Supply Chain Management Exam #1
T/F: Examples of non tariffs include quotas, licensing agreements, and embargoes imposed on import and exports.
C
T/F: Context of SCM, acts of obtaining raw materials, services, maintenance, repair and operating supplies for money can be defined as integration.
F
T/F: Effective supply chain management relies on competitive bidding, corporate privacy, and contracts based on short-term performance.
F
T/F: Examples of tariffs include quotas, licensing agreements, and embargoes.
F
T/F: Future trends in supply chain management include increasing inventory levels and considering the elimination of logistics intensive online retailing.
F
T/F: If the break-even point in a typical make buy scenario is 24,000 units and 8,000 are required, the firm should choose to make.
F
T/F: In a TCO system, certification and training of suppliers would be considered post-transaction costs.
F
T/F: In a weighted-criteria evaluation system the weights of all the performance dimensions must add up to total more than 1 and less than 100.
F
T/F: In order to maintain a shared vision, the buyer alone should establish the objectives of the partnership, which must then be fulfilled by the actions of the supplier.
F
T/F: 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.
F
T/F: Possibility of events like strikes, assembly line breakdowns, and natural disasters are all reasons a company should favor using a single supplier.
F
T/F: 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.
F
T/F: Retail items, which would likely be found at a store like Target or Wal-Mart, like lamps, blankets, microwave ovens, and candy bars would be classified as innovative products.
F
T/F: Reverse logistics activities include negotiating purchasing contracts with suppliers and delivering small shipment from the manufacturer to distribution centers.
F
T/F: 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 TCO software.
F
T/F: Successful supply chain integration occurs when supply chain participants realize that the needs and desires of the end item manufacturer dictate the objectives and policies of all other supply chain participants.
F
T/F: The assembly or production of finished products, producing the right amount of product, and ensuring that finished products meet specific quality, cost, and customer service requirements can all be considered elements of logistics.
F
T/F: 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.
F
T/F: The bullwhip effect is the result of companies producing excessive defective products; defective items are whipped back from the end customer toward the manufacturer of the defect.
F
T/F: The universally accepted definition of supply chain management is "the management and integration of the parties involved in producing the end items coveted by consumers"
F
T/F: US Federal Acquisition Streamlining Act (FASA) allows government purchases that are less than $250k to occur through a simplified procedure that includes full and open competitive bidding.
F
T/F: WTO is a trade organization seeking to establish trade barriers that will protect member countries by excluding nations that pose an economic treat.
F
T/F: 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.
F
T/F: When using a weighted-criteria evaluation system with five or more categories, vendors should be ranked based on their score in the two highest categories, and the others disregarded.
F
T/F: While a manufacturer may have substantial influence over first tier suppliers, their influence over second and third tier suppliers is typically higher.
F
T/F: 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.
F
T/F: While paperless transactions are now possible through e-procurement and Web-based services, these would NOT be considered sustainable business practices.
F
T/F: Trucking companies, airfreight shipping companies, and information systems providers can all be considered service providers to the supply chain.
T
The term supply chain management and the field of study it represents today seems to have emerged in a. 1980's b. 1970's c. 1960's d. 1990's
a. 1980's
Following is supply chain for a company: 1. Raw materials supplier 2. Components manufacturer 3. Firm that manufacturers sub-assemblies 4. End item manufacturer 5. Wholesale distributor 6. Local retail chain warehouse Who is the end item's second tier supplier?
2. Components manufacturer
T/F: According to the text, driving your suppliers to offer lowest possible prices, which in turn lowers your cost of goods, could prove to be harmful to buyer-supplier relationships and may also increase quality levels of items produced using your suppliers' low cost components.
F
T/F: According to the textbook, retail stores are considered the focal firms in modern supply chains.
F
T/F: According to the textbook, supply chains include raw material suppliers, intermediate component manufacturers, end-product manufacturers, but they do not include warehouses and retailers.
F
T/F: 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.
F
T/F: Companies that lack internal expertise in a specific functional area would likely consider insourcing.
F
The acronym SRM refers to:
Supplier Relationship Management
T/F: "Rationalizing the supplier base" would mean that purchasing firm is attempting to reduce the number of suppliers in its supplier network by eliminating poor performing suppliers in its present supplier base.
T
T/F: A comprehensive SRM strategy would likely include dedicated supplier managers, processes that would help in established standardized best practices, and the utilization of tools that would help gather and evaluate results.
T
T/F: According to annual survey of manufacturers, cost of materials exceeds value added to materials during manufacturing.
T
T/F: According to the text, driving your suppliers to offer lowest possible prices, which in turn lowers your cost of goods, could prove to be harmful to buyer-supplier relationships and may also decrease quality levels of items produced using your suppliers' low cost components.
T
T/F: According to the textbook, supply chains include raw material suppliers, intermediate component manufacturers, end-product manufacturers, wholesale distributors, and retailers.
T
T/F: According to the textbook, the end-product manufacturer is considered the focal firm in modern supply chains.
T
T/F: According to the textbook, the keys to successful supply chain management include trust and honest, accurate communications between supply chain partners.
T
T/F: 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 specific needs of purchasing organization.
T
T/F: Blank check purchase order, corporate purchasing cards, petty cash, and open-end purchase orders are all possible alternatives to dealing with small value purchases such as those for office supplies.
T
T/F: Companies that experience late deliveries or low product quality from their supplier may resort to insourcing.
T
T/F: 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.
T
T/F: Future trends in supply chain management include increasing supply chain responsiveness and considering the negative environmental impacts of supply chains.
T
T/F: ISO 14000 is a series of international standards for environmental management.
T
T/F: In a TCO system, the costs associated with defective products, including repair and warranty costs would be considered post-transaction costs.
T
T/F: In context of SCM, acts of obtaining raw materials, services, maintenance, repair and operating supplies for money can all be defined as purchasing.
T
T/F: Manufacturers typically have very little influence over second and third tier suppliers compared to first tier.
T
T/F: 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.
T
T/F: NAFTA and WTO are trade organizations seeking to reduce tariff and non-tariff barriers among member countries.
T
T/F: Offering an awards program to suppliers both motivates the suppliers to commit to a program of continuous improvement as well as provides role models for suppliers to follow.
T
T/F: 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.
T
T/F: Reverse logistics activities include the return of defective and damaged items to the manufacturer, and the recycling of used packaging.
T
T/F: 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.
T
T/F: 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.
T
T/F: Successful supply chain integration in a retail industry occurs when supply chain participants realize the needs and desires of the end retail consumer dictate the objectives and policies of all the other supply chain participants.
T
T/F: The Hormel company awards their Hormel Food Corporations No. 1 Award to their top supplier, but only give out the award every 5 years.
T
T/F: The assembly or production of finished products, producing the right amount of product, and ensuring that finished products meet specific quality, cost, and customer service requirements can all be considered elements of operations.
T
T/F: 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 TCO, which stands for total cost of ownership.
T
T/F: The goal of a good purchasing system is to ensure efficient information transitions between materials users, purchasing personnel, and suppliers.
T
T/F: The internet and ERP systems have made global teamwork both possible and necessary for companies trying to compete in today's global marketplace.
T
T/F: While inventory turnovers can be calculated a number of different ways, a common way to calculate inventory turnovers is by dividing cost of goods sold by average inventory at cost.
T
T/F: 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.
T
T/F: if break even point in a typical make buy scenario is 10,000 units and 15,000 are required, firm should make.
T
T/F:Retail items, which would likely be found at a store like Target or Wal-Mart, like lamps, blankets, microwave ovens, and candy bars would be classified as functional products.v
T
Which of the following was a popular way in the 1990's of developing radically new business processes in an effort to reduce waste and increase performance? a. Business process reengineering b. Benchmarking c. Process integration d. Vertical integration
a. Business process reengineering
While most public procurement is focused on goals similar to those of purchasing departments in private sector, US federal government purchases must comply with: a. Federal acquisition regulation b. Fair Standards and equitable purchases act c. Federal code of conduct for procurement d. Services and materials acquisition act.
a. Federal acquisition regulation
Costs associated with supplier certification, investigating alternative suppliers, and investigating alternative delivery options can be classified as: a. Pre-transaction costs b. Post-transaction costs c. Transaction costs d. all the above
a. Pre-transaction costs
On occasion, firms assist suppliers, new or old, to improve processing capabilities, product or service quality, delivery effectiveness, and cost performance by providing the required technical and financial assistance. Referred to as: a. Supplier development b. Outsourcing c. Centralized purchasing d. Supplier hybridization
a. Supplier development
Which 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 department and allowing 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 technology to make a required component they need to consider buying/outsourcing
b. Decentralized purchasing means not having any purchasing department and allowing employees to act as purchasing agents
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 capabilities and core competencies of the supplier. d. Open lines of communication that both promote sharing and secure confidentiality.
b. Developing efficient processes that will remain unchanged for the duration of the partnership
If a distribution company that focused on warehousing and distribution of grocery items decided to purchase a chain of grocery stores, distribution company would be exemplifying: a. Backward vertical integration b. Forward vertical integration c. Backward horizontal integration d. Forward horizontal integration
b. Forward vertical integration
Which of the following is an example of internationally recognized supplier certification program focused on quality? a. MRP II b. ISO 9000 c. 3PL d. CAPS
b. ISO 9000
Which third party certification was adopted by EU in 1992 that 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 d. EU third party initiative
b. ISO 9000
Assembly or production of finished products, producing the right amount of product, ensuring that finished products meet specific quality, cost, and customer service requirements are all important issues most closely related to: a. Purchasing b. Operations c. Integration d. Distribution
b. Operations
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 these above
b. Post-transaction costs
According to text, the four important levels of supply chain are: a. Purchasing, manufacturing, transportation, retail stores b. Purchasing, operations, distribution, integration c. Purchasing, manufacturing, distribution, transportation d. Purchasing, operations, manufacturing, distribution
b. Purchasing, operations, distribution, integration
Which of the following is true? a. Supply chain management was invented by the automobile industry b. Strategic partnerships are seen as one of the foundations of supply chain management c. Purchasing is seen as the final and most difficult step in supply chain d. Service response logistics is the digital distribution of services
b. Strategic partnerships are seen as the foundations of supply chain management
Lean production is typically associated with which company's production systems? a. Proctor and Gamble b. Toyota c. Boeing d. Intel
b. Toyota
According to the textbook, which of the following companies has established a goal of reducing energy costs and greenhouse gas emissions by 30% by their new stores by 2010? a. Toyota b. Wal-Mart c. Home Depot d. Best Buy
b. Wal-Mart
Benefits derived from implementing e-procurement systems include all of following except: a. Allows buyers to submit bids and suppliers to respond in real time b. Increases accuracy in communication between buyers and suppliers c. Creates numerous additional job opportunities in purchasing department. d. Tracking bids and transactions is easier and faster
c. Creates numerous additional job opportunities in purchasing department
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. Early supplier involvement
Which of the following would be considered a third party provider? a. Raw materials supplier. b. Intermediate component manufacturer c. Firm that leases storage warehousing d. End product manufacturer
c. Firm that leases storage warehousing
Which is a reason that single sourcing is considered risky/bad? a. Buyer's required ordering quantities are very low b. Larger orders make quantities discounts are more likely c. Limited (finite) capacity of one supplier d. Decreases item to item quality variability of items purchased.
c. Limited (finite) capacity of one supplier
Direct benefits of ISO 14000 are: a. Reduced defect rates b. Improved on time delivery rates c. Reduction of pollution costs d. All of these
c. Reduction of pollution costs
Successful modern supply chain management typically includes practice of: a. Keeping high inventories throughout the supply chain b. Always purchasing materials with lowest per unit cost c. Sharing of information between supply chain partners d. Leadership through the practice of issuing ultimatums to your supply chain partners.
c. Sharing of information between supply chain partners
Which type of requisition is used for materials and standard parts that are requested on a recurring basis? a. Open requisition b. Blanked requisition c. Traveling requisition d. Recyclable requisition
c. Traveling requisition
Which of the following is an illustration of a company that has vertically integrated? a. Computer manufactures acquires its computer components supplier b. Computer manufacturer acquires warehouses to aid in its product distribution c. Computer components supplier begins to assemble computers for sale for its customers d. All the above
d. All the above
Which of the following is important in developing successful relationships in partnership? a. Commitment by top management b. Interpersonal relationships between employees of the companies c. Mutual/compatible needs that result in win-win situation for partners. d. All the above
d. All the above
Which is true? a. SRM software modules are very affordable (< $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 3.5 d. Continuous improvement and change management are both keys to building successful partnerships.
d. Continuous improvement and change management are both keys to building successful partnerships.
Transportation management, customer relationship management, network design, and service response logistics are all important issues that are most closely related to: a. Purchasing b. Management c. Integration d. Distribution
d. Distribution
Which of the following is not paired with its correct translation? a. TQM- Total Quality Management b. JIT-Just-in-time c. MRP-Materials Requirement Planning d.ERP- Estimated Response Parameters
d. ERP- Estimated Response Parameters
Which of following documents is considered buyer's offer to purchase products/services from a supplier, is legally binding once the supplier accepts, and usually has terms and conditions of purchase preprinted on back of document? a. Purchase requisition b. Planned order release c. Material requisition d. Purchase order
d. Purchase order
Proctor and Gamble is developing capabilities in three areas to create value for retail customers and also drive growth for their company's businesses. Capabilities include: a. Purchasing, processing, distribution b. Performance measurement, communication, technology c. Low cost, high quality, fast delivery d. Reliable service, agile demand-driven supply, affordable differentiation
d. Reliable service, agile demand-driven supply, affordable differentiation
Which of following is forward integration? a. Microsoft starting a new division that designs and manufactures clothing b. Ford automotive buying additional machines for production c. Subway sandwiches company buying a bakery to make bread for them d. Sony buying tricks to deliver their finished goods inventories to their customers' warehouses
d. Sony buying tricks to deliver their finished goods inventories to their customers' warehouses
SRM software should be capable of: a. Automating transactional processes b. Making information flow between partners more visible c. Integration of supply chain making it possible to monitor multiple departments and processes both internally and externally d. all the above
d. all the above
