Operations True/False 11 – Flashcards
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5. Supply chain management faces additional challenges, such as those related to quality production and distribution systems, when companies enter growing global markets.
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True
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6. McDonald's was able to utilize existing plants and transportation systems in preparing the supply chain for opening its stores in Moscow.
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False
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7. When using the low-cost strategy for supply chain management, the firm should invest aggressively to reduce production lead time.
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False
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8. Savings in the supply chain exert more leverage as the firm has a lower net profit margin.
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True
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9. A reduction in inventory costs is one reason for making rather than buying.
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False
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10. Outsourcing refers to transferring a firm's activities that have traditionally been internal to outside vendors in other countries.
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False
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11. Outsourcing is a form of specialization that allows the outsourcing firm to focus on its critical success factors.
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True
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12. Supply chain decisions are not generally strategic in nature, because purchasing is an ordinary expense to most firms.
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False
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13. The objective of the make-or-buy decision is to help identify the products and services that can be obtained externally.
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True
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14. Because service firms do not acquire goods and services externally, their supply chain management issues are insignificant.
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False
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15. Because the supply chain has become so electronic and automated, opportunities for unethical behavior have been greatly reduced.
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False
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16. With the many-suppliers strategy, the order usually goes to the supplier that offers the best quality.
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False
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17. Developing long-term, "partnering" relationships with a few suppliers is a long-standing American purchasing strategy.
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False
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18. Vertical integration, whether forward or backward, requires the firm to become more specialized.
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False
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19. A fast-food retailer that acquired a spice manufacturer would be practicing backward integration.
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True
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20. Keiretsus offer a middle ground between few suppliers and vertical integration.
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True
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21. If the purchasing firm and the supplying firm have compatible corporate cultures, substantial efficiencies related to the use of independent specialists, each with their objectives, will be lost.
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False
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22. The bullwhip effect refers to the increasing fluctuations in orders that often occur as orders move through the supply chain.
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True
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23. Vendor Managed Inventory is a form of outsourcing.
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True
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24. In the vendor evaluation phase, most companies will use the same list of criteria and the same criteria weights.
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False
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25. One classic type of negotiation strategy is the market-based price model.
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True
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26. Drop shipping results in time and shipping cost savings.
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True
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27. The supply chain management opportunity called postponement involves delaying deliveries to avoid accumulation of inventory at the customer's site.
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False
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28. Channel assembly, which sends components and modules to be assembled by a distributor, treats these distributors as manufacturing partners.
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True
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29. Blanket orders are a long-term purchase commitment to a supplier for items that are to be delivered against short-term releases to ship.
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True
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30. Internet purchasing may be part of an integrated enterprise resource planning (ERP) system.
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True
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31. Waterways are an attractive distribution system when speed is more important than shipping cost.
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False
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32. Logistics management can provide a competitive advantage through improved customer service.
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True
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33. With the growth of just-in-time practices, railroads have made large gains in the share of the nation's transport that they haul.
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False
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34. 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.
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False
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35. Benchmark firms have driven down costs of supply chain performance.
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True
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