ISDS 3115 CH. 11
Airfreight A. is a fast-growing mode of shipping. B. is the oldest means of freight transportation. C. represents about 10% of the tonnage shipped in the United States. D. is the best way to transport natural gas.
A
Local optimization is a supply-chain complication best described as: A. optimizing one's local area without full knowledge of supply chain needs. B. the opposite of the bullwhip effect. C. obtaining very high production efficiency in a decentralized supply chain. D. the prerequisite of global optimization. E. the result of supply chains built on suppliers with compatible corporate cultures.
A
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, improve delivery reliability and speed, and provide better market response. D. drive down inventory investment, lower delivery costs, and provide better market response.
A
The advantage of having many potential suppliers is their willingness to A. offer lower prices in the short term. B. provide technical expertise. C. participate in JIT. D. provide innovations
A
Vertical integration appears particularly advantageous when the organization has: A. a large market share. B. a very common, undifferentiated product. C. a very specialized product. D. purchases that are a relatively small percent of sales. E. little experience operating an acquired vendor.
A
What is developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor? A. vertical integration B. horizontal integration C. outsourcing D. virtual companies
A
What is the practice of keeping a product generic as long as possible before customizing? A. postponement B. backward integration C. vendor-managed inventory D. forward integration E. keiretsu
A
Which of the following could reduce distribution risk? A. careful selection, monitoring and effective contracts with penalties B. cross-country diversification C. secure IT systems D. use multiple suppliers
A
Which of the following statements is NOT generally an implication stemming from an increase in the number of facilities? A. decreased total logistics cost B. quicker response C. increased customer satisfaction D. increased facility costs
A
Which of the following statements is true regarding the leverage of supply chain savings? A. Supply chain savings exert more leverage as the firm's net profit margin decreases. B. Supply chain leverage depends only upon the percent of sales spent in the supply chain. C. Supply chain savings exert more leverage as the firm's purchases are a smaller percent of sales. D. Supply chain leverage is about the same for all industries. E. None of the above is true.
A
Hewlett-Packard delays customization of its laser printers as long as possible. This is an example of which of the following? A. postponement B. timely customization C. standardization D. vendor-managed inventory E. backward integration
A
A restaurant runs a special promotion on lobster and plans to sell twice as many lobsters as usual. When this large order is sent to the distributor, the distributor assumes the large size is a trend, not a one-time event. The distributor therefore places an even larger order with the lobsterman. This behavior is the result of which of the following? A. double marginalization B. the bullwhip effect C. postponement D. vendor-managed inventory E. CPFR
B
Prior to embarking on supply chain design, operations managers must first consider A. what kind of distribution network to have. B. "make-or-buy" and outsourcing decisions. C. how to manage supply chain inventory. D. how to select suppliers.
B
The advantage of having few suppliers is to A. look for short-term attributes. B. form a long-term relationship. C. pursue low cost. D. take advantage of diseconomies of scale.
B
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.
B
Which negotiation strategy bases price on a published, auction, or index price? A. competitive bidding B. market-based price model C. cost-based price model D. supply-based price model
B
Which of the following statements is NOT one of the response strategy decisions? A. fast transportation B. gather and communicate market research data C. use buffer stocks to ensure speedy supply D. low setup time
B
Which of the following statements is NOT true regarding channel assembly? A. Channel assembly represents one way to implement postponement. B. Channel assembly sends individual components, modules, and finished products, to the distributor. C. Channel assembly treats distributors more as manufacturing partners than as distributors. 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? A. "Closed-loop supply chain" is sometimes used as a synonym for "reverse logistics." B. A closed-loop supply chain is a designed to optimize only reverse flows. C. Reverse logistics involves the processes of sending returned products back up the supply chain for resale, repair, reuse, remanufacture, recycling, or disposal. D. A closed-loop supply chain prepares for returns prior to product introduction.
B
With regard to the cost-based price model negotiation strategy, which of the following is true? A. Prices are based in some way upon market standards agreed to by both supplier and purchaser. B. Prices are based upon supplier costs. 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.
B
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. e-procurement. B. postponement. C. vendor-managed inventory. D. single stage control of replenishment.
C
Trucking A. is one of the least flexible transportation modes. B. does not play a role in multimodal shipping. C. is increasingly using computers to manage its operations. D. is the least used transportation mode for manufacturing goods.
C
Which of the following statements is NOT one of the differentiation strategy decisions? A. Minimize inventory to avoid product obsolescence. B. Gather and communicate market research data. C. Use buffer stocks to ensure speedy supply. D. Modular design to aid product differentiation.
C
A response strategy requires suppliers be selected based primarily on A. cost. B. being willing to share information. C. product development skills. D. capacity, speed, and flexibility.
D
A supply chain ends with A. suppliers. B. manufacturers. C. distributors. D. a satisfied customer.
D
The cost to produce the goods or services sold for a given period is referred to as A. inventory investment. B. inventory turnover. C. weeks of supply. D. cost of goods sold.
D
Three common measures of supply chain performance are: A. debt/equity ratio, inventory turnover, and weeks of supply. B. percentage invested in inventory, inventory turnover, and debt/equity ratio. C. percentage invested in inventory, debt/equity ratio, and weeks of supply. D. percentage invested in inventory, inventory turnover, and weeks of supply.
D
What is a supply chain designed to optimize both forward and reverse flows? A. reverse-loop supply chain B. open-loop supply chain C. bullwhip-loop supply chain D. closed-loop supply chain
D
What is a long-term purchase commitment to a supplier for items that are to be delivered against short-term releases to ship? A. advanced shipping notice B. postponement C. drop shipping D. blanket order
D
Which of the following is NOT an opportunity for effective management in the supply chain? A. accurate "pull" data B. CPFR C. postponement D. local optimization E. vendor-managed inventory
D
Which of the following is an advantage of the postponement technique? A. better quality of the product B. reduction in automation C. early customization of the product D. reduction in inventory investment E. reduction in training costs
D
Which of the following mitigation tactics could reduce economic risk? A. subcontractors on retainer B. franchising and licensing C. multiple transportation modes and warehouses D. purchasing contracts that address price fluctuations
D
Which of the following statements is true regarding cross-sourcing? A. Cross-sourcing develops the ability to produce goods or services previously purchased or actually buying a supplier or distributor. B. Cross-sourcing enhances technological skills. C. Cross-sourcing describes suppliers who become part of a company coalition. D. 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
Which of the following strategies is part collaboration, part purchasing from few suppliers, and part vertical integration? A. horizontal integration B. joint ventures C. virtual companies D. keiretsu networks
D
A rice mill in south Louisiana purchases the trucking firm that transports packaged rice to distributors. This is an example of which of the following? A. keiretsu B. backward integration C. current transformation D. horizontal integration E. forward integration
E
Japanese manufacturers often pursue a strategy that is part collaboration, part purchasing from a few suppliers, and part vertical integration. What is this approach called? A. poka-yoke B. kanban C. samurai D. kaizen E. keiretsu
E
The bullwhip effect: A. increases the costs associated with inventory in the supply chain. B. occurs because of distortions in information in the supply chain. C. occurs as orders are relayed from retailers to distributors to wholesalers to manufacturers. D. results in increasing fluctuations at each step of the sequence. E. All of the above are true.
E
The supply chain management opportunity called postponement involves delaying deliveries to avoid accumulation of inventory at the customer's site.
FALSE
A fast-food retailer that acquired a spice manufacturer would be practicing backward integration.
TRUE
Outsourcing is a form of specialization that allows the outsourcing firm to focus on its key success factors.
TRUE
Outsourcing refers to transferring a firm's activities that have traditionally been internal to external suppliers.
TRUE
The bullwhip effect refers to the increasing fluctuations in orders that often occur as orders move through the supply chain.
TRUE
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. drop shipping. B. vendor-managed inventory. C. postponement. D. the bullwhip effect.
c