inexpensive and flexible transportation modes. D) expensive and inflexible transportation modes.
B
27) The viability of suppliers is especially important for suppliers who A) provide mission-critical products that would be easy to replace. B) provide mission-critical products that would be difficult to replace. C) provide non-critical products that would be difficult to replace. D) provide non-critical products that would be easy to replace.
B
28) Postponement is valuable for a firm that A) sells a large variety of products with demand that is dependent and comparable in size. B) sells a large variety of products with demand that is independent and comparable in size. C) sells a small variety of products with demand that is dependent and comparable in size. D) sells a small variety of products with demand that is independent and comparable in size.
B
28) Select an IT system that addresses the company's key success factors because A) every industry has the same key success factors. B) IT systems need to give a company an advantage in the areas most crucial to the success of the business. C) these elements do not determine whether or not a company is going to be successful. D) A and B only
B
28) Supplier performance should be compared based on A) purchase price alone. B) their impact on total cost. C) the supplier's quality of material. D) the ability of the supplier to coordinate forecasting and planning.
B
29) Postponement is A) not very effective if a large fraction of demand comes from multiple products. B) not very effective if a small fraction of demand comes from a single product. C) only effective if a large fraction of demand comes from a single product. D) effective even if a large fraction of demand comes from a single product.
B
29) The fundamental trade-off between selling in bulk or on the spot market is A) different from the situation where a firm serves two market segments. B) similar to the case when a firm serves two market segments. C) similar to the case where a firm must deal with seasonal demand. D) similar to the case where a firm has a perishable asset.
B
31) Under tailored postponement, a firm produces the amount that is very likely to sell using A) the lower cost production method with postponement and produces the portion of demand that is uncertain using postponement. B) the lower cost production method without postponement and produces the portion of demand that is uncertain using postponement. C) the higher cost production method with postponement and produces the portion of demand that is uncertain using postponement. D) the higher cost production method without postponement and produces the portion of demand that is uncertain using postponement.
B
32) If adding a supplier with a unique and valuable capability does not clearly add to a firm's total cost, the supply base may be A) too large. B) too small. C) neither too large or too small. D) both too large and too small.
B
34) The text states that the effectiveness of carriers is influenced by infrastructure. Which of the following would not fall into this category? A) Ports B) Effective management C) Roads D) Airports
B
35) The textbook defines three macro supply chain processes. Which of the following is not one of these? A) Customer relationship management B) External supply chain management C) Internal supply chain management D) Supplier relationship management
B
36) A contract where the buyer pays a minimal amount for each unit purchased from the supplier but shares a fraction of the revenue for each unit sold is A) buyback or returns contract. B) revenue-sharing contract. C) quantity flexibility contract. D) quantity discount contract.
B
37) Internal supply chain management is focused on operations internal to the enterprise. Which of the following would not fall into this category? A) Supply planning B) Customer support C) Fulfillment D) Field service
B
37) It is important for the firm to structure its revenue management program in a way that A) it is presented simply as a mechanism for extracting maximum revenue. B) revenue increases while improving service along some dimension that is important to customers that pay the highest price. C) profit is maximized. D) all of the above
B
37) ________ are the preferred mode of transport for online businesses such as Amazon.com and Dell, as well as for companies such as W.W. Grainger and McMaster-Carr that send small packages to customers. A) Air B) Package carriers C) Rail D) Water
B
37) ________ is the set of actions a supply chain takes to reduce the replenishment lead time. A) Lengthened forecasting window B) Quick response C) Postponement D) Tailored sourcing
B
38) Key decisions include location and capacity planning of facilities. Which process of the ICSM would this describe? A) Demand planning B) Strategic planning C) Supply planning D) Fulfillment
B
41) Example industries of a product whose value varies by market segment would not include A) airlines. B) grocery stores. C) hotels. D) car rental companies.
B
44) ________ is the set of actions a supply chain takes to reduce the replenishment lead time. A) Lengthened forecasting window B) Quick response C) Postponement D) Tailored sourcing
B
48) The procurement process for indirect materials should focus on A) improving coordination and visibility with the supplier. B) decreasing the transaction cost for each order. C) consolidation of orders to take advantage of economies of scale and quantity discounts. D) all of the above
B
5) The selection of suppliers, design of supplier contracts, product design collaboration, procurement of material, and evaluation of supplier performance are a part of A) procurement. B) sourcing. C) supplier scoring and assessment. D) supplier selection.
B
5) The use of differential pricing should A) decrease total profits for a firm. B) increase total profits for a firm. C) increase capacity for a firm. D) decrease capacity utilization for a firm.
B
51) Which of the following is a traditional logistics driver of sourcing? A) Pricing B) Inventory C) Sourcing D) Information
B
52) The decision to have a third party perform a supply chain function is called A) insourcing. B) outsourcing. C) offshoring. D) onshoring.
B
54) There are various mechanisms that third parties can use to grow the supply chain surplus. Which of the following is not one of these? A) Capacity aggregation B) Warehousing decentralization C) Inventory aggregation D) Warehouse aggregation
B
6) The key factors that influence the optimal level of product availability do not include A) the cost of overstocking the product. B) the cost of stocking the product. C) the cost of understocking the product. D) All of the above are key factors.
B
9) The basic trade-off to be considered by the supplier with production capacity is between A) committing to an order from a high-price buyer or waiting for a lower price buyer to arrive later on. B) committing to an order from a lower price buyer or waiting for a high-price buyer to arrive later on. C) allowing the market to be controlled by price or capacity. D) having marketing or operations establish the constraints within which orders are accepted.
B
9) The cost of holding inventory incurred by the shipper's supply chain network is A) transportation cost. B) inventory cost. C) facility cost. D) processing cost.
B
9) The successful categories of software in the evolution taking place in enterprise software will be A) those focused on the supply chain macro processes. B) those not focused on the supply chain macro processes. C) those focused on basic functions. D) both A and C
B
1) Pricing can be used to A) change available supply. B) reduce supply chain costs. C) influence demand if customers are price sensitive. D) all of the above
C
10) The cost of various facilities in the shipper's supply chain network is A) transportation cost. B) inventory cost. C) facility cost. D) processing cost.
C
10) The emergence of supply chain management has broadened the scope across which companies make decisions to A) the supplier. B) the enterprise. C) the entire supply chain. D) the customer.
C
11) Cost of Goods Sold (COGS) represents A) less than 20 percent of sales for most major manufacturers. B) less than 50 percent of sales for most major manufacturers. C) well over 50 percent of sales for most major manufacturers. D) well over 80 percent of sales for most major manufacturers.
C
11) The costs of overstocking and understocking have a direct impact on A) the optimal cycle service level but not profitability. B) profitability but not the optimal cycle service level. C) both the optimal cycle service level and profitability. D) neither the optimal cycle service level or profitability.
C
12) An order from a lower price buyer A) should always be accepted rather than waiting for potential revenue from a higher price buyer. B) should only be accepted if the expected revenue from a higher price buyer is higher than the current revenue from the lower price buyer. C) should be accepted if the expected revenue from a higher price buyer is lower than the current revenue from the lower price buyer. D) should not be accepted if the expected revenue from a higher price buyer is lower than the current revenue from the lower price buyer.
C
13) Which of the following is not a benefit of effective sourcing decisions? A) Better economies of scale can be achieved if orders within a firm are aggregated. B) More efficient procurement transactions can significantly reduce the overall cost of purchasing. C) Sequential design results in products that are easier to manufacture and distribute, resulting in lower overall costs. D) Good procurement processes can facilitate coordination with the supplier and improve forecasting and planning.
C
14) Processes that focus on upstream interactions between the enterprise and its suppliers are part of A) Customer Relationship Management (CRM). B) Internal Supply Chain Management (ISCM). C) Supplier Relationship Management (SRM). D) Transaction Management Foundation (TMF).
C
15) A perishable asset is A) something that decays or deteriorates. B) an item that has a short life span. C) any asset that loses value over time. D) all of the above
C
17) A company with multiple products, that chooses to delay product differentiation until closer to the point of sale, is using A) tailored sourcing. B) quick response. C) postponement. D) improved forecasting.
C
17) Which transportation network design option establishes an extra layer between suppliers and retailers to store inventory and to serve as a transfer location? A) Direct shipping network B) Direct shipping with milk runs C) All shipments via central DC D) Shipping via DC using milk runs
C
18) Effective differential pricing over time will generally A) decrease the level of product availability for the consumer willing to pay full price and also decrease total profits for the retailer. B) decrease the level of product availability for the consumer willing to pay full price but will increase total profits for the retailer. C) increase the level of product availability for the consumer willing to pay full price and also increase total profits for the retailer. D) increase the level of product availability for the consumer willing to pay full price but will decrease total profits for the retailer.
C
19) The tactic of overbooking or overselling the available asset is suitable where A) there is a clear date beyond which the asset loses a lot of its value. B) there is no clear date beyond which the asset loses a lot of its value. C) customers are able to cancel orders and the value of the asset drops significantly after a deadline. D) customers are unable to cancel orders and the value of the asset drops significantly after a deadline.
C
22) The CRM processes are crucial to the supply chain because A) all demand, and therefore revenue, ultimately arises from the customer. B) CRM processes (and also CRM software) must be integrated with internal operations to optimize performance. C) customer-focused units should be working independently from internal operations. D) A and B only
C
22) The delivery frequency of a supplier can be converted into the cost of holding A) cycle inventory. B) safety inventory. C) both cycle and safety inventory. D) neither cycle nor safety inventory.
C
24) If quick response allows multiple orders in the season, A) profits decrease and the overstock quantity decreases. B) profits decrease and the overstock quantity increases. C) profits increase and the overstock quantity decreases. D) profits increase and the overstock quantity increases.
C
24) Which of the following is not a key process under ISCM? A) Strategic Planning B) Fulfillment C) Supply Collaboration D) Demand Planning
C
25) Good information coordination will not result in A) better replenishment planning. B) a decrease in the inventory carried as well as the sales lost because of lack of availability. C) a decrease in the bullwhip effect. D) a decrease in the sales lost because of lack of availability.
C
25) The goal when making the overbooking decision is to maximize supply chain profits by A) maximizing the value of wasted capacity and the cost of capacity shortage. B) maximizing supply chain profits. C) minimizing the cost of wasted capacity and the cost of capacity shortage. D) minimizing the cost of wasted capacity and minimizing capacity shortages.
C
26) Managers should ensure that a firm's transportation strategy A) involves cost minimization. B) involves profit maximization. C) supports its competitive strategy. D) is separate from competitive strategy.
C
26) Which of the following is a major SRM process? A) Strategic Planning B) Order Management C) Design Collaboration D) Supply Planning
C
28) Inexpensive and inflexible transportation modes tend to A) perform poorly. B) perform very poorly when plans change. C) perform well when everything goes as planned. D) all of the above
C
29) The ________ is the party that requires the movement of the product between two points in the supply chain. A) carrier B) producer C) shipper D) consumer
C
3) The process used to rate supplier performance is A) procurement. B) sourcing. C) supplier scoring and assessment. D) supplier selection.
C
31) Use IT systems to support decision making, not to make decisions because A) the software available today can make many supply chain decisions for management. B) companies need to maintain the amount of managerial effort they spend on supply chain issues. C) management needs to be able to make adjustments in the supply chain because the competitive and customer landscape changes. D) B and C only
C
31) Which of the following is the fastest delivery method of transportation? A) Rail B) Truck C) Air D) Intermodal
C
34) Information on product margins, prices, quality, delivery lead times, and so on, are all important in making sourcing decisions. Which supply chain driver is relevant here? A) Transportation B) Facilities C) Sourcing D) Inventory
C
34) The level of product availability, also referred to as the ________, is one of the primary measures of a supply chain's responsiveness. A) no stock out level B) reliability level C) customer service level D) logistics measure
C
34) Which of the following is not a contract that will increase overall profits by making the supplier share some of the buyer's demand uncertainty? A) Buyback or returns contracts B) Quantity flexibility contracts C) Renewal contracts D) Revenue-sharing contracts
C
36) ________ typically move commodities over large distances at lower costs per unit shipped. A) Air B) Truck C) Rail D) Package carriers
C
37) A contract that allows the buyer to modify the order (within limits agreed to by the supplier) as demand visibility increases closer to the point of sale is a A) buyback or returns contract. B) revenue-sharing contract. C) quantity flexibility contract. D) quantity discount contract.
C
38) In order to achieve the greatest value, A) supply planning and revenue management should be performed separately. B) supply planning should be completed first. C) supply planning and revenue management should be combined. D) revenue management should be completed first.
C
38) ________ allows a firm to increase profits and better match supply and demand if the firm produces a large variety of products whose demand is unpredictable, not positively correlated, and is of about the same size. A) Shortened forecasting window B) Quick response C) Postponement D) Tailored sourcing
C
39) Capacity assets in the supply chain do not exist for A) transportation. B) production. C) inventory. D) storage.
C
39) ________ may reduce overall profits for a firm if a single product contributes the majority of the demand. A) Shortened forecasting window B) Quick response C) Postponement D) Tailored sourcing
C
4) A supply chain needs to achieve a balance between the level of availability and the cost of inventory that A) maximizes supply chain revenues. B) minimizes supply chain costs. C) maximizes supply chain profitability. D) maximizes supply chain availability.
C
4) Which of the following is not a characteristic information must have to be useful when making supply chain decisions? A) Information must be accurate. B) Information must be accessible in a timely manner. C) Information must be interesting. D) Information must be of the right kind.
C
41) In the textbook, Gartner listed the top five ERP software vendors in 2010. Which of the following is not one of these? A) SAP B) Microsoft C) Peoplesoft D) Oracle
C
41) The level of product availability, also referred to as the ________, is one of the primary measures of a supply chain's responsiveness. A) no stock out level B) reliability level C) customer service level D) logistics measure
C
45) Which of the following is not listed as a step in revenue management? A) Quantify the benefits of revenue management. B) Implement a forecasting process. C) Involve sales and not operations D) Understand and inform the customer.
C
45) ________ allows a firm to increase profits and better match supply and demand if the firm produces a large variety of products whose demand is unpredictable, not positively correlated, and is of about the same size. A) Shortened forecasting window B) Quick response C) Postponement D) Tailored sourcing
C
46) ________ may reduce overall profits for a firm if a single product contributes the majority of the demand. A) Shortened forecasting window B) Quick response C) Postponement D) Tailored sourcing
C
49) The procurement process for both direct and indirect materials should work on A) improving coordination and visibility with the supplier. B) decreasing the transaction cost for each order. C) consolidation of orders to take advantage of economies of scale and quantity discounts. D) all of the above
C
5) Whether the optimal level of product availability is high or low depends on where a particular company believes they can A) minimize cost. B) maximize revenue. C) maximize profits. D) maximize product availability.
C
50) Which of the following is a cross-functional driver of sourcing? A) Transportation B) Inventory C) Sourcing D) Faciltities
C
53) The decision to move a production facility outside of domestic boundaries and still maintain ownership is called A) insourcing. B) outsourcing. C) offshoring. D) onshoring.
C
58) Considering the factors influencing total cost and supplier performance, which of the following is the LEAST quantifiable factor? A) Supplier price B) Supplier terms C) Support D) Warehousing cost
C
6) Price has traditionally been the only dimension that suppliers have been compared on during the process of A) procurement. B) sourcing. C) supplier scoring and assessment. D) supplier selection.
C
7) Supplier characteristics such as lead time, reliability, quality, and design capability that impact the total cost of doing business with a supplier should be considered during the process of A) procurement. B) sourcing. C) supplier scoring and assessment. D) supplier selection.
C
8) The margin lost by a firm for each lost sale because there is no inventory on hand is A) the cost of overstocking the product. B) the cost of stocking the product. C) the cost of understocking the product. D) the cost of overselling the product.
C
9) The goal of procurement is A) to analyze spending across various suppliers and component categories to identify opportunities for decreasing the total cost. B) to analyze spending across various suppliers and component categories to identify opportunities for increasing the total cost. C) to enable orders to be placed and delivered on schedule at the lowest possible overall cost. D) to enable orders to be placed and delivered on schedule regardless of cost.
C
9) The margin lost from current as well as future sales if the customer does not return should be included in A) the cost of overstocking the product. B) the cost of stocking the product. C) the cost of understocking the product. D) the cost of overselling the product.
C
1) Information technology (IT) consists of the tools A) used to gain awareness of information. B) to analyze information. C) to act on information to improve the performance of the supply chain. D) B and C only
D
1) The level of product availability A) is also referred to as the customer service level. B) is an important component of any supply chain's responsiveness. C) increases revenues for the supply chain by increasing sales. D) Only A and B are true.
D
10) Which of the following is not a situation involving the trade-off between the cost of overstocking and the cost of understocking? A) Seasonal products where all leftover items must be disposed of at the end of the season B) Continuously stocked items where demand during stockout is backlogged C) Continuously stocked items where demand during stockout is lost D) Continuously stocked items where demand during stockout is redirected
D
11) The cost of loading/unloading orders, as well as other processing costs associated with transportation, is considered A) transportation cost. B) inventory cost. C) facility cost. D) processing cost.
D
11) Which of the following is not one of the supply chain macro processes? A) Customer Relationship Management (CRM) B) Internal Supply Chain Management (ISCM) C) Supplier Relationship Management (SRM) D) Transaction Management Foundation (TMF)
D
12) Which of the following is not a managerial lever to increase profitability? A) Increasing the salvage value of each unit B) Decreasing the margin lost from a stockout C) Reducing demand uncertainty D) Reducing the level of product availability below optimal
D
13) To successfully use revenue management when serving multiple customer segments, a firm must use which of the following tactics effectively? A) Price based on the value assigned by each segment B) Use different prices for each segment C) Forecast at the segment level D) all of the above
D
13) Which mode of transportation is the least expensive? A) Air B) Truck C) Rail D) Water
D
14) The amount of the asset reserved for the higher price segment is such that A) all orders from the lower priced segment will be accepted and filled. B) the expected marginal revenue from the higher priced segment is more than the price to the lower price segment. C) the expected marginal revenue from the higher priced segment is less than the price to the lower price segment. D) the expected marginal revenue from the higher priced segment equals the price to the lower price segment.
D
15) As the ratio of the cost of overstocking to the cost of understocking gets smaller, A) the optimal level of product availability becomes irrelevant. B) the optimal level of product availability decreases. C) the optimal level of product availability remains stable. D) the optimal level of product availability increases.
D
15) Software that provides the foundation upon which the macro processes rest through basic ERP systems, infrastructure software, and integration software is A) Customer Relationship Management (CRM). B) Internal Supply Chain Management (ISCM). C) Supplier Relationship Management (SRM). D) Transaction Management Foundation (TMF).
D
15) When designing a sourcing strategy, it is important for a firm to A) develop a process that will procure materials at the lowest possible cost. B) maintain a record of all contracts, receipts, issues and other transactions in the event of lawsuits. C) maximize the profitability of the distributors within the supply chain. D) be clear on the factors that have the greatest influence on performance and target improvement on those areas.
D
15) Which mode of transportation is used primarily for petroleum and natural gas? A) Air B) Truck C) Water D) Pipeline
D
16) Which of the following is (are) revenue management tactics appropriate for perishable assets? A) Vary price over time to maximize expected revenue B) Under book sales of the asset to account for unexpected demand C) Overbook sales of the asset to account for cancellations D) all of the above
D
16) Which of the following is not a factor that must be considered when scoring and assessing suppliers? A) Quoted price B) Replenishment lead time C) On-time performance D) Supply affability
D
16) With reduced demand uncertainty, a supply chain manager can A) increase both overstocking and understocking. B) increase overstocking and reduce understocking. C) reduce overstocking and increase understocking. D) reduce both overstocking and understocking.
D
17) The ability to integrate is important to a customer because A) applications that are easy to integrate are generally easier to get implemented and produce value. B) applications that integrate across macro processes will be able to provide the benefits of making decisions for the extended supply chain. C) firms that do not have integrated solutions in all three macro processes have a competitive advantage. D) both A and B
D
17) Which of the following is not a factor that must be considered when scoring and assessing suppliers? A) Supply flexibility B) Supply quality C) Inbound transportation cost D) Information instigation capability
D
18) The goal of the CRM macro process is to A) negotiate an effective contract that best meets enterprise needs. B) improve the design of products. C) fulfill demand generated by ISCM processes. D) generate customer demand and facilitate transmission and tracking of orders.
D
18) Which transportation network design option uses a combination of other options to reduce the cost and improve responsiveness of the supply chain? A) Direct shipping network B) Direct shipping with milk runs C) Shipping via DC using milk runs D) Tailored network
D
19) Weakness in the CRM process results in A) orders that are not processed and executed effectively. B) demand being lost. C) a poor customer experience. D) all of the above
D
19) What trade-offs do managers need to consider when making transportation decisions? A) Transportation cost versus inventory cost B) Transportation cost versus customer responsiveness C) Inventory cost versus customer responsiveness D) A and B only
D
2) A supply chain can use a high level of product availability to A) improve its responsiveness and attract customers. B) reduce costs for the supply chain by reducing inventories. C) increase revenues for the supply chain by increasing sales. D) Only A and C are true.
D
2) Information is A) the supply chain driver that serves as the glue allowing the other three drivers to work together to create an integrated, coordinated supply chain. B) crucial to supply chain performance. C) the key to the success of a supply chain. D) all of the above
D
20) Scoring the performance of suppliers in terms of replenishment lead time thus allows the firm to evaluate the impact each supplier has on A) the cost of holding cycle inventory. B) the cost of holding replacement inventory. C) the purchase price of material. D) the cost of holding safety inventory.
D
20) The fundamental supply chain decision(s) involving the trade-off between transportation and inventory costs is (are) A) choice of transportation mode. B) inventory aggregation. C) level of customer responsiveness. D) both A and B
D
20) Which of the following is a key process under CRM? A) Strategic Planning B) Fulfillment C) Field Service D) Order Management
D
21) Cheaper modes of transport typically have A) shorter lead times and smaller minimum shipment quantities. B) shorter lead times and larger minimum shipment quantities. C) longer lead times and smaller minimum shipment quantities. D) longer lead times and larger minimum shipment quantities.
D
21) On-time performance affects the variability of the lead time, because A) a reliable supplier has high variability of lead time. B) a reliable supplier has low variability of lead time. C) an unreliable supplier has high variability of lead time. D) B and C
D
22) Which of the following is not a consequence of being able to place a second order during the season for a seasonal product? A) The expected total quantity ordered during the season with two orders is less. B) The average overstock to be disposed of at the end of the sales season is less. C) The profits are higher. D) The average inventory level is higher.
D
23) Sourcing a product overseas may have A) higher product cost and will generally incur a higher inbound transportation cost. B) higher product cost but will generally incur a lower inbound transportation cost. C) lower product cost and will generally incur a lower inbound transportation cost. D) lower product cost but will generally incur a higher inbound transportation cost.
D
23) Tailored transportation is the use of different transportation networks and modes based on A) customer density. B) customer distance from warehouse. C) customer size and location. D) all of the above
D
23) Which of the following is a key process under ISCM? A) Design Collaboration B) Negotiate C) Supply Collaboration D) Supply Planning
D
24) The most important operational decision related to transportation in a supply chain is A) minimizing cost of transportation. B) maximizing profitability of the supply chain. C) reducing the level of cycle inventory. D) the routing and scheduling of deliveries.
D
25) Which of the following are computational procedures that can be used to make decisions regarding the routing and scheduling of deliveries? A) the savings matrix method B) the generalized assignment method C) the loss prevention method D) A and B only
D
28) Most firms must decide what fraction of an asset to A) sell in bulk and what fraction of the asset to discard. B) save for the spot market and what fraction of the asset to discard. C) save for emergencies and what fraction of the asset to rework. D) sell in bulk and what fraction of the asset to save for the spot market.
D
29) Take incremental steps and measure value because A) some of the worst IT disasters are due to the fact that companies try to implement IT systems in a wide variety of processes at the same time. B) companies should not take a big picture perspective. C) the big picture perspective should be implemented in digestible pieces. D) A and C only
D
3) Information Technology (IT) A) consists of the hardware and software throughout a supply chain that gather, analyze, and act on information. B) serves as the eyes and ears (and sometimes a portion of the brain) of management in a supply chain. C) can have a significant impact on a firm's performance. D) all of the above
D
3) The key players in any transportation that takes place within a supply chain are A) the shipper and the receiver. B) the shipper and the supplier. C) the shipper and the manufacturer. D) the shipper and the carrier.
D
30) Align the level of sophistication with the need for sophistication because A) there is a trade-off between the ease of implementing a system and the system's level of complexity. B) erring on the less sophisticated side leaves the firm with a competitive weakness. C) trying to be too sophisticated leads to a higher possibility of the entire system failing. D) all of the above
D
30) The purpose of having multiple suppliers for a product is to A) guarantee the supplier sufficient business when the supplier has to make a significant buyer-specific investment. B) ensure a degree of competition. C) ensure the possibility of a backup should a source fail to deliver. D) both B and C
D
30) When a firm uses production with postponement to satisfy a part of its demand with the rest being satisfied without postponement, it is using A) adjustable postponement. B) flexible postponement. C) managed postponement. D) tailored postponement.
D
31) The reserved quantity for the spot market will be affected by A) the difference in margin between the spot market and the bulk sale. B) the distribution of demand from the bulk sale. C) the distribution of demand from the spot market. D) A and C only
D
32) Companies need to think about the future because A) trends in a company's industry regarding insignificant characteristics could become crucial in the future. B) managers need to explore how flexible the systems will be when changes are required in the future. C) IT systems often last for many more years than originally planned. D) all of the above
D
32) Successful revenue management requires A) a proper understanding of customer preferences. B) a quantification of the impact of various tactics on consumer behavior. C) a clear focus on profitability. D) A and B only
D
33) A shipper uses transportation to minimize the total cost while providing an appropriate level of responsiveness to the customer. Which of the following is not considered to be a major part of the total cost? A) Sourcing B) Inventory C) Information D) Production
D
33) In product-based tailored sourcing A) low-volume products with uncertain demand are obtained from a flexible source. B) high-volume products with less demand uncertainty are obtained from an efficient source. C) high-volume products with less demand uncertainty are obtained from a flexible source. D) A and B only
D
33) To improve overall profits, the supplier must design a contract that A) encourages the buyer to purchase more. B) increases the level of product availability. C) requires the supplier to share in some of the buyer's demand uncertainty. D) all of the above
D
33) Which of the following is not true concerning information supporting supply chain decisions? A) Information must be accurate B) Information must be accessible in a timely fashion C) Information must be of the right kind D) Information needs to be kept confidential
D
36) The sales force must understand the revenue management tactic in place A) in order to align their sales pitch accordingly. B) in order to identify those customers who truly need the supply chain asset during the peak period. C) in order to identify those customers that will benefit from moving their order to the off-peak period. D) all of the above
D
38) A contract that decreases overall costs but leads to higher lot sizes and thus higher levels of inventory in the supply chain is a A) buyback or returns contract. B) revenue-sharing contract. C) quantity flexibility contract. D) quantity discount contract.
D
38) There are three basic questions to be considered when designing a transportation network between two stages of a supply chain. Which of the following is not a question to be considered? A) Should transportation be direct or through an intermediate site? B) Should intermediate site stock product or only serve as a cross-docking location? C) Should each delivery route supply a single destination or multiple destinations (milk run)? D) Should transportation costs be minimized?
D
39) A contract that is used to induce performance improvement from a supplier along dimensions, such as lead time, where the benefit of improvement accrues primarily to the buyer, whereas the effort for improvement comes primarily from the supplier is a A) buyback or returns contract. B) revenue-sharing contract. C) quantity flexibility contract. D) shared savings contract.
D
39) The ________ process links each order to a specific supply source and means of transportation. A) Demand planning B) Field service C) Supply planning D) Fulfillment
D
4) Investment decisions regarding the transportation infrastructure (rails, locomotives, trucks, airplanes, etc.) are the primary concern of A) the shipper. B) the supplier. C) the manufacturer. D) the carrier.
D
4) Revenue management may be defined as A) the use of differential costing based on product or capacity availability to decrease supply chain cost. B) the use of differential costing based on customer segment, time of use, and product or capacity availability to increase profitability. C) the use of differential pricing based on customer segment, time of use, and product or capacity availability to decrease supply chain surplus. D) the use of differential pricing based on customer segment, time of use, and product or capacity availability to increase supply chain surplus.
D
4) Using the output from supplier scoring and assessment to identify the appropriate supplier(s) is A) procurement. B) sourcing. C) supplier scoring and assessment. D) supplier selection.
D
40) Revenue management adjusts the pricing and available supply of assets and has a significant impact on supply chain profitability when one of four conditions exist. Which is not one of the four conditions listed in the textbook? A) The product is highly perishable or product wastage occurs. B) Demand has seasonal and other peaks. C) The product is sold both in bulk and on the spot market. D) The value of the product is the same across different market segments.
D
41) Which contracts result in the supply chain producing retailer orders rather than actual consumer demand? A) Buyback or returns contract B) Revenue-sharing contract C) Quantity flexibility contract D) A and B
D
42) Examples of perishable assets would not include A) high-fashion apparel. B) fruits. C) computers. D) ink jet printers.
D
42) Which contracts create information distortion that result in excess inventory in the supply chain and a greater mismatch of supply and demand? A) Buyback or returns contract B) Revenue-sharing contract C) Quantity flexibility contract D) A and B only
D
43) Which type of contract is used when agents act on behalf of a principal and the dealer's margin is set to be the same as the supply chain margin, and the dealer exerts the right amount of effort? A) Buyback or returns contract B) Revenue-sharing contract C) Quantity flexibility contract D) Two-part tariffs
D
44) Overbooking as a tactic has been used in many industries. However, it has not been used as much as possible in the following industry: A) hotels. B) passenger rail. C) airline. D) transportation capacity.
D
44) Which contract increases the margin for the dealer as sales cross certain levels? A) Buyback or returns contract B) Revenue-sharing contract C) Quantity flexibility contract D) Threshold contracts
D
45) The key themes that must be communicated to suppliers as they take greater responsibility for design are A) design for logistics. B) design for manufacturability. C) design for the future. D) A and B
D
46) Which of the following is not a key principle used in design for manufacturability? A) Part commonality B) Symmetrical parts C) Using catalog parts rather than designing a new part D) All of the above are principles used in design for manufacturability.
D
5) To be accurate, information must A) give the true picture of the state of the supply chain. B) be 100 percent correct. C) paint a picture of reality that is at least directionally correct. D) A and C only
D
55) An intermediary can increase the supply chain surplus by decreasing the number of relationships required between multiple buyers and sellers. This is called A) capacity aggregation. B) inventory aggregation. C) warehouse aggregation. D) relationship aggregation.
D
6) To be accessible in a timely manner, information must be A) out of date. B) current. C) easily accessible. D) B and C only
D
6) Which of the following are issues that must be dealt with in order for differential pricing to be effective? A) The firm must differentiate between the market segments and structure its pricing to make one segment pay more than the other. B) The firm must control demand such that the lower paying segment does not utilize the entire availability of the asset. C) The firm must secure enough capacity to meet demand from each segment. D) A and B only
D
6) Which of the following is not a factor that affects carrier decisions? A) Vehicle-related cost B) Fixed operating cost C) Quantity-related cost D) Transportation cost
D
7) Which of the following is not a cost the shipper needs to consider when making transportation decisions? A) Transportation cost B) Inventory cost C) Facility cost D) Quantity-related cost
D
8) Design collaboration is important because A) about 80 percent of the cost of a product is determined during design. B) it ensures that any design changes are communicated effectively to all parties involved with designing and manufacturing the product. C) the supplier sends product in response to orders placed by the buyer. D) A and B
D
8) Information is a key ingredient A) at each stage of the supply chain. B) within each phase of supply chain decision making. C) only at each stage of the supply chain. D) A and B only
D
Learning Outcome: Describe major approaches to forecasting 35) The decision to use overbooking will A) lead to upset customers and a high cost of providing them space. B) lead to unutilized assets and lost revenue. C) lead to reduced profits. D) depend upon optimization to be successful.
D
14) Which of the following would be a strategy to decrease the margin lost in a stockout? A) Arranging for backup sourcing B) Discarding the unused material C) Selling unsold product to an outlet store D) Reduce the level of cycle inventory
A
12) Which mode of transportation is the most expensive? A) Air B) Truck C) Rail D) Water
A
1) The movement of product from one location to another as it makes its way from the beginning of a supply chain to the customer's hands is referred to as A) transportation. B) retailing. C) distribution. D) manufacturing.
A
1) The process by which companies acquire raw materials, components, products, services, and other resources from suppliers to execute their operations is A) procurement. B) sourcing. C) supplier scoring and assessment. D) supplier selection.
A
10) The role of sourcing planning and analysis is A) to analyze spending across various suppliers and component categories to identify opportunities for decreasing the total cost. B) to analyze spending across various suppliers and component categories to identify opportunities for increasing the total cost. C) to enable orders to be placed and delivered on schedule at the lowest possible overall cost. D) to enable orders to be placed and delivered on schedule regardless of cost.
A
11) If higher price buyers have to be turned away because the capacity has already been committed to lower price buyers, this is A) spill. B) spoilage. C) wastage. D) excess.
A
12) Effective sourcing processes within a firm can A) improve profits for the firm and total supply chain surplus. B) reduce profits for the firm and total supply chain surplus. C) reduce total supply chain surplus. D) reduce profits for the firm.
A
12) Processes that focus on downstream interactions between the enterprise and its customers are included in A) Customer Relationship Management (CRM). B) Internal Supply Chain Management (ISCM). C) Supplier Relationship Management (SRM). D) Transaction Management Foundation (TMF).
A
