Topic 4

The strategic profit model (aka, DuPont formula) . . .? a. Is another name for the profit leverage effect. b. Allows us to trace the impact of your decision on important financial indicators. c. Uses information from stock analysts to develop and analyze scenarios. d. Is a popular marketing tool.

b. Allows us to trace the impact of your decision on important financial indicators.

A metric is consistent when . . .? a. You measure it at the same time each time. b. The metric is used consistently over time & situations, so it is meaningful for comparison. c. It is measured in currency. d. People agree it is a good metric. e. All of the above

b. The metric is used consistently over time & situations, so it is meaningful for comparison.

Which of the following is another way to say on-shelf in-stock percentage? a. The percent of a store's shelf space that it filled. b. The percent of advertised items that are in stock. b. The percentage of time that a product is available on the shelf, rack, or wherever the customer expects to find and buy it. d. All of the above e. None of the above

b. The percentage of time that a product is available on the shelf, rack, or wherever the customer expects to find and buy it.

If a company decides to outsource its transportation to a third-party, which of the following would you expect? a. Its assets will increase on its balance sheet b. Its assets will decrease on its balance sheet c. Its income will increase d. None of the above

b. its assets will decrease on its balance sheet

Which of the following is a traditional logistics customer service metric? a. Improvement in sales revenue b. On-time delivery c. Customer repeat sales d. All of the above e. Only A and C

b. on-time delivery

The strategic profit model focuses on which ratios as outputs? a. Return on equity b. Return on assets c. Cash-to-cash cycle d. All of the above e. None of the above

b. return on assets

Which of the following are balanced supply chain metrics? a. The perfect order fulfillment b. Total supply chain cost c. Days of inventory outstanding d. Cash-to-cash cycle

b. total supply chain cost

We does the profit leverage effect show top management and others? a. Logistics cost savings is pretty low, so we need to make it look good b. We are pretty good at basic math and financial statements c. A dollar saved in logistics can have a multiplicative effect on profitability d. We have a college degree e. All of the above

c. A dollar saved in logistics can have a multiplicative effect on profitability

If you have a major reduction in inventory and stop renting space in an outsourced distribution center, which of the following would you expect? a. Your income statement will be affected. b. Your balance sheet will be affected. c. Both your income statement and balance sheet will be affected. d. Neither your income statement or balance sheet will be affected.

c. Both your income statement and balance sheet will be affected.

Logistics metrics often fail to resonate or be meaningful to top management.

true

The lower your firm's operating margin, the greater the impact of logistics cost reduction vis-a-vis that of additional sales.

true

If your profit margins are 5%, the profit leverage affect tells you which of the following? a. A dollar saved in logistics is the same as $200 sales increase b. A dollar saved in logistics will have the same impact on the company as a $20 sales increase c. A penny saved is a penny earned d. A dollar saved in logistics has the same impact on profit as $5 increase in sales revenue

b. A dollar saved in logistics will have the same impact on the company as a $20 sales increase

If a company has a very low profit margin, which of the following is true? a. Saving money in logistics will have a greater relative impact on profitability versus sales revenue than a company with a high profit margin b. Your company should outsource logistics c. Logistics cost is no more or less important to a company with a very high profit margin d. None of the above

a. Saving money in logistics will have a greater relative impact on profitability versus sales revenue than a company with a high profit margin

hat do the SMART criteria stand for? a. Specific, Measurable, Attainable, Relevant, Timeframe b. Sustainable, Measurable, Attainable, Realistic, Timeframe c. Specific, Measurable, Attainable, Realistic, Transportation d. Sustainable, Measurable, Attainable, Relevant, Transportation

a. Specific, Measurable, Attainable, Relevant, Timeframe

The disadvantage of increasing profit through logistics cost reduction vis-à-vis increased sales is . . .? a. You aren't getting as much visibility/brand recognition as you get in the market when you sell more. b. There are no disadvantages. c. There might be fewer trucks with your name on them. d. All of the above e. None of the above

a. You aren't getting as much visibility/brand recognition as you get in the market when you sell more.

If your fixed assets go down, and your sales revenue and profit go up, which of the following will happen? a. Your return on assets will increase b. Your return on assets will decrease c. There is no way to know without having actual dollar amounts d. Your return on assets will be unchanged

a. Your return on assets will increase

A consistent is measure . . .? a. Allows comparison over time b. Is important c. Aligns with set priorities, not creating conflict d. Requires minimum effort to apply e. None of the above

a. allows comparison over time

Supply chain wide metrics are distinguished by which of the following? a. End-to-end information sharing b. Fast and easy to implement c. Very common in practice d. All of the above

a. end-to-end information sharing

Which of the following do NOT apply to the SCOR model? a. SCOR is used by CEVA logistics. b. SCOR was started by the Supply Chain Council. c. SCOR provides standard measurements that allow for comparison among companies. d. SCOR focuses on supply chain activities.

a. scor is used by CEVA logistics

Which of the following logistics levers will affect your fixed assets on the balance sheet? a. Storage and handling equipment b. Facility financing c. Logistics administration d. On-time delivery

a. storage and handling equipment

The margin side of the strategic profit model derives its financials from which of the following? a. The income statement b. The balance sheet c. The financial statement d. The strategic profit mode e. Both A and B

a. the income statement

Which of the following are company supply chain metrics in terms of what they actually measure? a. The perfect order fulfillment b. Total supply chain cost c. Accounts payable d. Total landed cost

a. the perfect order fulfillment

Which of the following will happen if you decrease transportation cost but everything else stays the same? a. Your return on assets will increase b. Your return on assets will decrease c. There is no way to know without having actual dollar amounts d. Your return on equity will be unchanged e. None of the above

a. your return on assets will increase

Customer inquiry resolution time is a __________ because _________. a. Balanced supply chain metric; the whole supply chain affects it b. Part of the perfect order; it is a key to the customer experience c. Company supply chain metric; it focuses on the company's piece of the supply chain d. Balanced supply chain metric; the customer is the only one that adds money to the supply chain

c. Company supply chain metric; it focuses on the company's piece of the supply chain

What is Alibaba's strategy for dealing with its increased logistics needs? a. Buy more transportation assets to build capacity b. Outsource logistics because it is not its core competency c. Form equity relationships with organizations that are already good at logistics and work with them d. All of the above

c. Form equity relationships with organizations that are already good at logistics and work with them

Which types of metrics are more important in logistics? a. Operating metrics b. Financial metrics c. They are equally as important, depending on the situation d. Metrics only matter if you get the job done

c. They are equally as important, depending on the situation

If a company decides to increase its investment in inventory, and as result must rent additional warehousing space, this decision will impact which of the following? a. Balance sheet b. Income statement c. Both d. Neither

c. both

Which of the following is an example of a true supply chain metric? a. Cash-to-cash cycle b. Perfect Order c. Inventory days supply d. All of the above e. Only A. and B.

c. inventory days supply

Which of the following will NOT happen if transportation costs are reduced? a. Net Income Increases b. Total Operating Costs Decrease c. Return on Assets Decreases d. Transportation as % of Sales Decreases

c. return on assets decreases

When thinking about metrics versus measures, which of the following is true? a. They are identical in meaning b. Measures are more complex c. A measure represents a system d. A metric generally combines measures or develops a ratio for comparison

d. A metric generally combines measures or develops a ratio for comparison

A company's revenue can be affected by which of the following? a. Order-fill rate b. Order cycle time c. Perfect-order delivery performance d. All of the above e. Only A and B

d. all of the above

According to the book, how did First Solar improve operating and strategic performance, allowing them to be more successful in the marketplace? a. By adopting a software tool that enabled "what if" analysis of potential sales b. By implementing RapidResponse as their single demand planning tool c. By replacing siloed goals with common goals and objectives across functions of the organization d. All of the above e. Only A and C

d. all of the above

Your company's revenues are directly affected by which of the following? a. Order fill rate b. Order cycle time c. Delivery performance d. All of the above e. None of the above

d. all of the above

Top management is held accountable for which of the following metrics or indicators? a. Asset utilization b. Total supply chain cost c. Revenue d. Both A and C

d. both A and C

Of the company supply chain metrics, which of the following is of most interest to top management? a. Inventory Days Supply b. Perfect Order Fulfillment c. Order Fulfillment Cycle Time d. Cash-to-cash Cycle

d. cash-to-cash cycle

Which of the following logistics levers might affect revenue on the income statement? a. Inbound transportation b. Inventory obsolescence c. Inventory damage d. On-time delivery

d. on-time delivery

Which of the following are key financial ratios included as outputs of the strategic profit model? a. Return on Equity and return on income b. Return on assets and return on liabilities c. Return on inventory and asset turnover d. Return on Equity and return on assets e. Cashflow and asset turnover

d. return on equity and return on assets

If an organization is able to reduce its warehousing costs by holding less inventory, but suffers a reduction in sales as a result, how will ROA (return on assets) be affected? a. ROA will not be affected b. ROA will go down c. ROA will go up d. We don't have enough information to determine the outcome

d. we don't have enough information to determine the outcome

Based on the principle of the profit leverage effect, which of the following is most accurate and important? a. Each dollar saved in logistics is worth about five times the amount of a sales dollar b. Logistics cost saving is more important to the company than sales c. A dollar saved in logistics can increase the company's gross margin d. Logistics is about 5% of the value of sales for most companies e. Logistics should emphasize the profit impact of logistics savings rather than just the dollar savings itself

e. Logistics should emphasize the profit impact of logistics savings rather than just the dollar savings itself

Which of the following are characteristics of a good measure? a. Concise b. Consistent c. Aligned d. Easy to use (i.e., minimizes effort) e. All of the above f. Only A and B

e. all of the above

Which of the following is true of the strategic profit model? a. Is very similar to the profit leverage effect. b. Is designed specifically towards logistics and supply chain performance. c. Focuses on operating metrics (versus strategic metrics). d. All of the above e. None of the above

e. none of the above

What does the profit leverage affect indicate? a. $1 saved in logistics goes right to the bottom-line b. Companies should focus on saving money more than generating additional revenue c. We can translate the cost savings from logistics into the sales equivalent required to have the same profit impact d. All of the above e. Only A and C

e. only a and c

What is one concern related to logistics metrics? a. They may conflict with the goals of other functional areas b. There are no standards whatsoever in terms of how they are calculated c. They tend to be narrowly focused on operational performance rather than financial outcomes d. All of the above e. Only A and C

e. only a and c

Which of the following are concerns related to logistics metrics? a. They may conflict with the goals of other functional areas. b. There are no standards whatsoever in terms of how they are calculated. c. They tend to be narrowly focused on operational performance rather than financial outcomes. d. All of the above e. Only A and C

e. only a and c

Achieving logistics' major goals requires metrics that focus on (but may not be limited to) which of the following? a. Asset management b. Cost management c. Productivity d. Revenue generation e. All of the above e. Only A, B, and C

e. only a, b, and c

What is scenario analysis? a. It is always a part of the DuPont formula b. It allows us to model the impact of different decisions on our financial statements c. It can help improve financial performance d. All of the above e. Only B and C

e. only b and c

Which of the following is a vital role of good measurement? a. Measurement helps managers understand how well process are performing b. Measurement keeps managers busy, giving them something to do to fill their spare time c. Communicates expectations and motivates behavior d. Measurements make life difficult for people who actually have to the work e. All of the above f. Only A and C

f. Only A and C

In working to improve its supply chain sustainability performance, which of the following did HP do? a. Required suppliers to seek environmental certification b. Increased shipment consolidation c. Switched from rail to truck, because truck has less GHG/ton mile. d. Redesigned packaging for improved shipping weight and space utilization e. All of the above f. Only B and D

f. only B and D

Balance sheet items related to logistics include which of the following? a. Inventory b. The value of owned distribution center assets c. Revenues d. Transportation costs e. All of the above f. Only a and b

f. only a and b

Logistics performance affects costs, but not revenues.

false

Measurement is a very straight forward process that few organizations struggle with.

false

Within the S.M.A.R.T. criteria for metrics, "relevant" means that it can be clearly defined to avoid misrepresentation.

false

Which of the following are qualities of good metrics? a. The firm has a large number of metrics b. They tend to be complex so that they are difficult to game c. They tend to be very broad so that they cover a lot of issues d. They are measured quarterly, so not much time is taken to gather them e. All of the above f. None of the above

none of the above