Deck 3: Strategic and Financial Logistics

Question 1

Which generic strategy concentrates an organization's effort on a narrowly defined market to achieve either a cost leadership of differentiation strategy?

A)Hybrid
B)Stuck-in-the-middle
C)First to market
D)Focus

Answer 1

D

Question 2

Suppose that a logistics manager is able to eliminate some unnecessary inventory,which reduces the value of current assets as well as total asset value.What is the corresponding impact on inventory turnover and return on assets?

A)Both inventory turnover and return on assets will increase
B)Inventory turnover increases,while return on assets decreases
C)Inventory turnover decreases,while return on assets increases
D)Both inventory turnover and return on assets will decrease

Answer 2

A

Question 3

Which of the following does not appear on the balance sheet?

A)Assets
B)Owner's equity
C)Liabilities
D)Net income
E)All appear on the balance sheet

Answer 3

D

Question 4

Which of the following is a common measure of organizational financial success?

A)Profitability
B)The income statement
C)Current ratio
D)Return on investment

Question 5

Which of the following is not a potential type of logistics strategy decisions?

A)Investments in technology that support logistics activities
B)Selecting appropriate transportation modes
C)Deployment of inventory
D)Number and location of warehouses
E)All are potential types of logistics strategy decisions

Question 6

Which of the following is not a level at which strategy can be formulated?

A)Corporate
B)Business unit
C)Functional
D)All of the above are levels at which strategy can be formulated

Question 7

____ strategy decisions involve issues such as the number and location of warehouses and the selection of appropriate transportation modes.

A)Marketing
B)Production
C)Finance
D)Logistics

Question 8

____ strategy is focused on determining the goals for the company,the types of businesses in which the company should compete,and the way the company will be managed.

A)Functional-level
B)Business unit-level
C)Divisional-level
D)Corporate-level

Question 9

The ____ reflects the assets,liabilities,and owners' equity at a given point in time.

A)Balanced scorecard
B)Balance sheet
C)Income statement
D)Annual report

Question 10

The balance sheet reflects the assets,liabilities,and ____ at a given point in time.

A)Costs of goods sold
B)Net income
C)Owners' equity
D)Asset turnover

Question 11

In general,the ____ measures the profitability of the products and/or services provided by a company

A)Balance sheet
B)Strategic profit model
C)Balanced scorecard
D)Income statement

Question 12

A ____ strategy entails an organization developing a product and/or service that offers unique attributes that are valued by customers and that the customer perceives to be distinct from competitor offerings.

A)Focus
B)Differentiation
C)Value enhancement
D)Market orientation

Question 13

A

A)Supply chain
B)Interfunctional cooperation
C)Hierarch of strategy
D)Command and control style

Question 14

Depending on industry and product type,reverse logistics costs as a percent of revenue can range between ____ and ____ percent.

A)5; 10
B)4; 8
C)3; 6
D)2; 4

Question 15

Which of the following is not one of the generic strategies that can be pursued by an organization,as identified by strategist Michael Porter?

A)Value enhancement
B)Differentiation
C)Cost leadership
D)Focus
E)All of the above are generic strategies

Question 16

Which of the following represents the preferred hierarch of strategy

A)Corporate business unit functional
B)Functional business unit corporate
C)Corporate business unit divisional
D)Business unit divisional functional

Question 17

The current ratio is calculated by dividing ____ by ____.

A)Total current assets; total current liabilities
B)Total current liabilities; total current assets
C)Total assets; total liabilities
D)Total liabilities; total assets

Question 18

What provides the framework for conducting return on assets analysis by incorporating revenues and expenses to generate net profit margin,as well as inclusion of assets to measure asset turnover?

A)The Balanced Scorecard
B)The Strategic Profit Model
C)Microfinancing
D)Supply Chain Operations Reference Model

Question 19

The ____ shows revenues,expenses,and profit for a period of time.

A)Balance sheet
B)Current ratio
C)Income statement
D)Annual report

Question 20

Return on assets equals:

A)Current assets divided by total assets
B)Return on investment divided by return on net worth
C)Net profit margin times asset turnover
D)Total assets divided by costs of goods sold

Question 21

The income statement is the same thing as the balance sheet.

Question 22

Logistics measurement systems have been traditionally designed to include information on how many types of performance?

A)Two
B)Three
C)Four
D)Five

Question 23

A differentiation strategy entails an organization developing a product and/or service that offers unique attributes that are valued by customers and that customers perceive to be distinct from competitor offerings.

Question 24

Which of the following is false?

A)The Strategic Profit Model
B)The SPM fails to consider the timing of cash flows
C)The SPM is subject to manipulation in the short run
D)The SPM fails to recognize assets that are dedicated to specific relationships
E)All of the above are true

Question 25

Strategy at a business unit level is primarily focused on the types of businesses in which the company should compete and the way the company should be managed.

Question 26

Which of the following is not one of the perspectives evaluated in the balanced scorecard approach?

A)Customers
B)Internal business processes
C)Learning and growth
D)Financial
E)All of the above are perspectives in the balanced scorecard approach

Question 27

Strategist Michael Porter identified three generic strategies that can be pursued by an organization,namely,cost leadership,differentiation,and value enhancement.

Question 28

From a financial perspective,improvements to an organization's reverse logistics system could provide cost improvements and/or revenue enhancement opportunities.

Question 29

Marketing goals in areas such as product availability,desired customer service levels,and packaging design have limited influence on logistics decisions.

Question 30

With respect to asset turnover,____ is typically the most relevant logistics asset.

A)Warehousing
B)Inventory
C)Transportation equipment
D)Materials handling equipment

Question 31

In general,the income statement measures the profitability of the products and/or service provided by a company.

Question 32

Depending on the industry and product type,reverse logistics costs as a percent of revenue can range between 2 and 4 percent.

Question 33

Research indicates a positive benefit to aligning functional strategies such as marketing or logistics with the overall corporate strategy.

Question 34

The balanced scorecard approach is based on the belief that management should evaluate their business from ____ distinct perspectives.

A)Two
B)Three
C)Four
D)Five
E)None of the above

Question 35

Functional strategies can exist in such areas as marketing,finance,manufacturing,and logistics.

Question 36

What is the formula for net profit margin?

A)Gross profit minus interest expenses
B)Sales divided by costs of goods sold
C)Total sales divided by total assets
D)Net profit divided by sales

Question 37

An understanding of financial terminology can help logisticians to manage logistical activities to improve their company's financial performance.

Question 38

Strategy can be formulated at a corporate level,a business unit level,and a functional level.

Question 39

With respect to net profit margin,the most relevant categories for logistics managers to consider are:

A)Sales,costs of goods sold,asset turnover
B)Accounts receivable,costs of goods sold,total expenses
C)Sales,costs of goods sold,total expenses
D)Inventory,accounts receivable,total expenses

Question 40

What is the formula for asset turnover?

A)Total sales divided by total assets
B)Net profit divided by total assets
C)Return on assets divided by total assets
D)Return on investment divided by return on net worth

Question 41

Owners' equity is the difference between what a company owns and what it owes at any particular point in time.

Question 42

Superior logistics service can have a positive influence on an organization's financial performance.

Question 43

With respect to asset turnover,inventory is typically the most relevant logistics asset.

Question 44

Return on assets equals net profit margin times asset turnover.

Question 45

The primary influence of logistics activities on sales would be through the improvement of customer service.

Question 46

The balance sheet reflects the assets,liabilities,and costs of goods sold at a given point in time.

Question 47

Asset turnover is computing by dividing return on assets by total assets.

Question 48

A reduction in inventory would increase inventory turnover,which means an increase in that organization's return on assets

Question 49

The balanced scorecard provides the framework for conducting return on assets analysis by incorporating revenues and expense to generate net profit margin,as well as inclusion of assets to measure asset turnover.

Question 50

The balanced scorecard is based on the belief that management should evaluate their business from five different perspectives.

Question 51

A decision to invest in an electronic data interchange

Question 52

According to the balanced scorecard approach,the financial perspective is considered the best indicator of whether or not logistics strategy is being properly implemented and executed.

Question 53

With respect to net profit margin,the most relevant categories for logistics managers to consider are sales,costs of goods sold,and asset turnover.

Question 54

The current ratio is calculated by dividing total current liabilities by total current assets.

Question 55

A common measure of organizational financial success is return on investment.

Question 56

Long-term assets have a useful life of more than two years.

Question 57

When applying performance measures to logistics activities,determination of the key measures should be tailored to the individual organization and level of decision making.

Question 58

Operationally,net profit margin is net profit divided by cost of goods sold.

Question 59

The measures associated with the balanced scorecard can be at a strategic,tactical,or operational level.

Question 60

With respect to performance measures for logistics,research suggests that measuring inventory performance is more important than measuring performance in other key logistics activities such as transportation or warehousing.

Question 61

Holding all other information constant,what would be the effect on ROA for 2010 if warehousing costs declined 10 percent from 2009 levels?

Question 62

When comparing performance during the first five months of 2010 with performance in 2009,which warehouse shows the most improvement?

Question 63

When comparing 2009 figures with the 2010 figures shown in the table,the amount budgeted for each warehouse in 2010 was greater than actual 2009 costs.How much of the increase is caused by increased volume of business

Question 64

Q.is aggressive and is going to recommend that his father cancel the contract with one of the warehouses and give that business to a competing warehouse in the same city.J.Q.feels that when word of this gets around,the other warehouses they use will "shape up." Which of the seven should J.Q.recommend be dropped? Why?

Question 65

Use the 2009 income statement and balance sheet to complete a Strategic Profit Model for J.Q.

Question 66

When comparing performance during the first five months of 2010 with performance in 2009,which warehouse shows the poorest change in performance?

Question 67

The year 2010 is nearly half over.J.Q.is told to determine how much the firm is likely to spend for warehousing at each of the eight warehouses for the last six months of 2010.Do his work for him.