SCM Chapter 2

A company's competitive strategy defines the set of customer needs that it seeks to satisfy through its products and services.

True

The value chain emphasizes the close relationship between all the functional strategies within a company.

True

A company's product development strategy defines the set of customer needs that it seeks to satisfy through its products and services.

False

A company's product development strategy specifies the portfolio of new products that it will try to develop.

True

Supply chain strategy specifies what the operations, distribution, and service functions, whether performed in-house or outsourced, should do particularly well.

True

A company's supply chain strategy determines the nature of procurement and transportation of materials as well as the manufacture and distribution of the product.

True

The degree of supply chain responsiveness should be consistent with the implied uncertainty.

True

To achieve complete strategic fit, a firm must ensure that all functions in the value chain have diverse strategies that support functional goals.

False

Because demand and supply characteristics change, the supply chain strategy must change over the product life cycle if a company is to continue achieving strategic fit.

True

To retain strategic fit, supply chain strategy must be adjusted over the life cycle of a product and as the competitive landscape changes.

True

The intercompany scope of strategic fit is no longer relevant today because the competitive playing field has shifted from company versus company to supply chain versus supply chain.

False

Having far more capacity than demand is helpful for a supply chain dealing with uncertainty.

True

Operating with low levels of inventory helps a supply chain facing uncertainty because there is that much less product to flush out of the system before filling today's order.

False

Uncertainty is nothing but an absence of the right information.

True

The interoperation scope has each stage of the supply chain devising its strategy independently.

False

Intraoperation scope resulted in minimal supply chain surplus.

True

An example of intrafunctional scope is that outsourcing a key component is reasonable if the savings in staying current in technology results in improved performance in other areas of R&D that permit improved overall performance.

True

If all functional strategies are deliberately aligned with each other and with the overall competitive strategy, then the company profit will be maximized.

True

Intercompany scope is broader than intrafunctional scope.

True

Monolithic Lumber has purchased timber from Bunyan Axe, the same wholly-owned subsidiary, for the last two centuries and plans to do so for another two centuries. It is crucial that Monolithic continue to demonstrate an agile company scope.

False

A company's competitive strategy

defines the set of customer needs that it seeks to satisfy through its products and services.

The value that potential customers place on product cost and delivery time determines a company's

competitive strategy.

The value chain in a company begins with

new product development.

Seven-Eleven in Japan's operations and distribution strategy focuses on

being responsive and having an excellent information infrastructure.

Which element in the value chain is responsible for transforming inputs into outputs?

Operations

Which of these services facilitates the function of the value chain but is not considered a core element of the supply chain?

Information Technology

A company's product development strategy

specifies the portfolio of new products that it will try to develop.

A company's marketing and sales strategy

specifies how the market will be segmented and how the product will be positioned, priced, and promoted.

A company's supply chain strategy

determines the nature of procurement and transportation of materials as well as manufacture and distribution of the product.

The value chain consists of direct and indirect activities. Which of the following is an indirect activity for an enterprise?

Human Resources

A ________ strategy specifies the portfolio of new products that a company will try to develop.

Product Development

A ________ strategy specifies how the market will be segmented and how the product will be positioned, priced, and promoted.

Marketing and Sales

Which of the following determines the nature of procurement of raw materials, transportation of materials to and from the company, manufacture of the product or operation to provide the service, and distribution of the product to the customer along with follow-up service?

Supply chain strategy

Which of the following defines the set of customer needs that a company seeks to satisfy through its products and services?

Competitive strategy

Which of the following specifies the portfolio of new products that a company will try to develop?

Product development strategy

A supply chain strategy involves decisions regarding all of the following except

new product development.

The uncertainty of customer demand for a product is the

demand uncertainty.

The uncertainty that exists due to the portion of demand that the supply chain is required to meet is the

implied demand uncertainty.

Which of the following customer needs will cause implied uncertainty of demand to increase?

Lead time decreases

The first step in achieving strategic fit between competitive and supply chain strategies is to

understand customers and supply chain uncertainty.

The second step in achieving strategic fit between competitive and supply chain strategies is to

understand the supply chain and map it on the responsiveness spectrum.

The final step in achieving strategic fit between competitive and supply chain strategies is to

match supply chain responsiveness with the implied uncertainty of demand.

Supply chain responsiveness includes the ability to do which of the following?

Handle supply uncertainty

Supply chain responsiveness includes the ability to do which of the following?

Meet a very high service level

Supply chain responsiveness includes the ability to do which of the following?

Meet short lead times

The cost of making and delivering a product to the customer is referred to as

supply chain efficiency.

The curve that shows the lowest possible cost for a given level of responsiveness is referred to as the

cost-responsiveness efficient frontier.

A firm that is not on the cost-responsiveness efficient frontier can improve

both responsiveness and cost performance.

A graph with two axes with implied uncertainty along the horizontal axis and responsiveness along the vertical axis is referred to as the

uncertainty/responsiveness map.

The relationship where increasing implied uncertainty from customers and supply sources is best served by increasing responsiveness from the supply chain is known as the

zone of strategic fit.

The drive for strategic fit should come from

the highest levels of the organization.

The preferable supply chain strategy for a firm that sells multiple products and serves customer segments with very different needs is to

tailor the supply chain to best meet the needs of each product's demand.

Which of the following would be a demand and supply characteristic toward the beginning stages of a product's life cycle?

Product availability is crucial to capturing the market.

Between 1993 and 2006, Dell's competitive strategy was to provide a large variety of customizable products at a reasonable price. Given the focus on customization, Dell's supply chain was designed to

be responsive.

For a company to achieve strategic fit, it must accomplish which of the following keys?

The overall supply chain must operate at the lowest cost possible to achieve success.

Efficient supply chains

maximize performance at a minimum cost.

A mechanic invests in a basic set of sockets and open ended wrenches and waits patiently under a shade tree for the next car to pull up. Under the watchful eye of his dog Spike, the mechanic can service any make or model car. They never know what type of car and what problem they will face each day, but are prepared for this uncertainty thanks to

flexible capacity.

Ron Popiel is so convinced that his next product, the Thong-O-Matic, will be a big hit, that he has contracted with the three largest outsource call centers in Bangalore India before his first infomercial airs. "Operators truly will be standing by," Ron confides in his twin Don, "as I extoll the virtues of this device that can help a person get dressed in the morning." Forecasts for demand are all over the place, which is why Ron has elected to pull the

excess capacity lever.

Wilma has spent a decade perfecting her Hoagie Cannon, which is capable of firing a submarine sandwich as a projectile across a five-mile radius of Upper Darby Township. Customers simply type in their coordinates on Wilma's app, and literally within seconds, they will receive an incoming hoagie with their choice of cold cuts and dressing. Wilma's uncertainty demons are kept at bay with her skillful use of her

time lever.

Wilma has invested in a 30,000-square foot warehouse to stock a wide variety of cold cuts and dressings for her hoagie shop in Upper Darby Township. There is no order she has been unable to accept and fill promptly over her forty years in the same location. Wilma's approach to mitigating uncertainty is by the use of

inventory.

An aggressive investment in customer analytics represents the use of which lever to reduce supply chain uncertainty?

Information

The Boeing 747 was scheduled to take off from Will Rogers Airport bound for Galeão International in just two days and with only four seats booked, the holiday getaway appeared to be a money-losing proposition. Bob lowered the airfare 90% and hoped to make up the loss of logistical revenue by doubling the price of caipirinhas and samba drums throughout the trip. Bob has handled uncertainty using which tool?

Price

The functions and stages that devise an integrated strategy with an aligned objective are referred to as

scope of strategic fit.

With the ________ view, firms attempt to align all operations within a function. In this view, all supply chain functions including sourcing, manufacturing, warehousing, and transportation must align their strategy to minimize total functional cost.

intrafunctional scope

The key weakness of the ________ view is that different functions within a firm may have conflicting objectives.

intrafunctional scope

Which of these has the broader range?

intercompany scope

Scope of strategic fit refers to both the

function within the firm and stages across the supply chain.

The authors cite IKEA as achieving an intercompany scope of strategic fit which serves to

increase the supply chain surplus.

A company's partners in the supply chain determine

the company's success.

Company A and Company B of the same supply chain rely on market responsiveness to attract customers. Each company has access to the other company's designs, production schedules, and goals, and if Company A needs product overnight, Company B gladly ships it, knowing that in the long run it works to the benefit of both. Such an arrangement is an example

intercompany scope.