question

Operations managers are finding online auctions a fertile area for disposing of discontinued inventory.

answer

True

question

The key to effective supply-chain management is to get many suppliers to compete with each other, in order to drive down prices.

answer

False

question

Even though a firm may have a low cost strategy, supply-chain strategy can select suppliers primarily on response or differentiation

answer

False

question

The supply chain for a brewery would include raw ingredients such as hops and barley but not the manufactured goods such as bottles and cans.

answer

False

question

Supply-chain management faces additional challenges, such as those related to quality production and distribution systems, when companies enter growing global markets

answer

True

question

McDonald's was able to utilize existing plants and transportation systems in preparing the supply chain for opening its stores in Moscow.

answer

False

question

When using the low-cost strategy for supply chain-management, the firm should invest aggressively to reduce production lead time.

answer

False

question

Savings in the supply chain exert more leverage as the firm has a lower net profit margin.

answer

True

question

A firm that employs a "response strategy" should minimize inventory throughout the supply chain.

answer

False

question

Outsourcing refers to transferring a firm's activities that have traditionally been internal to external suppliers.

answer

True

question

Outsourcing is a form of specialization that allows the outsourcing firm to focus on its key success factors.

answer

True

question

Supply-chain decisions are not generally strategic in nature, because purchasing is an ordinary expense to most firms.

answer

False

question

The objective of the make-or-buy decision is to help identify the products and services that can be obtained externally.

answer

True

question

Because service firms do not acquire goods and services externally, their supply-chain management issues are insignificant.

answer

False

question

Because the supply chain has become so electronic and automated, opportunities for unethical behavior have been greatly reduced.

answer

False

question

With the many-suppliers strategy, the order usually goes to the supplier that offers the best quality.

answer

False

question

Developing long-term, "partnering" relationships with a few suppliers is a long-standing American purchasing strategy.

answer

False

question

Vertical integration, whether forward or backward, requires the firm to become more specialized.

answer

False

question

A fast-food retailer that acquired a spice manufacturer would be practicing backward integration.

answer

True

question

Keiretsus offer a middle ground between few suppliers and vertical integration.

answer

True

question

In several industries, online exchanges have been created by buyers

answer

True

question

The bullwhip effect refers to the increasing fluctuations in orders that often occur as orders move through the supply chain.

answer

True

question

Vendor-Managed Inventory is a form of outsourcing.

answer

True

question

In the vendor evaluation phase, most companies will use the same list of criteria and the same criteria weights.

answer

False

question

One classic type of negotiation strategy is the market-based price model.

answer

True

question

Drop shipping results in time and shipping cost savings

answer

True

question

The supply-chain management opportunity called postponement involves delaying deliveries to avoid accumulation of inventory at the customer's site.

answer

False

question

Channel assembly, which sends components and modules to be assembled by a distributor, treats these distributors as manufacturing partners.

answer

True

question

Blanket orders are a long-term purchase commitment to a supplier for items that are to be delivered against short-term releases to ship

answer

True

question

Bar code and radio frequency technology, like that used to track UPS or FedEx packages on their global journeys, can also be used to track objects within the boundaries of a warehouse or shop.

answer

True

question

Waterways are an attractive distribution system when speed is more important than shipping cost.

answer

False

question

Logistics management can provide a competitive advantage through improved customer service.

answer

True

question

With the growth of just-in-time practices, railroads have made large gains in the share of the nation's transport that they haul.

answer

False

question

Improvements in security, especially regarding the millions of shipping containers that enter the U.S. each year, are being held back by the lack of technological advances.

answer

False

question

Benchmark firms have driven down costs of supply-chain performance.

answer

True

question

The three major variations of online catalogs are

answer

catalogs by vendors, catalogs by intermediaries, and exchanges provided by buyers

question

Visibility throughout the supply chain is a requirement among supply-chain members for

answer

Mutual trust

question

Which of the following is not a concern of the supply chain?

answer

Maintenance scheduling

question

Which of the following is an aspect of environmental risk in supply-chain management?

answer

Political issues

question

Toyota's policy of having two suppliers per component after its experience with fire and earthquakes is similar to Hark Rock Café's franchising in societies that have significant cultural or environmental barriers because

answer

Both companies are coping with environmental supply-chain risk

question

McDonald's Russian "food town" is to __________ risk as Hard Rock Café's franchising in diverse political and cultural environments to overcome barriers is to __________ risk.

answer

Process, Environmental

question

What type of negotiating strategy requires the supplier to open its books to the purchasers?

answer

cost-based price model

question

Which of the following statements is true regarding the leverage of supply-chain savings?

answer

Supply chain savings exert more leverage as the firm has a lower net profit margin

question

One dollar saved in purchasing is

answer

worth even more than a dollar earned in sales revenue

question

Which one of the following statements about purchasing is true?

answer

Purchasing has an impact on the quality of the goods and services sold.

question

Outsourcing

answer

A) transfers traditional internal activities to outside vendors B) utilizes the efficiency which comes with specialization C) lets the outsourcing firm focus on its key success factors D) None of the above are true of outsourcing. E) All of the above are true of outsourcing

question

The transfer of some of what are traditional internal activities and resources of a firm to outside vendors is

answer

outsourcing

question

The Institute for Supply Management

answer

publishes the principles and standards for ethical supply management conduct

question

In supply-chain management, ethical issues

answer

A) are particularly important because of the enormous opportunities for abuse B) may be guided by company rules and codes of conduct C) become more complex the more global is the supply chain D) may be guided by the principles and standards of the Institute for Supply Management E) All of the above are true.

question

Keeping a product generic as long as possible before customizing is known as

answer

postponement

question

Which one of the following is not a supply-chain strategy?

answer

short-term relationships with few suppliers

question

A disadvantage of the "few suppliers" strategy is

answer

the high cost of changing partners

question

The purchasing approach that holds the suppliers responsible for maintaining the necessary technology, expertise, and forecasting ability plus cost, quality, and delivery competencies is

answer

many suppliers

question

Which of the following is not an advantage of the "few suppliers" concept?

answer

vulnerability of trade secrets

question

Which of the following supply-chain strategies creates value by allowing suppliers to have economies of scale?

answer

long-term partnering with a few suppliers

question

Which of the following is not a condition that favors the success of vertical integration?

answer

small market share

question

Which of the following best describes vertical integration?

answer

to produce goods or services previously purchased

question

A fried chicken fast-food chain that acquired feed mills and poultry farms has performed

answer

backward integration

question

Vertical integration appears particularly advantageous when the organization has

answer

a large market share

question

A rice mill in south Louisiana purchases the trucking firm that transports packaged rice to distributors. This is an example of

answer

forward integration

question

Japanese manufacturers often take a middle ground between purchasing from a few suppliers and vertical integration. This approach is

answer

keiretsu

question

The Japanese concept of a company coalition of suppliers is

answer

keiretsu

question

Which of the following is not an advantage of a virtual company?

answer

total control over every aspect of the organization

question

An advantage of a joint venture over vertical integration is

answer

reduced risk

question

When Daimler and BMW pooled resources to develop standardized auto components the supply-chain strategy could best be described by

answer

joint venture

question

Which of the following best describes Vizio's supply chain

answer

virtual company

question

Local optimization is a supply-chain complication best described as

answer

optimizing one's local area without full knowledge of organizational needs

question

The "bullwhip" effect

answer

A) occurs as orders are relayed from retailers to wholesalers B) results in increasing fluctuations at each step of the sequence C) increases the costs associated with inventory in the supply chain D) occurs because of distortions in information in the supply chain E) all of the above

question

) A restaurant runs a special promotion on lobster and plans to sell twice as many lobsters as usual. When this large order is sent to the distributer, the distributer assumes the large size is a trend, not a one-time event. The distributer therefore places an even larger order with the lobsterman. This is the result of

answer

the bullwhip effect

question

) Giving quantity discounts based on annual volume instead of single order size helps to control which supply-chain issue?

answer

the bullwhip effect

question

Which of the following is not an opportunity for effective management in the supply chain?

answer

local optimization

question

Which of the following is an opportunity for effective management in the supply chain?

answer

channel assembly

question

Drop shipment

answer

means the supplier will ship directly to the end consumer, rather than to the seller

question

A carpet manufacturer has delivered carpet directly to the end consumer rather than to the carpet dealer. The carpet manufacturer is practicing

answer

drop shipping

question

Hewlett-Packard withholds customization of its laser printers as long as possible. This is an example of

answer

postponement

question

All of the following are "opportunities" for supply-chain management except

answer

line balancing

question

Which of the following is an advantage of the postponement technique?

answer

reduction in inventory investment

question

A furniture maker has delivered a dining set directly to the end consumer rather than to the furniture store. The furniture maker is practicing

answer

drop shipping

question

TAL Apparel's management of its supply chain for Stafford shirts sold in JCPenney in an example of

answer

single stage control of replenishment

question

A grocery store is trying to find a new vendor for carrots. Its three criteria are 1. Freshness, 2. Lot Size, and 3. Cost with factor weights of .6, .1, and .3 respectively. What would a vendor with ratings of 6, 8, and 10 in the three respective categories score as a weighted total?

answer

7.4

question

What is the average capacity utilization in the motor carrier (trucking) industry?

answer

50%

question

What term is used to describe the outsourcing of logistics?

answer

third party logistics

question

E-procurement

answer

is the same thing as Internet purchasing

question

The three classic types of negotiation strategies are

answer

cost-based price model, market-based price model, and competitive bidding

question

Consider a firm with a 2007 net income of $20 million, revenue of $60 million and cost of goods sold of $25 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant & equipment, what is the inventory turnover?

answer

12.50

question

The three stages of vendor selection, in order, are

answer

vendor evaluation, vendor development, and negotiations

question

Which one of the following distribution systems offers quickness and reliability when emergency supplies are needed overseas?

answer

airfreight

question

With the growth of JIT, which of the following distribution systems has been the biggest loser?

answer

railroads

question

By which distribution system is 90 percent of U.S. coal shipped?

answer

railroads

question

Which distribution system is the fastest growing mode of shipping?

answer

airfreight

question

Which of the following devices represents an opportunity for technology to improve security of container shipments?

answer

A) devices that identify truck and container location B) devices that sense motion C) devices that measure radiation or temperature D) devices that can communicate the breaking of a container lock or seal E) all of the above

question

Which one of the following performance measures is not true of a world class firm?

answer

large lead time

question

Consider a firm with a 2007 net income of $20 million, revenue of $60 million and cost of goods sold of $25 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant & equipment, how many weeks of supply does the firm hold?

answer

4.16

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