Deck 11: Supply chain focused outsourcing

Question 1

Choose among the following statements, the statements that are correct regarding the influence the Nation's cultural distance has on the cost of outsourcing relationships.
1)Other factors such as organizational culture, professional culture have a stronger influence on effect on control and coordination costs
2)Inter-firm management difficulties can be directly liked to Cultural Distance
3)Collectivist cultures tend to generate lower costs
4)The cost of Individualistic cultures and collectivist cultures are the same

A) (1) and (3)
B) (2) and (3)
C) (1), (2), and (4)
D) None of the above

Answer 1

C

Question 2

Within an outsourcing relationship, it has been shown that suppliers sometime do not behave in the manner expected.Choose a contributing factor of suppliers' opportunistic behaviors.
1)The buyer has a stronger position in the power relationship
2)The location of the supplier is far from the buyer
3)There are many possible suppliers that can perform the same function
4)The information system of the two parties in the relationship is integrated

A) (2)
B) (1) and (3)
C) (2) and (4)
D) (1), (2), and (4)

Answer 2

A

Question 3

Which of the following descriptions accurately describe "Internal Coordination" for outsourcing?

A) Activities associated with switching sources
B) Payroll, benefits management expected to be eliminated with outsourcing
C) Activities involved with ensuring compliance with governmental laws
D) Costs involved with lobbying efforts and related travel

Answer 3

B

Question 4

Find the terms associated with appraisal cost when discussing outsourcing among the following choices?
1)Rework
2)Returns
3)IT investments
4)Monitoring mechanisms

A) (1)
B) (1) and (2)
C) (2) and (3)
D) (4)

Question 5

Among the following choice, find the choices that are not a criterion for an outsourcing decision's consensus transition plan.
1)Personnel criteria
2)Transition criteria
3)Financial criteria
4)Performance criteria

A) (1)
B) (1) and (4)
C) (1), (2), and (4)
D) (3) and (4)

Question 6

Among the following activities, which choice does the party who originated the order has the least amount of control?

A) Subcontracting
B) Contract manufacturing
C) Outsourcing
D) Joint venturing

Question 7

Supply Chain Risk Management involves several activities to reduce supply chain risk including _________ and _____________.Fill in the blanks correctly.

A) Risk assessment/Disruption planning
B) Contingency planning/Disruption planning
C) Risk planning/Risk mitigation
D) Risk mitigation/Contingency planning

Question 8

Domestic Industries.Inc.is relocating its manufacturing facilities from Ohio to Mexico.What term could we use for this decision?

A) Outsourcing
B) Off-shoring
C) Domestic Outsourcing
D) In-sourcing

Question 9

Within an outsourcing relationship, is has been shown that suppliers some time do not behave in the manner expected.Creating a comprehensive contract can prevent some of these behaviors.Which of the following contract specifications could prevent opportunistic behaviors on the part of the outsource service provide?

A) Clearly outline a dispute resolution process
B) Specify the length of the contract to be a long term contract
C) Include clauses to protect transferred equipment
D) Do not specify which party is responsibility for an external disruption of the supply chain

Question 10

Generally, there are 7well known hidden costs of outsourcing.Find these costs among the possible choices.Which of the following is not considered one of the 7 hidden cost of outsourcing?
1)Transportation costs
2)Quality costs
3)Internal Coordination costs
4)Supply Chain Risk Management costs

A) (2)
B) (1) and (4)
C) (2), (3), and (4)
D) None of the above

Question 11

The following statements are concerned with the location specific complexities for outsourcing relationships.Choose the least likely statement.

A) Geographic dispersion complicates monitoring the service provider
B) Geographic dispersion increases control cost
C) Geographic dispersion decreases the information asymmetry and uncertainty
D) Geographic dispersion increases coordination cost

Question 12

Which of the following reasons seem to be the largest specific contributor to the failure of outsourcing relationships and the process being brought back in-house?

A) Global economic down turn
B) Cost of Monitoring and controlling suppliers
C) Cultural difference between buyers and suppliers
D) Competitive global competition

Question 13

The popularity of outsourcing had increased drastically over the last few decades.Among the following statements about this phenomena, choose the ones most likely to be true.
1)By 2010, Global business process outsourcing surpassed the US$7 trillion
2)Only 5~10% of all outsourcing relationships fail within 5 years
3)It has becoming a trend to bring back in-house outsourced business functions
4)25~34 % of a typical executive's budget is outsourced

A) (1) and (4)
B) (2) and (4)
C) (2), (3), and (4)
D) (1), (3), and (4)

Question 14

Among the following, which is not an expected benefit from outsourcing?

A) Conversion of variable costs into fixed costs
B) Reduce and control operating costs
C) Refocus on core competencies
D) Reduce cycle time

Question 15

What is the buyer's risk when the probability of outsourced function being disrupted is 2% and the cost of a disruption is $4,000,000?

A) $500,500
B) $250,000
C) $80,000
D) $100,000

Question 16

An outsourcing decision requires a detailed examination beforehand.Choose an activity that should be performed when evaluating the business case for an outsourcing decision.
1)Vendor searching
2)Vender contracting
3)Strategic Evaluation
4)Relationship Management

A) (1)
B) (1) and (2)
C) (3) and (4)
D) (3)

Question 17

US electronics is purchasing of goods to facilitate a business process owned by itself.What term should be used to describe this situation?

A) Off-shoring
B) Contract manufacturing
C) Outsourcing
D) Joint venturing

Question 18

Which of the following is not considered a quality cost category when discussing outsourcing?

A) Appraisal cost
B) Internal failure cost
C) Return cost
D) Preventative cost

Question 19

Which of the following is not true about core competence when discussing outsourcing?

A) It can be built over a short period
B) It is essential to ensure survival in a competitive market-place
C) Only a few core competencies should be developed at the same time
D) Non-core competencies could be outsourced

Question 20

The ____________ complexity can be described as being related to the scale and breadth of the outsourcing service.Fill in the bank space with the correct answer.

A) Location-Specific
B) Task-Specific
C) Resource-Specific
D) Industry-Specific

Question 21

List at least 3 costs of switching sources in the context of outsourcing.

Question 22

Describe the nature of Core Competencies in the context of outsourcing.

Question 23

Describe what the quality cost category, "External failure cost", means in the context of outsourcing?

Question 24

Describe the difference between individualism-collectivism in regard to national culture.

Question 25

Provide a brief description of what implementing of external sourcing model entails in the context of outsourcing.

Question 26

In your own words, provide reasons for the reduction in internal coordination costs from outsourcing being less than expected.

Question 27

List at least two possible opportunistic behaviors on the part of the outsource service provider.

Question 28

Describe outsourcing in one sentence.

Question 29

What quality cost category is associated with scrap, rework, and internal downtime when discussing outsourcing?

Question 30

Provide an example of incentive misalignment in the outsourcing contract.