Deck 10: Supply-Chain Strategy

Question 1

The value of an item per pound of weight is called value density.

Answer 1

True

Question 2

Outsourcing allows a firm to achieve an improved focus on its core competencies.

Answer 2

True

Question 3

The optimal strategy for functional products is to utilize a responsive supply-chain.

Answer 3

False

Question 4

A revenue-driven reason for outsourcing is that it can transform the organization.

Question 5

A financially-driven reason for outsourcing is that it can generate cash by transferring assets to the provider.

Question 6

Retailers who stock up during promotion periods where the prices of goods are reduced are doing backward buying.

Question 7

The idea of supply-chain management is to apply a total system approach to managing the entire flow of information,materials and services from raw-materials suppliers through factories and warehouses to the end customer.

Question 8

The optimal strategy for innovative products is to utilize an efficient supply-chain.

Question 9

An employee-driven reason for outsourcing is that it can give employees a stronger career path.

Question 10

Functional products include staples that people buy in a wide range of retail outlets,such as grocery stores and gas stations.

Question 11

Two common measures to evaluate supply-chain efficiency are the inventory turnover and weeks-of-supply ratios.

Question 12

Inventory turn values that are considered "good" differ by industry and the type of products being handled.

Question 13

Logistics is a term indicating transportation choices for goods produced internationally but consumed domestically.

Question 14

Outsourcing is the act of moving some of a firm's internal activities and decision responsibility to outside providers.

Question 15

The phenomenon that magnifies the variability in order quantities for goods as orders move through the supply-chain from the customer to the producer is called the bullwhip effect.

Question 16

Two common measures to evaluate supply-chain efficiency are the consumer price index and the beta flow system.

Question 17

The best strategy for innovative products is to use either a responsive or an agile supply-chain.

Question 18

The optimal strategy for functional products is to utilize an efficient supply-chain.

Question 19

Logistics is a term that refers to the management functions that support the complete cycle of material flow,from the purchase and internal control of production materials;to the planning and control of work-in-process;to the purchasing,shipping and distribution of the finished product.

Question 20

An improvement-driven reason for outsourcing is that it can increase product and service value,customer satisfaction and shareholder value.

Question 21

If the average aggregate inventory value is $1,200,000 and the cost of goods sold is $600,000,which of the following is weeks of supply?

A)1,040
B)606
C)104
D)60.6
E)2.0

Question 22

The inventory turnover ratio used in measuring supply-chain efficiency is found by the ratio of which of the following?

A)Cost of goods sold/Average aggregate inventory value
B)Fixed costs/Variable costs
C)Sales costs/Marketing costs
D)Cost of goods sold/Cost to sell goods
E)Operations flow costs/Suppliers flow costs

Question 23

Supply chain thinking can not be applied to many services as services can not be inventoried.

Question 24

The value chain and the supply chain are different terms for the same thing.

Question 25

In Hau Lee's uncertainty framework to classify supply chains,a supply chain that has functional products and a stable supply process is called which of the following?

A)Efficient
B)Forward looking
C)Agile
D)Risk hedging
E)Responsive

Question 26

It is not unusual for a service supply chain to be unidirectional which contrasts with the more typical bidirectional manufacturing supply chain.

Question 27

An important issue in applying supply chain thinking to services is that customers tend also to be suppliers of some of the inputs to the service product.

Question 28

Firms producing functional products are forced to introduce a steady stream of innovations in order to survive.

Question 29

In service supply chains flows tend to be linear with services flowing from vendors to customers.

Question 30

If the average aggregate inventory value is $1,200,000 and the cost of goods sold is $600,000,which of the following is inventory turnover?

A)60
B)10.4
C)2
D)0.5
E)None of the above

Question 31

Studies show that there is no clear correlation between supply chain performance and change in stock market capitalization.

Question 32

A stable supply process is where the manufacturing process and the underlying technology are mature and the supply base is well established.

Question 33

Service supply chains focus on the interaction between the customer and the provider,while manufacturing supply chains focus on the creation and delivery of a physical good.

Question 34

The total value of all items held in inventory for the firm at cost is which of the following?

A)Cost of goods to be sold
B)Average aggregate inventory value
C)Weeks supply of goods
D)Inventory turnover
E)None of the above

Question 35

In Hau Lee's uncertainty framework to classify supply chains,a supply chain that has functional products and an evolving supply process is called which of the following?

A)Efficient
B)Forward looking
C)Agile
D)Risk hedging
E)Responsive

Question 36

Value density is an important measure for determining the quality of logistical services.

Question 37

A stable supply process is one where product volumes are high,demand is predictable and there is a long product life.

Question 38

If the average aggregate inventory value is $45,000 and the cost of goods sold is $10,000,which of the following is weeks of supply?

A)45,000
B)234
C)120
D)23.4
E)4.5

Question 39

If the average aggregate inventory value is $100,000 and the cost of goods sold is $450,000,which of the following is inventory turnover?

A)19.23
B)4.5
C)0.8654
D)0.2222
E)None of the above

Question 40

Value density is an important measure when deciding where items should be stocked geographically and how they should be shipped.

Question 41

Name the transportation modes discussed in the textbook.

Question 42

Highly specialized,low cost per mile,product requiring no packaging and very high initial investment costs are characteristics of which transportation mode?

A)Highway
B)Rail
C)Water
D)Pipeline
E)Air

Question 43

Which of the following is not an improvement-driven reason to outsource?

A)Improve risk management
B)Increase commitment in a noncore area
C)Acquire innovative ideas
D)Improve control
E)Obtain expertise,skills and technologies

Question 44

Which of the following of Fisher's product categories includes fashionable clothing,personal computers and other products that typically have a very brief life cycle?

A)Functional products
B)Dysfunctional products
C)Innovative products
D)Bullwhip products
E)Low value-density products

Question 45

Which of the following is an organizationally-driven reason for outsourcing?

A)Enhance effectiveness by focusing on what you do best
B)Turn fixed costs into variable costs
C)Generate cash by transferring assets to the provider
D)Give employees a stronger career path
E)None of the above

Question 46

What is the effect of the lack of synchronization among supply-chain members called?

Question 47

Name the four types of supply chain in Hau Lee's uncertainty framework for classifying supply chains.

Question 48

Which of the following is an improvement-driven reason for outsourcing?

A)Improve operating performance
B)Give employees a stronger career path
C)Generate cash by transferring assets to the provider
D)Turn fixed costs into variable costs
E)Commercially exploit existing skills

Question 49

Which of the following terms best describes the ability of a company to deliver highly customized products and services to different customers around the world?

A)Customization
B)High customization
C)Mass customization
D)Global sourcing
E)Outsourcing

Question 50

The effect of the lack of synchronization among supply-chain members is referred to as which of the following?

A)Forward buying
B)Continuous replenishment
C)Bullwhip effect
D)Metcalf's Law
E)Being out of step

Question 51

When considering outsourcing,what should firms be sure to avoid?

A)Losing control of non-core activities which don't distinguish the firm
B)Allowing outsourcing to develop into a substitute for innovation
C)Giving the outsourcing partner the opportunity to become a strong competitor
D)Allowing employees transferred to the outsourcing partner to rejoin the firm
E)Adverse corporate tax implications of asset transfers to the outsourcing partner

Question 52

In Hau Lee's uncertainty framework to classify supply chains,a supply chain that has innovative products and an evolving supply process is called which of the following?

A)Efficient
B)Forward looking
C)Agile
D)Risk hedging
E)Responsive

Question 53

In Outsourcing which of the following internal activities and decision responsibilities can not be transferred to outside contractors?

A)Activities involving people
B)Activities involving facilities
C)Activities involving equipment
D)Activities involving shareholders
E)Activities involving technology

Question 54

In Hau Lee's uncertainty framework to classify supply chains,a supply chain that has innovative products and a stable supply process is called which of the following?

A)Efficient
B)Forward looking
C)Agile
D)Risk hedging
E)Responsive

Question 55

Which of the following is an organizationally-driven reason for outsourcing?

A)Improve operating performance
B)Give employees a stronger career path
C)Generate cash by transferring assets to the provider
D)Turn fixed costs into variable costs
E)Transform the organization

Question 56

One of the reasons that decision making related to global sourcing is so very complex is which of the following?

A)Multiple languages
B)Cultural differences
C)New currencies,like the Euro
D)Distance between materials,labor and markets
E)Powerful new markets

Question 57

Which of the following is one of the strategic characteristics to consider when deciding how supplier relationships should be structured on the continuum between vertical integration (do not outsource)to arm's length relationships (outsource)?

A)Cost
B)Location
C)Investment
D)Coordination
E)Investment.

Question 58

Which of the following is not an improvement-driven reason for outsourcing?

A)Improve management and control
B)Enhance effectiveness by focusing on what you do best
C)Improve risk management
D)Obtain expertise,skills and technologies not otherwise available
E)Acquire innovative ideas

Question 59

Which is the most challenging kind of supply chain to manage according to Hau Lee?

A)Agile supply chain
B)Efficient supply chain
C)Risk-hedging supply chain
D)Erratic supply chain
E)Responsive supply chain

Question 60

Which of the following functional areas in an organization do not directly support an effective mass customization program?

A)Human resources
B)Marketing
C)Finance
D)Manufacturing
E)Distribution

Question 61

In Hau Lee's uncertainty framework to classify supply chains,a supply chain that combines the strengths of a "risk-hedging" and a "responsive" supply chain is called what?

Question 62

If inventory turnover is 20 and cost of goods sold is $100,000,what is the average aggregate inventory value?

Question 63

If the average aggregate inventory value is $4,000 and the cost of goods sold is $104,000,what is the weeks of supply?

Question 64

What is the principle of "postponement" and why is it considered the key to mass customization?

Question 65

What are the main distinctions between service supply chains and manufacturing supply chains?

Question 66

What is "design for logistics"?

Question 67

If the weeks of supply is 10 and the average aggregate inventory value is $1,000,000,what is the cost of goods sold?