ISDS 3115 Chapter 11 True/False
False
Designing distribution networks to meet customer expectations suggests three criteria: (1) rapid response, (2) cost, and (3) service.
True
Drop shipping results in time and shipping cost savings.
False
Even though a firm may have a low cost strategy, supply-chain strategy can select suppliers primarily on response or differentiation.
False
The new model of a tight, fast, low-inventory supply chain, operating across political and cultural boundaries, has reduced the overall level of supply chain risk.
True
Logistics management can provide a competitive advantage through improved customer service.
False
Once revenue and total logistics costs are considered together, the optimal number of facilities in a distribution network may decrease compared to the optimal number of facilities based on total logistics costs only.
True
One classic type of negotiation strategy is the market-based price model.
True
Operations managers are finding online auctions a fertile area for disposing of discontinued inventory.
True
Outsourcing is a form of specialization that allows the outsourcing firm to focus on its key success factors.
True
Outsourcing refers to transferring a firm's activities that have traditionally been internal to external suppliers.
True
Savings in the supply chain exert more leverage as the firm's net profit margin decreases.
False
Supply chain decisions are not generally strategic in nature, because purchasing is not a large expense for most firms.
True
The objective of the make-or-buy decision is to help identify the products and services that can be obtained externally.
True
The bullwhip effect refers to the increasing fluctuations in orders that often occur as orders move through the supply chain.
False
The supply chain for a brewery would include raw ingredients such as hops and barley but not the manufactured goods such as bottles and cans.
False
The supply chain management opportunity called postponement involves delaying deliveries to avoid accumulation of inventory at the customer's site.
True
Use of a diversified supply base represents one of the most common supply chain risk reduction tactics for several different supply chain risk categories.
False
Vertical integration, whether forward or backward, requires the firm to become more specialized.
False
Waterways are an attractive distribution system when speed is more important than shipping cost.
False
When using the low-cost strategy for supply chain management, a firm should use buffer stocks to ensure speedy supply.
True
While the prices that consumers pay are often inflexible, a significant number of final prices paid in business-to-business transactions are negotiated.
False
With the "many suppliers" sourcing strategy, the order usually goes to the supplier that offers the highest quality.
True
A blanket order is a long-term purchase commitment to a supplier for items that are to be delivered against short-term releases to ship.
True
A fast-food retailer that acquired a spice manufacturer would be practicing backward integration.
False
A firm that employs a response strategy should minimize inventory throughout the supply chain.
False
As the number of facilities increases, total logistics costs tend to follow a curve that first rises, then declines.
False
Because service firms do not acquire goods and services externally, their supply chain management issues are insignificant.
False
Because the supply chain has become so electronic and automated, opportunities for unethical behavior have been greatly reduced.
True
Benchmark firms have driven down costs of supply-chain performance.
False
Keiretsu refers to a company coalition that is part collaboration, part purchasing from many suppliers, and part vertical integration.
True
Channel assembly, which sends components and modules to be assembled by a distributor, treats these distributors as manufacturing partners.
False
Cross-sourcing describes the practice of having two suppliers provide every component.
False
Improvements in security, especially regarding the millions of shipping containers that enter the U.S. each year, are being held back by the lack of technological advances.
