Question 1

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

Accepted Answer

Logistics refers to the overall process of managing how resources are acquired, stored, and transported to their final destination. It includes the planning, implementation, and coordination of complex operations and is not limited to international production or transportation choices.

Question 2

A financially driven reason for outsourcing is that it can reduce costs through a lower cost structure.

Accepted Answer

Outsourcing can often lead to lower costs due to the lower cost structure of the outsourcing provider. The outsourcing provider may operate in a country with lower labor costs or be more efficient due to economies of scale. This can result in cost savings for the company outsourcing certain tasks or functions.

Question 3

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

Accepted Answer

The optimal strategy for functional products, which have stable demand, is to use an efficient supply chain focused on cost minimization rather than a responsive supply chain, which is more suited for innovative products with uncertain demand.

Question 4

A financially driven reason for outsourcing is that it can shorten cycle time.

Accepted Answer

Shortening cycle time is an operational benefit, not a financial one. Financial reasons for outsourcing typically include cost reduction and improved financial efficiency.

Question 5

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

Accepted Answer

An innovative product often requires a flexible supply chain rather than just an efficient one, to adapt to the uncertainties and rapid changes in demand and technology associated with new products.

Question 6

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

Accepted Answer

The answer of An improvement-driven reason for outsourcing is that...

Question 7

An organizationally driven reason for outsourcing is that it can transform the organization.

Accepted Answer

The answer of An organizationally driven reason for outsourcing is...

Question 8

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

Accepted Answer

This is the definition of outsourcing.

Question 9

Retailer behavior when stocking up during promotion periods (where the prices of goods are reduced) is called backward buying.

Accepted Answer

The correct term for retailer behavior when stocking up during promotion periods is "forward buying," not "backward buying."

Question 10

Theonly optimal strategy for functional products is to use an efficient supply chain.

Accepted Answer

While an efficient supply chain is crucial for functional products due to their stable demand and high competition, it's not the only strategy. Companies also focus on cost leadership, product differentiation, and customer service improvements to gain a competitive edge.

Question 11

A financially driven reason for outsourcing is that it can turn fixed costs into variable costs.

Accepted Answer

Outsourcing allows a company to pay for specific services only when needed, rather than bearing the fixed cost of maintaining in-house resources at all times. This converts the fixed cost into a variable cost based on the volume of work or services required.

Question 12

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

Accepted Answer

Outsourcing allows a firm to delegate non-core functions to other firms, allowing them to focus on their core competencies and improve efficiency in their core operations.

Question 13

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

Accepted Answer

Inventory turn values that are considered good can vary significantly based on the industry and types of products being handled, as certain industries (such as grocery or fashion retail) typically have higher inventory turn expectations than others (such as automotive or industrial equipment manufacturing).

Question 14

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.

Accepted Answer

Logistics refers to the management functions supporting the complete cycle of material flow from the purchase of materials to the distribution of finished products.

Question 15

Two common measures to evaluate supply chain efficiency are the Consumer Price Index and the beta flow system.

Accepted Answer

The Consumer Price Index is a measure of inflation, not supply chain efficiency. The beta flow system is also not a commonly used measure for evaluating supply chain efficiency. Instead, common measures include total supply chain cost, inventory turnover, and order fulfillment time.

Question 16

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.

Accepted Answer

This statement is true. The bullwhip effect is a well-researched logistical phenomenon that occurs when small fluctuations in customer demand can cause a chain reaction in the supply chain, leading to larger and larger swings in inventory levels and production quantities as information is distorted and amplified at each stage of the supply chain.

Question 17

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

Accepted Answer

Both inventory turnover and weeks-of-supply ratios are commonly used measures to evaluate supply chain efficiency.

Question 18

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

Accepted Answer

A responsive or agile supply chain allows for quick adjustments to production and distribution in response to changes in demand or market trends, which is crucial for innovative products that may have unpredictable or rapidly changing demand.

Question 19

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

Accepted Answer

Functional products are everyday items that are necessary for daily life and are commonly purchased at a variety of retail outlets. Examples include food, beverages, toiletries, and household cleaning supplies.

Question 20

An organizationally driven reason for outsourcing is that it can improve effectiveness by focusing on what the firm does best.

Accepted Answer

Outsourcing allows a firm to delegate certain tasks to other companies or individuals who specialize in those tasks, freeing up the firm's resources to focus on its core competencies and improve overall effectiveness.

Quiz 16: Global Sourcing and Procurement