Question 1

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

Accepted Answer

i, II, and IV only  Risk management strategies include risk avoidance, risk reduction, and risk sharing with supply chain partners.

Question 2

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

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

Question 3

51. 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

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

Question 4

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

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

Question 5

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

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

Question 6

Which of these aspects of supply chain management are especially concerning to small business?  (I) customer reliability (II) inventory management (III) purchasing costs (IV) risk management (V) international trade     A. III, IV, and V only  B. I, II, and III only  C. I, III, and IV only  D. I and II only  E. II, IV, and V only

Accepted Answer

E  Three aspects of supply chain management that are often of concern to small businesses are: (1) inventory management; (2) reducing risks; and (3) international trade.

Question 7

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

Accepted Answer

D  -Minimizing transportation costs might lead to an unacceptable trade-off elsewhere.

Question 8

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.

Accepted Answer

customer selection  -Logistics involves moving goods.

Question 9

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.

Accepted Answer

bullwhip effect

Question 10

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

Accepted Answer

I,II, and IV  RFID chips do not contain special instructions.

Question 11

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

Accepted Answer

c  RFID does little to facilitate the cost reductions required to make frequent, small deliveries feasible.

Question 12

60. 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. RFIDs.

Accepted Answer

increasing gobalization  -Globalization is making supply chain management more important.

Question 13

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

Accepted Answer

Larger # of suppliers  Supply chain management often results in fewer suppliers.

Question 14

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

Accepted Answer

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

Question 15

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.

Accepted Answer

RFID  -RFID facilitates the automatic identification of material.

Question 16

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 .

Accepted Answer

universal product codes  -Universal product codes are not part of E-business

Question 17

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

Accepted Answer

I and II  Gaining and maintaining customer loyalty is even more difficult once a firm is involved in E-business.

Question 18

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

Accepted Answer

I and III  Capacity imbalances can be overcome, but conflicting objectives and mistrust are substantial barriers.

Question 19

_________ has/have helped firms to concentrate on their core business.     A. Supply chains  B. Scheduling  C. Outsourcing  D. ERP  E. Lean production .

Accepted Answer

ousourcing  -Outsourcing enables firms to focus on what they do, or should do, best

Question 20

Outsourcing followed by __________ is not simple.     A. integration  B. unionization  C. backsourcing  D. computerization  E. just-in-time

Accepted Answer

backsourcing  -Backsourcing is difficult to implement effectively if outsourcing has been done

Question 21

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

Accepted Answer

purchasing  -The purchasing function bridges the organization and its suppliers.

Question 22

The two types of decisions that are relevant to supply chain management are:     A. short- and long-term.  B. domestic and international.  C. location and layout.  D. in-sourcing and outsourcing.  E. tactical and operational.

Accepted Answer

E  -Decision making in supply chain management falls into either tactical or operational areas.

Question 23

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.

Accepted Answer

be knowledgeable about new products.  -Purchasing can play a crucial role by helping solidify the supplier base for a new product.

Question 24

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.

Accepted Answer

Receiving a requisition  -The requisition notes what is needed, in what quantity, and when it is needed.

Question 25

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.

Accepted Answer

A  -Performance can be evaluated with respect to price, quality, reputation, or service.

Question 26

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.

Accepted Answer

High Annual Cost Volume  These represent the bulk of purchasing costs.

Question 27

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.

Accepted Answer

A  -The function of purchased parts or raw materials would be done by the procuring department.

Question 28

Which of the following is not a performance driver?     A. quality  B. cost  C. stability  D. velocity  E. flexibility

Accepted Answer

stability  -Stability is not a performance driver.

Question 29

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

Accepted Answer

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

Question 30

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

Accepted Answer

B  -These are all part of the purchasing cycle.

Question 31

79. 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

Accepted Answer

Value Analysis  -All the others are highly likely to be considered in supplier selection.

Question 32

80. 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 .

Accepted Answer

C  -Quick response to local needs is a benefit of decentralized purchasing

Question 33

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 percent inspection for quality.  E. low volume.

Accepted Answer

one or a few suppliers  -Fewer suppliers enhance the chances of building real partnerships.

Question 34

Vendor analysis is the examination of the _________ of purchased materials.     A. function  B. source  C. quality  D. cycle  E. quantity

Accepted Answer

source  -Sources of supply are evaluated in vendor analysis.

Question 35

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 percent.     A. fill rate  B. inventory yield  C. profit margin  D. inventory turnover  E. working yield

Accepted Answer

fill rate  -This retailer\'s fill rate was 88 percent.

Question 36

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     A. III only  B. I only  C. II only  D. I, II, and III  E. II and III only

Accepted Answer

I, II and III   -All of these are ethical principles in purchasing.

Question 37

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. .

Accepted Answer

purchasing cycle  -The purchasing cycle begins with a requisition

Question 38

Our organization can obtain visibility to potential trading partners on the Internet by using:     A. C2C.  B. B2C.  C. B2B.  D. C2B.  E. 2BC. .

Accepted Answer

B2B

Question 39

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.

Accepted Answer

RFI tags  -RFID facilitates real-time data gathering.

Question 40

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.

Accepted Answer

E-commerce  -These are front-end and back-end facets of e-commerce

Question 41

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

Accepted Answer

1.61  Multiply the holding cost by the speed differential, then divide by 365. Compare this to the actual shipping cost difference.

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