Chapter 11

Which of the following is a primary supplier selection criterion for a firm pursuing a differentiation strategy?

A) product development skills

Warehouses sometimes perform certain other functions besides storing goods. Which of the following is NOT typically one of those functions?

A) purchasing

By which distribution system is more than 90 percent of U.S. coal shipped?

A) railroads

What are the four stages of supplier selection?

A) supplier evaluation, supplier development, negotiations, and contracting

Distribution management focuses on which of the following?

A) the outbound flow of products

Which of the following is NOT one of the five parts of the Supply Chain Operations Reference (SCOR) model?

B) Sell

Vertical integration appears particularly advantageous when the organization has:

B) a large market share.

A furniture maker has delivered a dining set directly to the end consumer rather than to the furniture store. The furniture maker is practicing which of the following?

B) drop shipping

A rice mill in south Louisiana purchases the trucking firm that transports packaged rice to distributors. This is an example of which of the following?

B) forward integration

E-procurement:

B) is the same thing as Internet purchasing.

Japanese manufacturers often pursue a strategy that is part collaboration, part purchasing from a few suppliers, and part vertical integration. What is this approach called?

B) keiretsu

Which sourcing strategy is particularly common when the products being sourced are commodities?

B) many suppliers

In most manufacturing industries, which of the following would likely represent the largest cost to the firm?

B) purchasing

Designing distribution networks to meet customer expectations suggests what three criteria?

B) rapid response, product choice, and service

A restaurant runs a special promotion on lobster and plans to sell twice as many lobsters as usual. When this large order is sent to the distributor, the distributor assumes the large size is a trend, not a one-time event. The distributor therefore places an even larger order with the lobsterman. This behavior is the result of which of the following?

B) the bullwhip effect

Which of the following is NOT an advantage of a virtual company?

B) total control over every aspect of the organization

In what type of auction does a buyer initiate the process by submitting a description of the desired product or service?

C) Dutch

Which of the following statements is true regarding the leverage of supply chain savings?

C) Supply chain savings exert more leverage as the firm's net profit margin decreases.

Which one of the following distribution systems offers speed and reliability when emergency supplies are needed overseas?

C) airfreight

A fried chicken fast-food chain that acquired feed mills and poultry farms has performed which of the following?

C) backward integration

Which of the following describes using one supplier for a component and a second supplier for another component, where each supplier acts as a backup for the other?

C) cross-sourcing

What three logistics-related costs are relevant when analyzing the choice of number of facilities in a distribution network?

C) inventory costs, transportation costs, and facility costs

When Daimler and BMW pooled resources to develop standardized auto components, the sourcing strategy could best be described by which of the following?

C) joint venture

The Japanese concept of a company coalition of suppliers is:

C) keiretsu.

Which of the following is NOT an advantage of the "few suppliers" sourcing strategy?

C) less vulnerable trade secrets

Drop shipping:

C) means the supplier will ship directly to the end consumer, rather than to the seller.

Which of the following best describes vertical integration?

C) produce goods or services previously purchased

The Institute for Supply Management:

C) publishes the principles and standards for ethical supply management conduct.

Among which of the following industries are purchasing costs the LOWEST percentage of sales?

C) restaurants

Outsourcing:

D) All of the above are true of outsourcing.

Which of the following is NOT true about reverse logistics as compared to forward logistics?

D) Speed is often very important.

As the number of facilities increases, total logistics costs tend to follow a curve that first declines, then rises. Why?

D) Transportation costs first decline steeply, then rise, while facility and inventory costs always rise.

What are the three classic types of negotiation strategies?

D) cost-based price model, market-based price model, and competitive bidding

A carpet manufacturer has delivered carpet directly to the end consumer rather than to the carpet dealer. The carpet manufacturer is practicing which of the following?

D) drop shipping

Which of the following is NOT an opportunity for effective management in the supply chain?

D) local optimization

The transfer of some of what are traditional internal activities and resources of a firm to outside vendors is:

D) outsourcing.

Hewlett-Packard withholds customization of its laser printers as long as possible. This is an example of which of the following?

D) postponement

Which of the following is NOT a typical benefit of centralized purchasing?

D) reduce lead times

Which of the following characteristics is NOT common to all four of Darden Restaurants' supply channels?

D) refrigeration

Which of the following is NOT one of the risk mitigation tactics for the supply chain risk category of suppliers failing to deliver?

D) require overnight delivery

Which one of the following is NOT one of the six sourcing strategies?

D) short-term relationships with few suppliers

Which of the following is NOT a condition that favors the success of vertical integration?

D) small market share

While freight rates are often based on very complicated pricing systems, in general, the primary freight price factor is based on which of the following attributes?

D) speed of shipment

A disadvantage of the "few suppliers" sourcing strategy is:

D) the high cost of changing partners.

Consider a firm with an annual net income of $20 million, revenue of $60 million and cost of goods sold of $25 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant & equipment, how many weeks of supply does the firm hold?

E) 4.16

In supply chain management, ethical issues:

E) All of the above are true.

The bullwhip effect:

E) All of the above are true.

Which of the following would NOT be subject to negotiation between a buyer and supplier?

E) All of the above could be negotiated.

Which of the following devices represents an opportunity for technology to improve security of container shipments?

E) all of the above

Which of the following would NOT typically be considered as part of a manufacturing firm's supply chain?

E) landscaping contractors

All EXCEPT which of the following are "opportunities" in managing the integrated supply chain?

E) line balancing

For which corporate strategy(ies) should supply chain inventory be minimized?

E) low cost and differentiation

Which of the following is an advantage of the postponement technique?

E) reduction in inventory investment

Which of the following statements does NOT accurately explain what occurs when the number of facilities in a distribution network increases?

E) response time first decreases, then increases

TAL Apparel's management of its supply chain for Stafford shirts sold in JCPenney in an example of which of the following?

E) single-stage control of replenishment

What term is used to describe the outsourcing of logistics?

E) third-party logistics (3PL)

Which of the following best describes Vizio's sourcing strategy?

E) virtual company

What is the practice of keeping a product generic as long as possible before customizing?

A) postponement

With cross-sourcing, how many suppliers provide each component on a regular basis (i.e., excluding backup suppliers)?

A) 1

Consider a firm with an annual net income of $20 million, revenue of $60 million and cost of goods sold of $25 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant & equipment, what is the inventory turnover?

A) 12.50

What term describes a supply chain that is designed to optimize both forward and reverse flows?

A) closed-loop supply chain

What type of negotiating strategy requires the supplier to open its books to the purchasers?

A) cost-based price model

Local optimization is a supply-chain complication best described as:

A) optimizing one's local area without full knowledge of supply chain needs.