Deck 15: Supply Chain Management

Question 1

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

Answer 1

True

Question 2

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

Answer 2

True

Question 3

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

Answer 3

True

Question 4

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

Question 5

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

Question 6

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

Question 7

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

Question 8

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

Question 9

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

Question 10

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

Question 11

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.

Question 12

Traffic management refers to truck movement within our parking areas.

Question 13

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

Question 14

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

Question 15

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

Question 16

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

Question 17

Disintermediation refers to the phenomenon that the traditional retailer or service provider is reduced or eliminated in a supply chain.

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

The need for supply chain management increases as globalization increases.

Question 20

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

Question 21

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

Question 22

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 23

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

Question 24

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

Question 25

Gatekeeping manages the cost of shipping returned goods.

Question 26

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

Question 27

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

Question 28

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

Question 29

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

Question 30

Using third-party fulfillment means losing control of fulfillment.

Question 31

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 32

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

Question 33

Returned goods are part of reverse logistics.

Question 34

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 35

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 36

RFID eliminates the need for counting and bar-code scanning.

Question 37

Scheduling and maintaining equipment are operational decisions.

Question 38

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

Question 39

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

Question 40

Information technology is the key to success of global supply chains.

Question 41

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

Question 42

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 43

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 44

Event management is the advanced planning required for major performances such as concerts or conferences.

Question 45

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 46

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

Question 47

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 48

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 49

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

Question 50

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 51

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 52

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 53

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 54

Decentralized purchasing can usually offer quicker response than centralized purchasing.

Question 55

Which of the following, while desirable from some perspectives, might actually increase the risk of supply chain reductions?
(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 56

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 57

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

Question 58

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 59

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

Question 60

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

Question 61

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 62

One important objective of purchasing is to:

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

Question 63

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 64

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 65

The two types of decisions that are relevant to supply chain management are:

A) short- and long-term.
B) domestic and international.
C) location and layout.
D) in-sourcing and outsourcing.
E) tactical and operational.

Question 66

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 67

Outsourcing followed by __________ is not simple.

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

Question 68

Which of the following is not a performance driver?

A) quality
B) cost
C) stability
D) velocity
E) flexibility

Question 69

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 70

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 71

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) value analysis
D) quality and quality assurance
E) flexibility of design change

Question 72

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.

Question 73

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 74

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

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

Question 75

The interface between the firm and its suppliers is:

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

Question 76

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 77

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 78

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 79

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 80

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