question

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

answer

TRUE

question

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

answer

FALSE

question

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

answer

FALSE

question

Using third-party logistics involves using your organization's logistics function to ship to customers that are not officially part of the supply chain.

answer

FALSE

question

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

answer

TRUE

question

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

answer

TRUE

question

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.

answer

FALSE

question

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

answer

FALSE

question

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

answer

TRUE

question

The need for supply chain management increases as globalization increases.

answer

TRUE

question

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

answer

FALSE

question

Traffic management refers to truck movement within our parking areas.

answer

FALSE

question

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

answer

TRUE

question

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

answer

TRUE

question

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

answer

TRUE

question

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

answer

TRUE

question

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

answer

TRUE

question

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

answer

FALSE

question

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

answer

FALSE

question

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

answer

FALSE

question

The optimization of the supply chain uses a mathematical model to determine the optimal number of business organizations to be included in the chain.

answer

FALSE

question

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

answer

TRUE

question

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.

answer

TRUE

question

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

answer

FALSE

question

Scheduling and maintaining equipment are operational decisions.

answer

TRUE

question

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

answer

TRUE

question

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

answer

TRUE

question

Returned goods are part of reverse logistics.

answer

TRUE

question

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

answer

FALSE

question

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

answer

TRUE

question

Gatekeeping manages the cost of shipping returned goods.

answer

FALSE

question

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

answer

FALSE

question

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

answer

FALSE

question

Using third-party fulfillment means losing control of fulfillment.

answer

TRUE

question

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

answer

FALSE

question

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

answer

TRUE

question

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.

answer

FALSE

question

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.

answer

TRUE

question

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

answer

TRUE

question

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

answer

FALSE

question

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

answer

FALSE

question

Decentralized purchasing can usually offer quicker response than centralized purchasing.

answer

TRUE

question

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

answer

TRUE

question

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

answer

FALSE

question

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

answer

True

question

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

answer

True

question

Supplier certification is the first step required in a supplier audit program.

answer

False

question

Design and purchasing people should work closely because changes in design, specifications, or materials can impact future purchase requirements.

answer

True

question

The purchasing cycle ends when the purchasing department is notified that the supplier has shipped the items.

answer

False

question

Producing and shipping in large lots may reduce costs but increase lead times.

answer

True

question

Variations create uncertainty, thereby causing inefficiencies in a supply chain.

answer

True

question

Disintermediation is the refusal of one party to use mediators for price negotiation.

answer

False

question

Which of the following is not a goal of supply chain management? A. fewer suppliers and long-term relationship B. small lot sizes C. on time deliveries D. lowest possible transportation costs E. delivery often to the place of use

answer

D. lowest possible transportation costs

question

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

answer

D. customer selection

question

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

answer

D. Bullwhip effect

question

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

answer

D. I, II, and IV

question

Which of the following is not a benefit of RFID? A. increased productivity B. elimination of paper work C. frequent deliveries of smaller shipments D. reduction in clerical labor E. increased accuracy

answer

C. frequent deliveries of smaller shipments

question

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. RFID's

answer

B. increasing globalization

question

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

answer

E. larger number of suppliers

question

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

answer

A. supply chain response time

question

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

answer

B. RFID

question

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

answer

E. universal product codes

question

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

answer

C. I and II

question

Which of the following is a barrier to integration of separate organizations in the supply chain? (I) conflicting objectives of the companies in the chain. (II) different level of capacity 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

answer

D. I and III

question

_________ has helped business concentrate on their core business. A. Supply Chains B. Scheduling C. Outsourcing D. ERP E. Lean Production

answer

C. Outsourcing

question

Outsourcing followed by __________ is not simple. A. Integration B. Unionization C. Backsourcing D. Computerization E. Just-in-time

answer

C. Backsourcing

question

The interface between the firm and its suppliers is: A. purchasing B. production C. distribution D. engineering E. accounting

answer

A. purchasing

question

The two types of decisions that are relevant to supply chain management are: A. Short, long term B. Domestic, international C. Location, layout D. In-source, out-source E. Tactical, operational

answer

E. Tactical operational

question

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

answer

B. be knowledgeable about new products

question

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

answer

E. receiving a requisition

question

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

answer

A. vendor analysis

question

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

answer

E. high annual cost-volume

question

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.

answer

A. It involves an examination of the function of purchased parts or raw materials.

question

Which of the following is not a performance driver? A. Quality B. Cost C. Stability D. Velocity E. Flexibility

answer

C. Stability

question

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

answer

D. inventory turnover

question

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

answer

B. I, II, and III

question

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

answer

C. value analysis

question

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

answer

C. quick response to local needs

question

The purchasing perspective of the supplier as a partner is characterized by: A. an emphasis on low prices B. one or a few suppliers C. low flexibility D. 100% inspection for quality E. low volume

answer

B. one or a few suppliers

question

Vendor Analysis is the examination of the _________ of purchased materials. A. Function B. Source C. Quality D. Cycle E. Quantity

answer

B. Source

question

Last quarter, a retailer sold 8,000 t-shirts, 7,000 of which were sold directly from on-hand inventory. This retailer's ________ was 88%. A. fill rate B. inventory yield C. profit margin D. inventory turnover E. none of the above

answer

A. fill rate

question

Which of the following is a principle required for ethical behavior in purchasing? A. loyalty to employer. B. justice to those you deal with. C. faith in your profession. D. all of the above. E. none of the above.

answer

D. all of the above.

question

The activity which begins with a request from within the organization is: A. Outsourcing search B. Purchasing cycle C. Supplier selection D. Order receipt E. Supply chain management

answer

B. Purchasing cycle

question

Our organization can obtain visibility to potential trading partners on the internet by using: A. C2C B. B2C C. B2B D. C2B E. None of the above

answer

C. B2B

question

Real time information about product movement on store shelves could benefit from the use of: A. batch processing B. economic order quantities C. statistical process control D. radio frequency identification tags E. infrared remote scanners

answer

D. radio frequency identification tags

question

The website and order fulfillment are essential features of: A. delayed differentiation B. e-commerce C. internet service providers D. inventory balancing E. market segmentation

answer

B. e-commerce

question

A given inventory item has a per-year holding cost of $500. One method of shipping this item is three days faster than the other, but it is $2.50 more per unit. Using the slower method would be __________ more expensive overall than using the faster method. A. $1.08 B. $1.16 C. $2.37 D. $2.73 E. $1.61

answer

E. $1.61

question

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

answer

A. I, II, and IV only

question

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

answer

D. I only

question

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

answer

C. most visible

question

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`

answer

B. global

question

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

answer

A. domestic suppliers

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