Supply Chain Final
Grizzly fly-fishing shop believes that H.S Sponge is a key profitable customer. Using the traditional accounting technique, what is the cost-to-serve for H.S. Sponge that the shop's accounting department would report to the financial community?
$50,000
What is a more accurate cost-to-serve measure using activity based costs?
$80,000
What is the re-order point quantity in the figure above?
30 days worth of inventory
Average daily demand for a product is 12 units, average lead time for an order to arrive is 6 days, and the economic order quantity is 80 units. What is the average cycle inventory at any given time?
40 units
What is the lead time for receiving inventory once an order is placed in the figure above?
5 days
For many products, researchers have shown that out of the whole order cycle, on average how much time is actually value-added time?
5% or less
According to our lecture on risk, around what percent of US firms have a supply chain risk management strategy?
50%
Of 1,000 deliveries from P&G to walmart last year, 500 fulfilled all 12 requirements of the perfect order, 300 fulfilled 11 of the 12.......What was P&G's perfect order score?
50%
The curves represent the cost benefit of logistics customer service. To maximize the profit, the service level should be set at
65%
Given the pareto chart above, approximately how many of the customers are generating profit from sales?
87%
What is one of the key characteristics os the traditional view of competition as being between companies (old paradigm)?
A transactional approach to supply chain partners dominated by a win-lose mentality
What overarching goal should drive the design and execution of the supply chain?
Achieving customer value
in sit-down restaurants, steaks are generally cooked after the waiters place the order to the kitchen with customers' preference. Which of the following techniques best describes the fulfillment of steak orders to the final customer?
Agile
Since the ultimate values of a firm may be represented by the new present value of its future cash flow, forms should seek to implement logistics and supply chain practices that:
All of the above
In class, we talked about how Japanese automotive manufacturers (Toyota, Honda) would manage collaborative relationships with their suppliers. Based on the discussion in class, Japanese automotive manufacturers would take the following collaborative approaches EXCEPT:
Always splitting the profits fifty-fifty with suppliers
Based on one article from South China Morning Post, Amazon is expanding its logistics service into overseas shipping hubs, and moving towards a global logistics & fulfillment broker. Which of the following statement is INCORRECT about Amazon's brokerage business?
Amazon, as a middle man, holds all inventory for sellers
Using focused factories is a global supply chain management strategy. What is a probable outcome of this strategy?
An increase in transportation cost and lead time
Among Lowe's product categories, nails are one of the basic products that have low customization, long product life cycle, and very stable demand. Which of the following fulfillment techniques is the best fit for ordering nails?
Anticipatory
In the first class for Chapter 1, we had a video describing how woman manages the supply chain for her shoe store in St. Louis. Which of the following was NOT a point in the video?
As long as businesses have inexpensive products on the shelf, they can please customers
Among the following examples, which refers mostly to the place utility that supply chain provides?
Australian grocery store provides food in remote towns
When a company in the electronics industry benchmarks the online ordering processes used at Amazon, they are using:
Best-in-Class benchmarking
An increase in the variation of demand from the customer level up through the manufacturer to the suppliers that results in greater amounts of wasted inventory and increased cost in the supply chain is called:
Bullwhip effect
According to our lecture and the case example from Freightwatch International, principle threats to the supply chain include:
Cargo theft
John has started to sell grizzly fly fishing shop t-shirts nationally through various retail outlets. However, John is much better at forecasting demand for his shirts across a region than he is at forecasting demand at individual retail locations. John decides to pull his shirt inventory back from several locations and instead support several locations using a regional distribution center. This is an example of using ____________ to mitigate demand risk.
Centralized inventory
Dr. Bell talked about the example of coca-cola entering India market. The company faced multiple challenges. Which of the following was NOT discussed?
Coca-cola has to build roads to deliver their products
Your firm has decided to expand globally by adding the UK to your delivery area. You are attempting to decide what services will make you successful in this market. Which type of benchmarking makes the most sense?
Competitive
What type of risk includes incidents such as the IT system being attacked by a malicious group?
Control risk
Barriers preventing companies from moving away from the old paradigm and toward the new paradigm include which of the following?
Conventional organization structure focused on functional untits
With regard to supply chain information flows, planning is performed in the ________ flows while order processing occurs in the _________ flows.
Coordination, Operating
Firms have been talking about the "great divide" as one of their biggest challenges. among these approaches, which would NOT help a business deal with the great divide?
Creating a production-oriented focus across the supply chain
When designing supply chain solutions, what should be the first priority that we need to know?
Customer needs
To complexity in global supply chains is exponentially higher due to all of the following EXCEPT:
Decrease pipeline inventories and lead times
Some companies have a mismatch between their product's characteristics and the supply chain they use. Suppose company A is producing innovative products using a lean supply chain system. And customers are unhappy about the long order cycle time. What can company A do to correct this mismatch?
Decrease product varieties to make the product more functional
What is one benefit of buyer-seller collaboration in a synchronized supply chain?
Demand and supply information is communicated and shared in near real-time
Which type of risk is concerned with questions about how products or services will sell in the future?
Demand risk
Dr. Autry gave an example of himself operating a fast food restaurant. Everyday Dr. Autry would predict then next day's demand and prepare large batches of ingredients beforehand. However, at the end of the day, there were large amounts of ingredients being wasted. What most possibly caused such a waste?
Dr. Autry was unable to respond to customers' changing demands with forecasting
Which type of risk is concerned with questions about to ability of operations to survive a hurricane?
Environmental risk
Establishing a segmented customer service policy involves all of the following EXCEPT:
Establishing a standard customer service policy for all customers
One of the WSJ articles we discussed talks about how manufacturing companies build resilience into their supply chains. Based on this article, which of the following statements are TRUE?
Firms should evaluate risks in their own manufacturing facilities and also their suppliers'
In the past, Ford Motor Company relied on vertical integration and tight control over from the upstream part supplier to the downstream customers. Now they have changed outsourced components to suppliers, as most of the automobile manufacturers do. What does this indicate?
Firms should focus more on their core competencies
Lightning struck a Philip's microchip plant in New Mexico, causing a fire that contained millions of microchips. This is an example of a supply chain disruption that impacted both Nokia and Ericsson, and the two firms reacted differently to the same disruption. What can you learn from this example?
Firms should quickly implement back-up plans for supply chain disruptions
A firm decides to outsource its warehousing to a third party logistics provider. What financial component does this decision have the biggest impact on?
Fixed asset cost
Two kinds of customers walk into Grizzly fly-fishing shop: a college freshman taking a first-time class, and high-end professional executives with fishing experience. In order to deliver the most value to each of these customers, John should:
Focus on creating supply chains that deliver the specific form, time, and place utility that each customer segment is looking for, at a price that each segment is willing to pay
When considering the design of global supply chains, one must consider the different types of "distance" between nations. For example, the biggest "distance" between Australia and the United Kingdom can be considered:
Geographic
Improved performance measurement for today's supply chain includes:
Horizontally focused KPIs such as Total Cost to Serve
Coordination is all about:
How dispersed activities, or activities performed in different nations, are managed
Which of the following is NOT one of the three questions you should ask when making an order fulfillment decison?
How should we price the product?
In our lecture, we discussed the economic value created (EVC) and what it means to the business. Which part (I, II, III, IV) demonstrates the economic value created?
I
The strategic profit model (dupont model) can be used to illustrate the impact of logistics and supply chain management on ROA by:
Illustrating how supply chain activities impact the components of the income statement and balance sheet that lead to the return on assets ratio
In today's competitive business environment, the most successful firms maintain satisfaction by:
Improving how they deliver value to different customer segments
To create financial value in a firm, managers should seek supply chain improvements that:
Increase Return on Assets
Which of the following lowers the risk of supply chain vulnerability due to disruption?
Increase supply chain flexibility
Which of the following is not a way that supply chain management impacts ROA/ROI?
Increasing advertising spend to increase demand
The Reuters article we discussed in class talks about the auto industry in Japan rewiring supply chains after the earthquake in 2011. One critical theme is building resilient supply chains. Which of the following practices is NOT a part of this theme in the article?
Increasing innovative suppliers and entrepreneurial procurment
a WSJ article talks about recent acquisitions among supply chain technology firms, as e-commerce becomes mainstream. Regarding such consolidation, which of the following statement is incorrect?
Information consolidation could create problems with data expansion
You are a divisional inventory manager at a company that has grown through the acquisition of 20 different smaller firms. You are completing an initial assessment of your inventory management principles. Which type of benchmarking makes the MOST sense?
Internal
Dr. Bell described how Clorox acquired Burt's Bee, partly to increase its expertise in environmental and social performance. This is an example of what kind of benchmarking?
Internal benchmarking
In a synchronized supply chain using time-based competition, information is usually substituted for what?
Inventory
What is one major issue that still exists in a lean fulfillment model?
Inventory must be held in anticipation of customers orders
Fill in the blanks with the appropriate combination of words: As the time horizon for planning supply chain activities_______, the accuracy of the planning_______.
Is pulled closer to actual time (shortens), improves
Supply Chain Management:
Is the systematic coordination of purchasing, manufacturing management, and distribution upstream with suppliers and downstream to customers
John is approached by a fishing goods supplier who tells him that he can reduce his purchasing price by half with ensured quality due to his lower cost structure resulting from his manufacturing locations in China. Should John accept the supplier's offer and why?
It depends on the tradeoffs and the impact on total cost of owership
All of the following are trends in global supply chain management EXCEPT:
Less complexity due to a decrease in cultural differences
What are some potential risks associated with each activity or "touch point" represented in the square?
Longer lead times and greater lead time variation
Fiat Chrysler is using magnesium in place of aluminum or steel in some vehicle parts, which would have multiplied implications on vehicle's performance and the firm's supply chain. Of the following implications, which is INCORRECT?
Magnesium costs less than aluminum, which helps profitability
The time that raw material inventory spends at a manufacturing plant waiting to be converted into finished goods is an example of which of the following:
Non value added time
Another trend in globalized supply chains is moving manufacturing or services outside a firm's home country to achieve low labor costs. This is called:
Offshoring
Referring to the figure above and our in-class example of having to replace an Apple computer, Apple operations contributes to the total order cycle time only during which portion of the order cycle?
Order receipt/processing to order shipment
grizzly fly fishing shop needs to put together a re-order plan for fly fishing rods. given that this product is high cost and highly customized in order to meet the unique demands of different users, John should utilize which of the following strategies?
Order rods based on actual customer orders and work with supplier-partners to quickly ship the rods directly to customers
One trend in globalized supply chains in contracting manufacturing or services that are outside a firm's core competencies to an external partner. This is called:
Outsourcing
Dr. Bell talked about the example of the collaboration between walmart and P&G, to improve supply chain performance. out of the following statements which is not irrelevant?
P&G shares its costs structure information with walmart during price negotiations
Which of the following is NOT an issue that impacts global supply chain decisions for US firms?
Passage of new US domestic transportation spending legislation
Our text and lecture listed eight types of complexity that increases supply chain risk. All of the following are types of complexity mentioned, EXCEPT which one?
Price complexity
At its core, a supply chain risk profile assesses the_________ and the _________.
Probability of a risk occurring, the impact of that risk if it occurs
Nowadays many firms purchase materials or products from overseas countries. Which of the following is NOT an advantage that firms may derive from this approach?
Reduced safety stock
At Caterpillar, they understand that the key to managing a complex quick response supply network is both the management of _________ and ___________.
Relationships, information systems
Which of the following strategies is an example of using redundancy to mitigate risk?
Souring products from suppliers in multiple locations
Companies located in the commodity market quadrant (C) should try to do all of the following EXCEPT:
Stay the same
What is the key of the video about Starbucks' supply chain?
Supply chain management creates value beyond cost reduction
Which type of risk is concerned with questions about the ability to replenish our raw materials and sub-components?
Supply risk
What is an implication of the Panama Canal expansion project for global supply chains?
The canal has expended its width and depth to accommodate larger vessels
In order to minimize the lead time gap, firms use the concept of postponement, which is described as:
The delay of the final steps of manufacturing to more closely match demand
Decreasing average inventory held by the firm, while maintaining sales levels, should be a managerial objective because:
The holding costs of inventory average 15-40% annually
According to the pareto or 80/20 rule shown above:
The top 20% of products and customers by sales or profitability are considered the **** category, and should be given the highest levels of customer service
Companies lose money on a significant percentage of active customers because:
They cannot identify the actual costs of selling to individual customers
Car dealers are opening digital showrooms to sell cars-consumers experience driving their future cars in a virtual environment. Consumers can digitally "create" a car design from a broad range of configurations. Far manufacturers, after receiving the design, assemble semi-finished parts into the exact configuration and deliver the car to consumers. Regarding this new practice, which of the following statements is INCORRECT?
This process reduces the customer delivery lead time for buying a car
Which of the following is NOT a sound reason for a company to expand globally?
To decrease complexity by selling to emerging markets
If Grizzly FF shop divides their products and customers into 3 categories based on profitability: A, B, and C What is the purpose of this activity?
To enable John so serve his best customers at a higher level and promote his best products
Which of the following is NOT a purpose of benchmarking?
To increase information visibility to maximize operational communication
If you take into account things such as maintenance, disposal, returns management, and training when calculating the true cost of a product/service, you are employing the concept of:
Total Cost of Ownership
Adding up all the costs associated with each of the activities represented in the squares above yields:
Total Landed Cost
Chuck from the sales department wants to increase the volume of sales for a product. To do this, he wants to service a client in a new market that is three times as far from your current distribution center as current markets. Although Chuck might be happy because his sales numbers go up, total overall profit might not improve because:
Transportation and other distribution costs would likely increase
In a conventional organization, the only way to close the lead time gap is to attempt to forecast and carry just-in-case inventory to protect against uncertainty. What is true about the relationship between this uncertainty in forecasting and the related inventory?
Uncertainty makes this forecasting very difficult and all forecasting errors result in some kind of inventory problem
According to one of our WSJ articles, from a supply chain management perspective, firms could have responded better to economic downturns and recessions. In anticipation of a recession, which of the following approaches does NOT help firms?
Using unique components in production
In class, Dr. Bell gave an example of Lowes and Whirlpool coordinating suppliers for appliances. Which of the following implications is not relevant for this example?
Vendors have the most power over retailers
According to our textbook author, in order to create supply chain responsiveness to customer demands a firm should focus on what two primary capabilities?
Visibility and Velocity
One of the WSJ articles we read mentions a possible slave and child labor lawsuit against Nestle. What's the supply chain implication of such legal action?
Visibility and transparency are keys to successful supply chain management
Configuration is all about:
Where, and how many nations, each value chain actively is performed
Your boss walks into your office and says, "our global supply chain faces the challenge of serving heterogeneous markets as well as the challenge of coordinating operations to avoid potentially higher costs." Do you agree, and why?
Yes, consumer preferences vary by country and high levels of coordination are required to manage the complexity in a global supply chain
Demand for fashion goods are difficult to predict. Zara produces standardized, un-dyded clothes beforehand, and then dyes clothes into different colors once the customer demand is realized. Why does Zara do this?
Zara postpones the dying process to help match supply capacity to uncertain demand
John has just patented an innovative design for a fishing pole that completely bypasses other market competitors, and he will sell it in his fly fishing shop. However, John is thinking about offshoring the manufacturing of the new product to an Asian-based supplier to lower his labor costs in production. Which of the following questions should John answer BEFORE making his decision?
all of the above
Which of the following is NOT an example of an information-enabled supply chain?
buyers negotiate with vendors to gain the lowest unit purchase price for the next order
The equation for return on investment (ROI) is the product of two ratios, where ROI=Profit/Sales multiplied by Sales/Capital-Employeed. Assuming sales are constant, a supply chain manager can increase ROI
by either decreasing capital employed or increasing profit margin
The Economic Order Quantity (EOQ) model attempts to:
calculate the optimal amount of inventory to be recovered by balancing order costs with carrying costs
The time that it takes to convert a payment for raw materials into a collection of revenue for the finished goods into which those raw materials were built is known as:
cash-to-cash cycle time
The best way to decrease safety stock is to:
decrease variation
In the figure, the point where the inventory carrying cost curve and the order/set-up cost curve represents which of the following:
economic order quantity
If grizzly fly-fishing shop realizes that they always lose money when selling to one segment of the current customer base, what is the best thing they can do regarding those customers in the future?
either provide lower levels of service to reduce cost-to-serve, or raise the product price
Which of the following statements below is false?
firms have the same control over stages B and D, as stages A, C, E, G
Our guest speaker, Dr. Autry, mentioned that now some firms are substituting information for inventory. What does this mean?
firms rely on shared information to improve predictions and reduce safety stocks
In managing the demand penetration point (decoupling point), a firm should seek to:
get information on real end customer demand to the upstream supply chain, in order to move the decoupling point as close to the point of origin as possible
As supply chains increase their degree of globalization, which of the following trade-offs occur: transportation costs tend to__________ whereas productions costs tend to ___________.
increase, decrease
Which of the following is an incorrect statement about the Naive EOQ process?
it accounts for lead time variance and demand variance
In the EOQ model, the manager wants to optimize fulfillment, as a consultant, what will you suggest to the manager?
lower cycle stock by reducing ordering/set up costs and lower safety stock by reducing demand and supply variance
Dell sells direct to consumers so that they do not actually start making computers until the customer order comes in, at which point they then order from their suppliers and have the computer manufactured very quickly. The point where the customer order triggers this response in manufacturing is called:
order penetration point
In the video of quick response manufacturing (QRM), QRM is demonstrated as an innovative way of competing. Which of the following points is NOT relevant to QRM's success?
outsourcing manufacturing overseas drives down labor costs
Companies that do not benchmark their processes and companies that use limited supply chain benchmarking have been shown to:
overestimate their competitive abilities
A crossdock is a:
part of a quick response system where inbound shipments are mixed but not stored
Based on the video of FedEx, which of the following factors does not contribute to its supply chain success?
providing a highly standardized customer experience
It is said today that marketing is responsible for identifying needs and creating demand, while supply chain management's role is to:
satisfy demand by putting the right product in the customers' hands at the right time, right place, right quantity, and right price
Supply chain mapping techniques enable managers to see where value is added in the supply chain. To improve the value added time ratio, managers should seek to:
shorten times products sit waiting to have form, time, or place value added
The strategic profit, or DuPont model as discussed in class, demonstrates the following principle:
small improvement in supply chain activities can yield large improvement in ROA
Lean order fulfillment differs from traditional order fulfillment in that lean utilizes:
smaller inventory deployment and shorter cycle times
The lead time gap is an expression of the difference between the amount of time it takes for the supply chain to deliver the product/service and:
the amount of time the customer is willing to wait
