Ch. 11 Final

Operations managers are finding online auctions a fertile area for disposing of discontinued inventory.
The key to effective supply-chain management is to get many suppliers to compete with each other, in order to drive down prices.
Even though a firm may have a low cost strategy, supply-chain strategy can select suppliers primarily on response or differentiation
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.
Supply-chain management faces additional challenges, such as those related to quality production and distribution systems, when companies enter growing global markets
McDonald’s was able to utilize existing plants and transportation systems in preparing the supply chain for opening its stores in Moscow.
When using the low-cost strategy for supply chain-management, the firm should invest aggressively to reduce production lead time.
Savings in the supply chain exert more leverage as the firm has a lower net profit margin.
A firm that employs a “response strategy” should minimize inventory throughout the supply chain.
Outsourcing refers to transferring a firm’s activities that have traditionally been internal to external suppliers.
Outsourcing is a form of specialization that allows the outsourcing firm to focus on its key success factors.
Supply-chain decisions are not generally strategic in nature, because purchasing is an ordinary expense to most firms.
The objective of the make-or-buy decision is to help identify the products and services that can be obtained externally.
Because service firms do not acquire goods and services externally, their supply-chain management issues are insignificant.
Because the supply chain has become so electronic and automated, opportunities for unethical behavior have been greatly reduced.
With the many-suppliers strategy, the order usually goes to the supplier that offers the best quality.
Developing long-term, “partnering” relationships with a few suppliers is a long-standing American purchasing strategy.
Vertical integration, whether forward or backward, requires the firm to become more specialized.
A fast-food retailer that acquired a spice manufacturer would be practicing backward integration.
Keiretsus offer a middle ground between few suppliers and vertical integration.
In several industries, online exchanges have been created by buyers
The bullwhip effect refers to the increasing fluctuations in orders that often occur as orders move through the supply chain.
Vendor-Managed Inventory is a form of outsourcing.
In the vendor evaluation phase, most companies will use the same list of criteria and the same criteria weights.
One classic type of negotiation strategy is the market-based price model.
Drop shipping results in time and shipping cost savings
The supply-chain management opportunity called postponement involves delaying deliveries to avoid accumulation of inventory at the customer’s site.
Channel assembly, which sends components and modules to be assembled by a distributor, treats these distributors as manufacturing partners.
Blanket orders are a long-term purchase commitment to a supplier for items that are to be delivered against short-term releases to ship
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.
Waterways are an attractive distribution system when speed is more important than shipping cost.
Logistics management can provide a competitive advantage through improved customer service.
With the growth of just-in-time practices, railroads have made large gains in the share of the nation’s transport that they haul.
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.
Benchmark firms have driven down costs of supply-chain performance.
catalogs by vendors, catalogs by intermediaries, and exchanges provided by buyers
The three major variations of online catalogs are
Mutual trust
Visibility throughout the supply chain is a requirement among supply-chain members for
Maintenance scheduling
Which of the following is not a concern of the supply chain?
Political issues
Which of the following is an aspect of environmental risk in supply-chain management?
Both companies are coping with environmental supply-chain risk
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
Process, Environmental
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.
cost-based price model
What type of negotiating strategy requires the supplier to open its books to the purchasers?
Supply chain savings exert more leverage as the firm has a lower net profit margin
Which of the following statements is true regarding the leverage of supply-chain savings?
worth even more than a dollar earned in sales revenue
One dollar saved in purchasing is
Purchasing has an impact on the quality of the goods and services sold.
Which one of the following statements about purchasing is true?
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
The transfer of some of what are traditional internal activities and resources of a firm to outside vendors is
publishes the principles and standards for ethical supply management conduct
The Institute for Supply Management
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.
In supply-chain management, ethical issues
Keeping a product generic as long as possible before customizing is known as
short-term relationships with few suppliers
Which one of the following is not a supply-chain strategy?
the high cost of changing partners
A disadvantage of the “few suppliers” strategy is
many suppliers
The purchasing approach that holds the suppliers responsible for maintaining the necessary technology, expertise, and forecasting ability plus cost, quality, and delivery competencies is
vulnerability of trade secrets
Which of the following is not an advantage of the “few suppliers” concept?
long-term partnering with a few suppliers
Which of the following supply-chain strategies creates value by allowing suppliers to have economies of scale?
small market share
Which of the following is not a condition that favors the success of vertical integration?
to produce goods or services previously purchased
Which of the following best describes vertical integration?
backward integration
A fried chicken fast-food chain that acquired feed mills and poultry farms has performed
a large market share
Vertical integration appears particularly advantageous when the organization has
forward integration
A rice mill in south Louisiana purchases the trucking firm that transports packaged rice to distributors. This is an example of
Japanese manufacturers often take a middle ground between purchasing from a few suppliers and vertical integration. This approach is
The Japanese concept of a company coalition of suppliers is
total control over every aspect of the organization
Which of the following is not an advantage of a virtual company?
reduced risk
An advantage of a joint venture over vertical integration is
joint venture
When Daimler and BMW pooled resources to develop standardized auto components the supply-chain strategy could best be described by
virtual company
Which of the following best describes Vizio’s supply chain
optimizing one’s local area without full knowledge of organizational needs
Local optimization is a supply-chain complication best described as
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
The “bullwhip” effect
the bullwhip effect
) 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
the bullwhip effect
) Giving quantity discounts based on annual volume instead of single order size helps to control which supply-chain issue?
local optimization
Which of the following is not an opportunity for effective management in the supply chain?
channel assembly
Which of the following is an opportunity for effective management in the supply chain?
means the supplier will ship directly to the end consumer, rather than to the seller
Drop shipment
drop shipping
A carpet manufacturer has delivered carpet directly to the end consumer rather than to the carpet dealer. The carpet manufacturer is practicing
Hewlett-Packard withholds customization of its laser printers as long as possible. This is an example of
line balancing
All of the following are “opportunities” for supply-chain management except
reduction in inventory investment
Which of the following is an advantage of the postponement technique?
drop shipping
A furniture maker has delivered a dining set directly to the end consumer rather than to the furniture store. The furniture maker is practicing
single stage control of replenishment
TAL Apparel’s management of its supply chain for Stafford shirts sold in JCPenney in an example of
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?
What is the average capacity utilization in the motor carrier (trucking) industry?
third party logistics
What term is used to describe the outsourcing of logistics?
is the same thing as Internet purchasing
cost-based price model, market-based price model, and competitive bidding
The three classic types of negotiation strategies are
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?
vendor evaluation, vendor development, and negotiations
The three stages of vendor selection, in order, are
Which one of the following distribution systems offers quickness and reliability when emergency supplies are needed overseas?
With the growth of JIT, which of the following distribution systems has been the biggest loser?
By which distribution system is 90 percent of U.S. coal shipped?
Which distribution system is the fastest growing mode of shipping?
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
Which of the following devices represents an opportunity for technology to improve security of container shipments?
large lead time
Which one of the following performance measures is not true of a world class firm?
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?

Get access to
knowledge base

MOney Back
No Hidden
Knowledge base
Become a Member