Question 1

Some firms are reluctant to use third-party logistics firms because they wish to maintain direct contact with customers and retain control over the logistics process.

Accepted Answer

Some firms prefer to manage logistics internally to ensure direct customer interaction and maintain control over service quality and operational processes.

Question 2

Not all products nor all customers require the same level of logistical service.

Accepted Answer

Different products and customers have varying needs and priorities, which means logistical services must be tailored to meet those specific requirements efficiently.

Question 3

Recent evidence suggests that firms that stumble in the SCM area are punished by the stock market.

Accepted Answer

Research indicates that supply chain management issues can lead to operational disruptions, affecting a firm's financial performance and investor confidence, which in turn can negatively impact stock prices.

Question 4

For innovative products, the goal is to design a supply chain that minimizes logistics and inventory costs, and assures low- cost manufacturing.

Accepted Answer

The goal for innovative products is to design a supply chain that is responsive and flexible to handle unpredictable demand, rather than just minimizing costs.

Question 5

Firms that adopt supply chain management generally find that costs increase but are more than offset by higher profit margins and revenue growth.

Accepted Answer

Supply chain management typically aims to reduce costs and improve efficiency, leading to increased profit margins and revenue growth, not increased costs.

Question 6

The longer the delivery time in the logistical system, the more inventory customers must maintain to service their needs.

Accepted Answer

Longer delivery times require customers to hold more inventory to avoid stockouts and ensure they can meet demand during the waiting period.

Question 7

If the costs of each logistical activity are minimized, total logistical costs for the enterprise will be minimized.

Accepted Answer

Minimizing costs for each logistical activity individually may not lead to minimized total logistical costs due to potential trade-offs and interdependencies between activities.

Question 8

Supply chain management, as a source of competitive advantage, should be seen as a source of revenue as well as a means of reducing costs.

Accepted Answer

Supply chain management can enhance efficiency and reduce costs, but it also improves customer satisfaction and service levels, potentially increasing revenue by differentiating a company from its competitors.

Question 9

Properly implemented, supply chain management will lead to longer order-to-delivery cycle time.

Accepted Answer

Properly implemented supply chain management aims to streamline processes, reduce inefficiencies, and shorten the order-to-delivery cycle time.

Question 10

Supply chain management may require that all firms in the supply chain share sensitive and proprietary information about customers and corporate strategic plans.

Accepted Answer

Sharing sensitive and proprietary information can enhance coordination and efficiency across the supply chain, but it requires trust and careful management to protect competitive advantages and customer privacy.

Question 11

Warehousing is usually the largest single logistical expense.

Accepted Answer

Transportation is typically the largest single logistical expense, not warehousing.

Question 12

As a customer adopts JIT purchasing, the typical order size shrinks and more frequent deliveries are required.

Accepted Answer

JIT (Just-In-Time) purchasing aims to reduce inventory levels by ordering smaller quantities more frequently to align with production schedules and minimize holding costs.

Question 13

Although air provides the lowest average delivery time, generally it has the highest variability in delivery time relative to average.

Accepted Answer

Air transport is fast but can be affected by weather, air traffic, and other factors, leading to high variability in delivery times.

Question 14

For supply chain management, functional products typically have predictable demand patterns while innovative products do not.

Accepted Answer

Functional products usually have stable and predictable demand due to their long life cycles and consistent consumption patterns, whereas innovative products often face unpredictable demand due to their novelty and shorter life cycles.

Question 15

An increase in the supplier's delivery time performance permits a buyer to hold less inventory.

Accepted Answer

An increase in the supplier's delivery time performance means that deliveries are slower or less reliable, which typically requires the buyer to hold more inventory to buffer against potential delays.

Question 16

If the business marketer can offer a buyer more consistent delivery performance from the logistical system, the buyer would have the opportunity to cut the level of safety stock maintained.

Accepted Answer

Consistent delivery performance reduces the uncertainty in supply, allowing the buyer to maintain lower safety stock levels to buffer against variability.

Question 17

Supply chain management is both a boundary and function spanning endeavor.

Accepted Answer

Supply chain management involves coordinating and integrating activities across various functions and organizations, making it both a boundary-spanning and function-spanning endeavor.

Question 18

The faster modes of transportation result in higher levels of customer service, but also higher investments in inventory.

Accepted Answer

Faster transportation reduces the need for high inventory levels as goods can be replenished quickly, thus potentially lowering inventory investment.

Question 19

Speed of service is usually more important that service consistency.

Accepted Answer

Service consistency is often prioritized over speed because it ensures reliability and customer satisfaction, leading to long-term success.

Question 20

The underlying premise of SCM is that waste reduction and enhanced supply chain performance come only when there is both intrafirm and interfirm functional integration, sharing and cooperation.

Accepted Answer

The underlying premise of Supply Chain Management (SCM) is that both internal (intrafirm) and external (interfirm) integration, sharing, and cooperation are essential for reducing waste and improving supply chain performance.

Quiz 11: Supply Chain Management