ISDS 3115 TEST 3 Chapt 11

Prior to embarking on supply chain design, operations managers must first consider A. "make-or-buy" and outsourcing decisions B. how to select suppliers C. what kind of distribution network to have D. how to manage supply chain inventory

A. "make-or-buy" and outsourcing decisions

Supply chain managers outsource logistics to meet three goals: A. drive down inventory investment, lower delivery costs, and improve delivery reliability and speed B. drive down inventory investment, improve delivery reliability and speed, and provide better market response C. drive down inventory investment, lower delivery costs, and provide better market response D. lower delivery costs, improve delivery reliability and speed, and provide better market response

A. drive down inventory investment, lower delivery costs, and improve delivery reliability and speed

A rice mill in south louisiana purchases the trucking that transports packaged rice to distributors. This is an example of A. forward integration B. backward integration C. keiretsu D. horizontal integration E. current transformation

A. forward integration

Which of the following is NOT one of the benefits accrued from a centralized purchasing function? A. increase the duplication of tasks B. devote more resources to the supplier selection and negotiation process C. leverage purchase volume for better pricing D. maintain professional control over the purchasing process

A. increase the duplication of tasks

Three common measures of supply chain performance are: A. percentage invested in inventory, inventory turnover, and weeks of supply B. percentage invested in inventory, debt/equity ratio, and weeks of supply C. percentage invested in inventory, inventory turnover, and debt/equity ratio D. Debt/equity ratio, inventory turnover, and weeks of supply

A. percentage invested in inventory, inventory turnover, and weeks of supply

Which of the following statements is true regarding the leverage of supply chain savings? A. supply chain savings exert more leverage as the firm's net profit margin decreases B. supply chain leverage depends only upon the percent of sales spent in the supply chain C. Supply chain savings exert more leverage as the firm's purchases are a smaller percent of sales. D. Supply chain leverage is about the same for all industries. E. none of the above

A. supply chain savings exert more leverage as the firm's net profit margin decreases

Which of the following statements is NOT true? A. supply chain management describes the coordination of all supply chain activities, starting with raw materials, and ending with a satisfied customer. B. An increased sales effort may help a firm reach its profit goals more easily than would effective cost cutting. C. A supply chain includes suppliers; manufacturers and/or service providers; and distributors, wholesalers, and/or retailers who deliver the product and/or service to the final customer. D. The objective of supply chain management is to coordinate activities within the supply chain to maximize the supply chain's competitive advantage and benefits to the ultimate consumer.

B. An increased sales effort may help a firm reach its profit goals more easily than would effective cost cutting

Which of the following statements is NOT true? A. a closed-loop supply chain prepares for returns prior to product introduction B. a closed-loop suppl chain is designed to optimize only reverse flows C. "Closed-loop supply chain" is sometimes used as a synonym for "reverse logistics" D. Reverse logistics involves the processes of sending returned products back up the supply chain for resale, repair, reuse, remanufacture, recycling or disposal.

B. a closed-loop supply chain is designed to optimize only reverse flows

Which of the following mitigation tactics is NOT designed to reduce the risk of information loss or distortion? A. secure IT systems B. alternate sourcing C. redundant databases D. training of supply chain partners on the proper interpretations and use of information

B. alternate sourcing

Which of the following could reduce distribution risk? A. use multiple suppliers B. careful selection, monitoring, and effective contracts with penalties C. secure IT systems D. cross-country diversification

B. careful selection, monitoring, and effective contracts with penalties

What is a supply chain designed to optimize both forward and reverse flows? A. bullwhip-loop supply chain B. closed-loop supply chain C. open-loop supply chain D. reverse-loop supply chain

B. closed-loop supply chain

The cost to produce the goods or services sold for a given period is referred to as A. weeks of supply B. cost of goods sold C. inventory investment D. inventory turnover

B. cost of goods sold

Which of the following statements is NOT generally an implication stemming from an increase in the number of facilities? A. increased facility costs B. decreased total logistics cost C. quicker response D. increased customer satisfaction

B. decreased total logistics cost

The advantage of having few suppliers is to A. look for short-term attributes B. form a long-term relationship C. take advantage of diseconomies of scale D. pursue low cost

B. form a long-term relationship

Trucking A. is one of the least flexible transportation modes B. is increasingly using computers to manage its operations C. is the least used transportation mode for manufacturing goods D. does not play a role in multimodal shipping

B. is increasingly using computers to manage its operations

Which negotiation strategy bases price on a published, auction or index price? A. cost-based price model B. market-based price model C. competitive bidding D. supply-based price model

B. market-based price model

Which of the following industries has the highest supply chain cost as a percentage of sales? A. metals B. petroleum C. automobile D. restaurants

B. petroleum

A lawnmower assembly plant uses a variety of nuts, bolts, screws, and other fasteners in its operation. Its supplier delivers these items directly to the point of use on the assembly line and ensures that there are always sufficient quantities of fasteners to maintain the production schedule. This is an example of A. e-procurement B. vendor-managed inventory C. postponement D. single stage control of replenishment

B. vendor-managed inventory

What is developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor? A. horizontal integration B. vertical integration C. virtual companies D. outsourcing

B. vertical integration

Which of the following statements is NOT true regarding channel assembly? A. channel assembly treats distributors more as manufacturing partners than as distributors B. channel assembly postpones final assembly of a product so the distribution channel can assemble it C. Channel assembly sends individual components, modules, and finished products to the distributor D. channel assembly represents one way to implement postponement

C. Channel assembly sends individual components, modules and finished products, to the distributor

A supply chain ends with A. manufacturers B. distributors C. a satisfied customer D. suppliers

C. a satisfied customer

What is a long-term purchase commitment to a supplier for items that are to be delivered against short-term releases to ship? A. postponement B. drop shipping C. blanket order D. advanced shipping notice

C. blanket order

Which of the following statements is NOT one of the response strategy decisions? A. fast transportation B. use buffer stocks to ensure speedy supply C. gather and communicate market research data D. low setup time

C. gather and communicate market research data

Which organization has developed principles and standards to be used as guidelines for ethical behavior? A. Institute for Procurement management B. Institute for Purchasing management C. Institute for supply management D. Institute for vendor management

C. institute for supply management

Airfreight A. is the oldest means of freight transportation B. is the best way to transport natural gas C. is a fast-growing mode of shipping D. represents about 10% of the tonnage shipped in the United States

C. is a fast-growing mode of shipping

Which of the following strategies is part collaboration, part purchasing from few suppliers and part vertical integration? A. joint ventures B. horizontal integration C. keiretsu networks D. virtual companies

C. kieretsu networks

What is transferring a firm's activities that have traditionally been internal to external suppliers? A. keiretsu network B. vertical integration C. outsourcing D. make-or-buy

C. outsourcing

The do-it-yourselfer plucked a gallon can of base paint from the shelf of the local hardware store and handed it to Keith, the cheerful clerk at the paint counter. Their eyes met briefly and the do-it-yourselfer silently handed over sample 150C-1, Musical Mist, to the clerk. It was impractical to keep several gallons of every possible color on the shelves at the hardware store, so the paint manufacturer had created clever workaround. The walkaround was a computer-based system that added predetermined quantities of pigments to a gallon can of base paint depending on the desired shade, in this case, Musical Mist. The hardware store now needed to stock only the base paint, this machine, and a small supply of paint pigments in order to create the thousands of colors in its catalog. This scenario is a prime example of A. the bullwhip effect B. vendor-managed inventory C. postponement D. drop shipping

C. postponement

With regard to the cost-based price model negotiation strategy, which of the following is true? A. prices float based on what the customer is willing to pay B. prices are based in some way upon market standards agreed to by both supplier and purchaser C. prices are based upon supplier costs D. potential suppliers each submit quotations as to price, delivery, and so on

C. prices are based upon supplier costs

When determining the optimal number of facilities, logistics related costs do NOT usually include which of the following costs? A. transportation B. facility C. purchasing D. inventory

C. purchasing

Which of the following is NOT true about reverse logistics as compared to forward logistics? A. distribution costs are less directly visible B. pricing is dependent on many factors C. speed is often very important D. forecasting is more uncertain

C. speed is often very important

Which of the following is the first stage of supplier selection? A. negotiations B. contracting C. supplier evaluation D. Supplier development

C. supplier evaluation

What term is used to describe the outsourcing of logistics? A. hollow logistics B. e-logistics C. third-party logistics (3PL) D. shipper-managed inventory (SMI) E. sub-logistics

C. third-party logistics (3PL)

Which of the following statements is NOT one of the differentiation strategy decisions? A. minimize inventory to avoid product obsolescence B. gather and communicate market research data C. use buffer stocks to ensure speedy supply D. modular design to aid product differentiation

C. use buffer stocks to ensure speedy supply

A response strategy requires suppliers be selected based primarily on A. being willing to share information B. cost C. product development skills D. capacity, speed, and flexibility

D. capacity, speed, and flexibility

Whcih of the following statements is true regarding cross-sourcing? A. cross-sourcing develops the ability to produce goods or services previously purchased or actually buying a supplier or distributor B. cross-sourcing describes suppliers who become part of a company coalition C. cross-sourcing enhances technological skills D. cross-sourcing uses one supplier for a component and a second supplier for another component, where each supplier acts as a backup for the other.

D. cross-sourcing uses one supplier for a component, and a second supplier for another component, where each supplier acts as a backup for the other

Which of the following statements is NOT true? A. top-notch supply chain performance requires good downstream management, just as it does good upstream management. B. an effective supplier management program and an effective distribution management program may make the difference between supply chain success and failure C. packaging and logistics are important distribution decisions, because the manufacturer is usually held responsible for breakages and serviceability D. finding the optimal number of facilities represents a critical and static decision

D. finding the optimal number of facilities represents a critical and static decision

The advantage of having many potential-suppliers is their willingness to A. provide technical expertise B. participate in JIT C. provide innovations D. offer lower prices in the short term

D. offer lower prices in the short term

Which of the following mitigation tactics could reduce economic risk? A. multiple transportation modes and warehouses B. subcontractors on retainer C. franchising and licensing D. purchasing contracts that address price fluctuations

D. purchasing contracts that address price fluctuations

Three criteria for designing distribution networks to meet customer expectations are: A. rapid response, low cost and service B. low cost, rapid response, and product choice C. low cost, product choice and service D. rapid response, product choice, and service

D. rapid response, product choice, and service

Which of the following statements is NOT true regarding the bullwhip effect? A. bullwhip fluctuations in the supply chain decrease customer service and profitability B. inaccurate information results in distortions and fluctuations, causing what is known as the bullwhip effect C. bullwhip fluctuations in the supply chain increase the costs associated with inventory, transportation, shipping and receiving D. The bullwhip effect occurs as orders are relayed from retails, to distributors, to wholesalers, to manufacturers, with fluctuations decreasing at each step in the sequence.

D. the bullwhip effect occurs as orders are relayed from retails, to distributors, to wholesalers, to manufacturers, with fluctuations decreasing at each step in the sequence

The bullwhip effect A. occurs as orders are relayed from retailers to distributors to wholesalers to manufacturers B. increases the costs associated with inventory in the supply chain C. results in increasing fluctuations at each step of the sequence D. Occurs because of distortions in information in the supply chain E. All of the above are true

E. all of the above are true

Savings in the supply chain exert more leverage as the firm's net profit margin decreases. (t/f)

T

The bullwhip effect refers to the increasing fluctuations in orders that often occur as orders move through the supply chain (t/f)

T

Make-or-buy decision

a choice between producing a component or service in-house or purchasing it from an outside source

Keiretsu

a japanese term that describes suppliers who become part of a company coalition

Blanket Order

a long-term purchase commitment to a supplier for items that are to be delivered against short-term releases to ship

Supply Chain Operations Reference (SCOR) model

a set of processes, metrics, and best practices developed by the Supply Chain Council

Closed-loop supply chain

a supply chain designed to optimize both forward and reverse flows

Vendor-managed Inventory (VMI)

a system in which a supplier maintains material for the buyer, often delivering directly to the buyer's using department

Collaborative planning, forecasting, and replenishment (CPFR)

a system in which members of a supply chain share information in a joint effort to reduce supply chain costs

Pull Data

accurate sales data that initiate transactions to "pull" product through the supply chain

Logistics management

an approach that seeks efficiency of operations through the integration of all material acquisition, movement, and storage activities

Virtual Companies

companies that rely on a variety of supplier relationships to provide services on demand. Also known as hollow corporations or network companies.

Inventory Turnover

cost of goods sold divided by average inventory

Postponement

delaying any modifications or customization to a product as long as possible in the production process

Vertical Integration

developing the ability to produce goods or services previously purchased or actually buying a supplier or distributor

Single-Stage control of replenishment

fixing responsibility for monitoring and managing inventory for the retailer

Channel assembly

postpones final assembly of a product so the distribution channel can assemble it

E-Procurement

purchasing facilitated through the internet

Drop Shipping

shipping directly from the supplier to the end consumer rather than from the seller, saving both time and reshipping costs

Supply chain management

the coordination of all supply chain activities involved in enhancing customer value

Bullwhip Effect

the increasing fluctuation in orders that often occurs as orders move through the supply chain

Reverse Logistics

the process of sending returned products back up the supply chain for value recovery or disposal

Outsourcing

transferring a firm's activities that have traditionally been internal to external suppliers

Cross-Sourcing

using one supplier for a component and a second supplier for another component, where each supplier acts as a backup for the other