Deck 11: Supply Chain Management

Question 1

A business marketer that provides erratic delivery service to industrial distributors:

A)increases the distributor's inventory carrying costs.
B)creates stockouts at the distributor level.
C)damages channel relations.
D)all of the above
E)(a)and (c)only

Answer 1

D

Question 2

In contrast to "innovative" products,the supply chain for functional products is designed to:

A)minimize logistics and inventory costs.
B)assure low-cost manufacturing.
C)adapt production capacity to uncertain demand patterns.
D)all of the above
E)(a)and (b)only

Answer 2

E

Question 3

The use of faster modes of transportation within the logistical network results in:

A)lower variable costs for product movement.
B)higher customer service levels.
C)higher investments in inventory.
D)all of the above
E)(a)and (c)only

Answer 3

B

Question 4

In applying the total cost approach to logistical management,management:

A)seeks to minimize the cost associated with each logistical activity in the firm.
B)attention centers on minimizing transportation costs.
C)attention centers on minimizing inventory costs.
D)recognizes that a decision made for one logistical variable affects all or some of the other logistics variables.
E)recognizes the importance of minimizing fixed facility (warehouse)costs.

Question 5

The supply chains for products that could be categorized as "innovative" (e.g.,high-tech products)differ from the supply chains for functional products because:

A)demand is less predictable for innovative products.
B)attention centers on capturing high profits during peak demand periods for the innovative product.
C)minimizing inventory costs is not a major concern with innovative products.
D)all of the above
E)(a)and (b)only

Question 6

Concerning speed of service in the logistical system,which of the following is(are)accurate?

A)The longer the delivery time,the more inventory customers must maintain to service their needs while the shipment is in transit.
B)The slower modes of transportation involve higher variable costs for product movement.
C)The faster modes of transportation result in the need for higher investments in inventory by customers.
D)all of the above
E)both (b)and (c)

Question 7

A firm that can respond to a customer's unique requirements for packaging and order size in a cost-effective manner is addressing which of the following supply chain goals?

A)time compression
B)waste reduction
C)unit cost reduction
D)flexible response
E)inventory reduction

Question 8

The most commonly reported benefits for firms that adopt supply chain management are:

A)higher profit margins.
B)enhanced cash flow.
C)higher order-to-delivery cycle time.
D)all of the above.
E)(a)and (b)only.

Question 9

A business marketer who shifts from rail to air in the logistical system would likely generate:

A)higher variable costs associated with product movement.
B)lower customer investments in inventory.
C)a higher customer service level.
D)all of the above
E)(a)and (c)only

Question 10

As a controllable element in the logistics system,____ triggers the logistics process and directs the activities necessary to deliver products to customers.

A)order processing
B)customer service
C)production planning
D)inventory management
E)information management

Question 11

The warehouse circumvents the need for premium transportation (for example,air freight)and costly order processing by keeping products readily available in local markets. Which type of warehousing involves no capital investment and offers the advantage of flexibility--the firm can increase or decrease its use of space in a given market?

A)merchant
B)mobile
C)fixed
D)third party
E)private

Question 12

To integrate activities across the supply chain,supply chain management often:

A)requires that firms in the supply chain share sensitive and proprietary information about customers and corporate plans.
B)creates excess inventory in the pipeline leading to the customer.
C)involves higher transportation and handling costs.
D)all of the above.
E)(b)and (c)only

Question 13

The "best" mode of transportation to use in moving industrial products to customers is:

A)rail.
B)air.
C)truck.
D)barge.
E)dependent upon cost,service and investment tradeoffs.

Question 14

In serving JIT customers,business marketers find that:

A)the typical order size shrinks.
B)more frequent deliveries are required.
C)relationships with JIT customers are longer lasting and often formalized with a written contract that may span up to five years.
D)all of the above
E)(b)and (c)only

Question 15

In the management of logistical activities,the performance variable(s)of prime interest (is)are:

A)number of products handled.
B)total distribution costs.
C)inventory movement per warehouse facility.
D)the level of logistical service provided to customers.
E)both (a)and (d)

Question 16

Supply chain management seeks to achieve which of the following goals?

A)waste reduction
B)unit cost reduction
C)flexible response
D)all of the above
E)(a)and (b)only

Question 17

Many U.S. manufacturers have adopted the just-in-time (JIT)purchasing principle. Concerning this trend,all of the following statements are accurate except:

A)One objective of a JIT system is to eliminate waste of all kinds from the production process.
B)Because JIT attempts to relate purchases to production requirements,the typical order size increases.
C)A significant effect of JIT purchasing has been the drastic reduction in the number of suppliers utilized by manufacturers.
D)Suppliers find that relationships with JIT customers are longer lasting.
E)both (b)and (c)

Question 18

The supply chain includes a variety of firms,ranging from those that process raw materials to make component parts to those engaged in wholesaling. Included also are organizations engaged in:

A)warehousing.
B)transportation.
C)materials handling.
D)all of the above.
E)(a)and (b)only.

Question 19

_____ is typically the largest logistics expense.

A)Warehousing
B)Inventory control
C)Transportation
D)Order processing
E)Materials handling

Question 20

In regard to logistical service,the business marketer should:

A)provide the same level of logistical service to all customers.
B)adjust the level of logistical service for different segments based on requirements of the product type.
C)adjust the level of logistical service for different segments based on requirements of the customer.
D)all of the above.
E)(b)and (c)only.

Question 21

_____ is the integration of business processes from end user through original suppliers that provides products,services,and information that add value for customers.

A)Customer relationship management
B)Supply chain management
C)Logistics management
D)A marketing plan
E)Order processing

Question 22

The mechanism to trace the cost of performing logistics services to the customer that use these services is called:

A)ABC
B)JIT
C)TCO
D)SCM

Question 23

As a controllable element in the logistics system,_____ relates to the effectiveness of creating time and place utility.

A)customer service
B)order processing
C)inventory control
D)production planning
E)logistics communication

Question 24

The Internet has allowed business marketers to realize several supply chain related benefits,including more timely:

A)product development.
B)access to new customer segments.
C)reduction in communication and customer support costs.
D)all of the above.
E)(b)and (c)only.

Question 25

A firm that is able to accomplish production and logistics processes in less time is addressing which of the following supply chain management goals?

A)Waste reduction.
B)Time compression.
C)Flexible response.
D)Unit cost reduction.
E)Transportation cost reduction.

Question 26

Supply chains should manage _____ in an integrated manner across organizational borders.

A)relationships
B)information
C)material flow
D)all of the above.
E)(b)and (c)only.

Question 27

Despite the advantages,some firms are reluctant to use third party logistics firms because:

A)of the diminished direct contact with customers.
B)they lose direct control of the logistics process.
C)of the problems associated with terminating internal operations.
D)all of the above
E)(b)and (c)only

Question 28

The underlying premise of SCM is that waste reduction and enhanced supply chain performance will exist when there is both intrafirm and interfirm:

A)functional integration.
B)sharing.
C)cooperation.
D)all of above.
E)(b)and (c)only.

Question 29

Which of the following statements is false regarding the relationship of the Internet and SCM?

A)The Internet promotes efficiency across the supply chain.
B)The Internet promotes effectiveness across the supply chain.
C)The Internet permits suppliers to gain real-time knowledge of their customer's needs for materials and components.
D)The use of the Internet as a part of supply chain management has allowed business marketers develop new products in a more timely manner.
E)The Internet has provided companies the opportunities to increase channel inventories.

Question 30

Which of the following statements is false regarding supply chain management?

A)SCM seeks to create an overlap among participants in the supply chain.
B)Traditional supply chains openly share information across the supply chain.
C)Non-integrated approaches to managing product and information flows are expensive and time consuming.
D)Aligning both internal and external processes is the ultimate goal of SCM.

Question 31

Which of the following is false regarding supply chain management?

A)The focus of logistics is the flow of product through the supply chain.
B)Timely information drives the entire supply chain process.
C)Product flow in the reverse direction is an important aspect of supply chain management.
D)The formation close relationships among participants is an inherent need of SCM.
E)All of the above are true statements.

Question 32

The use of slower modes of transportation within the logistical network results in:

A)lower variable costs for product movement.
B)higher customer service levels.
C)higher investments in inventory.
D)all of the above
E)(a)and (c)only

Question 33

A firm that is able to lower costs by minimizing duplication,harmonizing operations,and enhancing quality is addressing which of the following supply chain management goals?

A)Waste reduction.
B)Time compression.
C)Flexible response.
D)Inventory reduction.
E)Transportation cost reduction.

Question 34

As a controllable element in the logistics system,_____ ensures that products are available for inventory in the correct assortment and quantity.

A)production planning
B)plant and warehouse location
C)customer service
D)inventory control
E)logistics communication

Question 35

Inventories are needed in business channels because:

A)production and demand are perfectly matched.
B)operating deficiencies in logistical system often result in product unavailability.
C)business customers can predict their product needs with certainty.
D)all of the above.
E)(a)and (c)only.

Question 36

Which of the following statements are false regarding Supply Chain Management?

A)SCM is one of the predominant management approaches driving many organizations.
B)The supply chain increasingly is seen as the main conduit for getting products from its source to the ultimate customer.
C)The supply chain touches almost every function within the organization.
D)The supply chain has the greatest impact on customer satisfaction and the greatest potential for improving the bottom line and enabling competitive advantage.
E)All of the above are true statements.

Question 37

An emerging development in performing the logistics process is the utilization of third-party logistics firms. Third-party logistics firms can:

A)perform the warehousing function.
B)perform the transportation function.
C)perform the entire logistics process from production scheduling to delivery of finished goods to the customer.
D)all of the above.
E)(a)and (b)only.

Question 38

Waste reduction throughout the supply chain is accomplished by minimizing:

A)duplication.
B)harmonizing operations and systems.
C)quality defects.
D)all of the above.
E)(a)and (b)only.

Question 39

The advantages of third-party warehouses are that they allow the business marketing firm to:

A)increase or decrease warehouse space in a given market.
B)replace the distributor channel when the sales function can be performed by a direct sales force or by manufacturers' representatives.
C)reduce expenditures on company-owned warehouses.
D)all of the above
E)(a)and (c)only

Question 40

As a controllable element in the logistics system,_____ ensures that information exchanged in the distribution process guides the activities of the logistics system.

A)customer service
B)order processing
C)logistics communications
D)inventory control
E)production planning

Question 41

If the business marketer can offer a buyer more consistent delivery performance from the logistical system,the buyer would have the opportunity to cut the level of safety stock maintained.

Question 42

Not all products nor all customers require the same level of logistical service.

Question 43

When compared to logistics management,supply chain management is:

A)broader.
B)less integrative.
C)is focused on moving and storing activities.
D)All of the above.
E)Only (a)and (b).

Question 44

An increase in the supplier's delivery time performance permits a buyer to hold less inventory.

Question 45

Common elements of logistics service include:

A)delivery time.
B)order accuracy.
C)cost-per-unit.
D)All of the above.
E)Only (a)and (b).

Question 46

The key to maintaining a competitive advantage through supply chain strategies is to:

A)the ability to adapt to changes.
B)the ability to maintain low cost relationships with partners.
C)the ability to continuously develop successful new products.
D)continue purchasing the most advanced supply chain software and technologies.

Question 47

For a supply chain partnership to succeed,which of the following are true?

A)Partners need to clearly define their strategic objectives.
B)Managers in both organizations need to fairly divide decision-making responsibilities.
C)Use performance metrics that are tied to chosen strategies.
D)All of the above.
E)Only (a)and (c).

Question 48

_____ is the variable cost of moving products from origin to destination,including any terminal and accessory charges.

A)Speed of service
B)Transportation cost
C)Cost of service
D)Fixed cost
E)None of the above.

Question 49

Firms that adopt supply chain management generally find that costs increase but are more than offset by higher profit margins and revenue growth.

Question 50

As a customer adopts JIT purchasing,the typical order size shrinks and more frequent deliveries are required.

Question 51

The longer the delivery time in the logistical system,the more inventory customers must maintain to service their needs.

Question 52

Properly implemented,supply chain management will lead to longer order-to-delivery cycle time.

Question 53

For supply chain management,functional products typically have predictable demand patterns while innovative products do not.

Question 54

Supply chain management may require that all firms in the supply chain share sensitive and proprietary information about customers and corporate strategic plans.

Question 55

Warehousing is usually the largest single logistical expense.

Question 56

If the costs of each logistical activity are minimized,total logistical costs for the enterprise will be minimized.

Question 57

Although air provides the lowest average delivery time,generally it has the highest variability in delivery time relative to average.

Question 58

For innovative products,the goal is to design a supply chain that minimizes logistics and inventory costs,and assures low- cost manufacturing.

Question 59

The final stage in the adoption of supply chain management where companies have successfully aligned both their internal and external processes is called:

A)the Expanded Enterprise stage.
B)Internal Process Integration stage.
C)the Informal stage.
D)the Functional stage.
E)the Customer Relationship Management stage.

Question 60

Some firms are reluctant to use third-party logistics firms because they wish to maintain direct contact with customers and retain control over the logistics process.

Question 61

Reasons for having inventories in business channels include the inability of business customers to predict their demand perfectly and operational problems in the logistics system that can cause stockouts.

Question 62

Logistics management is primarily concerned with movement and storage activities.

Question 63

Supply chain management can improve overall company performance in two fundamental ways: ____________________ and ____________________.

Question 64

A measure of the physical conditions of the product when received by the buyer is known as____________________,this common element of logistics service.

Question 65

Materials handling is the controllable element of a logistics system that relates to the effectiveness of in creating time and place utility.

Question 66

Central to SCM are the coordination and collaboration activities performed with channel partners,which may include____________________,____________________,third party____________________,and____________________.

Question 67

The focus of____________________in the supply chain for business marketers is the flow of product through the supply chain,with timely information driving the entire process.

Question 68

Innovative approaches to tighten the distribution process,bolstering links with suppliers and customers,and integrating production and marketing is described by the term ____________________management.

Question 69

Speed of service is usually more important that service consistency.

Question 70

The faster modes of transportation result in higher levels of customer service,but also higher investments in inventory.

Question 71

____________________ increases the speed of,and reduces the cost of,picking orders in the warehouse and moving products between storage and the transportation carriers.

Question 72

Supply chain management is both a boundary and function spanning endeavor.

Question 73

When designing the supply chain,firms should concentrate on creating____________________processes for functional products and____________________processes for innovative products.

Question 74

Supply chain management,as a source of competitive advantage,should be seen as a source of revenue as well as a means of reducing costs.

Question 75

Recent evidence suggests that firms that stumble in the SCM area are punished by the stock market.

Question 76

When evaluating transportation performance,service consistency is usually more important than average delivery time.

Question 77

The underlying premise of SCM is that waste reduction and enhanced supply chain performance come only when there is both intrafirm and interfirm functional integration,sharing and cooperation.

Question 78

The two performance variables that must be considered when managing logistical activities are the total distribution costs and the level of logistical service.

Question 79

The ____________________,or trade-off,approach to logistical management guarantees to minimize total logistical costs in the firm and within the channel.

Question 80

Waste reduction,time compression,and flexibility are all goals of supply chain management.