Deck 9: The Role of Manufacturing, Marketing and Finance in Supply Chains

Question 1

__________ is a classic example of a manufacturer who excelled at utilizing a make-to-order approach to produce their products after receiving customer orders.

A) Dell Computer
B) Ford Motor Company
C) General Motors
D) Hewlett-Packard
E) Ikea

Answer 1

Dell Computer

Question 2

Which of the following would not be a characteristic of make-to-order (MTO) manufacturing?

A) Better if set-up costs are low.
B) Production based on customer order.
C) Requires production flexibility.
D) Typically longer delivery time.
E) Typically more stock-outs.

Answer 2

Typically more stock-outs.

Question 3

Which of the following would not be a characteristic of make-to-stock (MOS) manufacturing?

A) Better if demand uncertainty is low.
B) Production based on demand forecast.
C) Requires finished goods inventory.
D) Typically fewer stock-outs.
E) Typically shorter delivery time.

Answer 3

Typically fewer stock-outs.

Question 4

A component of a MRP system that would provide the following information about a product such as an electric toothbrush (one electric toothbrush requires 1 set of bristles, 1 electric motor, 2 batteries, 1 plastic casing, 3 brand labels and 4 screws), would be called:

A) Bill of materials (BOM).
B) Demand forecast.
C) Inventory status information.
D) Master production schedule (MPS)
E) Orders

Question 5

Reduction of waste is central to lean manufacturing. The earliest and most well-known proponent of the concept of waste in manufacturing was:

A) Ford Motor Company
B) General Electric Company
C) General Motors
D) Motorola
E) Toyota Motor Company

Question 6

In lean manufacturing, waste is categorized according to their sources. One of the eight wastes in lean manufacturing identified by company engineers was producing more than required by demand, creating excess inventory and making it difficult to track errors. The term used to represent this type of waste is called:

A) Defects.
B) Excess transporting.
C) Excess waiting.
D) Overproduction.
E) Unnecessary inventory.

Question 7

Lean manufacturing consists of a set of managerial practices which may be grouped into four broad categories. Which of the following is not one of those categories?

A) Customer relationship management.
B) Human resource management.
C) Just-in-time.
D) Total preventive maintenance.
E) Total quality management.

Question 8

Success in agile manufacturing requires firms to excel in six different areas. Which of the following areas would be the most important in implementing agile manufacturing successfully?

A) Customer orientation.
B) Flexible manufacturing.
C) Human resource management.
D) Information management.
E) Internal organization.

Question 9

For supply chains to be successful, any marketing effort of the organization must integrate the ideas of having the right product, at the right price, combined with the right promotion, and available in the right place-these are the 4-Ps (product, price, promotion, place) of the marketing mix and successfully implementing them creates various forms of utility (time, place, possession, form). Supply chain activities primarily occur in relationship to which utility?

A) Form, time and possession.
B) Place and possession.
C) Possession, place, price and promotion.
D) Time and place.
E) Time and possession.

Question 10

Which of the following statements about omnichannel distribution is FALSE?

A) A majority of customers expect to be able to contact the same person at a company irrespective of which channel they are using.
B) A majority of customers expect to obtain assistance from every channel.
C) A majority of customers have had difficulty in switching from one channel of a firm to another.
D) A majority of marketers identified a lack of resources as the most significant barrier to achieving omnichannel retailing.
E) Approximately one-half of in-store shoppers expect sales personnel to be knowledgeable about products the firm sells online.

Question 11

All of the following could be common obstacles to implementing data analytics in SCM, except for:

A) Difficulties in integrating big data with current information systems.
B) Understanding which data to collect and interpret.
C) Gathering and interpreting external unstructured data from social media sites.
D) Updating older legacy systems found in many companies, including heavy reliance on spreadsheets.
E) Overcoming objections of senior management as to the merits of implementing big data in SCM.

Question 12

Which statement about the implications of product stock-outs for retailers and manufacturers is FALSE?

A) For retailers generally, brand switching in the short term will likely not adversely impact revenues significantly if the product stock-out is not repeated.
B) If an item that is out-of-stock is not needed immediately by the shopper, many will delay the purchase until a later trip to the same store.
C) Brand switching does not result in direct loss of revenues and profits to manufacturers.
D) Overall, the cost of a stock-out is higher for manufacturers than retailers because most shoppers will engage in substitution behavior, often selecting another brand.
E) Brand loyal shoppers will wait to buy the product, but a different size of the same product, or travel elsewhere to buy the product, thus, out-of-stock costs to manufacturers will be low in the short term.

Question 13

For manufacturers, strategies to eliminate product stock-outs or minimize their potential adverse effects, would include all of the following except:

A) Frequent monitoring of stock levels in the retail stores.
B) Supplying retailers with multiple sizes and varieties of manufacturer's brand(s).
C) Increase safety stocks to high levels for products that could possibly go out-of-stock.
D) Direct store delivery should be made of some products, such as sale and other promotional items.
E) Expedited transportation should be used when product stock-outs are expected to last more than one day.

Question 14

Which of the following statements about product returns is FALSE?

A) According to the National Retail Federation, e-commerce product returns account for approximately eight percent of total retail sales.
B) Product return rates are generally higher in Internet sales than in brick-and-mortar stores.
C) The majority of products returned to an online retailer are defective.
D) Returns consist of both products and packaging.
E) Product return rates vary by type of product, with shoes and clothing some of the most returned items.

Question 15

Which of the following reasons for product returns would be considered an "uncontrollable return"?

A) Buyers change their minds about purchasing the item(s).
B) Damaged products from poor handling or transport.
C) Incorrect forecasts of demand.
D) Poor product quality due to manufacturing problems.
E) Poorly written instructions accompanying products for their set-up and implementation.

Question 16

Which of the following reasons for product returns would be considered a "controllable return"?

A) Company shipped the wrong product size.
B) Incorrect product or size ordered by the customer.
C) Product no longer needed by the customer.
D) Product did not match description on the website or in the catalog.
E) Holiday purchases that are returned after the holiday.

Question 17

Many disposition options exist for products returned by customers. Which of the following disposition options would likely result in the greatest return on investment (ROI) to the seller?

A) Donating returned items to charities.
B) Reconditioning the returned items and reselling them.
C) Reselling the items as new if they were returned in an unopened package.
D) Selling the returned items as scrap.
E) Selling the returned items at an outlet store.

Question 18

Utilizing the Strategic Profit Model (DuPont Model), if a company has a net profit margin of 5%, an asset turnover of 2, and a financial leverage of 2, then return on net worth (RONW) is equal to:

A) 5%
B) 10%
C) 15%
D) 20%
E) 25%

Question 19

The Chief Financial Officer (CFO) can have a positive impact on supply chain management is several ways. Which of the following is not one of the ways the CFO can make a positive impact?

A) Challenge rationale used for new supply chain investments.
B) Effectively manage risk with a long-term approach to business decision making.
C) Help to create consistency across the supply chain.
D) Maintain a "hands off" approach to the financial issues in supply chain management by allowing the Chief Supply Chain Officer to make their own financial decisions.
E) Use data analytics to support supply chain decisions.

Question 20

Chief Financial Officers (CFO) versus Chief Supply Chain Officers (CSCO) can view the same things differently because they have different perspectives on the issue. When viewing a "lean inventory" strategy from a transportation viewpoint, the CFO would take which of the following perspectives?

A) Complicated changes in transport mode.
B) Greater need for expedited freight.
C) Loss of a customer and the associated lifetime revenue.
D) Pressure for 100 % accurate fulfillment.
E) Reduction in working capital tied up in inventory.

Question 21

A make-to-stock (MOS) manufacturing strategy produces products in advance of sales and holds them as finished goods inventory until demanded by customers.

Question 22

The key difference between make-to-stock (MTS) and make-to-order (MTO) is that MTO is triggered by a customer order.

Question 23

As a variation of a make-to-order (MTO) strategy, build-to-order (BTO) involves taking subassemblies and putting them together into a final product.

Question 24

A bill of materials (BOM) is issued whenever there is a need to revise the MRP system due to an unanticipated event.

Question 25

Material Requirements Planning (MRP) is a planning system designed to manage the flow of raw materials and components to the factory floor.

Question 26

A major disadvantage to MRP systems is that they are slow to adjust to changes generated either externally or internally to the firm.

Question 27

One of the outputs of a MRP system is to plan the dates when orders should be released to suppliers.

Question 28

One of the strengths of a MRP system is that it accounts for lead time variability.

Question 29

MRP II, an extension of MRP, made significant enhancements to the traditional MRP components, but did not incorporate additional business functions such as finance, marketing, and human resources.

Question 30

In lean production, products are manufactured in batches, while in traditional manufacturing the production process runs as much as possible in a constant flow.

Question 31

Enterprise Resource Planning (ERP) includes all core processes needed to run a company and provides visibility, analytics, and efficiency across every aspect of the business.

Question 32

Enterprise Resource Planning (ERP) only applies to manufacturers and not to not-for-profit organizations, such as service firms.

Question 33

Omnichannel distribution can be defined as strategic customer care initiatives designed to delivery seamless customer experiences across multiple channels and devices.

Question 34

The omnichannel approach is primarily utilized by retailers, although the concept can apply to all types of organizations.

Question 35

Much of the data needed by organizations would be considered unstructured and often come from social media sources rather than the firm's MIS.

Question 36

The expression "data rich, but information poor"means that a firm has too much data and they are uncertain as to how to utilize it quickly and effectively to make business decisions.

Question 37

Manufacturers and retailers are equally affected by product stock-outs experienced by consumers in retail stores.

Question 38

Because of the "hidden costs"of rain checks, product substitutions should be offered to retail customers experiencing stock-outs.

Question 39

The best option for dealing with product stock-outs is to eliminate the stock-out before it can occur, utilizing approaches such as good forecasting or vendor managed inventory (VMI).

Question 40

Product return rates are lower in Internet sales than in brick-and-mortar stores.