Deck 13: Performance Measurement

Question 1

Productivity relates the outputs generated by an activity to the resources consumed by the activity and is usually expressed as a ratio; for example, units produced per labor hour.

Answer 1

True

Question 2

A well-designed supply chain measurement system provides information feedback regarding all of the following except _________.

A) customer requirements
B) the company and its suppliers' capabilities
C) the probable success of collaborative initiatives
D) the project management status of new product introduction

Answer 2

the project management status of new product introduction

Question 3

Traditional customer service measurement which has relied on internally generated statistics regarding such measurements as fill rates, on-time delivery, and response time to inquiries does not provide a clear understanding of customer ________.

A) quality
B) specifications
C) minimum requirements
D) expectations

Answer 3

expectations

Question 4

In the SC functions of purchasing, production, and logistics, five performance areas are regarded as essential to accomplishing customer service and profitability goals. They include asset management, cost, customer service, ________, and quality.

A) inventory turns
B) productivity
C) shipments rejected
D) employee turnover

Question 5

________ is the formal process of comparing the attributes of one organization to those of another and is a critical component of a company's performance assessment arsenal.

A) ABC analysis
B) Benchmarking
C) Pareto analysis
D) Balance scorecard

Question 6

Supply management professionals increasingly measure the percent of certified suppliers and the percent of orders (or dollars spent) from certified suppliers.

Question 7

A key performance measure for a company's "Sourcing" function is ________.

A) customer complaints
B) defects per million of procured product
C) units shipped per employee
D) inventory turns

Question 8

Measurement can be used to create alignment. Three areas should be considered: alignment between strategy and measurement, alignment among measures used across functional areas, and alignment of measures employed up and down the supply chain.

Question 9

All of the following are steps in "benchmarking" except ________.

A) define the attribute and identify best-in-class
B) qualitative data from benchmark company candidates
C) document benchmark company process at strategic and operational levels
D) develop a strategy for adopting the best practices

Question 10

Non-competitive (or non-restricted) benchmarking entails looking to companies in ________ industries for examples of best practice.

A) their
B) Fortune 500
C) other
D) related

Question 11

Measurement shapes behavior. Tom Peters suggests, "What gets measured, gets ________."

A) control limits
B) done
C) reported to all levels of management
D) is always prioritized

Question 12

________ links costs directly to the activities that drive them, helping managers understand the nature of important processes.

A) Expense reporting
B) Activity-based costing
C) Common cost analysis
D) A budget

Question 13

Just-in-time or lean management substitutes information for inventory throughout the supply chain, requiring accurate information on a real-time basis.

Question 14

The typical balanced scorecard emphasizes total order performance by including measures of five critical dimensions-cost, quality, delivery, responsiveness, and _________.

A) compliance
B) profit
C) delinquencies
D) innovation

Question 15

Each of the following is a characteristic of an excellent measurement system except________.

A) helps managers understand critical value-added processes
B) quantitative analysis can be routinely performed
C) delivers high levels of targeted results
D) communicates expectations and promotes correct behavior

Question 16

A key performance measure for a company's "Operations" function is ________.

A) percent suppliers certified
B) complete orders
C) direct labor costs
D) document/invoicing accuracy

Question 17

A company's ability to monitor and manage its value-added processes as well as those of its SC partners depends on its measurement capability.

Question 18

Measurement performs three vital roles: It creates understanding, shapes behavior, and leads to operational improved information systems.

Question 19

The downside of activity based costing is that enables decisions outside of the standard business accounting system.

Question 20

Just-in-time or ________ management substitutes information for inventory throughout the supply chain, requiring accurate information on a real-time basis.

A) sourcing
B) logistics
C) operations
D) lean

Question 21

Inventory Turnover is equal to cost of goods sold during a time period divided by the average inventory valued cost during the time period.

Question 22

There are five performance areas that are regarded as essential to accomplishing customer service and profitability goals. They are cost, customer service, proactive ness, and quality.

Question 23

Benchmarking, the formal process of comparing the positive attributes of one organization to those of another, is a critical component of a company's performance assessment arsenal.

Question 24

Most supply chain measures do capture what is going on across the entire supply chain.

Question 25

Benchmarking can help companies identify and emulate best practices.

Question 26

The generic benchmarking process consists of three steps; define the attribute to be studied, document the comparison company's process at strategic and operational levels, and develop a strategy, complete with specific methods for adopting best practices.

Question 27

The proactive use of balanced scorecards focuses resource use to drive constant improvements in performance.

Question 28

Customer demands necessitate much better satisfaction information that comes straight from the customer.

Question 29

Customer-centric measures should be tailored to important customers.

Question 30

A perfect order is one that is received, processed, picked, packed, shipped, documented, and delivered on time without damage.

Question 31

In his book, The Goal, Eliyu Goldratt pointed out that minimal emphasis on capacity utilization generates excess inventory that can create chaos and confusion, greatly reducing a manager's ability to make good, competitive decisions.

Question 32

A company's ability to monitor and manage its value-added processes as well as those of its supply chain partners depends on its measurement capability.

Question 33

Managers cannot effectively control processes that they do not understand.

Question 34

One of the easiest challenges encountered in benchmarking is to identify the right company to use as the benchmark.

Question 35

Accurate total costing and activity-based costing create process transparency and make trade-offs to understand.

Question 36

The role of measurement in a business creates understanding, drives behavior, and it leads to results.

Question 37

The key to maximizing throughput is to alleviate the bottleneck, keeping it operating at maximum capacity all the time.

Question 38

To manage the supply chain for competitive advantage, modern measurement systems must provide a broader array of historical information that is better balanced between internally focused and externally oriented measures.

Question 39

Scorecards incorporate financial and key qualitative measures to communicate expectations, evaluate performance, and motivate improvement.

Question 40

Measurement is more critical than communication, training, or perhaps anything else when it comes to managing human behavior.

Question 41

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Cycle times are an indicator of and are measured in terms of elapsed time from order receipt to order delivery.

Question 42

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can help companies identify and emulate best practice.

Question 43

Inventory turns is a measurement of the ratio of forecast or sales to inventory available. Usually the lower the value the more efficient the operation.

Question 44

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Traditional measurement practice has emphasized five critical areas: asset management, , customer service, productivity, and quality.

Question 45

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Measurement performs three vital roles: It creates , shapes behavior, and leads to operational performance and results.

Question 46

To be useful, productivity measurement requires a comparison with past performance, competitor performance, or industry standards.

Question 47

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A measurement of inventory, "days of supply" refers to the ratio of forecast or sales to inventory available.

Question 48

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Productivity relates the outputs generated by an activity to the consumed by the activity and is usually expressed as a ratio; for example, units produced per labor hour.

Question 49

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The percent of products delivered on time is an important measure in sourcing, operations, and .

Question 50

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Accurate costing and activity-based costing create process transparency and make trade-offs visible.

Question 51

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The ideal is to have just enough inventory to keep operations running smoothly and meet customer needs.

Question 52

Explain the difference between activity based costing (ABC) and conventional costing methods.
ABC costing requires process transparency and detailed information on products, customers, activities, and resource costs. Conventional costing usually does not provide the true allocated costs to directly related support functions, equipment, facilities, and people.
Fill in the Blank(s) (Blank Identified in RED)

Question 53

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costing is a critical step in managing world-class processes.

Question 54

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Measurement can be used to create alignment. Three areas should be considered: alignment between and measurement, alignment among measures used across functional areas, and alignment of measures employed up and down the supply chain.

Question 55

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incorporate financial and key qualitative measures to communicate expectations, evaluate performance, and motivate improvement.

Question 56

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The favored measure of asset utilization at the senior management level is return on assets, which is calculated as net profit divided by total .

Question 57

The "lean" ideal regarding inventory is to have just enough inventory to keep operations running smoothly and meet customer needs.

Question 58

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A company's ability to monitor and manage its value-added processes as well as those of its SC partners depends on its capability.

Question 59

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The cost of goods sold during a time period divided by the average inventory valued cost during the time period is equal to .

Question 60

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In sourcing and operations, the most common measure of is defect rate expressed as defective parts per million opportunities.

Question 61

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The role of in the supply chain creates understanding and drives behavior, often leading to improved business results.