Question 1

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

Accepted Answer

TRUE  Flow of materials and information are the central focus of supply chain management.

Question 2

Which of the following would not usually be a main factor in selecting a vendor?    A.location  B.inventory turnover  C.vendor services  D.price  E. quality

Accepted Answer

Inventory Turnover     Turnover would only rarely be associated with the vendor that is selected.

Question 3

Which of the following is not a measure of the reliability of the supply chain?      A.lead time variability  B.supply chain response time  C.fill rate  D.on-time delivery  E.improving e-fulfillment statistics

Accepted Answer

supply chain response time    Response time is a measure of supply chain effectiveness.

Question 4

Which of the following is a principle required for ethical behavior in purchasing?    (I) loyalty to employer  (II) justice to those you deal with  (III) faith in your profession

Accepted Answer

I, II, and III     All are ethical principles in purchasing

Question 5

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

Accepted Answer

FALSE  Functions should be integrated.

Question 6

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

Accepted Answer

FALSE  Purchasing personnel have ethical obligations with regard to a variety of stakeholders, primarily the organizations that employ them.

Question 7

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

Accepted Answer

FALSE  Using third-party logistics involves outsourcing the logistics function.

Question 8

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

Accepted Answer

TRUE  Either the business organization is a complete supply chain or it is a player in a supply chain.

Question 9

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

Accepted Answer

TRUE  This is one of the trade-offs inherent in supply chain management.

Question 10

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.

Accepted Answer

FALSE  Material flows toward the final consumer and information and dollars flow upstream.

Question 11

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

Accepted Answer

FALSE  Supply chain visibility has to do with making sure that current trading partners have access to needed data in real time.

Question 12

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

Accepted Answer

TRUE  Synchronizing multiple organizations is one of the difficulties of supply chain management.

Question 13

The need for supply chain management increases as globalization increases.

Accepted Answer

TRUE  As globalization increases, supply chain management is becoming more important.

Question 14

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

Accepted Answer

FALSE  These are tactical responsibilities.

Question 15

Traffic management refers to truck movement within our parking areas.

Accepted Answer

FALSE  Traffic management is the management of the shipment of incoming and outgoing goods.

Question 16

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

Accepted Answer

TRUE  Outsourcing logistics to third parties enables a company to focus on its core business.

Question 17

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

Accepted Answer

TRUE  E-commerce is a growing trend in supply chain management.

Question 18

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

Accepted Answer

TRUE  Disintermediation involves reducing one or more steps in a supply chain by cutting out intermediaries.

Question 19

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

Accepted Answer

TRUE  Most people working for a business organization are involved in the flow of materials, money, or information.

Question 20

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

Accepted Answer

TRUE  Complementarity is key to successful strategic partnering.

Question 21

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

Accepted Answer

FALSE  Velocity refers to the rate at which goods pass through a supply chain.

Question 22

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

Accepted Answer

FALSE  Global purchasing is more complex because of the variety of issues and risks that must be considered.

Question 23

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

Accepted Answer

FALSE  The use of centralized or decentralized purchasing is independent of organization size.

Question 24

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

Accepted Answer

FALSE  Optimizing a supply chain through mathematical models is typically not feasible.

Question 25

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

Accepted Answer

TRUE  Global supply chains are made possible by the use of information technology.

Question 26

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.

Accepted Answer

TRUE  The effect of demand variations grows as it works its way back through the supply chain.

Question 27

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

Accepted Answer

FALSE  Safety stock might increase, but batch sizes won\'t.

Question 28

Scheduling and maintaining equipment are operational decisions.

Accepted Answer

TRUE  Maintenance would be a form of corrective or preventive action to ensure the continued availability of capacity.

Question 29

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

Accepted Answer

TRUE  In cross-docking, inbound goods are moved directly onto outbound trucks.

Question 30

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

Accepted Answer

TRUE  Delayed differentiation is used to create customized output without large inventories.

Question 31

Returned goods are part of reverse logistics.

Accepted Answer

TRUE  Reverse logistics involves managing the flow of goods back up the supply chain.

Question 32

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

Accepted Answer

FALSE  Reducing variety is a prominent means of increasing efficiency.

Question 33

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

Accepted Answer

TRUE  Purchasing interfaces with a wide variety of areas.

Question 34

Gatekeeping manages the cost of shipping returned goods.

Accepted Answer

FALSE  Gatekeeping manages the cost of dealing with inappropriately returned goods.

Question 35

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

Accepted Answer

FALSE  Outsourcing logistics can lead to more flexibility.

Question 36

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

Accepted Answer

FALSE  Vendor analysis evaluates sources of supply with respect to price, quality, reputation, and service.

Question 37

Using third-party fulfillment means losing control of fulfillment.

Accepted Answer

TRUE  Outsourcing this key function means a loss of control.

Question 38

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

Accepted Answer

FALSE  With vendor analysis, price is just one of many considerations.

Question 39

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

Accepted Answer

TRUE  RFID does away with the need for counting and bar-code scanning.

Question 40

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.

Accepted Answer

FALSE  Purchasing is important because other costs resulting from the purchase of parts and materials are highly consequential.

Question 41

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.

Accepted Answer

TRUE  These costs resulting from the purchase of parts and materials are highly consequential.

Question 42

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

Accepted Answer

TRUE  Evaluating sources in terms of price, quality, reputation, and service is vendor analysis.

Question 43

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

Accepted Answer

FALSE  Back-end design is often more consequential in e-commerce.

Question 44

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

Accepted Answer

FALSE  RFID doesn\'t need line-of-sight reading.

Question 45

Decentralized purchasing can usually offer quicker response than centralized purchasing.

Accepted Answer

TRUE  Centralized purchasing can be more efficient, but decentralized purchasing can offer faster response.

Question 46

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

Accepted Answer

TRUE  Good purchasing can involve both centralized and decentralized elements.

Question 47

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

Accepted Answer

FALSE  Event management involves detecting and responding to unplanned events.

Question 48

Strategies to address supply chain risks include:    (I) risk avoidance.  (II) risk reduction.  (III) risk projection.  (IV) risk sharing.

Accepted Answer

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    Risk management strategies include risk avoidance, risk reduction, and risk sharing with supply chain partners.

Question 49

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

Accepted Answer

D. I only    Fewer suppliers results in greater concentration among suppliers, making the supply chain riskier.

Question 50

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

Accepted Answer

C. most visible    Consumers tend to blame the major company or brand in the supply chain associated with the ethical infractions.

Question 51

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`

Accepted Answer

B. global    Problems with supply chain ethics are particularly difficult to manage when supply chains are global.

Question 52

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

Accepted Answer

A. domestic suppliers    For small businesses, the advantages of domestic suppliers include lower shipping times and costs, closer interactions with suppliers, and increased agility.

Question 53

Examination of the sources of supply for purchased parts or materials in order to improve performance is called:    A.disintegration.  B.vendor analysis.  C.reverse engineering.  D.negotiated purchasing.  E.value analysis.

Accepted Answer

Vendor Analysis     Performance can be evaluated with respect to price, quality, reputation, or service.

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