Chapter 10

From a strategic level, which of the following is the most logical to outsource ? A) an item that can be bought and sold in a commodity exhange B) An item that is critical to the sucess of the product C) An item that requries specialized design, manufacturing skills or equipment D) An item that fits well within the firm's core competencies

A

Which of the following is a major element typically included in a "to make " cost analysis A) Direct labor costs at your facility B) Purchase price of the part from the supplier C) Transportation costs D) Receiving and inspection costs of incoming goods E) Any follow-on costs related to quality or service provided by the supplier

A

Which of the following is not a strategic issue in makin the outsourcing decision? A) The issue of Short-term Vulnerabilities B) Core competencies C) Supplier Dominance D) The creation of strategic vulnerabilities E) the dangers of vertical integration

A

Which of the following is a major element typically included in a "to buy" cost analysis ? A) Delivered purchased material cost B) Transportation costs C) Direct labor costs D) ANy follow-on costs stemming from quality and related problems E) Incremental inventory carry cost

B

Which of the following is not true about outsourcing? A)Outsourcing is increasing rapidly in not just materials, many business functions are being outsourced B)Outsourcing should be used for all materials when suppliers are available C)Outsourcing can enable l everaging of the supplier's expertise and increases in innovation D)Outsourcing can result in lower staffing levels E)Outsourcing can result in reduced costs and more flexibility

B

Which of the following points is not considered a danger of outsourcing? A) Loss of control B) Loss of client focus C) loss of centralization D) Loss of clarity E) Loss of cost control

C

As technology has advanced most manufacturing firms have become much more specialized

True

Cost of materials has continued to increase in many industries, which means that the make or buy outsourcing decision must be reinvestigated from time to time for even stable demand products

True

Outsourcing all non-critical activities is a trend where the idea is to achieve significant cost leverage

True

Outsourcing has become a way to increase an organizations flexibility to meet rapidly changin market conditions, focus on core competencies and develop competitive advantage. As a result, the need for SM has intensified and positioned supply managers as agents of strategic change critical to supply chain success

True

To identify non-critical activies, the firm's core competencies must be defined

True