343 Exam 2
The following describes which benefit of outsourcing? -Capital investment transferred to suppliers -Suppliers' higher investment shared between customers
Reduce capital investment
Push strategies focus on ________
Resource allocation
Pull strategies focus on _________
Responsiveness
The following describes which benefit of outsourcing? -Demand uncertainty transferred to the suppliers -Suppliers reduce uncertainty through the risk pooling effect
Risk pooling
A reading of manufacturing PMI above 50 percent indicates: A) the manufacturing economy is expanding. B) the manufacturing economy is shrinking. C) the manufacturing economy is stagnant. D) the manufacturing economy is crashing.
a
Based on Marshall Fisher's theory, what kind of product does a diaper belong to? A) Functional product B) Innovative product C) Durable product D) Nondurable product
a
In the reebok jersey case, reebok kept blank jerseys in its warehouse in Indiana and printed the number and name of players on the blank jersey after the demand is more predictable. This type of supply chain strategy is a a. push pull strategy b. pull strategy c. push strategy d. Lean strategy
a
Which one is NOT a good reason for adopting a push strategy? A) Demand is uncertain. B) Lead time is long. C) The unit cost can be significantly decreased through a large batch size. D) Cost is an important strategic concern.
a
Which one is NOT the advantage of a "Pull-based" supply chain? A) Lower production cost B) Shorter lead time C) Less bullwhip effect D) Lower inventory level
a
Based on Prahalad & Hamel's definition, which one is NOT a core competency of Amazon.com? A) Amazon has a well-known brand name and over 1.3 million sellers on its website. B) Amazon is a listed company on Nasdaq. C) Amazon can off a wide product selection that meets most customers' needs. D) Amazon's customers enjoy shopping at Amazon and have a high loyalty.
b
Based on what we learned in class, which one is NOT an appropriate outsourcing decision? A) Apple outsources the assembly of iPad. B) Boeing outsources the design of airplane. C) GM outsources the production of transmission system. D) Airbus outsources the production of airplane.
b
In MGMT 343, we have learned many concepts about supply chain management. Given that Dell computer is renowned for its assembly-to-order strategy, which concept is NOT relevant to Dell's strategy? A) Push-pull strategy B) Product standardization C) Postponement D) Process standardization
b
In the Quick Response supplier-retailer relationship, who is the decision maker of placing order? A) Supplier B) Retailer C) Either supplier or retailer D) Neither supplier nor retailer
b
In the Reebok NFL jersey case, which supply chain strategy is NOT related to blank jersey? A) Postponement B) Vendor-managed inventory C) Risk pooling D) Process modularity
b
In the Reebok case, which standardization strategy does Reebok use? A) Part standardization B) Process standardization C) Product standardization D) Procurement standardization
b
Which one is NOT an advantage of VMI for manufacturers? A) Manufacturers may build a strategic partnership with retailers. B) It may release manufacturers' stress on working capital. C) Manufacturers may have more accurate demand information. D) The bullwhip effect could be decreased.
b
Which one is NOT part of transaction costs? A) Cost of searching for qualified suppliers B) Cost for purchasing raw materials C) Cost of inspecting the quality of finished goods D) Cost of transferring know-how to suppliers
b
Which one is NOT the dark side of globalization? A) Increased risk of supply chain disruption B) Higher production costs C) Longer transportation lead time D) Higher inventory levels
b
A car rental company features a variety of choices. However, it just keeps limited types of cars. If a customer reserves the type of car that is not available, this company automatically upgrades the customer with a car of higher grade. This strategy is called: A) Part standardization B) Process standardization C) Product standardization D) Procurement standardization
c
Based on Marshall Fisher's theory, which product is a good match for responsive supply chain? A) Coke B) Diaper C) Fashion D) Book
c
In the HP Network printer case, HP uses the universal power supply for both North American and European markets. Which one is NOT the benefit of this strategy? A) HP can use transshipment to fulfill a higher demand in one market. B) Risk pooling decreases the inventory levels for printers. C) Production cost will be reduced so that price becomes more competitive. D) It is easier to make accurate forecast for the demand.
c
In the Reebok NFL jersey case, which one is NOT a reason that Reebok needs to keep the inventory of blank jersey in their warehouse in Indiana? A) Demand for jersey of specific player is not easy to predict. B) Holding cost for a blank jersey is lower than that for a dressed jersey. C) The cost of printing a player number on blank jersey in Indiana is cheaper than that in China. D) Reebok can respond to the surge of demand more efficiently.
c
In the ramp-up stage, the gross margin is higher and the demand is more uncertain. Which one will be the best strategy for the HP network printer? A) HP differentiates the products for the markets of North America and Europe at the early stage of production. B) HP uses push-based strategy to meet customer demand. C) HP uses universal power supply to postpone the product differentiation. D) HP uses transshipment strategy to fulfill demand at different markets.
c
What is NOT a risk for firms to outsource their production to the suppliers? A) It may open up opportunities for competitors. B) It may prevent firms from more innovation. C) It may dilute firms' focus on their core competency. D) There may be conflicting objectives between firms and outsourcing partners.
c
Compared with Li&Fung, Zara has a much higher net profit ratio. Which one is NOT a reason leading to the high net profit ratio? A) Lower inventory to sales ratio B) Fewer mark-down items C) Quick response to customers' demand D) Higher commitment to pre-season production volume
d
In the case of Kimberly-Clark, it directly manages the inventories of Huggies diapers at the site of Costco. Which activity does Kimberly-Clark do? A) Replenishing the inventories at Costco B) Placing orders to Kimberly-Clark for Costco C) Monitoring the sales of Huggies at Costco D) All of above
d
Toyota decides to make 100% of engine by itself. Which one is NOT a reason leading to its insourcing decision? A) Car is an integral product and engine is designed for the car. B) Toyota wants to own the knowledge about making engines. C) Toyota wants to own the capacity for making engines. D) Toyota wants to decrease the cost of making engine.
d
What is NOT a benefit for firms to outsource their production to the suppliers? A) Production costs can be reduced because of economies of scale. B) Demand uncertainty can be transferred to suppliers. C) Firms can respond to customers more efficiently. D) Firms can lead the innovation in the outsourced activity.
d
Windscreen wipers account for a tiny portion of total costs for a car and there are many suppliers in market. Which one is a proper procurement strategy for a carmaker based on Kraljic supply matrix? A) Forming a strategic alliance with suppliers. B) Signing a long-term contract with suppliers. C) Carrying a high inventory level for windscreen wipers. D) Online order placement to suppliers without pre-approval process
d
The following describes which benefit of outsourcing? -Aggregation of multiple orders reduces costs, both in purchasing and in manufacturing
economies of scale
The following describes which benefit of outsourcing? -The ability to better react to changes in customer demand -The ability to use the suppliers technical knowledge to accelerate product development cycle time -The ability to gain access to new technologies and innovation -Critical in certain industries: --High tech where tech change very frequently --fashion where products have short life cycle
increased flexibility
The following describes which benefit of outsourcing? -Buyer can focus on its _________ -Allows buyers to differentiate from its competitors
Focus on core competence
The following describes a _________ product. -Made up from components whose functionalities are tightly related -Not made from off the shelf components -Designed as a system by taking a top down design approach -Evaluated on system performance, not on component performance
Integral
The following describes which risk of outsourcing: -Outsourcing critical components to suppliers may open up opportunities for competitors -Outsourcing implies that companies lose their ability to introduce new designs based on their own agenda rather than the suppliers agenda -Outsourcing the manufacturing of various components to different suppliers may prevent the development of new insights, innovations, and solutions that typically require cross functional teamwork
Loss of competitive knowledge
Two main risks of outsourcing
Loss of competitive knowledge, Conflicting objectives
Objective of a pull strategy
Maximize service level
Objective of a push strategy
Minimize cost
The following describes a _________ product. -Made by combining different components -Components are independent of each other -Components are interchangeable -Standard interfaces are used -Customer preference determines the product configuration Ex. Computer
Modular
A ______________: -Each product undergoes a discrete set of operations making it possible to store inventory in semi-finished form -Products differ from each other in terms of the subset of operations that are performed
Modular process
A ___________: -Can be made by appropriately combining the different modules -Entails providing customers a number of options for each module
Modular product
The following are characteristics of ____________. -Common parts used across many products -Common parts reduce: --Inventories due to risk pooling --Costs due to economies of scale -Excessive part commonality can reduce product differentiation -May be necessary to redesign product lines or families to achieve commonality
Part standardization
Swaminathan's Four approaches to standardization
Part, process, product, procurement
The following describes ___________. -A push pull strategy -decisions about specific product to be manufactured are delayed until demand is more predictable --Starts by making a generic or family product (use risk pooling to reduce uncertainty) -Differentiate later into a specific end product
Postponement
The following are characteristics of ____________. -Standardize as much of the process as possible for different products -Customizing the products as late as possible -Decisions about specific product to be manufactured is delayed until after manufacturing is under way -Postponement or delayed product differentiation
Process standardization
The following are characteristics of ____________. -Large variety of products may be offered, but only a few produced and kept in inventory (because producing each one incurs high setup costs) -When a product not kept in stock is ordered, the order may be filled by a product that offers a superset of the features required by a customer (substitute products with higher feature set for those with lower feature set) -Downward substitution
Product standardization
The following describes _____________ supply chains. -Production and distribution are coordinated with true customer demand rather than forecast demand --Firm does not hold any inventory and only responds to specific orders -Intuitively attractive --Reduced lead times through the ability to better anticipate incoming orders from the retailers --Less bullwhip effect and thus less variability in the system --Decreased inventory at the manufacturer due to the reduction in variability
Pull Based
What is PMI? What are the five sub indexes and there weights? What does it mean if PMI is above 50%? Below?
Purchasing Managers index, Production level .25, New orders .3, Supplier delivery time .15, Inventories .1, Employment level .2, Above 50 means manufacturing economy is expanding, below means contracting
The following describes _______________ supply chains. -Production and distribution decisions based on long term forecasts. -Manufacturers forecast demand based on orders received from the retailers and make to forecast/stock -Longer reaction time to changing marketplace: --Inability to meet changing demand patterns --High obsolescence if demand for certain products disappears -Variability of orders received is much larger than that in customer demand due to the bullwhip effect
Push Based
Lead times in a push strategy are often ___________
long
the process for a pull strategy is
order fulfillment
Lead times in a pull strategy are often __________
short
The process for a push strategy is
supply chain planning
The following describes a _________ strategy -Some stages of the supply chain operated in a push based manner -Remaining stages employ a pull based strategy -The interface between the push based stages and the pull based stages is the push pull boundary Ex. Postponement
Push pull
A ______ strategy has a high complexity level while a ______ strategy has a low complexity level
Push, pull
The following describes which risk of outsourcing: -Buyers insist on flexibility --Buyers want to match demand and supply by adjusting production rates --In good economy, buys want to secure production quantity through a long term contract -Suppliers focus on cost reduction --Suppliers want to get the long term, firm, and stable commitment from the buyer --In slow economy, the long term commitments entail huge financial risks for the buyer
Conflicting objectives
The following describes which main reason for outsourcing? -Firm has the knowledge and skills required to produce the component, but for various reasons decides to outsource
Dependency on capacity
Two main reasons for outsourcing
Dependency on capacity and on knowledge
The following describes which main reason for outsourcing? -Firm does not have the people, skills and knowledge required to product component -Outsources in order to have access to these capabilities
Dependency on knowledge
Five main benefits of outsourcing
Economies of scale, risk pooling, reduce capital investment, focus on core competence, increased flexibility
Two disadvantages of pull based supply chain systems
-Difficult to implement when lead times are long -Difficult to take advantage of economies of scale
The following are characteristics of ____________. -Standardizing processing equipment and approaches, even when the product itself isn't standardized -This is particularly valuable when processing equipment is very expensive --The firm reduces risk of investing in the wrong equipment by pooling demand across a variety of products
procurement standardization