Question 1

Fen-phen was an anti-obesity medication that consisted of two drugs: fenfluramine and phentermine.Fenfluramine was initially marketed by American Home Products.It was shown to cause potentially fatal pulmonary hypertension and heart valve problems.This eventually led to the withdrawal of the product and legal damages of over $13 billion.This is an example of ________.

Accepted Answer

The description describes a product recall, which is the process of removing a product from the market due to safety or quality concerns.

Question 2

MaXoSteel Inc.has been supplying steel to Agis Corp.,a well-known car manufacturer,for the past three years.Concerned employees at MaXoSteel can directly access Agis' inventory and sales information via electronic data interchange.This allows MaXoSteel to monitor Agis' inventory levels on a real-time basis.The system has worked well for both companies so far and there has never been any delay in the supply of steel.Which of the following steps,if taken by Agis,would most strengthen its supply chain strategy?

Accepted Answer

E is the correct choice because ensuring the confidentiality and security of shared inventory and sales information between Agis and MaXoSteel strengthens the trust and reliability within the supply chain, which is crucial for its efficiency and effectiveness.

Question 3

Supply chain planning begins with ________.

Accepted Answer

Supply chain planning starts with product demand planning and forecasting because it is essential to know the expected demand for a product before planning for production, distribution, inventory, and safety stock.

Question 4

Which of the following is the main objective of information systems that focuses on improving supply chains?

Accepted Answer

The main objective of information systems that focuses on improving supply chains is to accelerate product development and innovation, which can help organizations to stay competitive and respond quickly to changing market demands. Discouraging vendor-managed inventory systems and sustainable production processes or encouraging the bullwhip effect can have negative impacts on supply chain efficiency and sustainability. Decentralizing the organization may or may not be a goal of supply chain improvement depending on the specific context.

Question 5

Which of the following statements about a just-in-time strategy is true?

Accepted Answer

A just-in-time strategy focuses on optimizing ordering quantities so that parts or materials arrive just in time for production, reducing the need for large inventories and excess resources. Option A describes a vendor managed inventory strategy, Option B describes a supplier-managed inventory strategy, and Option E describes a collaborative planning, forecasting, and replenishment strategy. Option C is not true as holding large inventories goes against the principles of just-in-time.

Question 6

Which of the following statements about vendor-managed inventory (VMI)is true?

Accepted Answer

VMI involves the manufacturer allowing the supplier to monitor the stock levels and ongoing sales data in order to facilitate efficient restocking and inventory management. Option A is incorrect because VMI involves the supplier taking responsibility for managing inventory levels, not the manufacturer. Option B is incorrect because in VMI, the supplier manages the inventory and sends goods to the manufacturer as needed, not the other way around. Option C is incorrect because optimizing ordering quantities is a common supply chain practice and not exclusive to VMI. Option E is incorrect because it describes a different strategy called vendor-owned inventory (VOI), not VMI.

Question 7

Demand planning and estimating leads to the development of the overall ________.

Accepted Answer

Demand planning and estimating leads to the development of the overall demand forecast.

Question 8

Distribution planning leads to the development of the overall ________ plan.

Accepted Answer

Distribution planning focuses on the movement of products from the manufacturing or production stage to the end user or consumer. It involves determining the most efficient and cost-effective way to transport products, including selecting transportation modes, routes, and carriers. Therefore, the development of a transportation plan is a crucial component of distribution planning.

Question 9

Analytical tools are used to optimally utilize materials,equipment,and labor during the ________ process of supply chain planning.

Accepted Answer

Analytical tools are commonly used to facilitate production scheduling, which involves coordinating and sequencing different production processes based on factors such as availability of materials, equipment, and labor. Techniques such as linear programming, simulation, and optimization can be employed to identify the most efficient production sequences and minimize bottlenecks or delays. While analytical tools can also be employed to support other aspects of supply chain planning such as demand forecasting, distribution planning, inventory planning, and safety stock scheduling, production scheduling is the most directly related to the optimization of materials, equipment, and labor.

Question 10

One major problem affecting supply chains are ripple effects referred to as the ________ effect.

Accepted Answer

The term "bullwhip effect" is used to describe the phenomenon where small changes in demand at the end of the supply chain can result in amplified fluctuations in demand further up the supply chain. This can lead to issues such as over- or under-production, inventory stockouts, and increased costs for all parties involved in the supply chain.

Question 11

The key use of the order promising module of supply chain management is to ________.

Accepted Answer

The order promising module is primarily used to provide answers to customer queries regarding product availability, costs, and delivery times. This helps improve customer service and satisfaction. A, B, C, and D are functionalities of other modules of supply chain management.

Question 12

Production scheduling ________.

Accepted Answer

Production scheduling focuses on coordinating all activities needed to create the product or service, including the allocation of resources, management of inventory, and timing of production runs. It is an essential process for ensuring a smooth and efficient production process. Options B, C, D, and E are not accurate descriptions of production scheduling.

Question 13

________ is a business model in which the suppliers to a manufacturer manage the manufacturer's inventory levels based on preestablished service levels.

Accepted Answer

Vendor-managed inventory (VMI) is a business model in which the supplier takes responsibility for managing inventory levels of the manufacturer. The suppliers use preestablished service levels to manage the inventory levels, ensuring that the manufacturer has the required inventory to meet the demand. VMI helps to reduce the inventory carrying costs and out-of-stock situations for the manufacturer.

Question 14

The term ________ is commonly used to refer to a collection of companies and processes involved in moving a product from the suppliers of raw materials to the customer.

Accepted Answer

The term supply chain is commonly used to refer to the collection of companies and processes involved in moving a product from the suppliers of raw materials to the customer. The term supply warehouse refers to a specific type of storage facility, procurement refers to the process of purchasing goods or services, demand chain is not a commonly used term, and value network refers to a broader concept that includes not only suppliers and customers but also other stakeholders involved in creating value for the customer.

Question 15

________ involves the development of various resource plans to support the efficient and effective production of goods and services.

Accepted Answer

Supply chain planning involves developing resource plans to support the efficient and effective production of goods and services. This includes forecasting demand, planning inventory levels, determining production schedules, and managing transportation and logistics.

Question 16

La Belle Inc.introduced a new line of accessories for teenage girls the last season.Following its immense popularity with the targeted group,the company anticipated high sales in the current season and ordered raw materials accordingly..However,the success of the new line turned out to be a fad as the teens soon turned to other products offered by competing brands and La Belle's sales declined.This forecasting error caused a huge discrepancy in the amount of raw materials they needed and the amount of inventory they had already piled up in anticipation of good sales.This is an example of ________.

Accepted Answer

This scenario is an example of the bullwhip effect, where a small change in consumer demand can cause a ripple effect up the supply chain, leading to forecast errors and inventory imbalances. La Belle's overestimation of sales resulted in them ordering too many raw materials, leading to excess inventory and financial losses.

Question 17

________ planning focuses on delivering products or services to consumers as well as warehousing,delivering,invoicing,and payment collection.

Accepted Answer

Distribution planning involves the processes and decisions involved in getting a product or service from the manufacturer or provider to the end consumer. This includes logistics such as warehousing, transportation, invoicing, and payment collection. It is focused on ensuring the timely and efficient delivery of products or services to customers.

Question 18

The key use of the manufacturing execution module of supply chain management is to ________.

Accepted Answer

The manufacturing execution module of supply chain management supports production processes, taking into account capacity and material constraints. It involves monitoring and controlling the production process to ensure that products are manufactured efficiently, meeting quality standards and delivering them on time. It also includes managing inventory levels and identifying and resolving production issues. The other options refer to different modules or functions of supply chain management.

Question 19

Computer maker Dell realized the problems with keeping large inventories,especially because of the fast rate of obsolescence of electronics components.Dell now keeps only about two hours of inventory in its factories.The company is most likely using a ________ system.

Accepted Answer

Dell's strategy of keeping only two hours of inventory is an example of just-in-time inventory management, where companies keep inventory levels very low and receive supplies and materials just in time to meet production needs. This strategy helps reduce inventory costs, minimize waste, and improve efficiency.

Question 20

Which of the following is the key use of the distribution planning module of supply chain management?

Accepted Answer

The key use of the distribution planning module of supply chain management is to optimize the allocation of available supply to meet demand. This involves determining the most efficient use of resources, such as warehouses, transportation, and labor, to ensure that products are delivered on time and in the most cost-effective manner. This module focuses on the distribution network design, inventory placement, and transportation planning, to ensure that customer demand is met with the right product, in the right quantity, at the right time, and at the lowest possible cost to the organization.

Quiz 8: Strengthening Business-To-Business Relationships Via Supply Chain and Customer Relationship Management