Deck 13: Supply Chain Performance Measurement and Financial Analysis

Question 1

An index combines two or more metrics into a single indicator.

Answer 1

False

Question 2

Another driving influence for supply chain reexamination has been the desire of organizations to change their supply chain focus from a _____ to an "investment" center.

A) warehouse system
B) logistics-oriented system
C) cost center
D) value neutral

Answer 2

C

Question 3

The focus on performance measurement is a recent event in industry.

Answer 3

False

Question 4

The current logistics management approach is supported by which performance measurement concepts?

A) Metrics
B) Total cost
C) Least total cost
D) The D1 concept developed by the Supply Chain Council.

Question 5

Managers should resist sub-optimization of their particular function unless it benefits the organization as a whole.

Question 6

Order cycle time (OCT) is another very important logistics service metric. OCT influences product availability, customer inventories, and seller's cash flow and profit.

Question 7

Customers and suppliers should be included in the development of metrics.

Question 8

Another metric classification scheme that has been receiving increased attention is that developed by the Supply Chain Council and contained in the Supply Chain Operations and Reference (SCOR) model.

Question 9

An "executive dashboard" is:

A) a small number (usually less than five) of KPIs.
B) used by senior management to track profits.
C) metrics used by an organization's suppliers.
D) a trend that has only recently developed.

Question 10

A metric is complex to define, usually involves a calculation or a combination of measurements, and is often in the form of a ratio.

Question 11

A metric and a measure are the same.

Question 12

Evaluating current or potential supply chain performance metrics is not important to a sound logistics program.

Question 13

A metric could drive inappropriate behavior.

Question 14

An index:

A) combines two or more metrics into a single indicator.
B) is complex to define, usually involves a calculation, and is often in the form of a ratio.
C) is easily defined with no calculations and with simple dimensions.
D) is any quantitative output of an activity or process.

Question 15

Scorecards and key performance indicators (KPIs) are the same thing.

Question 16

Four major categories that provide a useful way to examine logistics and supply chain performance are time, quality, cost, and inventory.

Question 17

Gross margin equals:

A) sales - COGS.
B) sales + taxes - COGS.
C) COGS - sales.
D) COGS - taxes.

Question 18

Scorecard and key performance indicators (KPIs) refer to:

A) sporting events.
B) metrics to manage logistics operations.
C) Management's evaluation of supply chain staff.
D) measuring output.

Question 19

The equivalent sales increase for supply chain cost saving is found by dividing the cost saving by the organization's profit margin.

Question 20

Supply chain management involves the control of raw material, in-process, and finished goods inventories.

Question 21

There are seven factors in the successful development of supply chain metrics. Name them, and select any two to discuss in more detail.

Question 22

Earnings before interest and taxes is calculated:

A) sales - cost of goods sold - total operating cost.
B) gross margin - cost of goods sold.
C) sales - transportation costs - warehouse costs - inventory carrying costs.
D) none of these answers.

Question 23

What is the best financial metric to show the profit an organization generates in relationship to assets utilized?

A) ROA
B) Profit
C) Return on net worth
D) Stock price

Question 24

Effective order management can have an impact on:

A) reducing supply chain costs.
B) increasing revenues.
C) improving ROA.
D) all of these answers.

Question 25

Discuss the Supply Chain Financial Impact on an organization.

Question 26

Channel structure management includes decisions regarding the use of outsourcing, channel inventories, _____, and channel structure.

A) cash-to-cash management
B) information systems
C) order cycle
D) KPIs

Question 27

Discuss the revenue-cost savings connection and include the formula.

Question 28

The decision to alter the supply chain process is essentially _____ issue.

A) a management
B) an optimization
C) a supply chain
D) a customer satisfaction

Question 29

Which of the following is NOT a supply chain decision area regarding ROA improvement?

A) Channel Structure Management
B) Inventory Management
C) Order Management
D) Information Management

Question 30

What role should employees, in general, play in the development of performance metrics? Why is this role important?

Question 31

There are four major categories that provide a useful way for examining logistics and supply chain performance. They are time, _____, cost, and supporting metrics.

A) delivery
B) KPIs
C) competition
D) quality

Question 32

What is the "Order-to-Cash" cycle?

Question 33

In the SCOR model there are five major categories of metrics that need to be used to measure the performance of Process D1: reliability, _____, agility, costs, and asset management.

A) ROA
B) responsiveness
C) supply chains
D) cash-to-cash cycle

Question 34

Which of the following is NOT an element of Order Management?

A) Reducing stockouts
B) Reducing order processing times
C) Optimizing mode mix
D) Optimizing order fill rate

Question 35

Discuss the differences between the terms metric, measure, and index.

Question 36

Discuss the metric classification scheme that has been developed by the Supply Chain Council and defined in the Supply Chain Operations and Reference (SCOR) model to measure the performance of Process D1: Deliver Stocked Product.