Question 1

Supply chain network design decisions classified as capacity allocation are concerned with
A) what processes are performed at each facility.
B) where facilities should be located.
C) how much capacity should be allocated to each facility.
D) what markets each facility should serve and which supply sources should feed each facility.

Accepted Answer

Capacity allocation decisions are focused on determining the appropriate amount of capacity that should be allocated to each facility within the supply chain network. This involves considering factors such as the expected demand for each product, the lead times and throughput times for each facility, and the overall network design. Choices A, B, and D relate to other types of supply chain network design decisions, such as process design, location selection, and market segmentation.

Question 2

A facility located primarily to obtain access to knowledge or skills that may exist within a certain region is
A) an offshore facility.
B) a source facility.
C) a server facility.
D) an outpost facility.

Accepted Answer

An outpost facility is a location established to obtain access to knowledge or skills that may exist within a certain region. It is typically established by organizations or corporations to expand their operations or reach within a specific geographical area. An offshore facility refers to a facility located in a foreign country for the purpose of taking advantage of lower costs or different regulations. A source facility and server facility are not specific to obtaining access to knowledge or skills in a region.

Question 3

Supply chain network design decisions include
A) only the location of manufacturing, storage, or transportation-related facilities.
B) only the allocation of capacity and roles to each facility.
C) both the location of manufacturing, storage, or transportation-related facilities and the allocation of capacity and roles to each facility.
D) neither the location of manufacturing, storage, or transportation-related facilities nor the allocation of capacity and roles to each facility.

Accepted Answer

Supply chain network design decisions involve both the location of manufacturing, storage, or transportation-related facilities, and the allocation of capacity and roles to each facility. This includes determining the optimal number and location of facilities in a network and deciding the role that each facility will play, such as manufacturing, distribution, or warehousing. Both factors are crucial in designing an efficient and effective supply chain network.

Question 4

Capacity allocation decisions have a significant impact on supply chain performance because
A) capacity decisions tend to be permanent.
B) capacity decisions tend to be changed frequently.
C) capacity decisions do not tend to stay in place for several years.
D) capacity decisions tend to stay in place for several years.

Accepted Answer

Capacity allocation decisions tend to have a significant impact on supply chain performance because such decisions are typically long-term or permanent in nature. This means that once a capacity decision is made, it may remain in place for several years, which can impact a company's ability to respond to changes in demand, new product offerings, or shifts in the competitive landscape. As a result, it is critical for companies to carefully consider their capacity needs and make informed decisions that will enable them to meet customer demand while remaining competitive over the long-term.

Question 5

A facility that also has low cost as its primary objective, but its strategic role is broader than that of an offshore facility is
A) an offshore facility.
B) a source facility.
C) a contributor facility.
D) an outpost facility.

Accepted Answer

The answer of A facility that also has low cost...

Question 6

Network design decisions have a significant impact on performance because they
A) determine the customer demand.
B) determine the supply chain conflagration.
C) set constraints within which inventory, transportation, and information can be used to either decrease supply chain cost or increase responsiveness.
D) set constraints within which inventory, transportation, and information can be used to either increase supply chain cost or decrease responsiveness.

Accepted Answer

Network design decisions set constraints within which inventory, transportation, and information can be used to either decrease supply chain cost or increase responsiveness. Therefore, they have a significant impact on the performance of the supply chain. Choices A, B, and D do not accurately describe the impact of network design decisions on supply chain performance.

Question 7

Supply chain network design decisions classified as market and supply allocation are concerned with
A) what processes are performed at each facility.
B) where facilities should be located.
C) how much capacity should be allocated to each facility.
D) what markets each facility should serve and which supply sources should feed each facility.

Accepted Answer

Market and supply allocation decisions focus on determining which markets each facility should serve and which supply sources should feed each facility. A and C relate to process and capacity decisions, while B relates to location decisions.

Question 8

Facility location decisions have a long-term impact on a supply chain's performance because
A) it is very expensive to shut down a facility or move it to a different location.
B) it is not expensive to shut down a facility or move it to a different location.
C) it is advisable to shut down a facility or move it to a different location.
D) it is cost effective to shut down a facility or move it to a different location.

Accepted Answer

Facility location decisions have a long-term impact on a supply chain's performance mainly because it is very expensive to shut down a facility or move it to a different location. Therefore, companies must carefully consider factors such as transportation costs, labor availability, market demand, and government regulations before making a decision. Once a facility is established, it becomes challenging to relocate due to the high relocation cost which could affect the company's profitability.

Question 9

Customer order entry is
A) the point in time when the customer has access to choices and makes a decision regarding a purchase.
B) the customer informing the retailer of what they want to purchase and the retailer allocating product to the customer.
C) the process where product is prepared and sent to the customer.
D) the process where the customer receives the product and takes ownership.

Accepted Answer

Customer order entry is when the customer informs the retailer of what they want to purchase and the retailer allocates product to the customer. It is not the point in time when the customer has access to choices and makes a decision, the process of preparing and sending the product, or the customer receiving the product and taking ownership.

Question 10

Supply chain network design decisions classified as facility location are concerned with
A) what processes are performed at each facility.
B) where facilities should be located.
C) how much capacity should be allocated to each facility.
D) what markets each facility should serve and which supply sources should feed each facility.

Accepted Answer

Facility location decisions are specifically related to where facilities should be located in a supply chain network. The other options (A, C, D) are related to other aspects of supply chain network design decisions such as process allocation, capacity allocation, and market/supply source allocation, respectively.

Question 11

Firms focusing on cost leadership tend to
A) locate facilities close to the market they serve.
B) locate facilities very far from the market they serve.
C) find the lowest cost location for their manufacturing facilities.
D) select a high-cost location to be able to react quickly.

Accepted Answer

Firms focusing on cost leadership tend to find the lowest cost location for their manufacturing facilities in order to minimize costs and maximize profits.

Question 12

A facility built because of tax incentives, local content requirement, tariff barriers, or high logistics cost to supply the region from elsewhere with the objective to supply the market where it is located is
A) an offshore facility.
B) a source facility.
C) a server facility.
D) a contributor facility.

Accepted Answer

A server facility is established to supply the market where it is located, often due to factors like tax incentives, local content requirements, tariff barriers, or high logistics costs.

Question 13

Firms focusing on responsiveness tend to
A) locate facilities close to the market they serve.
B) locate facilities very far from the market they serve.
C) find the lowest cost location for their manufacturing facilities.
D) select a high-cost location to be able to react slowly.

Accepted Answer

Firms that prioritize responsiveness need to be able to react quickly to changes in demand and customer preferences. To do so, they often locate their facilities close to the market they serve. This allows them to minimize lead times and shipping costs, and to be more flexible in changing production as needed.

Question 14

Decisions concerning the role of each facility are significant because
A) they determine the amount of flexibility the supply chain has in demanding change.
B) they determine the amount of flexibility the supply chain has in changing the way it meets demand.
C) they determine the amount of capacity the supply chain has in changing the way it meets demand.
D) they determine the amount of inventory the supply chain has in demanding change.

Accepted Answer

The role of each facility determines the amount of flexibility the supply chain has in changing the way it meets demand. This is because each facility contributes to the overall capabilities of the supply chain, and the functions assigned to each facility impact how well the chain can adapt to changes in demand. Therefore, these decisions have a significant impact on the overall performance of the supply chain.

Question 15

The allocation of supply sources and markets to facilities should be reconsidered on a regular basis so that
A) the allocation can be held constant as market conditions or plant capacities expand.
B) the allocation can be changed as market conditions or plant capacities stagnate.
C) the allocation can be held constant as market conditions or plant capacities change.
D) the allocation can be changed as market conditions or plant capacities change.

Accepted Answer

The allocation of supply sources and markets to facilities should be reconsidered on a regular basis so that the allocation can be changed as market conditions or plant capacities change. This will ensure that the facilities are operating optimally and that the supply and demand are properly aligned. Holding the allocation constant in the face of changing market conditions or plant capacities could lead to inefficiencies and suboptimal performance.

Question 16

Supply chain network design decisions classified as facility role are concerned with
A) what processes are performed at each facility.
B) where facilities should be located.
C) how much capacity should be allocated to each facility.
D) what markets each facility should serve and which supply sources should feed each facility.

Accepted Answer

Facility role decisions focus on defining the specific activities or processes that will be carried out at each facility within the supply chain network. This includes determining whether a facility will function as a manufacturing plant, a distribution center, a warehouse, or a combination of roles, and what specific operations (e.g., assembly, packaging, storage) it will perform.

Question 17

A facility that serves the role of being a low-cost supply source for markets located outside the country where the facility is located is
A) an offshore facility.
B) a source facility.
C) a contributor facility.
D) an outpost facility.

Accepted Answer

An offshore facility is specifically designed to provide low-cost supply to markets that are outside the country where the facility is located.

Question 18

Allocating too much capacity to a location results in
A) poor utilization, and as a result, higher costs.
B) high utilization, and as a result, higher costs.
C) poor utilization, and as a result, lower costs.
D) high utilization, and as a result, lower costs.

Accepted Answer

Allocating too much capacity to a location results in poor utilization, which means that the resources are not being fully utilized and can lead to higher costs. Having excess capacity that is not being used efficiently can result in wastage of resources and increased expenses to maintain the unused capacity. Therefore, option A is the best choice.

Question 19

The allocation of supply sources and markets to facilities has a significant impact on performance because
A) it cannot affect total production, inventory, and transportation costs incurred by the supply chain to satisfy customer demand.
B) it cannot affect customer demand.
C) it affects total production, inventory, and transportation costs incurred by the supply chain to satisfy customer demand.
D) it cannot satisfy customer demand.

Accepted Answer

The allocation of supply sources and markets to facilities has a significant impact on performance because it affects total production, inventory, and transportation costs incurred by the supply chain to satisfy customer demand. This is because the supply sources and markets allocated to facilities determine where raw materials are sourced from, where finished goods are shipped to, and how products are transported between facilities. The efficiency of these processes can have a significant impact on overall supply chain costs and ultimately, customer satisfaction.

Question 20

Allocating too little capacity results in
A) good responsiveness if demand is not satisfied or low cost if demand is filled from a distant facility.
B) good responsiveness if demand is not satisfied or high cost if demand is filled from a distant facility.
C) poor responsiveness if demand is not satisfied or low cost if demand is filled from a distant facility.
D) poor responsiveness if demand is not satisfied or high cost if demand is filled from a distant facility.

Accepted Answer

Allocating too little capacity can lead to poor responsiveness if demand is not satisfied, as customers may have to wait longer for their orders or may not be able to receive their orders at all. Additionally, if demand is filled from a distant facility, this can result in higher transportation and logistics costs, leading to higher overall costs for the company.

Quiz 5: Network Design in the Supply Chain

Supply chain network design decisions classified as capacity allocation are concerned with

A facility located primarily to obtain access to knowledge or skills that may exist within a certain region is

Supply chain network design decisions include

Capacity allocation decisions have a significant impact on supply chain performance because

A facility that also has low cost as its primary objective, but its strategic role is broader than that of an offshore facility is

Network design decisions have a significant impact on performance because they

Supply chain network design decisions classified as market and supply allocation are concerned with

Facility location decisions have a long-term impact on a supply chain's performance because

Customer order entry is

Supply chain network design decisions classified as facility location are concerned with

Firms focusing on cost leadership tend to

A facility built because of tax incentives, local content requirement, tariff barriers, or high logistics cost to supply the region from elsewhere with the objective to supply the market where it is located is

Firms focusing on responsiveness tend to

Decisions concerning the role of each facility are significant because

The allocation of supply sources and markets to facilities should be reconsidered on a regular basis so that

Supply chain network design decisions classified as facility role are concerned with

A facility that serves the role of being a low-cost supply source for markets located outside the country where the facility is located is

Allocating too much capacity to a location results in

The allocation of supply sources and markets to facilities has a significant impact on performance because

Allocating too little capacity results in