Supply Management Final KEY QUESTIONS
If demand is not uniform and constant, then stockout risks can be controlled by:
Adding safety stock
A win-win (integrative) negotiation approach works best: - when the supplier adds a high level of value to the product or service - when technology, cycle time, quality, and price/cost are important - For services where cost control is crucial
All of the above
Which of the following are reasonable sources of relevant information when planning for a supplier negotiation? - Information derived through the internet - Inquires directly to personnel at the supplier - Others who have experience with the supplier
All of the above
Which of the following statements are true regarding single-sampling plans?
All of the above
According to the textbook, The following are reasons favoring multiple suppliers EXCEPT: - Need capacity - Spread the risk of supply interruption -Create competition
All of thee reasons are favoring multiple suppliers
According to the textbook, which of the following is NOT a Supply Chain Risk Management activity:
All of these are supply chain risk management activities
The ability of a sampling plan to discriminate between lots of high quality and lots of low quality is described by:
An operating characteristic curve
The EOQ is the lowest inventory level at which a new order must be placed to avoid a stockout
False
The EOQ is the lowest inventory level at which a new order must be placed to avoid a stockout.
False
The following is an example of the bullwhip effect
Barkley's incorrectly anticipates customer demand resulting in stockouts at several popular retailers
Making exaggerated or misleading environmental claims for products is called ____
Bullwhipping
The universally accepted definition of supply chain management is "the management and integration of the parties involved in manufacturing the end terms coveted by consumers"
False
The use of power in negotiation is pretty much a negative thing.
False
When making concessions in a negotiation, general concession should be significant and constant to show good faith.
False
____ is a negotiation tactic that involves taking a time out
Causus
________ includes the ability to punish the other party.
Coercive Power
The purpose of safety stock is to:
Control the likelihood of a stockout due to the variability of demand during lead time
Squeezing suppliers to generate a lower annual purchasing spend may lead to all the following except
Enhanced sustainability performance
When the order size for an item is large, orders have to be placed on a frequent basis, causing high annual order costs. However, the firm then has a low average inventory level for this item, resulting in low annual inventory holding costs
False
A negotiator with____ is recognized as having accumulated and mastered vast knowledge about a particular subject, often with verifiable credentials to document that mastery.
Expert power
A 4PL, commonly referred to as a lead logistics provider, is a trucking company that also provides tracking services
False
A negotiator should always allow his/her BATNA to be revealed to the other party, because the final settlement is unlikely to vary much from that point.
False
A procurement negotiation seldom affects other stakeholders throughout the organization
False
Because it could complicate the process, before engaging in a negotiation, the individual or team conducting the negotiation should avoid sharing details of their negotiation strategy with others in their organization.
False
Breakeven analysis is the only way to determine the answer to the Make or Buy problem
False
By decreasing the involvement of the supplier in the design process, the buyer is free to focus more attention on core competencies.
False
Coercive power is one of the most useful in negotiation when longer-term relationships are desired.
False
Firms engaging in supply chain management emphasize long-term strategic supplier alliances by increasing the variety of volume into one or fewer suppliers, resulting in a smaller supply base
False
In a negotiation, concede early, often, and significantly, compared to the other side.
False
In order to reach a negotiated agreement using principled negotiation, a negotiator should always focus on the other party's positions, not his or her underlying interests
False
It would be a sign of weakness for a negotiator to change positions when there is major concession by the other party- the negotiator should instead push for more
False
One key advantage when using third-party logistics (3PL) providers is a lessened reputational risk with customers.
False
One key advantage when using third-party logistics (3PL) providers is improved communication with customers and suppliers.
False
Ordering costs are easily and precisely measured
False
Performance measures should not be developed to monitor the firm's ongoing risk management capabilities if the firm does not fear any supply disruptions.
False
Since the transportation sector is responsible for approximately 15 percent of greenhouse gas emissions, less companies are looking for their logistics providers to reduce their carbon footprints since 15 percent is not significant.
False
Price fluctuations that are the result of special product promotions, quantity discounts, and other special pricing discounts by suppliers result in:
Forward buying
MRO supplies:
Goods used in the manufacturing process, but do not become parts of the finished goods
An underperforming supply chain is defined as one that exhibits poor service, unproductive assets and...
High variable operating costs
Dependent demand and independent demand items differ in that I. For any product, all components are dependent-demand items II. The need for independent-demand items is forecast III. The need for dependent-demand items is calculated
I, II, III
Which one of the following statements regarding the economic order quantity is true?
If an order quantity is larger than the EOQ, the annual holding cost exceeds the annual ordering costs
Which of the following is FALSE?
In general, the further up the supply chain a company is, there is less distortion of information received from downstream actions
The required safety inventory...
Increases with an increase in the lead time and the standard deviation of demand
Continuous review policies for inventory replenishment require safety inventory to cover demand during
Lead Time
Four areas are highly regulated in industry. Which of the following is NOT one of these areas:
Technology
Assembly or production of finished goods, producing the right amount of product, and ensuring that finished products meet specific quality, cost, and customer service requirements are all important issues that are most closely related to
Operations
Which of the following are not sources of referent power?
Position
Which of the following is NOT a reason to outsource (buy) versus making?
Protect proprietary technology
________ is the money a firm spends on goods and services
Purchase Spend
Which of the following is a reverse logistics activity
Recycling products and components
____ means that one party is able to offer something of perceived value to the other party.
Reward power
_________ negotiators tend to make very extreme initial demands and wait for the foreign negotiator to concede.
Russian
Inventory carried for the purpose of satisfying demand that exceeds the amount forecasted for a given period is
Safety Inventory
Which of the following illustrates Forward Vertical Integration?
Sony buying trucks to deliver their finished goods inventories to their customers' warehouse
Which of the following is not a reason for negotiating with suppliers?
The purchase is for widely available, commodity-like goods
The general idea behind _______ is that one company allows a specialist company to provide it with one or more logistics functions
Third-party logistics
According to the text, which of the following is not an important element of the supply chain
Transportation ***(Supply, logistics and integration are important elements)
A cardinal rule of negotiation is to not give away any concession without getting something of equal or greater value in return.
True
A negotiator must learn to recognize and understand the type of tactics a counterpart is using
True
According to the text, the four important elements of the supply chain are supply, operations, logistics, and integration
True
According to the textbook, studies point to the fact that as more and more firms penetrate new and emerging markets, supply chain risk is increasing
True
According to the textbook, supply chains include raw materials suppliers, intermediate component manufacturers, end-product manufacturers, wholesale distributors and retailers
True
An alternative to acceptance sampling is 100% inspection.
True
Before actual negotiations begin, the parties need to believe they can reach an agreement on their key objectives
True
Buyers and suppliers working together, sharing proprietary design and manufacturing information, establishes a level of trust and cooperation in many future collaborative and potentially successful projects
True
Effective planning means that buyers achieve an agreement that is more creative and valuable than one that might be available to their competitors.
True
If stock out costs are unknown, the safety stock level must be determined statistically
True
In a double-sampling plan, a second sample is taken if the results of the first sample are inconclusive
True
Indirect costs are those that cannot be traced directly to the unit produced and they are synonymous with manufacturing overhead
True
Inventory visibility is quite difficult to achieve along the supply chain
True
Negotiation is an efficient way to convey the buyer's specific sourcing requirements and specifications to its supply base
True
Negotiation is more appropriate when other issues besides price are important or when competitive bidding will not satisfy the buyer's requirements on various issues.
True
Negotiators who interact face-to-face are more likely to reach agreement and avoid impasse than their e-negotiation counterparts.
True
Performance evaluation metrics must be established; and, as alliances show signs of success, strategies can be shared across the various alliance boundaries
True
Proactively seeking and creating strategic supplier alliances have become important objectives of firms looking to manage their supply chains.
True
Probabilistic models tell you the optimal safety stock level to minimize the risk and cost of stockouts
True
Public standards (governance) aim to eliminate the worst offenders
True
Public standards (governance) set minimum standards and create barriers to entry
True
Purchasing the same or similar products from geographically dispersed suppliers could have the effect of spreading and hence reducing the risk of supply disruptions from political upheavals, weather-related disasters and other widespread supply problems.
True
Sampling plans are designed considering both the cost and time required for the inspection.
True
The ABC inventory control system categorizes inventory items into three groups, A, B, and C. A items are given highest priority, while C items have the lowest priority. Prioritization may be based on annual dollar usage, shelf life, or sales volume.
True
The basic EOQ model is a deterministic model
True
The reverse logistics activities are included in the supply chain
True
To deal with challenges associated with improving quality, manufacturing efficiency, customer service and new product design and development, manufacturers have begun purchasing from a select number of certified, high-quality suppliers with excellent service reputations.
True
Uncertain demand or lead time raises the possibility of stockouts, thus requiring safety stock to be held to safeguard against variations in demand or lead time
True
When the demand of a product is constant and the lead time is unknown but can be specified by means of a normal distribution, the safety stock is used to buffer against variations in the lead time
True