Supply Chain Chapters 1-4

The supply chain is a static system that remains largely stable over time.

True or False

False

Many companies are discovering that effective supply chain management is the next step they need to take in order to increase profit and market share.

True or False

True

The development chain includes the set of activities associate with new product information.

True or False

True

The decision chain does not include decisions such as product architecture.

True or False

False

Flexibility in the supply chain can be a tool to help a firm create a competitive advantage, reduce cost and improve responsiveness.

True or False

True

Sustainability in the supply chain includes corporate social responsibility and encompasses the range of decisions that provide social and environmental benefits.

True or False

True

In a typical supply chain, raw materials are procured and items are produced at one or more factories, shipped to warehouses for intermediate storage, and then shipped to retailers or customers.

True or False

True

The objective of supply change management is to be efficient and cost-effective across the entire system.

True or False

True

In a typical supply chain, raw materials are procured and items are produced at one or more factories, shipped to warehouses for intermediate storage, and then shipped to retailers or customers.

True or False

True

The development chain includes the set of activities associated with established products.

True or False

False

Which of the following is not a part of the logistics network?

Suppliers
Retail Outlets
Buyers
Finished Products

Buyers

Supply Chain Management revolves around efficient integration of all the following except

suppliers
manufacturers
warehouses
customers

customers

Which of the following is not a risk inherent in supply chains?

Currency exchange rates
Uncertain customer demand
Variation in travel times
Equipment failures

Currency exchange rates

The __________ level deals with decisions that have a long-lasting effect on the firm.

tactical
strategic
operational
distribution

strategic

The measure of a company's contribution to its customer, based on the entire range of products, services, and intangibles that constitute the company's offerings are

smart pricing
customer value
sustainability
product design

customer value

Global optimization is made even more difficult because supply chains need to be designed for, and operated in, uncertain environments. All of the below are factors that contribute to the difficulty except

matching supply and demand
inventory and back-order fluctuations across the supply chain
inaccurate forecasting
supply chain flexibility

supply chain flexibility

The tactical level of a firm's operations deals specifically with

- decisions that have a long-lasting effect on the firm.
- decisions regarding product design.
- decisions that are typically updated anywhere between once every quarter and once every year.
- decisions such as scheduling, lead time quotations, routing, and truck loading.

decisions that are typically updated anywhere between once every quarter and once every year.

The strategic level of a firm's operations deals specifically with

- decisions regarding product design.
- decisions that are typically updated anywhere between once every quarter and once every year.
- decisions such as scheduling, lead time quotations, routing, and truck loading.
- purchasing and production decisions, inventory policies, and transportation strategies.

decisions regarding product design.

Smart Pricing revenue management strategies have been applied in

airlines
hotels
rental cars
all these choices are correct

All of these choices are correct.

Which key issue in supply chain management deals specifically with relationships between suppliers and buyers?

- distributions strategies
- supply contracts
- supply chain integration and strategic partnering
- customer value

supply contracts

The inventory position is

the actual inventory at the warehouse plus items ordered by the distributor that have not yet arrived minus items that are backordered.

Each of the following is an effective inventory reduction strategy except

- performing periodic inventory review
- shifting more inventory or inventory ownership to suppliers
- increasing safety stock levels
- following quantitative approaches

following quantitative approaches

A firm may hold inventory for all reasons below except

- demand predictability
- unexpected changes in customer demand
- a significant uncertainty in the quantity and quality of the supply
- to meet delivery lead times

demand predictability

What are the trade-offs that should be considered in comparing the system in which inventory is centralized in the distribution network with those in which inventory is more distributed in the network?

- overhead costs
- service level
- safety stock
- none of these choices are correct
- all these choices are correct

All of these choices are correct

To manage inventory effectively, the distributor needs to decide

- appropriate pricing on raw materials.
- None of these choices are correct.
- when and how much to order.
- the lead time for each product.

when and how much to order.

Inventory is not held to take advantages of scale in transportation and manufacturing.

True or False

False

In many supply chains, inventory is a dominant cost.

True or False

True

The goal of effective inventory management in the supply chain is to have the correct inventory at the right place at the right time to minimize system costs while satisfying customer service requirements.

True or False

True

Risk pooling suggests that demand variability is increased if one aggregates demand across locations.

True or False

False

Reducing demand uncertainty, supply uncertainty, lead times, or economies of scale will not reduce the required inventory held by a firm.

True or False

False

All else equal, the service level will be higher for products for which it is either less expensive or more profitable to keep a higher service level.

True or False

True

The optimal order quantity is always equal to forecast, or average, demand.

True or False

False

The optimal order quantity is not necessarily equal to forecast, or average, demand.

True or False

True

The base stock level is an inventory policy that a firm may use if fixed cost does not play a role in the firm's environment.

True or False

True

The inventory policy is the strategy, approach, or set of techniques used to determine how to manage inventory.

True or False

True

One of the key requirements of any supply chain planning tool for network design is

- lead time
- flexibility
- quality
- cost

flexibility

In network design, the objective is to design or reconfigure the logistics network in order to minimize lead time.

True or False

False

Which of the following is not a warehousing and distribution center cost?

Freight
Storage
Fixed
Handling

Freight

The goal of supply chain master planning is to

- decide how to utilize resources effectively and address fundamental trade-offs in the supply chain.
- None of these choices are correct.
- decide how to utilize resources effectively.
- address fundamental trade-offs in the supply chain.

decide how to utilize resources effectively and address fundamental trade-offs in the supply chain.

Network planning consists of all of the following elements except

- These are all parts of network planning.
- finding the right balance between inventory, transportation, and manufacturing costs.
- matching supply and demand under uncertainty by positioning and managing inventory effectively.
- utilizing resources effectively by sourcing products from the most appropriate manufacturing facility.

These are all parts of network planning.

Resource allocation includes identifying stocking points as well as selecting facilities that will produce to stock and thus keep inventory, and facilities that will produce to order and hence keep no inventory.

True or False

False

Network flexibility does not consider the ability of the system to incorporate a large set of preexisting network characteristics.

True or False

False

Which of the following is not a network planning process step?

Inventory positioning
Determining sourcing requirements
Network design
Resource allocation

Determining sourcing requirements

A typical network configuration problem involves the collection of large amounts of data.

True or False

True

Public interest is a key consideration for a firm when assessing potential warehouse locations.

True or False

True

The usual first step In the typical sequence of a supply chain is

- supplier reacts to the buyer's order.
- buyer creates an order.
- buyer determines how man units to order.
- buyer creates a forecast.

buyer creates a forecast.

In a sales rebate scenario,

- full refunds are issued for a limited number of unsold goods.
- incentives are provided for meeting target sales.
- a partial refund is issued for all unsold goods.
- the buyer shares revenue with the supplier in return for discount wholesale prices.

incentives are provided for meeting target sales.

In a pay-back contract, the buyer agrees to pay some agreed-upon price for any unit produced by the manufacturer but not purchased by the distributor.

True or False

True

Nonstrategic components for products

- require close collaboration with suppliers.
- can be purchased from a variety of suppliers.
- None of these choices are correct.
- require effective contractual relationships focused on coordinating supply chain.

can be purchased from a variety of suppliers.

In a typical supply contract, buyers and suppliers will generally agree on

All of these choices are correct.
purchase quantities.
pricing and volume discounts.
product quality.

All of these choices are correct

In a sequential supply chain the supplier assumes all of the risk while the buyer takes no risk.

True or False

False

Commodity components are highly specialized products and must be strategically sources.

True or False

False

Strategic components for products

- are considered commodity components.
- require contractual relationships focused on coordinating the supply chain.
- can be purchased from any number of suppliers.
- are highly standard and switching from one supplier to another is inconsequential.

require contractual relationships focused on coordinating the supply chain.

Risk sharing is the process by which the supplier assumes a portion of the risk thereby decreasing the likelihood of out-of-stock probability.

True or False

True

A key reason that companies are outsourcing major parts of design and manufacturing is to

- increase the speed with which products are delivered.
- reduce labor costs.
- improve quality.
- increase the speed with which products are delivered and reduce labor costs.

reduce labor costs.

Inventory may consist of

work in progress
finished product
components
all of these are correct

All of these are correct

The service level will be higher for products for which it is either less expensive or more profitable to keep a higher service level. These products may have which of these qualities?

High volume
Short lead time
High profit margin
All of these are correct

All of these are correct

A limitation of Simulation and optimization techniques is that they deal with static models that do not account for change over time

True or False

True

Estimating transportation costs from company-owned trucks is more complex than calculating costs for an external fleet

True or False

False

In a make-to-order supply chain, the buyer purchasing items prior to knowing the customer demand based on a forecast

True or False

True

When characterizing the inventory policy that a distributor should use, h=

- the cost of holding one unit of the product for one day at the distributor.
- daily demand
- replenishment lead time from the supplier.
- service level

the cost of holding one unit of the product for one day at the distributor.

Which of the following do firms generally consider when assessing potential locations for warehouses?

Geographical and infrastructure conditions
Distribution costs
Distribution routes
Warehouse capacity

Geographical and infrastructure conditions

Retail outlets are not considered a part of the physical supply chain.

True or False

False

When assessing where to keep safety stock, firms should consider all of the following except

product demand
desired service level
the supply network
lead times

product demand

Which of the following is not a network planning process step?

Network design
Determining sourcing requirements
Inventory positioning
Resource allocation

Determining sourcing requirements

Quantity-flexibility contracts are contracts in which the supplier provides full refund for returned (unsold) items as long as the number of returns is no larger than a certain quantity.

True or false

True

In a buy-back scenario, the __________ agrees to buy back unsold goods from the __________.

seller, buyer

In a sequential supply chain, each party determines its own course of action independent of the impact of its decisions on other parties.

True or False

True

In a quantity-flexibility scenario,

-the buyer shares revenue with the supplier in return for discount wholesale prices.
- a partial refund is issued for all unsold goods.
- full refunds are issued for a limited number of unsold goods.
- incentives are provided for meeting target sales.

full refunds are issued for a limited number of unsold goods.

In a revenue sharing scenario,

- the buyer shares revenue with the supplier in return for discount wholesale prices.
- a partial refund is issued for all unsold goods.
- full refunds are issued for a limited number of unsold goods.
- incentives are provided for meeting target sales.

the buyer shares revenue with the supplier in return for discount wholesale prices.