SCM Exam 1

To hold down distribution cost, the lowest cost carrier should always be used.

False

U.S. ports can play a role in global supply chains since over 50 percent of global trade U.S. passes through them.

False

The world economy still favors the United States and European countries, even though China and India can participate in the global economy much more readily.

False

The inverse relationship that exists between the cost of lost sales and inventory costs is the inventory effect.

True

The scope and magnitude of trade flows between the United States and other countries have grown considerably in the last several decades.

True

The underlying logic of Adam Smith's theory was used to advance the rationalization what he called specialization of labor.

True

There are seven steps in the Strategic Sourcing Methodology.

True

Transportation is the physical movement or flow of goods.

True

Vendors may offer varying levels of discounts from their published prices.

True

The central theme behind the theory of Comparative Advantage is that if one country has an advantage (lower cost) in the production of two products, they should focus on the production of both so that they gain the greatest advantage and trade when compared to other countries that may have a lesser advantage.

False

The grid technique determines the highest cost facility location in an area.

False

The grid technique will evaluate all transportation rates equally.

False

The mathematical calculation of the point of equality between systems under analysis is used for short-run/static analysis.

False

The most important factor in vendor selection is usually financial health.

False

The quality of life locational determinant is most important to companies that must attract and retain an unskilled, static work force.

False

The utility created through the basic marketing activities is known as place utility.

False

An advantage of e-Sourcing and e-Procurement is that there is little risk involved.

False

As a firm spends more on transportation service, cost of lost sales increases.

False

Beginning in the late 1970;s and into the 1980s the US transportation industry was deregulated. The net result was a less competitive environment.

False

Distinctives are low-risk, high value items that are fundamental to the company's finishedproduct.

False

Globalization has had little effect on consumers

False

Honda and Toyota only manufacture automobiles in Japan.

False

In a logistics system, warehousing should be optimized at the expense of related logistics activities, such as transportation and procurement.

False

Landed costs are independent of sales/FOB terms.

False

Logistics facilities and their locations are relatively variable and easily modified in the short term.

False

MFN stands for Many foreign nationals.

False

Outsourcing is a fairly new concept.

False

Some firms are moving towards increasing their number of suppliers in order to encourage competition and lower procurement costs.

False

Strategic sourcing is almost the same as procurement.

False

Strategies such as compression and lean supply chains take the same amount of work to achieve in the global environment as it does in the domestic environment.

False

Supply and demand has become less volatile as managers become more adept at controlling the elements.

False

Supply chain managers no longer need to worry about suboptimization in light of today's technology.

False

The Customs Trade Partnership Against Terrorism (C-TPAT) was put in place to assess the vulnerability of U.S. ports and to deny entry to ships from countries that do not meet U.S. security standards.

False

The Regional Trade Agreements, the establishment of the General Agreement on Tariffs and Trade (GATT) and its 1995 successor, the World Trade Organization (WTO) have together led to multilateral trade promotion and lowered barriers to international business transactions.

False

The Trade Act of 2002 requires exporters to electronically submit shipping documents to U.S. Customs 24 hours before delivery to a port or 24 hours before vessel departure.

False

When a firm makes a "make" decision when analyzing whether to "make or buy", they may still have to purchase some types of inputs from outside suppliers.

True

While the total world population has been increasing on an absolute basis, the rate of increase has declined.

True

e-Sourcing and e-Procurement are the same.

True

A key element in Wal-Mart's ability to discount brand name products was an understanding of the criticality of efficiency in its logistics and supply chain system.

True

A logistics channel is a supply chain of network organizations engaged in transfer, storage, handling, communication, and other functions that contribute to the efficient flow of goods.

True

As the dollar value of a product decreases, its inventory value decreases.

True

Commodities are items or services that are low in risk but high in value.

True

Corporate reengineering is often a reason for examining the firm's current logistics/supply chain network.

True

Facilities may sometimes be located where senior officers prefer.

True

From a customer service perspective, one of the four important characteristics for global market and strategy is companies need to attempt to standardize to reduce complexity, but they have to recognize that global markets need some customization global markets and strategy.

True

From a customer service perspective, one of the four important characteristics for global market and strategy is technology companies counteract short product lifecycle with continual upgrades and new products.

True

Given the importance of global trade to the United States, a delicate balance exists between security and the efficient flow of global commerce.

True

In a commercial zone, the same transportation rate is applied from an origin to any point in the zone.

True

It is predicted that social networks such as Facebook and Twitter will influence supply chains because of their impact on customer demand and the speed of information transfers.

True

Labor-intensive industries place significant emphasis on the availability and cost of labor.

True

One could argue that its external role in recent years has moved technology ahead of globalization as an agent or driver of change.

True

One impact that the transit privilege has on facility location is that intermediate locations can be optimum.

True

Operating globally has become easier to accomplish for even individuals and small companies, because of the advances in information/communications technology.

True

Procurement serves as a critical link between members of the supply chain.

True

Reduced order cycle time has become an important part of supply chain management since it can lead to lower inventory levels for customers, improved cash flow, lower current assets and accounts receivable.

True

Tariffs and other trade barriers have been significantly reduced among many countries, allowing a much more competitive global economy.

True

The efficiency and effectiveness of a logistics/supply chain operation are constrained by the location of plants and warehouses in its overall network.

True

The first decade of the twenty-first century was a period of rapid change for organizations, especially businesses.

True

The first step in managing sourcing and procurement is to determine the type pf purchase.

True