Deck 15: Supply Chain Management

Question 1

The materials in the supply chain flow toward the end of the chain, while the information and the dollars move toward the beginning of the chain.

Answer 1

False

Question 2

The goal of supply chain management is to synchronize supply and demand of all of the organizations that are part of the chain.

Answer 2

True

Question 3

E-commerce refers to the use of electronic technology to facilitate business transactions.

Answer 3

True

Question 4

The design of the supply chain and establishing partnerships with vendors and distributors are examples of operating issues in a supply chain.

Question 5

The need for supply chain management increases as globalization increases.

Question 6

Most people working for a business organization are somehow involved with the supply chain of that business.

Question 7

In supply chain organizations, functions must operate independently of each other.

Question 8

Inventory velocity refers to the average speed (in miles/hour) of material handling equipment in a warehouse.

Question 9

Disintermediation refers to the phenomenon that the traditional retailer or service provider is reduced or eliminated in a supply chain.

Question 10

In purchasing, one's only ethical obligation is to one's suppliers.

Question 11

Frequent deliveries of small shipments can reduce inventory but also result in an increase in the transportation cost per unit.

Question 12

Managing supply chain visibility involves making sure that potential supply chain partners are aware of your organization's needs.

Question 13

Using third-party logistics involves using your organization's logistics function to ship to customers that aren't officially part of the supply chain.

Question 14

One of the major reasons for a company to adopt third-party logistics is to concentrate on one's core business.

Question 15

Strategic partnering is encouraged when two or more business organizations have complementary products or services that would benefit the others.

Question 16

E-commerce involves business-to-business (B2B) interaction only.

Question 17

A company's supply chain involves the flow of materials and information from suppliers, through production, to the end users.

Question 18

Every business organization is part of at least one supply chain.

Question 19

Traffic management refers to truck movement within our parking areas.

Question 20

Forming strategic partnerships is beneficial for two or more business organizations that have the same products or services.

Question 21

The optimization of the supply chain uses a mathematical model to determine the optimal number of business organizations to be included in the chain.

Question 22

Scheduling and maintaining equipment are operational decisions.

Question 23

The importance of purchasing is the cost of goods purchased, the quality of goods and services, and the timing of deliveries of goods or services.

Question 24

Vendor analysis examines the function of purchased parts and materials with a view towards improvement or cost reduction.

Question 25

Centralized or decentralized purchasing is directly related to the size of an organization.

Question 26

Price is the primary determining factor in choosing a vendor since most products are essentially the same.

Question 27

The importance of purchasing relates only to the cost of parts and materials purchased, which is often 60% or more of the cost of finished goods.

Question 28

RFID eliminates the need for counting and bar-code scanning.

Question 29

A 30% reduction in product and service variety won't really affect the efficiency of a supply chain.

Question 30

Bullwhip effect refers to a phenomenon that demand variations that exist at the customer end of the supply chain are magnified as orders are generated back through the supply chain.

Question 31

Using third-party fulfillment means losing control of fulfillment.

Question 32

Outsourcing logistics gives a company less flexibility because it forces them to focus more on core businesses.

Question 33

Gate keeping manages the cost of shipping returned goods.

Question 34

Starting with the final customer and moving backward through the supply chain, batch sizes and the level of safety stock tend to decrease.

Question 35

Returned goods are part of reverse logistics.

Question 36

Global supply chains make purchasing easier because of more options.

Question 37

Delayed differentiation is a means of increasing product variety without building the customized product from scratch or keeping large inventories of custom products.

Question 38

The service function of purchasing interfaces with many area including legal, accounting, and engineering functions.

Question 39

To prevent temporary storage in a warehouse, cross docking can be used.

Question 40

Information technology is the key to success of global supply chains.

Question 41

RFID chips: (I) are used to track goods in distribution
(II) are used to track job progress in production
(III) are used to provide special instructions to operators
(IV) can be used in inventory record keeping

A)II and III only
B)I and II only
C)II, III, and IV
D)I, II, and IV
E)IV only

Question 42

Some firms have structured their procurement function to include both centralized and decentralized purchasing.

Question 43

A factor that makes it desirable for business organizations to actively manage their supply chains is:

A)more potential vendors
B)increasing globalization
C)downsizing
D)the internet
E)RFID's

Question 44

Which of the following is not a benefit of RFID?

A)increased productivity
B)elimination of paper work
C)frequent deliveries of smaller shipments
D)reduction in clerical labor
E)increased accuracy

Question 45

Which of the following is not a goal of supply chain management?

A)fewer suppliers and long-term relationship
B)small lot sizes
C)on time deliveries
D)lowest possible transportation costs
E)delivery often to the place of use

Question 46

The purchasing cycle ends when the purchasing department is notified that the supplier has shipped the items.

Question 47

Supplier certification is the first step required in a supplier audit program.

Question 48

In e-commerce, the front-end design is significantly more important than the back-end design.

Question 49

One disadvantage to RFID is that they require a 'line of sight' for reading.

Question 50

Producing and shipping in large lots may reduce costs but increase lead times.

Question 51

Logistics includes all of these except:

A)the movement of materials within a production facility
B)incoming shipments of goods or materials
C)outgoing shipments of goods or materials
D)customer selection
E)returned goods processing

Question 52

Disintermediation is the refusal of one party to use mediators for price negotiation.

Question 53

An advantage of decentralized purchasing is the attention given to local needs.

Question 54

Event management is the advanced planning required for major performances such as concerts or conferences.

Question 55

Vendor analysis is the process that evaluates the source of supply in terms of price, quality, reputation, and service.

Question 56

Decentralized purchasing can usually offer quicker response than centralized purchasing.

Question 57

Small changes in consumer demand can result in large variations in orders placed because of the ...

A)Supply chain
B)Safety stock requirement
C)Lead time effect
D)Bullwhip effect
E)FCFS scheduling

Question 58

Variations create uncertainty, thereby causing inefficiencies in a supply chain.

Question 59

Design and purchasing people should work closely because changes in design, specifications, or materials can impact future purchase requirements.

Question 60

Creating an effective supply chain requires linking the marketing, distribution, and supplier channels.

Question 61

Which of the following is not an application of E-business?

A)internet buying and selling
B)e-mail
C)order and shipment tracking
D)electronic data interchange (EDI)
E)universal product codes

Question 62

Which of the following is a barrier to integration of separate organizations in the supply chain? (I) conflicting objectives of the companies in the chain.
(II) different level of capacity of the companies in the chain.
(III) reluctance of the organizations in the chain to allow other organizations access to their data.

A)I only
B)I and II
C)II and III
D)I and III
E)I, II and III

Question 63

One important objective of purchasing is to:

A)set quality standards for purchased items
B)be knowledgeable about new products
C)maintain numerous sources of supply
D)obtain the lowest prices on all purchased items
E)determine the processes that should be used

Question 64

Which of the following is not a measure of the reliability of the supply chain?

A)supply chain response time
B)on-time delivery
C)fill rate
D)lead time variability
E)improving e-fulfillment statistics

Question 65

_________ has helped business concentrate on their core business.

A)Supply Chains
B)Scheduling
C)Outsourcing
D)ERP
E)Lean Production

Question 66

Which of the following is not a benefit of effective supply chain management?

A)lower inventory costs
B)higher productivity
C)shorter lead times
D)greater customer loyalty
E)larger number of suppliers

Question 67

The two types of decisions that are relevant to supply chain management are:

A)Short, long term
B)Domestic, international
C)Location, layout
D)In-source, out-source
E)Tactical, operational

Question 68

Which of the following is least likely to be a key consideration when a company chooses a supplier?

A)lead time and on-time delivery
B)reputation and financial stability
C)value analysis
D)quality and Quality assurance
E)flexibility of design change

Question 69

Which of the following is not a performance driver?

A)Quality
B)Cost
C)Stability
D)Velocity
E)Flexibility

Question 70

Which of the following is part of the purchasing cycle? (I) Purchasing selects a supplier.
(II) Orders from vendors are received.
(III) Purchasing receives a requisition.

A)II and III
B)I, II, and III
C)I only
D)I and II
E)I and III

Question 71

The interface between the firm and its suppliers is:

A)purchasing
B)production
C)distribution
D)engineering
E)accounting

Question 72

Which of the following is not true of vendor analysis?

A)It involves an examination of the function of purchased parts or raw materials.
B)Its purpose is to reduce costs and/or improve performance of purchased goods or services.
C)It is usually performed only periodically.
D)Representatives from design and operations may work with purchasing.
E)If improvements are identified, purchasing implements those that purchasing agrees are justified.

Question 73

Outsourcing followed by __________ is not simple.

A)Integration
B)Unionization
C)Backsourcing
D)Computerization
E)Just-in-time

Question 74

Which of the following is an advantage of E-business? (I) reduction of transaction costs
(II) shortened supply chain response time
(III) greater customer loyalty

A)I
B)II
C)I and II
D)II and III
E)I, II, and III

Question 75

The automatic identification of material is part of/facilitated by:

A)holding costs
B)RFID
C)working capital reduction
D)net present value calculations
E)vendor analysis

Question 76

Vendor analysis has the greatest potential for savings for items which have:

A)low cost per unit
B)low annual cost-volume
C)high cost per unit
D)high annual usage
E)high annual cost-volume

Question 77

Examination of the sources of supply for purchased parts or materials in order to improve performance is called:

A)vendor analysis
B)value analysis
C)negotiated purchasing
D)reverse engineering
E)disintegration

Question 78

Which of the following would not usually be a main factor in selecting a vendor?

A)location
B)price
C)quality
D)inventory turnover
E)vendor services

Question 79

Which of the following is not a benefit of centralized purchasing?

A)potential for quantity discounts
B)better service from suppliers
C)quick response to local needs
D)potential for use of purchasing specialists
E)supplier research

Question 80

The purchasing cycle begins with:

A)selecting a supplier
B)placing an order
C)evaluating potential vendors
D)conducting a value analysis
E)receiving a requisition