SCM Practice 5,6,8

The possibility of events like strikes, assembly line breakdowns, and natural disasters are all reasons a company should favor using a single supplier

FALSE

Lean production systems are sometimes referred to as pull systems because demand from customers activates the production actions of the manufacturing facilities. In order for this demand to be communicated to everyone in the supply chain/manufacturing facility a signal must be passed from downstream processing centers to the upstream processing centers. This system of relaying signals is referred to as a: a. Kanban Pull System b. Semaphore System c. Keiretsu Network d. TQM Network

A

Modern supply chains simultaneously pursue the goals of high-quality, fast response, and low cost because customers nowadays want both high levels of quality and responsiveness. A key manufacturing philosophy that emphasizes waste elimination and minimizing inventories to expose problems is: a. Just-in-time b. Quick Response c. Efficient Consumer Response d. Total Quality Management

A

Which of the following best describes the five S's? a. These were originally Japanese words relating to industrial housekeeping b. Five ways to reduce inventories on the shop floor c. These are five different kinds of manufacturing layouts d. Refer to methods for reducing setup times

A

Which of the following would be a good reason to outsource (buy) versus making? a. A firm lacks the technology or expertise to produce an item b. To utilize existing capacity within a company's own firm c. To have more direct control over the deign and production of an end item d. No competent supplier presently produces the needed item

A

According to the textbook, collaborative relationships place a relatively lower importance rating on which of the following competitive priorities: a. Speed of Delivery b. Cost c. Product Quality d. Frequency of deliveries

B

An outsourcing program can result in all of the following positive outcomes, except: a. Reducing staffing levels b. Decreased need for supplier management c. Cost reduction d. Gains in manufacturing flexibility

B

Benchmarking is: a. A system of performance metrics that seeks to motivate suppliers to perform better. b. A practice where companies attempt to learn and apply the best practices of other companies. c. A system of marking defective inbound inventory so it can quickly be identified for return to the supplier. d. A program where suppliers compete for contracts, but those companies who are outbid are provided advice for winning future contracts

B

Field failures, loss of goodwill, a decreased reputation, and warranty costs can all be classified as: a. Pre-transaction costs b. Post-transaction costs c. Transaction costs d. All of these

B

Japanese manufacturing firms sometimes create cooperative coalitions with their suppliers in order to provide the suppliers with a certain degree of financial support. What are these cooperative coalitions called? a. Jidoka Networks b. Keiretsu Networks c. Kanban Networks d. Kaizen Networks

B

Which company probably played the largest role in the development of the Toyota Production System? a. General Motors b. Ford c. Chrysler d. Boeing

B

Which of the following is FALSE? a. The use of 3PL's has been increasing as companies seek more effective supply chain strategies. b. VMI provides retail facilities the opportunity to communicate to manufacturers that the customers are requesting customized items c. The use of 3PL providers allows companies to gain competitive advantages without having to gain the required knowledge through firsthand experience. d. VMI allows suppliers to manage their customers' inventory provided they have the capability to see inventory levels in real time

B

Which of the following is NOT important in developing a successful strategic alliance? a. Developing performance metrics b. Developing efficient processes that will remain unchanged for the duration of the partnership c. Investigating the capabilities and core competencies of the supplier d. Open lines of communication that both promote sharing and secure confidentiality

B

Which of the following is NOT one of Toyota's seven wastes? a. Excess inventories b. Environmental waste c. Waiting time d. Scrap and rework

B

Which of the following statements is FALSE? a. More than 50% of each sales dollar typically goes towards covering supply chain costs b. Decentralized purchasing means not having any purchasing departments and allowing all employees to act as purchasing agents c. Electronic procurement systems can aid a company in saving both time and money d. If a firm lacks the technology to make a required component they will need to consider buying/outsourcing.

B

Which third party certification was adopted by the European Union in 1992 that has caused US suppliers wishing to stay competitive in European Union countries to get certified? a. ISO 14000 b. ISO 9000 c. European Supplier Certification Initiative (ESCI '92) d. EU Third Party Initiative

B

While the philosophy of Six Sigma means different things to different people and is practiced differently in different companies, according to the textbook, two of the more important and agreed-upon elements of Six Sigma are: a. Minimizing inventories and increasing material flow b. Focusing on the customer and workforce involvement c. Rewarding employees and keeping defect rates below 2% d. Minimizing inventories and keeping defect rates below 1%

B

If a distribution company that focused on warehousing and distribution of grocery items decided to purchase a chain of grocery stores, the distribution company would be exemplifying: a. Backward vertical integration b. Forward vertical integration c. Backward horizontal integration d. Forward horizontal integration

B (no horizontal)

As firms seek to improve the products they offer to the market, companies are seeking help from their suppliers in new product design and development through: a. Supplier certification programs b. Manufacturer certification programs c. Early supplier involvement d. Total Cost of Ownership initiatives

C

Direct benefits of ISO 14000 include: a. Reduced defect rates b. Improved on-time delivery rates c. Reduction of pollution emission d. All of these

C

The ISO certification standard for environmental management is: a. ISO 9000 b. ISO 9005 c. ISO 14000 d. ISO 19000

C

Which of the following is NOT a form of countertrade? a. Barter b. Offset c. Incoterming d. Counterpurchase

C

Which of the following is NOT consistent with the lean philosophy? a. Cross-training employees to increase processing flexibility b. Developing a culture of continuous improvement within the organization c. Increasing batch size to take advantage of economies of scale d. Positioning WIP inventories near each processing center

C

Which of the following is the most accurate definition of a reverse auction? a. An auction where buyers attempt to outbid each other for the services of a supplier b. An auction where suppliers continuously attempt to guess the amount a buyer has established as the "buy price" c. An auction where a number of suppliers try to underbid their competition in hopes of gaining a buyer's contract d. An auction where competing buyers continuously bid lower and competing suppliers bid higher until 1 buyer and 1 supplier agree upon an acceptable price for both parties

C

Which type of requisition is used for materials and standard parts that are requested on a recurring basis? a. Open requisition b. Blanket requisition c. Traveling requisition d. Recyclable requisition (Cyc-Rec)

C

Hard-bargaining sourcing departments focused on decreasing purchasing spend may experience which of the following from their suppliers? a. Lower levels of quality from their suppliers b. Lower levels of service from their suppliers c. Deteriorating buyer-supplier relationships d. All of these

D

SRM software should be capable of: a. Automating transactional processes b. Making information flow between partners more visible c. Integration of the supply chain making it possible to monitor multiple departments and processes both internally and externally d. All of these

D

Which of the following are considered outcomes of implementing a supplier evaluation and selection criteria? a. Allows firm to screen out poor performing suppliers in its present supplier base. b. Allows firm to screen out undesirable suppliers that they may be considering for future purchases. c. Allows firm and its suppliers to develop a better corporate relationship d. All of these

D

Which of the following illustrates Forward Integration? a. Microsoft starting a new division that designs and manufactures clothing b. Ford automotive buying additional machines for production c. Subway sandwich company buying a bakery to make the bread for their sandwiches. d. Sony buying trucks to deliver their finished goods inventories to their customers' warehouses

D

Which of the following is TRUE? a. SRM software modules are very affordable (less than $50,000) and can be implemented with a week. b. ISO 75000 is the supplier award given to the highest rated supplier in Japan. c. The key to successful partnerships is developing performance measures with weights greater than 3.50. d. Continuous improvement and change management are both keys to building successful partnerships.

D

According to the textbook, Wal-Mart is perhaps the company that is most averse to implementing sustainable business practices.

FALSE

Centralized purchasing is the practice where individual, local purchasing departments throughout a single corporation make their own, individual purchasing decisions to fulfill their individual local needs.

FALSE

Companies that lack internal expertise in a specific functional area would likely consider insourcing.

FALSE

Examples of tariffs include quotas, licensing agreements, and embargoes.

FALSE

For a certain loaf of bread it was found that it measured 16 inches in length, 4 inches in height, and 4 inches across, it was also found to weigh 1 pound; all of these measures can be considered attribute data.

FALSE

If the break-even point in a typical make-buy scenario is 24,000 units and 8,000 units are required, than the firm should choose to make.

FALSE

In a TCO system, certification and training of suppliers would be considered post-transaction costs.

FALSE

Industrial supply chain member buyers purchase their merchandise in volume to take advantage of quantity discounts, transportation economy, and storage efficiency, and then they create value through services like consolidating merchandise or break bulking.

FALSE

Lean production is an operating philosophy or mindset that essentially attempts to minimize the impact of system variability and flaws in forecasting through the use of high safety stock inventories.

FALSE

Organizations practicing lean production often increase their inventory levels in the long-run in order to create a cushion against variability so that they can investigate and eliminate the weaknesses of their system.

FALSE

Product parts, processes, and product assembly should all be designed by the manufacturing firm to assure a single-minded approach that the suppliers can follow. Supplier involvement in these design phases is considered counterproductive.

FALSE

The WTO is a trade organization seeking to establish trade barriers that will protect member countries by excluding nations that pose an economic threat.

FALSE

The broad based performance metric, which is defined as "all costs associated with the acquisition, use, and maintenance of a good or service," is referred to as EMS, which stands for total cost of ownership.

FALSE

The objective of the Deming Prize is to stimulate quality and productivity improvement among US firms.

FALSE

When designing a manufacturing or service process, or even during the reengineering of such a process, a Pareto chart would be an essential tool for evaluating the process in terms of its action elements, waiting periods, and process flow.

FALSE

When evaluating a supplier it is not possible to create performance metrics that measure delivery speed, quality related outcomes, environmental responsibility, and costs related to inventory.

FALSE

When using a weighted-criteria evaluation system with five or more categories, vendors should be ranked based on their score in the two highest weighted categories, the others should be discarded.

FALSE

While a manufacturer may have substantial influence over its first tier suppliers, their influence over second and third tier suppliers is typically much higher.

FALSE

While most companies pursuing a sustainable supply chain program are focusing on efficient and clean transportation of cargo, few see any benefits in utilizing sustainable purchasing initiatives.

FALSE

Examples of nontariffs include quotas, licensing agreements, and embargoes imposed on import and exports.

FALSE but i think true

According to the Annual Survey of Manufacturers, the cost of materials exceeds the value added to the materials during manufacturing

TRUE

According to the text, driving your suppliers to offer the lowest possible prices, which in turn will lower your cost of goods sold, could prove to be harmful to buyer-supplier relationships and may also decrease the quality levels of the items produced using your suppliers' low cost components.

TRUE

Because internationally recognized certifications like ISO 9000 are becoming so common among suppliers, it is becoming more important that purchasing firms develop internal certification programs that are geared toward the specific needs of the purchasing organization.

TRUE

Channel integration is a supply chain term which refers to how a manufacturing firm within a supply chain attempts to create strategic alliances not only with their immediate suppliers but also with the suppliers' suppliers and in the other direction not only reaching out to its immediate customers but also the customer's customers.

TRUE

Companies that experience late deliveries or low product quality from their supplier may resort to insourcing.

TRUE

Decentralized purchasing is the practice where individual, local purchasing departments throughout a single corporation make their own, individual purchasing decisions to fulfill their individual local needs.

TRUE

ISO 14000 is a series of international standards for environmental management.

TRUE

If the break-even point in a typical make-buy scenario is 10,000 units and 15,000 units are required, than the firm should choose to make.

TRUE

Manufacturing layouts for an organization practicing lean manufacturing principles seek to maximize operator visibility, maintain an effective and efficient flow of people and materials, and minimize the distance that work in process must travel from one processing center to another processing center.

TRUE

Merchant supply chain member buyers purchase their merchandise in volume to take advantage of quantity discounts, transportation economy, and storage efficiency, and then they create value through services like consolidating merchandise or break bulking.

TRUE

NAFTA and the WTO are trade organizations seeking to reduce tariff and non-tariff barriers among its member countries.

TRUE

Reverse auctions are often run via third party providers known as application service providers (ASP's). These ASPs often charge both buyers and sellers a fee for participating in these reverse auctions

TRUE

Smoother processes, faster cycle times, reduced new product development, and improved time-to-market are possible benefits from the increased visibility that is offered by SRM software.

TRUE

Some strategic supplier agreements reward the highest performing suppliers with a share of the cost reductions resulting from supplier improvements, additional purchasing contracts, or contract extensions on existing contracts.

TRUE

Statistical process control uses control charts to monitor the outputs of a process to identify variations due to assignable causes from variations due to common causes.

TRUE

The goal of a good purchasing system is to ensure efficient information transitions between the materials users, the purchasing personnel, and the suppliers.

TRUE

W. Edwards Deming and Shigeo Shingo were two of the notables who helped Toyota develop the Toyota Production System.

TRUE

While most companies pursuing a sustainable purchasing program are focusing on paper, retailers like Corporate Express and Staples say they are seeing an increased demand for sustainable products across the board

TRUE