SCM 331 Exam 1

Accounts payable turnover and days

Accounts Payable/ Cost of Goods Sold x 365 = A/P Days

Accounts receivable turnover and days

Accounts Receivable/ Sales x 365 = A/R Days

What is the main problem with the traditional order process, as depicted in this figure?

Activities are sequential and thrown "over the wall" to the downstream functional area.

The meeting opens with the manager stating, "I just reviewed the financial report on Surfers, Inc. It really doesn't cost much to serve them, does it?" Which of the following would be an appropriate response to the manager's statement?

Activity-based costing could better show us how much it really costs to serve Surfers, Inc.

Which of the following companies refers to itself as a "technology company merged with a supply chain"?

Amazon

____________ the chain facilitates better strategic alignment between supply chain operations.

Bending

Free cash flow

Cash Flow from Operations - Capital Expenditures Free Cash Flow

Which of the following would be a metric for a senior level supply chain manager?

Cash to Cash cycle

Which of the following would be a metric for a senior level supply chain manager?

Cash-to-cash cycle

Which of the following actions will most directly will lead to more cash availabilty?

Collect account receivable more quickly

What are the three types of benchmarking discussed?

Competitive, Process, Internal

What negative outcomes can result from large lot-sized, long lead time operations?

Customers don't want the items The items are in places and at times customers don't want them Unsold products are sold at reduced prices or scrapped altogether

What negative outcomes can result from large lot-sized, long lead-time operations?

Customers don't want the items. The items are in places and at times customers don't want them. Unsold products are sold at reduced prices or scrapped altogether.

Which one of the types of planning was not introduced in this module?

Date Planning

The "Great Divide" in supply chains refers to the separation of processes, activities and metrics that exist between:

Demand focused activities and supply focused activities

What megatrend will greatly challenge supply chain managers?

Disruptive technology Talent/skills requirements Social changes

Which emerging megatrends will greatly challenge supply chain managers?

Disruptive technology, talent requirements and social changes

Earnings before interest, taxes, depreciation, and amortization (EBITDA)

Earnings Before Interest and Taxes + Depreciation Expense + Amortization Expense = EBITDA (used as proxy for operating cash flows)

Which planning approach was discussed in this module?

Exception Based

Supply chain management:

Extends the linking and coordination of materials management, manufacturing management and distribution upstream to suppliers and downstream to customers

Metrics provide a complete picture of supply chain performance.

False

A scorecard that is balanced typically includes which type of measure.

Financial Quality Learning and Improvement Cycle Time

Name the ways that supply chain management creates value?

Form, Time, Place and Exchange

How does supply chain management create value?

Form, time, place, exchange

What did Caterpillar do in 2013 that led to a better integration of its supply chain functions?

Formed an integrated supply chain group to manage it's supply chain

Exception Based Planning

Hundreds or thousands of decisions must be made as a part of plans, so routine steps are automated and handled by information technology systems. The exceptions to these standard transactions are where planners spend their time.

The Strategic Profit Model can be used to illustrate the impact of logistics and supply chain on ROA (Return on Assets) by:

Illustrating how varying components of Net Profit Margin and Asset Turnover can lead to different values of the Return on Assets ratio

Which of the following is NOT a way that supply chain management impacts ROI?

Increasing advertising spend to increase demand

Cash to Cash Days

Inventory Days + Accounts Receivable Days = Operating Cycle - Accounts Payable Days = Cash-to-Cash Days

Inventory days

Inventory/ Cost of Goods Sold x 365 = Inventory Days

Supply chain measurements are often called all of the below:

Key performance indicators Performance measures Metrics

What part of the Supply Chain Operations Reference (SCOR) model involves turning the raw material into a finished product?

Make

Which activity area in the supply chain is generally focused on productivity or "up time" and usually has no visibility of customer service or inventory metrics?

Make

What part of the Supply Chain Operations Reference (SCOR) model involves turning the raw material into a finished product?

Makes

On the demand creation side, _____________ is concerned with determining and shaping long term customer need, and innovating offerings to satisfy those needs.

Marketing

Should all customers receive the same level of customer service?

NO

What is the major advantage of Dell's ordering and payment policies?

Negative cash-to-cash cycle

ROA

Net Income/Total Assets Asset turnover * Profit Margin

Should all customers receive the same level of customer service?

No

A firm is a recognized cost leader but has a strategic goal to become a cost and service leader. What is one initiative that could be planned and implemented to make this a reality?

Offer tailored, customized services to key customers

Downstream, the priority is to deliver the form, time, and ________ for a specific customer order.

Place

Keeping all other inputs constant, what is one way that SCM does not increase ROI?

Receive better terms on loans for capital

Gross Margin

Revenues - CoGS

The Supply Chain value proposition framework represents the interactions between:

Revenues, costs and assets

Changes in the business _______ and ________ help shift the focus of functional goals in the departments of a business (finance, marketing, etc.) to total value creation for the enterprise.

Reward System and Culture

Which activity area in the supply chain is generally focused on the short term planning horizon and is often measured by reduction in cost of goods sold?

Source

Supply chain management refers to:

The management of up and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole.

Traditional cost accounting procedures allocate costs to customers based upon:

The percent of total sales represented by each customer

What is a company's optimal service level?

The point where the cost and revenue curves are farthest apart

Supply chain measurement is important for all the reasons below:

To provide important information to others in the supply chain To drive employee incentives and alignment To identify where improvement is needed

Data visualization involves using software packages to better see trends and patterns in data

True

End-to-end supply chain measures are the most important type of supply chain metric

True

Planning processes heavily utilized IT systems, but a planner is still vital to ensure a high quality plan.

True

Procurement, Conversion and Logistics are activities that must be done to fulfill the exchange commitment by creating form, time and place value.

True

In relation to the overall supply chain, ______ places a priority on cost savings while _______ places a priority on doing whatever necessary to deliver form, time and place as promised on a specific order.

Upstream operations, Downstream operations

Which of these is an example of a "tax haven"?

a country or jurisdiction with very low corporate taxes

perfect order concept

a primary goal is to measure the percentage of orders that were delivered to the customer according to their expectations about quality, time, and cost what percent was perfect? top companies only 65-70%

Control towers

are IT systems and organizations of people who manage them that are focused on a particular process or area across the end-to-end supply chain

New Product Planning

companies regularly launch new products or updates of existing products. These changes usually include new materials, new suppliers, new manufacturing processes, and potentially new requirements for delivery or handling. The launch of new products also involves planning throughout the supply chain

The "Great Divide" in supply chain management occurs between:

demand-generating activities and demand-fulfilling activities

Logistics & Distribution Planning

develops the plan for how much inventory to maintain and where to store it as well as the movement of this inventory to the customer at the appropriate time and cost.

What is a company's optimal service level?

e point where the cost and revenue curves are farthest apart

Production and Capacity Planning (Manufacturing)

function within supply chains also needs to have robust plans in place to operate efficiently and effectively. Production planners take the demand plan and convert it into a plan to produce products.

Asset turnover

how productive the firm's assets are at generating revenue sales / assets

Profit Margin

how well the firm controls costs net income / sales

According to an E&Y survey of supply chain professionals, what is the priority of the supply chain organization?

improving service quality

When benchmarking, ________ comparisons should be used if we are trying to determine if our process can be performed better than we have before, while __________ comparisons should be used if we are trying to determine industry competitiveness

internal, external

Data visualization

is a general term that refers to using charts, graphs, or more typically specialized software to visually display data and help identify insights

Strategy Planning

is responsible for the planning and execution of shifts in entire product lines, manufacturing strategies, or new market entries/exits

Benchmarking

is simply the comparison of a process, goal, or area with a similar feature somewhere else

Demand planning

is the process by which customer demand for upcoming time periods is estimated at appropriate levels of detail to allow the business to make necessary preparations.

Returns/Recall Planning

plan for returns as a critical component of their business.

Supply Planning (Sourcing)

process takes the demand forecast and plans what materials need to be purchased from suppliers over the coming periods.

Supply chain management refers to:

the management of up and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole.

Supply chain management refers to a relatively new business phenomenon of

the management of upstream and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole.

In relation to the overall supply chain, ______ place a priority on cost savings while _______ place a priority on doing whatever is necessary to deliver form, time, and place as promised on a specific order.

upstream operations, downstream operations