Chapter 1 4.Question

Chapter 1 Understanding the Supply Chain Multiple Choice 1.

Which of the following is not a stage within a typical supply chain? a. Customers b. Retailers c. Wholesalers/Distributors d. Manufacturers e. All of the above are stages within a typical supply chain.

2.

Which of the following is not a stage within a typical supply chain? a. Customers b. Retailers c. Wholesalers/Distributors d. Merchandisers e. Component/Raw material suppliers

3.

Supply chain profitability is a. not correlated to the value generated by the various stages of the supply chain. b. the total profit to be shared across all supply chain stages. c. the difference between the revenue generated from the customer and the overall cost across the supply chain. d. the total revenue generated by the distributor stage of the supply chain. e. b and c only

4.

Successful supply chain management requires which of the following decision phases? a. supply chain strategy/design b. supply chain planning c. supply chain operation d. all of the above e. a and b only

5.

The decision phases in a supply chain include a. production scheduling. b. customer relationship management. c. supply chain operation. d. supply chain orientation. e. all of the above

6.

The cycle view of a supply chain holds that a. the processes in a supply chain are divided into 2 categories. b. the processes in a supply chain are divided into a series of activities performed at the interface between successive stages. c. all processes in a supply chain are initiated in response to a customer order. d. all processes in a supply chain are performed in anticipation of customer orders. e. None of the above are true.

7.

The push/pull view of a supply chain holds that a. the processes in a supply chain are divided into a series of activities performed at the interface between successive stages. b. all processes in a supply chain are initiated in response to a customer order. c. all responses in a supply chain are performed in anticipation of customer orders. d. the processes in a supply chain are divided into 2 categories depending on whether they are initiated in response to or in anticipation of customer orders. e. None of the above are true.

8.

Which of the following is not a cycle in the supply chain cycle view? a. Analysis cycle b. Customer order cycle c. Replenishment cycle d. Manufacturing cycle e. Procurement cycle

9.

Which of the following is not a cycle in the supply chain cycle view? a. Customer order cycle b. Replenishment cycle c. Manufacturing cycle d. Procurement cycle e. All of the above are part of the supply chain cycle view.

10.

The customer order cycle occurs at the a. customer/retailer interface. b. retailer/distributor interface. c. distributor/manufacturer interface. d. manufacturer/supplier interface. e. none of the above

11.

Which of the following is not a process in the customer order cycle? a. Customer arrival b. Customer order entry

c. d. e.

Customer order fulfillment Customer order receiving All are processes in the customer order cycle

12.

Customer arrival refers to a. the point in time when the customer has access to choices and makes a decision regarding a purchase. b. the customer informing the retailer of what they want to purchase and the retailer allocating product to the customer. c. the process where product is prepared and sent to the customer. d. the process where the customer receives the product and takes ownership. e. none of the above

13.

The objective of the customer arrival process is to a. get the correct orders to customers by the promised due date at the lowest possible cost. b. maintain a record of product receipt and complete payment. c. maximize the conversion of customer arrivals to customer orders. d. ensure that orders are quickly and accurately entered and communicated to other affected supply chain processes. e. none of the above

14.

Customer order entry is a. the point in time when the customer has access to choices and makes a decision regarding a purchase. b. the customer informing the retailer of what they want to purchase and the retailer allocating product to the customer. c. the process where product is prepared and sent to the customer. d. the process where the customer receives the product and takes ownership. e. none of the above

15.

The objective of customer order entry is to a. get the correct orders to customers by the promised due date at the lowest possible cost. b. maintain a record of product receipt and complete payment. c. maximize the conversion of customer arrivals to customer orders. d. ensure that orders are quickly and accurately entered and communicated to other affected supply chain processes. e. none of the above

16.

Customer order fulfillment refers to a. the point in time when the customer has access to choices and makes a decision regarding a purchase. b. the customer informing the retailer of what they want to purchase and the retailer allocating product to the customer. c. the process where product is prepared and sent to the customer. d. the process where the customer receives the product and takes ownership. e. none of the above

17.

The objective of customer order fulfillment is to a. get the correct orders to customers by the promised due date at the lowest possible cost. b. maintain a record of product receipt and complete payment. c. maximize the conversion of customer arrivals to customer orders. d. ensure that orders are quickly and accurately entered and communicated to other affected supply chain processes. e. none of the above

18.

Customer order receiving is a. the point in time when the customer has access to choices and makes a decision regarding a purchase. b. the customer informing the retailer of what they want to purchase and the retailer allocates product to the customer. c. the process where product is prepared and sent to the customer. d. the process where the customer receives the product and takes ownership. e. none of the above

19.

The replenishment cycle occurs at the a. customer/retailer interface. b. retailer/distributor interface. c. distributor/manufacturer interface. d. manufacturer/supplier interface. e. none of the above

20.

The processes involved in the replenishment cycle include a. retail order receiving. b. retail order entry. c. retail order trigger. d. retail order fulfillment. e. all of the above

21.

The processes included in the replenishment cycle include all of the following except a. retail order receiving. b. retail order entry. c. retail order trigger. d. retail order fulfillment. e. none of the above

22.

The processes included in the replenishment cycle include a. order arrival. b. production scheduling. c. retail trigger. d. manufacturing. e. receiving.

23.

The replenishment cycle is initiated when a. the customer walks into the supermarket. b. the customer calls a mail order telemarketing center. c. customers load items intended for purchase into their carts. d. a product is received into stock at a store. e. None of the above.

24.

The manufacturing cycle occurs at the a. customer/retailer interface. b. retailer/distributor interface. c. distributor/manufacturer interface. d. manufacturer/supplier interface. e. none of the above

25.

The processes involved in the manufacturing cycle include a. receiving. b. manufacturing and shipping. c. production scheduling. d. order arrival. e. all of the above

26.

The processes involved in the manufacturing cycle include a. order trigger. b. production scheduling. c. order fulfillment. d. order entry. e. manufacturing order analysis.

27.

The production scheduling process in the manufacturing cycle is similar to the a. order receiving process in the replenishment cycle. b. order fulfillment process in the replenishment cycle. c. order entry process in the replenishment cycle. d. order trigger process in the replenishment cycle. e. none of the above

28.

The manufacturing and shipping process in the manufacturing cycle is equivalent to the a. order receiving process in the replenishment cycle. b. order fulfillment process in the replenishment cycle. c. order entry process in the replenishment cycle. d. order trigger process in the replenishment cycle. e. none of the above

29.

The procurement cycle occurs at the a. customer/retailer interface. b. retailer/distributor interface. c. distributor/manufacturer interface. d. manufacturer/supplier interface. e. none of the above

30.

The relationship between the manufacturer and supplier during the procurement cycle is very similar to the relationship between a. customer and retailer. b. retailer and distributor. c. distributor and manufacturer. d. manufacturer and customer.

31.

The cycle view of the supply chain is useful when considering operational decisions, because a. it categorizes processes based on whether they are initiated in response to or in anticipation of customer orders. b. it specifies the roles and responsibilities of each member of the supply chain. c. processes are identified as either reactive or speculative. d. it focuses on processes that are external to the firm. e. it focuses on processes that are internal to the firm.

32.

The push/pull view of the supply chain is useful when considering strategic decisions relating to supply chain design, because a. it categorizes processes based on whether they are initiated in response to or in anticipation of customer orders. b. it specifies the roles and responsibilities of each member of the supply chain. c. it clearly defines the processes involved and the owners of each process. d. it focuses on processes that are external to the firm. e. it focuses on processes that are internal to the firm.

33.

Which of the following statements about pull processes is accurate? a. May also be referred to as speculative processes. b. Execution is initiated in anticipation of customer orders. c. At the time of execution, demand must be forecast. d. May also be referred to as reactive processes. e. None of the above are accurate.

34.

Which of the following is not an accurate statement about pull processes? a. May also be referred to as speculative processes. b. Execution is initiated in response to a customer order. c. At the time of execution, demand is known with certainty. d. May also be referred to as reactive processes. e. All of the above are accurate.

35.

Which of the following statements about push processes is accurate? a. May also be referred to as speculative processes. b. Execution is initiated in response to customer orders. c. At the time of execution, demand is known with certainty. d. May also be referred to as reactive processes. e. None of the above are accurate.

36.

Which of the following is not an accurate statement about push processes? a. May also be referred to as speculative processes. b. Execution is initiated in anticipation of customer orders. c. At the time of execution, demand must be forecast. d. May also be referred to as reactive processes. e. All of the above are accurate.

37.

Supply chain macro processes include which of the following? a. Customer Relationship Management (CRM) b. Internal Supply Chain Management (ISCM) c. Supplier Relationship Management (SRM)

d. e.

all of the above none of the above

38.

Supply chain macro processes include which of the following? a. Internal Relationship Management (IRM) b. Customer Relationship Management (CRM) c. External Relationship Management (ERM) d. Supply Chain Relationship Management (SCRM) e. none of the above

39.

Supply chain macro processes include which of the following? a. Internal Relationship Management (IRM) b. External Relationship Management (ERM) c. Supplier Relationship Management (SRM) d. Supply Chain Relationship Management (SCRM) e. none of the above

40.

Activities involved in the Customer Relationship Management (CRM) macro process include a. planning of internal production and storage. b. order fulfillment. c. marketing. d. supply planning. e. demand planning.

41.

Activities involved in the Customer Relationship Management (CRM) macro process include all of the following except a. marketing. b. sales. c. order management. d. call center management. e. All of the above are activities of CRM.

42.

Activities involved in the Internal Supply Chain Management (ISCM) macro process include a. marketing. b. order fulfillment. c. sales. d. order management. e. call center management.

43.

Activities involved in the Internal Supply Chain Management (ISCM) macro process include all of the following except a. planning of internal production and storage. b. order fulfillment. c. supply planning. d. order management.

44.

Activities involved in the Supplier Relationship Management (SRM) macro process include a. planning of internal production and storage. b. order fulfillment. c. supplier evaluation and selection. d. order management.

45.

Activities involved in the Supplier Relationship Management (SRM) macro process include all of the following except a. negotiation of supply terms. b. design collaboration. c. demand planning. d. supplier evaluation and selection. e. supply collaboration.

Chapter 2 Supply Chain Performance: Achieving Strategic Fit and Scope 1.

A company’s competitive strategy a. defines the set of customer needs that it seeks to satisfy through its products and services. b. specifies the portfolio of new products that it will try to develop. c. specifies how the market will be segmented and how the product will be positioned, priced, and promoted. d. determines the nature of procurement and transportation of materials as well as manufacture and distribution of the product. e. determines how it will obtain and maintain the appropriate set of skills and abilities to meet customer needs.

2.

A company’s product development strategy a. defines the set of customer needs that it seeks to satisfy through its products and services. b. specifies the portfolio of new products that it will try to develop. c. specifies how the market will be segmented and how the product will be positioned, priced, and promoted. d. determines the nature of procurement and transportation of materials as well as manufacture and distribution of the product. e. determines how it will obtain and maintain the appropriate set of skills and abilities to meet customer needs.

3. A company’s marketing and sales strategy a. defines the set of customer needs that it seeks to satisfy through its products and services. b. specifies the portfolio of new products that it will try to develop. c. specifies how the market will be segmented and how the product will be positioned, priced, and promoted. d. determines the nature of procurement and transportation of materials as well as manufacture and distribution of the product. e. determines how it will obtain and maintain the appropriate set of skills and abilities to meet customer needs.

4. A company’s supply chain strategy a. defines the set of customer needs that it seeks to satisfy through its products and services. b. specifies the portfolio of new products that it will try to develop. c. specifies how the market will be segmented and how the product will be positioned, priced, and promoted. d. determines the nature of procurement and transportation of materials as well as manufacture and distribution of the product.

e.

determines how it will obtain and maintain the appropriate set of skills and abilities to meet customer needs.

5. 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? a. Competitive strategy b. Product development strategy c. Marketing and sales strategy d. Supply chain strategy e. none of the above

6. Which of the following defines the set of customer needs that a company seeks to satisfy through its products and services? a. Competitive strategy b. Product development strategy c. Marketing and sales strategy d. Supply chain strategy e. none of the above

7. Which of the following specifies how the market will be segmented and how the product will be positioned, priced, and promoted? a. Competitive strategy b. Product development strategy c. Marketing and sales strategy d. Supply chain strategy e. none of the above

8. Which of the following specifies the portfolio of new products that a company will try to develop? a. Competitive strategy b. Product development strategy c. Marketing and sales strategy d. Supply chain strategy e. all of the above

9. A supply chain strategy includes a. supplier strategy. b. operations strategy. c. logistics strategy. d. all of the above

e.

none of the above

10. A supply chain strategy involves decisions regarding a. inventory. b. transportation. c. operating facilities. d. information flows. e. all of the above

11. A supply chain strategy involves decisions regarding all of the following except a. inventory. b. transportation. c. new product development. d. operating facilities. e. information flows.

12. Which of the following is a key to the success or failure of a company? a. The competitive strategy and all functional strategies must fit together to form a coordinated overall strategy. b. Each functional strategy must support other functional strategies and help a firm reach its competitive strategy goal. c. The different functions in a company must appropriately structure their processes and resources to be able to execute strategies successfully. d. All of the above are keys to success. e. None of the above are a key to success.

13. Which of the following is not a key to the success or failure of a company? a. The competitive strategy and all functional strategies must fit together to form a coordinated overall strategy. b. Each functional strategy must support other functional strategies and help a firm reach its competitive strategy goal. c. The different functions in a company must appropriately structure their processes and resources to be able to execute strategies successfully. d. All of the above are keys to success. e. None of the above are a key to success.

14. Which of the following is not a key to the success or failure of a company? a. The competitive strategy and all functional strategies must fit together to form a coordinated overall strategy. b. The competitive strategy and all functional strategies operate independently of each other.

c. d. e.

The different functions in a company must appropriately structure their processes and resources to be able to execute strategies successfully. Each functional strategy must support other functional strategies and help a firm reach its competitive strategy goal. All of the above are keys to success.

15. Which of the following are basic steps to achieving strategic fit? a. Understanding the customer and supply uncertainty. b. Understanding the supply chain capabilities. c. Achieving strategic fit. d. All of the above are basic steps to achieving strategic fit. e. None of the above are a basic step to achieving strategic fit.

16. Customer demand from different segments varies along which of the following attributes? a. The quantity of product needed in each lot. b. The response time that customers are willing to tolerate. c. The variety of products needed. d. The service level required. e. all of the above

17. The uncertainty of customer demand for a product is the a. rate of strategic uncertainty. b. demand uncertainty. c. implied demand uncertainty. d. average forecast error. e. none of the above

18. The uncertainty that exists due to the portion of demand that the supply chain is required to meet is the a. rate of strategic uncertainty. b. demand uncertainty. c. implied demand uncertainty. d. average forecast error. e. none of the above

19. Which of the following customer needs will cause implied uncertainty of demand to increase? a. Range of quantity required increases b. Lead time decreases c. Variety of products required increases d. Required service level increases

e.

all of the above

20. Which of the following customer needs will cause implied uncertainty of demand to decrease? a. Range of quantity required increases b. Lead time decreases c. Variety of products required increases d. Required service level increases e. none of the above

21. Which of the following customer needs will cause implied uncertainty of demand to increase? a. Product margin b. Lead time decreases c. Average stockout rate d. Average forced season end markdown e. none of the above

22. Which of the following characteristics of customer demand have a correlation with implied uncertainty? a. Product margin b. Average forecast error c. Average stockout rate d. Average forced season end markdown e. all of the above

23. Which of the following is not a characteristic of customer demand correlated with implied uncertainty? a. Product margin b. Unpredictable and low yields c. Average stockout rate d. Average forced season end markdown e. None of the above are correlated with implied uncertainty

24. Which of the following supply chain capabilities will cause supply uncertainty to increase? a. Frequent breakdowns b. Unpredictable and low yields c. Poor quality d. Limited supply capacity e. all of the above

25. Which of the following supply chain capabilities will cause supply uncertainty to increase? a. Evolving production process b. Inflexible supply capacity c. Limited supply capacity d. Unpredictable and low yields e. all of the above

26. Which of the following supply chain capabilities will cause supply uncertainty to decrease? a. Evolving production process b. Inflexible supply capacity c. Limited supply capacity d. Unpredictable and low yields e. none of the above

27. Which of the following is not a supply chain capability that will impact supply uncertainty? a. Evolving production process b. Inflexible supply capacity c. Limited supply capacity d. Product margin e. Unpredictable and low yields

28. The first step in achieving strategic fit between competitive and supply chain strategies is to a. understand the supply chain and map it on the responsiveness spectrum. b. understand customers and supply chain uncertainty. c. match supply chain responsiveness with the implied uncertainty of demand. d. ensure that all functional strategies within the supply chain support the supply chain’s level of responsiveness. e. none of the above

29. The second step in achieving strategic fit between competitive and supply chain strategies is to a. understand the supply chain and map it on the responsiveness spectrum. b. understand customers and supply chain uncertainty. c. match supply chain responsiveness with the implied uncertainty of demand. d. ensure that all functional strategies within the supply chain support the supply chain’s level of responsiveness. e. none of the above

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

a. b. c. d.

understand the supply chain and map it on the responsiveness spectrum. understand customers and supply chain uncertainty. match supply chain responsiveness with the implied uncertainty of demand. combine customer and supply chain uncertainty and map it on the implied uncertainty spectrum. e. all of the above

31. Supply chain responsiveness includes the ability to do which of the following? a. Respond to wide ranges of quantities demanded b. Meet short lead times c. Handle a large variety of products d. Meet a very high service level e. all of the above

32. Supply chain responsiveness includes the ability to do which of the following? a. Handle supply uncertainty b. Build highly innovative products c. Meet short lead times d. Meet a very high service level e. all of the above

33. Supply chain responsiveness includes the ability to do which of the following? a. Handle supply uncertainty b. Understand customers and supply chain uncertainty c. Match supply chain responsiveness with the implied uncertainty of demand d. Ensure that all functional strategies within the supply chain support the supply chain’s level of responsiveness e. none of the above

34. Supply chain responsiveness includes the ability to do which of the following? a. Understand customers and supply chain b. Meet a very high service level c. Match supply chain responsiveness with the implied uncertainty of demand d. Ensure that all functional strategies within the supply chain support the supply chain’s level of responsiveness e. none of the above

35. Supply chain responsiveness includes the ability to do which of the following? a. Understand customers and supply chain b. Match supply chain responsiveness with the implied uncertainty of demand c. Meet short lead times

d. Ensure that all functional strategies within the supply chain support the supply chain’s level of responsiveness e. all of the above

36. The cost of making and delivering a product to the customer is referred to as a. supply chain responsiveness. b. supply chain efficiency. c. cost-responsiveness efficient frontier. d. implied uncertainty. e. none of the above

37. The curve that shows the lowest possible cost for a given level of responsiveness is referred to as the a. supply chain responsiveness curve. b. supply chain efficiency curve. c. cost-responsiveness efficient frontier. d. responsiveness spectrum. e. none of the above

38. A firm that is not on the cost-responsiveness efficient frontier can improve a. both responsiveness and cost performance. b. only responsiveness. c. only cost performance. d. responsiveness, but not cost performance. e. neither responsiveness nor cost performance.

39. A firm that is on the cost-responsiveness efficient frontier can improve a. responsiveness only by increasing cost and becoming less efficient. b. cost performance only by reducing responsiveness. c. both responsiveness and cost performance by improving processes and changing technology to shift the efficient frontier. d. all of the above e. neither responsiveness nor cost performance.

40. A graph with two axes with implied uncertainty along the horizontal axis and responsiveness along the vertical axis is referred to as the a. implied uncertainty spectrum. b. responsiveness spectrum. c. uncertainty/responsiveness map. d. zone of strategic fit. e. none of the above

41. 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 a. implied uncertainty spectrum. b. responsiveness spectrum. c. uncertainty/responsiveness map. d. zone of strategic fit. e. none of the above

42. To achieve complete strategic fit, a firm must a. consider all functional strategies within the value chain. b. ensure that all functions in the value chain have consistent strategies that support the competitive strategy. c. ensure that all substrategies within the supply chain such as manufacturing, inventory, and purchasing be consistent with the supply chain’s level of responsiveness. d. all of the above e. none of the above

43. The drive for strategic fit should come from a. the supply chain manager. b. the strategic planning department. c. the highest levels of the organization, such as the CEO. d. middle management. e. sales and marketing.

44. The important points to remember about achieving strategic fit are a. there is one best supply chain strategy for all competitive strategies. b. there is no right supply chain strategy independent of the competitive strategy. c. there is a right supply chain strategy for a given competitive strategy. d. all of the above e. b and c only

45. The preferable supply chain strategy for a firm that sells multiple products and serves customer segments with very different needs is to a. set up independent supply chains for each different product or customer segment. b. set up a supply chain that meets the needs of the highest volume product or customer segment. c. tailor the supply chain to best meet the needs of each product’s demand.

d. e.

set up a supply chain that meets the needs of the customer segment with the highest implied uncertainty. set up a supply chain that meets the needs of product with the highest implied uncertainty.

46. Which of the following would not be a demand and supply characteristic toward the beginning stages of a product’s life cycle? a. Demand is very uncertain and supply may be unpredictable. b. Demand has become more certain and supply is predictable. c. Margins are often high and time is crucial to gaining sales. d. Product availability is crucial to capturing the market. e. Cost is often of secondary consideration.

47. Which of the following would be a demand and supply characteristic toward the beginning stages of a product’s life cycle? a. Demand has become more certain and supply is predictable. b. Margins are lower due to an increase in competitive pressure. c. Product availability is crucial to capturing the market. d. Price becomes a significant factor in customer choice. e. none of the above

48. Which of the following would not be a demand and supply characteristic in the later stages of a product’s life cycle? a. Demand has become more certain and supply is predictable. b. Margins are lower due to an increase in competitive pressure. c. Product availability is crucial to capturing the market. d. Price becomes a significant factor in customer choice. e. All of the above are characteristics of the later stages. 49. The functions and stages that devise an integrated strategy with a shared objective are referred to as a. competitive strategy. b. supply chain strategy. c. scope of strategic fit. d. scope of marketing strategy. e. scope of product development strategy.

50. The most limited scope over which strategic fit is considered is one operation within a functional area in a company. This is referred to as a. intracompany intraoperational scope. b. intracompany intrafunctional scope. c. intracompany interoperational scope. d. intercompany interfunctional scope. e. agile intercompany scope.

Chapter 3 Supply Chain Drivers and Metrics 1. Which of the following is not a major driver of supply chain performance? a. Facilities b. Inventory c. Transportation d. Information e. All of the above are major drivers of supply chain performance.

2. Which of the following is not a major driver of supply chain performance? a. Customers b. Facilities c. Inventory d. Transportation e. Information

3. The places in the supply chain network where product is stored, assembled, or fabricated are known as a. facilities. b. inventory. c. transportation. d. information. e. customers.

4. All raw materials, work in process, and finished goods within a supply chain are known as a. facilities. b. inventory. c. transportation. d. information. e. customers.

5. Moving inventory from point to point in the supply is known as a. facilities. b. inventory. c. transportation. d. information. e. customers.

6. The data and analysis concerning facilities, inventory, transportation, and customers throughout the supply chain is known as a. facilities. b. inventory. c. transportation. d. information. e. customers.

7. The two major types of facilities are a. distribution sites and storage sites. b. production sites and distribution sites. c. production sites and storage sites. d. retail sites and distribution sites. e. distribution sites and inventory sites.

8. Which component of the supply chain decision-making framework would be established first? a. Customer strategy b. Supply chain strategy c. Supply chain structure d. Competitive strategy e. Replenishment strategy

9. Which component of the supply chain decision-making framework would be established second? a. Customer strategy b. Supply chain strategy c. Supply chain structure d. Competitive strategy e. Replenishment strategy

10. Which component of the supply chain decision-making framework would be used to reach the performance level dictated by the supply chain strategy? a. Customer strategy b. Supply chain strategy c. Supply chain structure d. Competitive strategy e. Replenishment strategy

11. Which of the following is not a component of facilities decisions?

a. b. c. d. e.

Location Capacity Operations methodology Warehousing methodology All of the above are components of facilities decisions.

12. Which of the following is not a component of facilities decisions? a. Warehousing methodology b. Forecasting methodology c. Operations methodology d. Capacity e. Location

13. Which of the following statements concerning decisions regarding location of facilities is false? a. Deciding where a company will locate its facilities constitutes a large part of the design of a supply chain. b. A basic trade-off here is whether to centralize to gain economies of scale or decentralize to become more responsive by being closer to the customer. c. Companies must also consider a host of issues related to the various characteristics of the local area in which the facility may be situated. d. All of these statements are true. e. None of these statements are true.

14. Which of the following is not an issue companies need to consider in facility location decisions? a. quality of workers b. product development c. proximity to customers and the rest of the network d. cost of facility e. tax effects

15. Which of the following is not an issue companies need to consider in facility location decisions? a. quality of workers b. availability of infrastructure c. proximity to customers and the rest of the network d. cost of facility e. All of the above are issues companies need to consider in facility location decisions.

16. Excess capacity

a. b. c. d. e.

allows a facility to be very flexible and to respond to wide swings in the demands placed on it. costs money and therefore can decrease efficiency. requires proximity to customers and the rest of the network. both a and b all of the above

17. Which of the following is a characteristic of a facility with excess capacity? a. will likely be more efficient per unit of product it produces than one with a lot of unused capacity b. would be very flexible and to respond to wide swings in the demands placed on it c. would be considered a high utilization facility d. will have difficulty responding to demand fluctuations e. none of the above

18. A facility with little excess capacity a. will likely be more efficient per unit of product it produces than one with a lot of unused capacity. b. would be considered a high utilization facility. c. will have difficulty responding to demand fluctuations. d. All of the above are true. e. None of the above are true.

19. Which of the following would be a characteristic of a facility with little excess capacity? a. allows a facility to be very flexible and to respond to wide swings in the demands placed on it b. costs money and therefore can decrease efficiency c. requires proximity to customers and the rest of the network d. will likely be more efficient per unit of product it produces e. none of the above

20. Which of the following is not a warehousing methodology? a. Warehouse unit storage b. Stock keeping unit (SKU) storage c. Job lot storage d. Cross-docking e. All of the above are warehousing methodologies.

21. The warehousing methodology that uses a traditional warehouse to store all of one type of product together is a. warehouse unit storage.

b. c. d. e.

stock keeping unit (SKU) storage. job lot storage. cross-docking. none of the above

22. The warehousing methodology in which all the different types of products needed to perform a particular job or satisfy a particular type of customer are stored together is a. warehouse unit storage. b. stock keeping unit (SKU) storage. c. job lot storage. d. cross-docking. e. none of the above

23. The following warehousing methodology is one in which goods are not actually warehoused in a facility. Instead, trucks from suppliers, each carrying a different type of product, deliver goods to a facility. There the inventory is broken into smaller lots and quickly loaded onto store-bound trucks that carry a variety of products, some from each of the supplier trucks. a. warehouse unit storage b. stock keeping unit (SKU) storage c. job lot storage d. cross-docking e. none of the above

24. All of the following are components of inventory decisions except a. cycle inventory. b. safety inventory. c. seasonal inventory. d. sourcing. e. All of the above are components of inventory decisions.

25. All of the following are components of inventory decisions except a. capacity. b. cycle inventory. c. safety inventory. d. seasonal inventory. e. sourcing.

26. The average amount of inventory used to satisfy demand between receipt of supplier shipments is referred to as a. cycle inventory. b. safety inventory.

c. seasonal inventory. d. sourcing. e. none of the above

27. The inventory that is built up to counter predictable variability in demand is called a. cycle inventory. b. safety inventory. c. seasonal inventory. d. sourcing. e. none of the above

28. The inventory held in case demand exceeds expectation in order to counter uncertainty is called a. cycle inventory. b. safety inventory. c. seasonal inventory. d. sourcing. e. none of the above

29. The set of business processes required to purchase goods and services is known as a. cycle inventory. b. safety inventory. c. seasonal inventory. d. sourcing. e. none of the above

30. Cycle inventory decisions involve a. how much to order for replenishment. b. how often to place orders. c. a basic trade-off between the cost of holding larger lots of inventory and the cost of ordering product frequently. d. all of the above e. a and b only

31. Cycle inventory is used because a. the world is perfectly predictable. b. demand is uncertain and may exceed expectations. c. it involves making a trade-off between the costs of having too much inventory and the costs of losing sales due to not having enough inventory. d. it focuses on processes that are external to the firm. e. it focuses on processes that are internal to the firm.

32. Seasonal inventory should be used when a. a company can rapidly change the rate of its production system at a very low cost. b. changing the rate of production is expensive (e.g., when workers must be hired or fired). c. adjusting to a period of low demand without incurring large costs. d. the world is perfectly predictable. e. production rate is flexible.

33. Sourcing involves a. deciding the tasks that will be outsourced and those that will be per-formed within the firm. b. deciding whether to source from a single supplier or a portfolio of suppliers. c. identifying the set of criterion that will be used to select suppliers and measure their performance. d. selecting suppliers and negotiating contracts with them. e. all of the above

34. Which of the following are key components of transportation decisions when designing and operating a supply chain? a. Mode of transportation b. Route and network selection c. In-house or outsource d. all of the above e. none of the above

35. Which of the following are key components of transportation decisions when designing and operating a supply chain? a. Software selection b. Mode of transportation c. Source selection d. Warehouse selection e. none of the above

36. Which of the following are key components of information that must be analyzed to increase efficiency and improve effectiveness in a supply chain? a. Push versus pull b. Coordination and information sharing c. Forecasting and aggregate planning d. Pricing and revenue management

e.

all of the above

37. Which of the following are key components of information that must be analyzed to increase efficiency and improve effectiveness in a supply chain? a. Software selection b. Source selection c. Warehouse selection d. Forecasting and aggregate planning e. none of the above

38. When all the different stages of a supply chain work toward the objective of maximizing total supply chain profitability, rather than each stage devoting itself to its own profitability without considering total supply chain profit, it is known as a. supply chain coordination. b. forecasting. c. aggregate planning. d. revenue management. e. pricing.

39. The art and science of making projections about what future demand and conditions will be is a. supply chain coordination. b. forecasting. c. aggregate planning. d. revenue management. e. pricing.

40. Transforming forecasts into plans of activity to satisfy the projected demand is known as a. supply chain coordination. b. forecasting. c. aggregate planning. d. revenue management. e. pricing.

41. The process by which a firm decides how much to charge customers for its goods and services is a. supply chain coordination. b. forecasting. c. aggregate planning. d. revenue management. e. pricing.

42. The use of differential pricing over time or customer segments to maximize profits from a limited set of supply chain assets is a. supply chain coordination. b. forecasting. c. aggregate planning. d. revenue management. e. pricing.

43. Which of the following are technologies that share and analyze information in the supply chain? a. Electronic Data Interchange (EDI) b. Internet c. Enterprise Resource Planning (ERP) d. Supply Chain Management (SCM) software e. all of the above

44. Which of the following are technologies that share and analyze information in the supply chain? a. Internet b. Enterprise Data Planning (EDP) c. Electronic Resource Interchange (ERI) d. Chain Management (CM) software e. none of the above

Chapter 4 Designing Distribution Networks and Applications to e-Business 1.

The steps taken to move and store a product from the supplier stage to a customer stage in the supply chain is referred to as a. transportation. b. retailing. c. wholesaling. d. distribution. e. manufacturing.

2.

Distribution is a key driver of the overall profitability of a firm because a. the addition of distributors only adds cost to the supply chain. b. it directly impacts both the supply chain cost and the customer experience. c. it slows down the responsiveness of the supply chain. d. it cannot be developed as a part of supply chain strategy. e. Distribution is not a key driver of profitability.

3.

The choice of the distribution network can be used to achieve supply chain objectives such as a. low cost. b. high responsiveness. c. high cost. d. high responsibility. e. a and b only

4.

Companies in the same industry often select very different distribution networks because a. some companies are poorly run. b. different companies try to avoid using the same approach. c. different companies have different objectives for their supply chain. d. all of the above e. none of the above

5.

A poor/inappropriate distribution network can a. lead to high profitability. b. hurt the level of service customers receive while increasing cost. c. have a significant negative impact on the profitability of a firm. d. all of the above e. b and c only

6.

Which of the following would not be the result of a poor/inappropriate distribution network? a. High profitability b. Low level of customer service c. High cost d. Poor profitability e. None of the above are true.

7.

On which dimensions should the performance of a distribution network be evaluated at the highest level? a. Profitability of individual supply chain components b. Efficiency of overall supply chain network c. Customer needs that are met d. Cost of meeting customer needs e. c and d only

8.

Which of the following are measures of customer service that are influenced by the structure of the distribution network? a. Response time b. Product variety c. Product availability d. Customer experience e. all of the above

9.

Which of the following are measures of customer service that are influenced by the structure of the distribution network? a. Returnability b. Order visibility c. Customer experience d. Product availability e. all of the above

10.

Which of the following is not a measure of customer service that is influenced by the structure of the distribution network? a. Returnability b. Customer experience c. Customer maturity d. Product availability e. All of the above are measures of customer service.

11.

The time between when a customer places an order and receives delivery is a. response time. b. product variety. c. product availability. d. customer experience. e. order visibility.

12.

The number of different products/configurations that a customer desires from the distribution network is a. response time. b. product variety. c. product availability. d. customer experience. e. order visibility.

13.

The probability of having a product in stock when a customer order arrives is a. response time. b. product variety. c. product availability. d. customer experience. e. order visibility.

14.

The ease with which the customer can place and receive their order as well as other aspects of value that the sales staff provides is a. customer experience. b. order visibility. c. product availability. d. response time. e. returnability.

15.

The ability of the customer to track their order from placement to delivery is a. customer experience. b. order visibility. c. product availability. d. response time. e. returnability.

16.

The ease with which a customer can return unsatisfactory merchandise and the ability of the network to handle such returns is

a. b. c. d. e.

customer experience. order visibility. product availability. response time. returnability.

17.

The costs incurred in bringing material into a facility are a. sourcing transportation costs. b. outbound transportation costs. c. crossbound transportation costs. d. inbound transportation costs. e. none of the above

18.

The costs incurred in sending material out of a facility are a. sourcing transportation costs. b. outbound transportation costs. c. crossbound transportation costs. d. inbound transportation costs. e. none of the above

19.

Outbound transportation costs per unit tend to be a. about the same as inbound costs. b. higher than inbound costs. c. lower than inbound costs. d. neither higher or lower than inbound costs. e. none of the above

20.

As the number of facilities in a supply chain increases a. the inventory and resulting inventory costs also increase. b. the inventory and resulting inventory costs decrease. c. the inventory increases and resulting inventory costs decrease. d. the inventory decreases and resulting inventory costs increase. e. the inventory and resulting inventory costs remain the same.

21.

As the response time desired by the customer decreases, the required number of facilities in the distribution network a. decreases. b. remains the same. c. increases. d. increases and then decreases. e. none of the above

22.

As the number of facilities in a supply chain increases, total transportation cost a. decreases. b. remains the same. c. increases. d. increases to a point and then decreases. e. decreases to a point and then increases.

23.

As the number of facilities in a supply chain increases, total facility costs a. decrease. b. remain the same. c. increase. d. increase to a point and then decrease. e. decrease to a point and then increase.

24.

Total logistics costs for a supply chain network are a sum of a. inventory and facility costs. b. inventory, facility, and distributor costs. c. facility, transportation, and distributor costs. d. inventory, transportation, and facility costs. e. none of the above

25.

As the number of facilities in a supply chain network increases, total logistics costs will a. decrease. b. decrease at first and then increase. c. increase. d. increase at first and then decrease. e. neither increase or decrease.

26.

Which of the following are key decisions in the design of a distribution network? a. Will product be delivered to the customer location or picked up from a preordained site? b. Will product flow through a production facility? c. Will product flow through an intermediary (or intermediate location)? d. all of the above e. a and c only

27.

Which of the following is not a distinct distribution network design that may be used to move products from factory to customer?

a. b. c. d. e.

Manufacturer storage with direct shipping Manufacturer storage with distributor pickup Distributor storage with package carrier delivery Distributor storage with last mile delivery Manufacturer/distributor storage with customer pickup

28.

Which of the following is not a distinct distribution network design that may be used to move products from factory to customer? a. Manufacturer storage with direct shipping b. Manufacturer storage with direct shipping and in-transit merge c. Distributor storage with package carrier delivery d. Distributor storage with manufacturer pickup e. Retail storage with customer pickup

29.

In which distribution network design is product shipped directly from the manufacturer to the end customer, bypassing the retailer (who takes the order and initiates the delivery request)? a. Manufacturer storage with direct shipping b. Manufacturer storage with direct shipping and in-transit merge c. Distributor storage with package carrier delivery d. Distributor storage with last mile delivery e. Manufacturer/distributor storage with customer pickup

30.

Which distribution network is also referred to as drop-shipping with product delivered directly from the manufacturer to the customer location? a. Manufacturer storage with direct shipping b. Manufacturer storage with direct shipping and in-transit merge c. Distributor storage with package carrier delivery d. Distributor storage with last mile delivery e. Manufacturer/distributor storage with customer pickup

31.

Advantages of manufacturer storage with direct shipping include a. the ability to reduce cost of inventory by centralizing inventories at the manufacturer. b. offering the manufacturer the opportunity to postpone customization until after the customer order has been placed. c. supply chains save on the fixed cost of facilities, because the need for other warehousing space in the supply chain has been eliminated. d. providing a good customer experience in the form of delivery to the customer location. e. all of the above

32.

Which of the following is an advantage of manufacturer storage with direct shipping? a. Transportation costs are low because the average outbound distance to the end consumer is small and package carriers are used to shipping the product. b. Supply chains save on the fixed cost of facilities, because the need for other warehousing space in the supply chain has been eliminated. c. Response times tend to be small because the order has to be transmitted from the retailer to the manufacturer. d. Order tracking is easy to implement because of the complete integration of information systems at both the retailer and the manufacturer. e. The handling of returns is likely to be simple and inexpensive, improving customer satisfaction.

33.

Disadvantages of manufacturer storage with direct shipping include a. Transportation costs are high because the average outbound distance to the end consumer is large and package carriers are used to shipping the product. b. Response times tend to be large because the order has to be transmitted from the retailer to the manufacturer and shipping distances are on average longer from the manufacturer’s centralized site. c. Order tracking becomes harder to implement because it requires complete integration of information systems at both the retailer and the manufacturer. d. The handling of returns is likely to be difficult and more expensive, hurting customer satisfaction. e. all of the above

34.

Which of the following would be a disadvantage of manufacturer storage with direct shipping? a. The ability to reduce cost of inventory by centralizing inventories at the manufacturer. b. The manufacturer has to postpone customization until after the customer order has been placed. c. Supply chains have to eliminate other warehousing space to save on the fixed cost of facilities. d. Response times tend to be large because the order has to be transmitted from the retailer to the manufacturer and shipping distances are on average longer from the manufacturer’s centralized site. e. Provides a good customer experience when a single order containing products from several manufacturers is delivered in partial shipments.

35.

Which distribution network design is similar to pure drop-shipping, except that pieces of the order coming from different locations are combined so that the customer gets a single delivery? a. Manufacturer storage with direct shipping b. Manufacturer storage with direct shipping and in-transit merge c. Distributor storage with package carrier delivery d. Distributor storage with manufacturer pickup

e. Retail storage with customer pickup

36.

The main advantage of in-transit merge over drop-shipping is a. the ability to reduce cost of inventory by centralizing inventories at the manufacturer. b. supply chains save on the fixed cost of facilities, because the need for other warehousing space in the supply chain has been eliminated. c. somewhat lower transportation cost and improved customer experience. d. order tracking is easy to implement because of the complete integration of information systems at both the retailer and the manufacturer. e. the handling of returns is likely to be simple and inexpensive, improving customer satisfaction.

37.

The major disadvantage of in-transit merge compared to drop-shipping is a. transportation costs are high because the average outbound distance to the end consumer is large and package carriers are used to shipping the product. b. response times tend to be large because the order has to be transmitted from the retailer to the manufacturer and shipping distances are on average longer from the manufacturer’s centralized site. c. order tracking becomes harder to implement because it requires complete integration of information systems at both the retailer and the manufacturer. d. the additional effort during the merge itself. e. the handling of returns is likely to be difficult and more expensive, hurting customer satisfaction.

38.

Which distribution network design is being used when inventory is not held by manufacturers at the factories, but is held by distributors/retailers in intermediate warehouses and package carriers are used to transport products from the intermediate location to the final customer? a. Manufacturer storage with direct shipping b. Manufacturer storage with direct shipping and in-transit merge c. Distributor storage with package carrier delivery d. Distributor storage with manufacturer pickup e. Retail storage with customer pickup

39.

Which of the following is an advantage of distributor storage with carrier delivery? a. Inventory cost is higher than with manufacturer storage. b. Product variety is lower than with manufacturer storage. c. Order visibility for the customer is easier than with manufacturer storage. d. Higher cost to provide the same level of product availability as manufacturer storage. e. Cost of facilities and handling is somewhat higher than manufacturer storage.

40.

Which of the following is a disadvantage of distributor storage with carrier delivery? a. Information infrastructure is simpler than manufacturer storage. b. Response time is faster than with manufacturer storage. c. Returnability is easier than with manufacturer storage. d. Product variety is lower than with manufacturer storage. e. Transportation cost is lower than with manufacturer storage.

41.

Which distribution network design is being used when the distributor/retailer delivers the product to the customer’s home instead of using a package carrier? a. Manufacturer storage with direct shipping b. Manufacturer/distributor storage with customer pickup c. Distributor storage with package carrier delivery d. Distributor storage with last mile delivery e. Retail storage with customer pickup

42.

Which of the following is an advantage of distributor storage with last mile delivery? a. More expensive to provide product availability than any other option except retail stores. b. Inventory cost is higher than distributor storage with package carrier delivery. c. Response time is very quick ranging from same day to next day delivery. d. Transportation cost is higher than any other distribution option. e. Returnability is harder and more expensive than a retail network.

43.

Which of the following is a disadvantage of distributor storage with last mile delivery? a. Transportation cost is higher than any other distribution option. b. Information cost is similar to distributor storage with package carrier delivery. c. Customer experience is very good, particularly for bulky items. d. Returnability is easier to implement than other options. e. Order traceability is less of an issue and easier to implement than manufacturer storage or distributor storage with package carrier delivery.

44.

Which distribution network design is being used when inventory is stored at the manufacturer or distributor warehouse but customers place their orders online or on the phone and then come to designated pickup points to collect their orders? a. Manufacturer storage with direct shipping b. Manufacturer/distributor storage with customer pickup c. Distributor storage with package carrier delivery d. Distributor storage with last mile delivery e. Retail storage with customer pickup

45.

Which of the following is an advantage of manufacturer/distributor storage with customer pickup? a. Facility costs can be very high if new facilities have to be built. b. Transportation cost is lower than the use of package carriers, especially if using an existing delivery network. c. Order visibility is difficult but essential. d. Product variety is similar to other manufacturer or distributor storage options. e. Significant investment in information infrastructure required.

46.

Which of the following is a disadvantage of manufacturer/distributor storage with customer pickup? a. Customer experience is lower than other options because of the lack of home delivery. b. Response time is similar to package carrier delivery with manufacturer or distributor storage. c. Returnability is somewhat easier given that pickup location can handle returns. d. Product availability is similar to other manufacturer or distributor storage options. e. Facilities costs are lower if existing facilities are used.

47.

Which distribution network design is being used when inventory is stored locally at retail stores and customers walk into the retail store or place an order online or on the phone and pick it up at the retail store? a. Manufacturer storage with direct shipping b. Manufacturer/distributor storage with customer pickup c. Distributor storage with package carrier delivery d. Distributor storage with last mile delivery e. Retail storage with customer pickup

48.

Which of the following is an advantage of retail storage with customer pickup? a. Inventory cost is higher than all other options. b. Transportation cost is lower than all other options. c. Facilities and handling costs are higher than other options. d. Product variety is lower than all other options. e. Product availability is more expensive to provide than all other options.

49.

Which of the following is a disadvantage of retail storage with customer pickup? a. Returnability is easier than other options given that pickup location can handle returns. b. Inventory cost is higher than all other options. c. Transportation cost is lower than all other options. d. Facilities and handling costs are lower than other options. e. Product variety is higher than all other options.

50.

Distributors add value to a supply chain between a supply stage and a customer stage a. if there is a small number of customers requiring a large amount of product. b. if there is a large number of customers requiring a large amount of product. c. if there are many small players at the customer stage, each requiring a small amount of the product at a time. d. if there are a few large players at the customer stage, each requiring a large amount of the product at a time. e. Distributors do not add value to a supply chain.

Chapter 5 Network Design in the Supply Chain 1.

Describe the four phases in the framework for network design decisions.

Chapter 6 Designing Global Supply Chain Networks 1.

The XYZ Company has a choice between two warehouses. A lease at location A costs $1000 per month with a payment of $2000 up front to guarantee the 3 year lease. Location B would cost $1200 per month and would be leased from month to month. The anticipated revenue in either location is $1500 per month. The estimated rate of return is 10% per year. Using net present value, determine which location would be the better choice.

Chapter 7 Demand Forecasting in a Supply Chain 1.

Describe the basic characteristics of forecasts that managers should be aware.