Deck 21: Supply Chain Management

Question 1

Disintermediation occurs when the traditional retailer or service provider is reduced or eliminated in a supply chain.

Answer 1

True

Question 2

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 2

False

Question 3

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

Answer 3

True

Question 4

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

Question 5

The need for risk management increases as globalization of supply chains increases.

Question 6

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

Question 7

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

Question 8

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

Question 9

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

Question 10

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

Question 11

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

Question 12

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

Question 13

Traffic management refers to truck movement within our parking areas.

Question 14

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

Question 15

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

Question 16

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

Question 17

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

Question 18

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

Question 19

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

Question 20

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

Question 21

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

Question 22

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 23

Important factors in purchasing include the cost of goods purchased, the quality of goods and services, and the timing of deliveries of goods or services.

Question 24

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

Question 25

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

Question 26

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

Question 27

Gatekeeping contracts with 3PLs to minimize the cost of shipping returned goods.

Question 28

Information technology is a key to integrating operations across global supply chains.

Question 29

Returned goods are part of reverse logistics.

Question 30

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

Question 31

Scheduling operations and shipping are operational responsibilities in supply chain management.

Question 32

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

Question 33

Using third-party fulfillment means losing control of fulfillment.

Question 34

RFID eliminates the need for manual counting and bar-code scanning of goods at receiving docks.

Question 35

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

Question 36

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

Question 37

Global supply chains make purchasing easier because there are more options.

Question 38

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

Question 39

A 30 percent reduction in product and service variety will not affect the efficiency of a supply chain.

Question 40

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

Question 41

The more __________ a company's supply chain, the more difficult it is to ensure that the supply chain is managed ethically.

A) interconnected
B) global
C) visible
D) shortened
E) Competitive

Question 42

One of the biggest ethical risks in supply chain management is that the __________ supply chain member tends to be the one that suffers the blame and/or lost goodwill when something goes wrong.

A) most responsible
B) buying
C) most visible
D) supplying
E) most ethical

Question 43

Which of these aspects of supply chain management are especially concerning to small business?
(I) customer reliability
(II) inventory management
(III) purchasing costs
(IV) risk management
(V) international trade

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

Question 44

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) RFIDs.

Question 45

Which of the following, while desirable from some perspectives, might actually increase the risk of supply chain disruptions?
(I) fewer supply chain partners
(II) a shorter supply chain
(III) greater supply chain visibility

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

Question 46

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 47

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

Question 48

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

Question 49

It is especially the case for small businesses that closer interactions and increased agility make __________ relatively more attractive.

A) domestic suppliers
B) centralized purchasing
C) global suppliers
D) decentralized purchasing
E) risk transfer

Question 50

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

Question 51

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

Question 52

Strategies to address supply chain risks include:
(I) risk avoidance.
(II) risk reduction.
(III) risk projection.
(IV) risk sharing.

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

Question 53

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

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

Question 54

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 55

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 56

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

Question 57

Decentralized purchasing can usually offer quicker response than centralized purchasing.

Question 58

Event-response capability is the advanced planning required to respond to planned events such as receiving a scheduled shipment.

Question 59

One disadvantage to RFID is that it requires a clear "line of sight" to operate.

Question 60

Which of the following is not a benefit of RFID?

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

Question 61

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 62

One important role of purchasing is to:

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

Question 63

After outsourcing to global suppliers, __________ is not simple.

A) integration
B) unionization
C) back-shoring
D) computerization
E) just-in-time

Question 64

_________ has/have helped firms to concentrate on their core business.

A) Supply chains
B) Scheduling
C) Outsourcing
D) ERP
E) Lean production

Question 65

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 66

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 67

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 68

The purchasing perspective of the supplier as a partner is characterized by:

A) an emphasis on low prices.
B) one or a few suppliers.
C) low flexibility.
D) 100 percent inspection for quality.
E) low volume.

Question 69

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 70

The interface between the firm and its suppliers is:

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

Question 71

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 72

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 73

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 74

Vendor analysis is the examination of the _________ of purchased materials.

A) function
B) source
C) quality
D) cycle
E) quantity

Question 75

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 76

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 77

Which of the following is a barrier to the integration of separate organizations in the supply chain?
(I) conflicting objectives of the companies in the chain
(II) different capacity levels 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 78

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 79

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) current inventory
D) quality and quality assurance
E) flexibility of design change

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.