Deck 10: Supply Chain and Logistics Management

Question 1

Intermodal transportation refers to transportation that occurs across state lines.

Answer 1

False

Question 2

Warehousing activities can be organized into three basic functions: storage, movement, and re-stocking.

Answer 2

False

Question 3

Costs required to make or buy a product including taxes, insurance and warehousing space to store the goods are referred to as inventory carrying costs.

Answer 3

True

Question 4

When a company recognizes the importance of sharing supply and demand information with suppliers and customers, it is practicing supply chain management.

Question 5

Effective materials management supports marketing objectives by making sure that goods are available to ship to customers in an efficient and effective manner.

Question 6

The terms push strategy and responsive supply chain are synonymous.

Question 7

Put-away refers to moving goods to their temporary or semi-permanent storage location and updating inventory records.

Question 8

Logistics is that part of supply chain management that plans, implements, and controls the flow of goods, services, and information between the point of origin and the final customer.

Question 9

The main advantage of a supply chain pull strategy is that it allows firms to achieve economies of scale.

Question 10

Transportation management is part of a firm's distribution activities.

Question 11

A set of three or more companies directly linked by one or more of the upstream and downstream flows of products, services, finances, and information from a source to a customer is referred to as a marketing chain.

Question 12

Distribution involves holding inventories of both intermediate materials and finished goods.

Question 13

Enterprise resource planning (ERP)systems are data management systems that are used exclusively to determine efficient transportation routes.

Question 14

Picking involves unloading goods from a carrier, updating inventory records, and quality inspection, if required.

Question 15

Of all the logistics functions, transportation management is the least important.

Question 16

An omnichannel is a type of retail that offers different methods of shopping and delivery of products to consumers.

Question 17

Due to the universal accessibility of motor transport, most shipments will include some leg of the journey that will be completed by truck.

Question 18

During the maturity and decline stages, a firm may want to stick with the maximum flexibility a pull strategy allows or follow a hybrid strategy that commits to inventory of raw and packaging materials without committing to a large amount of finished goods inventory.

Question 19

A purchase order is a legal obligation to buy from a supplier a certain amount of goods for an agreed upon price.

Question 20

The ultimate objective of supply chain management is to integrate related companies in order to facilitate coordinating activities across the supply chain in a manner that improves the entire chain's performance.

Question 21

Which statement best reflects the underlying philosophy behind the concept of supply chain management?

A)Better late than never.
B)You get out of it what you put into it.
C)Money makes the world go 'round.
D)No company is an island.
E)Every company for itself.

Question 22

Which statement regarding supply chain management is not true?

A)Supply chain management allows companies to have greater control over the customer value they provide.
B)Supply chain management seeks to coordinate the various flows within a supply chain.
C)In a supply chain, all companies rely on related companies whose activities add value to the final product.
D)Each channel within a supply chain acts independently of the other channels.
E)Decisions made in one area of the supply chain will affect other areas, sometimes negatively.

Question 23

Compare the following statements and select the one that accurately describes a company that is practicing supply chain management.

A)It does not rely on other members of the supply chain to add value to the final product.
B)It has an outward focus regarding the activities of its own company.
C)It recognizes the importance of sharing supply and demand information with suppliers and customers.
D)It sets up technology to enable the sharing of demand information with suppliers.
E)It has an inward focus on the activities and performance of other companies.

Question 24

Consumers wanting to buy products from companies that care about protecting the environment and the world's natural resources are interested in companies that practice sustainability.

Question 25

By leveraging the resources and skills of its various component firms, a supply chain provides the end customer with

A)value.
B)competition.
C)stability.
D)variety.
E)flexibility.

Question 26

What type of strategies must companies embrace for an integrated supply chain to work?

A)supplier-based
B)distribution-based
C)relationship-based
D)profit-based
E)production-based

Question 27

A supply chain strategy in which a company builds goods based on a sales forecast, puts those goods into storage, and waits for a customer to order the product is called a ________ strategy.

A)pull
B)supply
C)push-pull
D)push
E)demand

Question 28

Which of the following statements is accurate regarding the way a supply chain works?

A)In a supply chain, products flow both upstream and downstream, finances flow upstream, and information flows downstream.
B)In a supply chain, products flow downstream, finances flow upstream, and information flows both upstream and downstream.
C)In a supply chain, products, finances and information flow both upstream and downstream.
D)In a supply chain, products flow downstream, while finances and information flow both upstream and downstream.
E)In a supply chain, products flow upstream, finances flow downstream, and information flows both upstream and downstream.

Question 29

According to your text, the ultimate objective of supply chain management is to

A)choose intermediaries that share the same mission as the company.
B)integrate the activities of related companies so they function as one extended enterprise.
C)make each channel as efficient as possible, thus saving the company money.
D)utilize as few channel members as possible in the manufacture of the product.
E)accurately predict production levels in order to minimize inventory carrying costs.

Question 30

Supply chain management refers to

A)the planning, implementation, and control of the manufacture of a product.
B)the inbound movement and storage of materials in preparation for those materials to enter and flow through the manufacturing process.
C)the actions a firm takes to coordinate the various flows within a supply chain.
D)the management of data to integrate information across all departments of an organization.
E)the actions a firm takes to manage the costs required to make or buy a product.

Question 31

Intermediaries through which the flow of products travels are called

A)distribution channels.
B)supply chains.
C)logistic channels.
D)logistics chains.
E)core carriers.

Question 32

All along the supply chain, distribution channels add value to the product by

A)making the product available to ship, taking customer orders and shipping the product to the next step in the supply chain.
B)listening to customer feedback and reacting accordingly.
C)eliminating intermediaries for which a product must travel.
D)reducing the final cost that consumers must pay for the product.
E)keeping the flow of financial resources moving downstream.

Question 33

Pipelines make up a very specialized mode that services only a few industries.

Question 34

The costs required to make or buy a product, including risk of obsolescence, taxes, insurance, and warehousing space used to store the goods, are called ________ costs.

A)inventory carrying
B)distribution channel
C)marketing channel
D)logistics management
E)supply chain

Question 35

The main reason why airfreight is used sparingly is the lack of accessibility to all parts of the world.

Question 36

A supply chain refers to

A)the activities involved in delivering the right product, to the right place, to the right customer, at the right time, in the right quantity, in the right condition, and at the right price.
B)the intermediaries (wholesalers, distributors, and retailers)through which the flow of products travels.
C)The inbound movement and storage of materials in preparation for those materials to enter and flow through the manufacturing process.
D)the set of three or more companies directly linked by one or more of the upstream and downstream flows of products, services, finances, and information from a source to a customer.
E)the planning, implementation, and control of the flow of goods, services and information between the point of origin and the final customer.

Question 37

Neesha and Lucas went to Clear Creek Custom Dining to buy a new dining room set. At the store they configured the set to their specifications in terms of size, finish and style. The store sent the order out via the Internet to the manufacturer. The manufacturer, in turn, secured the correct type of wood from its supplier to complete the dining room set. When finished, the manufacturer shipped the product to its local warehouse where Clear Creek Custom Dining arranged for delivery to its store by a local trucking company. For Clear Creek Custom Dining, this is an example of

A)a push strategy.
B)its inventory management system.
C)its supply chain.
D)a stockout.
E)a just-in-time inventory system.

Question 38

A management philosophy that guides the actions of company members toward the goal of actively managing the upstream and downstream flows of goods, services, finances, and information across the supply chain is referred to as a

A)supply chain orientation.
B)marketing orientation.
C)distribution orientation.
D)channel management approach.
E)logistics approach.

Question 39

The main advantage of a push strategy is that it

A)allows firms to customize orders.
B)allows firms to achieve economies of scale.
C)allows firms to respond rapidly to changing market conditions.
D)eliminates the risk associated with producing an unwanted product.
E)reduces inventory carrying costs.

Question 40

Elimination of intermediaries, such as distribution centers, in the delivery of products from a producer to a consumer is referred to as disintermediation.

A)logistics.
B)a distribution center.
C)distribution management.
D)a value chain.
E)a supply chain.

Question 41

After the economic recession, the boating industry suffered from a decline in sales. However, recent sales forecasts indicate that the upcoming season will produce a strong demand for boats and boating equipment. Based on this, Lynn has decided to ramp up production this winter of both his bass fishing boats and speed boats, keep them in storage until the boating sales season officially resumes, and hope that customers will buy them. This is an example of a ________ strategy.

A)push
B)pull
C)demand
D)supply
E)push-pull

Question 42

A firm must track three types of costs to determine the correct level of inventory to keep in stock: purchasing costs, inventory carrying costs, and the costs incurred by

A)overruns.
B)distribution.
C)obsolete inventory.
D)stockouts.
E)customer returns.

Question 43

A company that forecasts sales, builds an inventory based on the forecast, holds the components in inventory until a customer order is received and then finalizes the product based on the order is using a ________ strategy.

A)supply
B)push-pull
C)push
D)pull
E)demand

Question 44

Which element(s)of the four Ps of the marketing mix is/are affected by logistics?

A)place only
B)product, price, and place
C)product, price, place, and promotion
D)product and place
E)product only

Question 45

Which type of supply chain strategy is demonstrated by the following sequence: (Step 1)forecast sales, (Step 2)plan production, (Step 3)order materials, (Step 4)customer orders, (Step 5)make product, and (Step 6)ship product?

A)pull strategy
B)push strategy
C)demand strategy
D)supply strategy
E)a push-pull strategy

Question 46

If demand is unstable, as it often is in the introductory and growth stages of the product life cycle, it might be best for a firm to use a ________ strategy.

A)pull
B)demand
C)supply
D)push
E)forecast

Question 47

Patio Creations is a manufacturer of outdoor furniture. Typically, customers purchase the company's products as the summer season begins and as such, do not want to wait for the product to be manufactured. Which supply chain strategy would work best for Patio Creations?

A)demand strategy
B)supply strategy
C)push strategy
D)a forecast strategy
E)pull strategy

Question 48

If cost reduction is part of a firm's strategy, it would be wise for the firm to use a ________ strategy, since it will allow the firm to achieve cost savings through economies of scale in purchasing, manufacturing, and transportation.

A)push
B)pull
C)push-pull
D)demand
E)supply

Question 49

The part of supply chain management that plans, implements, and controls the flow of goods, services, and information between the point of origin and the final customer is called

A)supply chain management.
B)warehousing.
C)production management.
D)value chain optimization.
E)logistics.

Question 50

Data management systems that integrate information across all the departments of an organization are called

A)enterprise resource planning (ERP)systems.
B)intermodal data planning (IDP)systems.
C)electronic data interchange (EDI)systems.
D)enterprise data planning (EDP)systems.
E)just-in-time (JIT)inventory systems.

Question 51

Those activities that focus on delivering the right product, to the right place, to the right customer, at the right time, in the right quantity, in the right condition, and at the right price is referred to as

A)transportation management.
B)value chain optimization.
C)distribution.
D)production management.
E)logistics.

Question 52

The almost instantaneous transfer of information from one company's computer to another that allows ERP systems to communicate with the information technology systems of other companies is done through

A)a radio frequency identification system.
B)a just-in-time inventory system.
C)an electronic data interchange.
D)a computerized identification system.
E)an electronic inventory system.

Question 53

Craig's Custom Cabinets is a business that provides custom cabinetry and furniture for both businesses and individual consumers. Craig does not make any products until he receives an order from the customer. What type of marketing strategy does this represent?

A)supply strategy
B)forecast strategy
C)push strategy
D)pull strategy
E)demand strategy

Question 54

Which activity demonstrates how logistics has an effect on the product element of the marketing mix?

A)deciding which mode of transportation to employ
B)shipping goods in full rather than partial vehicles
C)utilizing volume discounts
D)providing feedback on product packaging
E)deciding to reduce the amount of inventory in the warehouse

Question 55

Companies that want to take advantage of the economies of scale that result as part of a push strategy will most benefit from

A)using advanced technology to increase the responsiveness and flexibility of logistics operations.
B)hiring purchasing managers that can find suppliers that can offer short lead times.
C)hiring companies that have the ability to quickly customize products for timely delivery to customers.
D)having large warehouses that can efficiently store, retrieve, and load goods onto vehicles at a fast pace.

Question 56

A push-pull supply chain strategy

A)relieves the firm of having to incur inventory costs.
B)allows the firm to take advantage of manufacturing and transportation economies of scale.
C)does not rely on sales forecasts.
D)is the most cost competitive supply chain strategy to use.
E)produces more accurate sales forecasts.

Question 57

Which term is not associated with a pull strategy?

A)flexibility
B)speculation
C)customization
D)tailored
E)responsive

Question 58

According to your text, companies that employ a pull or push-pull strategy typically establish logistics operations based on

A)sales forecasts, inventory stockpiles, and volume.
B)inventory levels, customer orders, and flexibility.
C)speculation, forecasting, and chance.
D)routine, standardization, and transportation efficiency.
E)service quality, innovation, and flexibility.

Question 59

What type of inventory costs include the costs to place and process orders, materials, and finished goods?

A)inventory carrying costs
B)out-of-stock costs
C)distribution costs
D)production costs
E)purchasing costs

Question 60

According to your text, the primary reason firms rely on inventory management is

A)to facilitate the movement of product from the warehouse to the end-customer.
B)so that customer service won't suffer from lack of product in any given location.
C)to avoid an abundance of stock sitting in a warehouse.
D)so they can predict how much product to manufacture at the lowest cost.
E)to be able to forecast future production runs of a product.

Question 61

How does effective materials management support the firm's marketing objectives?

A)by reducing procurement, transportation, and production costs through economies of scale
B)by coordinating supply and demand for materials
C)by ensuring that stored or received materials get to the production floor when they are needed
D)by making sure that goods are available to ship to customers in an efficient and effective manner
E)by negotiating contracts and placing purchase orders in a timely manner

Question 62

Darius is a purchasing manager for a large auto manufacturer. The contract with the company's steel provider is just about to expire, so Darius is negotiating the terms and condition of a new contract with his supplier. Darius is satisfied with the negotiations, so he takes the next step of drawing up a legal obligation to buy the negotiated amount of steel at the price and delivery date agreed upon by himself and his supplier. This legal obligation is otherwise known as

A)the cost of goods sold.
B)an agreement.
C)a bill of sale.
D)a purchase order.
E)a contract amendment.

Question 63

Coordinating the supply and demand for materials and ensuring that stored or recently received materials get to the production floor when needed are jobs of the

A)materials manager.
B)purchasing manager.
C)plant manager.
D)supply chain manager.
E)production manager.

Question 64

A legal obligation to buy a certain amount of product at a certain price from a supplier to be delivered at a specified date is referred to as

A)a purchase order.
B)an agreement.
C)a contract.
D)the cost of goods sold.
E)a bill of sale.

Question 65

Sourcing and procurement of raw materials, component parts, finished goods and services is handled by which department?

A)production
B)distribution
C)finance
D)materials management
E)purchasing

Question 66

As noted in your text, managing ________ is one of the most important logistics function because it creates place and time utilities that are essential to keeping customers satisfied.

A)transportation
B)customer service
C)purchasing activities
D)inventory costs
E)operating expenses

Question 67

Which person is responsible for establishing performance expectations for suppliers and developing ways to measure their performance?

A)distribution channel manager
B)plant manager
C)warehouse manager
D)purchasing manager
E)salesperson

Question 68

One of the jobs of a purchasing manager is to

A)select appropriate suppliers.
B)oversee the transportation of goods.
C)manage warehouse inventory.
D)manage materials for manufacturing.
E)select appropriate carriers for delivery.

Question 69

Storage and handling expenses and service costs such as property taxes and insurance are what type of inventory costs?

A)inventory carrying costs
B)stockout costs
C)distribution costs
D)purchasing costs
E)production costs

Question 70

What retail channel offers consumers the ability to purchase goods at a retail store or through a website?

A)distribution
B)omnichannel
C)multilevel marketing
D)disintermediation
E)intermodal transport

Question 71

Phil works in a warehouse. His job is to assemble store displays and refurbish goods that have been returned by customers. What warehouse function is Phil responsible for?

A)logistics
B)put-away
C)picking
D)movement
E)production

Question 72

An omnichannel can be defined as

A)involving knowledgeable suppliers in the product-design process.
B)using global sourcing to acquire goods and services at the lowest price possible.
C)the receiving, picking and put-away activities that allow goods to get to customers quickly.
D)allowing consumers to purchase goods both in a retail store and through its website.
E)a distribution channel that selects the most appropriate form of transportation for each product.

Question 73

What is the warehouse activity that involves retrieving materials from storage and bringing them to manufacturing to fulfill a production order, or retrieving finishing goods from storage and preparing them for shipment to fulfill a customer order?

A)stocking
B)picking
C)logistics
D)put-away
E)movement

Question 74

Warehouse activities can be organized into which three basic functions?

A)storage, shipping, and restocking
B)production, assembly, and storage
C)storage, movement, and production
D)sorting, allocating, and movement
E)receiving, storing, and movement

Question 75

What is the term for the situation in which a company does not have enough inventory available to fill an order?

A)put-away
B)obsolete inventory
C)stockout
D)overrun
E)shortage

Question 76

What is the term used for the inbound movement and storage of materials in preparation for those materials to enter and flow through the manufacturing process?

A)warehouse management
B)supply chain management
C)distribution channel management
D)materials management
E)intermodal transportation

Question 77

A type of warehouse used specifically to store and ship finished goods to customers is called a ________ center.

A)shipment
B)distribution
C)materials
D)holding
E)transport

Question 78

How can purchasing help improve product design and time-to-market for new products?

A)by involving appropriate suppliers early in the product design process
B)by sourcing materials from reliable suppliers
C)by selecting suppliers that can provide high-quality goods and services
D)by taking advantage of cost savings by buying in bulk
E)by making sure purchase orders are accurate

Question 79

As it pertains to inventory, ________ takes place when a company ships its goods from a warehouse to its stores or customers.

A)distribution
B)intermodal transport
C)logistics
D)picking
E)supply chain management

Question 80

What term describes the sourcing of goods and services domestically that were once purchased internationally?

A)offshoring
B)onshoring
C)domestic-shoring
D)reshoring
E)near-shoring