Question 1

The cost of maintenance supplies are included in the capital budget.

Accepted Answer

Maintenance supplies are generally considered operating expenses and are not included in the capital budget. The capital budget typically includes expenses related to long-term investments or asset acquisition.

Question 2

Industry benchmarking allows an individual company to compare itself to the average and range of performance data for all respondents in the aggregate.

Accepted Answer

Industry benchmarking provides a way for a company to compare its performance with others in the same industry, based on aggregated data.

Question 3

The supply planning process starts with information derived from the annual sales forecast, production/service delivery forecasts, and general economic forecast.

Accepted Answer

The supply planning process does start with information derived from the annual sales forecast, production/service delivery forecasts, and general economic forecast.

Question 4

Supplier performance management systems should be designed to capture and communicate supplier performance data to improve future performance and future decisions.

Accepted Answer

Supplier performance management systems are designed to gather data about supplier performance and communicate it to relevant stakeholders to inform future decisions and identify areas for improvement. This allows for greater transparency and accountability in the supply chain, leading to better overall performance.

Question 5

Cost management categories that might be measured include: (1) cost savings, (2) cost reductions, (3) cost avoidance, and (4) process cost savings.

Accepted Answer

These are the four main categories of cost management that can be measured.

Question 6

Internal validation of supply's financial contribution is easy to achieve, but unlikely to happen in most organizations because the cost of assessment outweighs the benefits.

Accepted Answer

Internal validation of a supply's financial contribution can be challenging due to the complexity of supply chains and the difficulty in isolating the financial impact of supply-related decisions. It's not inherently easy or always cost-prohibitive; the difficulty lies in the complexity of accurately measuring and attributing financial benefits directly to supply chain activities.

Question 7

Performance benchmarking measures how an organization achieves results.

Accepted Answer

The answer of Performance benchmarking measures how an organization achieves...

Question 8

In most organizations, current supply performance metrics and evaluation methods are highly effective at validating supply's results and getting supply recognition as a major contributor to organizational success.

Accepted Answer

While supply performance metrics and evaluation methods are important, they may not always accurately capture the full value and contributions of the supply function. Additionally, there may be other factors at play, such as siloed organizational structures or a lack of understanding about the strategic role of supply, that can hinder supply recognition and success.

Question 9

Triple bottom line reporting refers to an organization's social, environmental, and political performance.

Accepted Answer

Triple bottom line reporting refers to an organization's social, environmental, and financial (economic) performance, not political.

Question 10

Efficiency metrics, which emphasize price, may lead to behavior that drives up total cost of ownership.

Accepted Answer

Efficiency metrics that focus solely on price may encourage cost-cutting measures that ultimately increase the total cost of ownership, such as sacrificing quality or investing in short-term solutions. This is because a narrow focus on price may overlook other important factors, such as reliability, durability, and long-term value.

Quiz 17: Supply Function Evaluation and Trends