Deck 9: Supply Chain and Logistics Management

Question 1

Compare the following statements and select the one that accurately describes a company that is practicing supply chain management.

A)It sets up technology to enable the sharing of demand information with suppliers.
B)It has an outward focus regarding the activities of its own company.
C)It does not rely on other members of the supply chain to add value to the final product.
D)It has an inward focus on the activities and performance of other companies.
E)It recognizes the importance of sharing supply and demand information with suppliers and customers.

Answer 1

A

Question 2

After the economic recession,the boating industry suffered from a decline in sales.However,recent sales forecasts indicate that the upcoming season will produce a strong demand for boats and boating equipment.Based on this,Les has decided to ramp up production this winter of both his bass fishing boats and speed boats,keep them in storage until the boating sales season officially resumes,and hope that customers will buy them.This is an example of a

A)push-pull strategy.
B)pull strategy.
C)demand strategy.
D)supply strategy.
E)push strategy.

Answer 2

E

Question 3

Which of the following statements reflects the underlying philosophy behind the concept of supply chain management?

A)Every company for himself.
B)Money makes the world go 'round.
C)You get out of it what you put into it.
D)No company is an islanD.
E)Better late than never.

Answer 3

D

Question 4

The costs required to make or buy a product,including risk of obsolescence,taxes,insurance,and warehousing space used to store the goods,are called

A)distribution channel costs.
B)inventory carrying costs.
C)logistics management costs.
D)marketing channel costs.
E)supply chain costs.

Question 5

Supply chain management refers to

A)the management of data to integrate information across all departments of an organization.
B)the inbound movement and storage of materials in preparation for those materials to enter and flow through the manufacturing process.
C)the actions a firm takes to manage the costs required to make or buy a product.
D)the actions a firm takes to coordinate the various flows within a supply chain.
E)the planning,implementation,and control of the manufacture of a product.

Question 6

According to your text,the ultimate objective of supply chain management is

A)to accurately predict production levels in order to minimize inventory carrying costs.
B)to choose intermediaries that share the same mission as the company.
C)to integrate the activities of related companies so they function as one extended enterprise.
D)to utilize as few channel members as possible in the manufacture of the product.
E)to make each channel as efficient as possible,thus saving the company money.

Question 7

A management philosophy that guides the actions of company members toward the goal of actively managing the upstream and downstream flows of goods,services,finances,and information across the supply chain is referred to as a

A)supply chain orientation.
B)marketing orientation.
C)logistics approach.
D)distribution orientation.
E)channel management approach.

Question 8

A supply chain strategy in which a company builds goods based on a sales forecast,puts those goods into storage,and waits for a customer to order the product is called a

A)demand strategy.
B)supply strategy.
C)push-pull strategy.
D)pull strategy.
E)push strategy.

Question 9

Brenda and Tim went to Carl's Custom Dining to buy a new dining room set.At the store they configured the set to their specifications in terms of size,finish and style.The store sent the order out via the Internet to the manufacturer.The manufacturer,in turn,secured the correct type of wood from its supplier to complete the dining room set.When finished,the manufacturer shipped the product to its local warehouse where Carl's Custom Dining arranged for delivery to its store by a local trucking company.For Carl's Custom Dining,this is an example of

A)a just-in-time inventory system.
B)a stockout.
C)its supply chain.
D)a push strategy.
E)its inventory management system.

Question 10

The main advantage of a push strategy is that

A)it eliminates the risk associated with producing an unwanted product.
B)it allows firms to achieve economies of scale.
C)it allows firms to respond rapidly to changing market conditions.
D)it allows firms to customize orders.
E)it reduces inventory carrying costs.

Question 11

By leveraging the resources and skills of its various component firms,a supply chain provides the end customer with

A)value.
B)variety.
C)competition.
D)stability.
E)flexibility.

Question 12

All along the supply chain,distribution channels add value to the product by

A)keeping the flow of financial resources moving downstream.
B)making the product available to ship,taking customer orders and shipping the product to the next step in the supply chain.
C)listening to customer feedback and reacting accordingly.
D)reducing the final cost that consumers must pay for the product.
E)eliminating intermediaries for which a product must travel.

Question 13

Bob's Custom Millwork is a business that provides custom cabinetry and furniture for both businesses and individual consumers.Bob does not make any products until he receives an order from the customer.What type of marketing strategy does this represent?

A)supply strategy.
B)demand strategy.
C)push strategy.
D)pull strategy.
E)forecast strategy.

Question 14

Which of the following terms is not associated with a pull strategy?

A)responsive
B)speculation
C)customization
D)flexibility
E)tailored

Question 15

Intermediaries through which the flow of products travels are called

A)logistic channels.
B)logistics chains.
C)supply chains.
D)core carriers.
E)distribution channels.

Question 16

Which of the following statements regarding supply chain management is not true?

A)Supply chain management allows companies to have greater control over the customer value they provide.
B)In a supply chain,all companies rely on related companies whose activities add value to the final product.
C)Supply chain management seeks to coordinate the various flows within a supply chain.
D)Decisions made in one area of the supply chain will affect other areas,sometimes negatively.
E)Each channel within a supply chain acts independently of the other channels.

Question 17

A set of three or more companies directly linked by one or more of the upstream and downstream flows of products,services,finances,and information from a source to a customer is referred to as

A)distribution management.
B)a value chain.
C)logistics.
D)a supply chain.
E)a distribution center.

Question 18

What sort of strategies must companies embrace for an integrated supply chain to work?

A)relationship-based
B)supplier-based
C)distribution-based
D)profit-based
E)production-based

Question 19

A supply chain refers to

A)the set of three or more companies directly linked by one or more of the upstream and downstream flows of products,services,finances,and information from a source to a customer.
B)the intermediaries (wholesalers,distributors,and retailers)through which the flow of products travels.
C)the planning,implementation,and control of the flow of goods,services and information between the point of origin and the final customer.
D)the activities involved in delivering the right product,to the right place,to the right customer,at the right time,in the right quantity,in the right condition,and at the right price.
E)The inbound movement and storage of materials in preparation for those materials to enter and flow through the manufacturing process.

Question 20

Which of the following statements is accurate regarding the way a supply chain works?

A)In a supply chain,products flow both upstream and downstream,finances flow upstream,and information flows downstream.
B)In a supply chain,products flow upstream,finances flow downstream,and information flows both upstream and downstream.
C)In a supply chain,products flow downstream,finances flow upstream,and information flows both upstream and downstream.
D)In a supply chain,products flow downstream,while finances and information flow both upstream and downstream.
E)In a supply chain,products,finances and information flow both upstream and downstream.

Question 21

According to your text,companies that employ a pull or push-pull strategy typically establish logistics operations based on

A)service quality,innovation,and flexibility.
B)routine,standardization,and transportation efficiency.
C)sales forecasts,inventory stockpiles,and volume.
D)speculation,forecasting,and chance.
E)inventory levels,customer orders,and flexibility.

Question 22

A push-pull supply chain strategy

A)allows the firm to take advantage of manufacturing and transportation economies of scale.
B)does not rely on sales forecasts.
C)is the most cost competitive supply chain strategy to use.
D)relieves the firm of having to incur inventory costs.
E)produces more accurate sales forecasts.

Question 23

Data management systems that integrate information across all the departments of an organization are called

A)enterprise data planning (EDP)systems.
B)intermodal data planning (IDP)systems.
C)electronic data interchange (EDI)systems.
D)enterprise resource planning (ERP)systems.
E)just-in-time (JIT)inventory systems.

Question 24

The almost instantaneous transfer of information from one company's computer to another that allows ERP systems to communicate with the information technology systems of other companies is done through

A)an electronic inventory system.
B)a computerized identification system.
C)an electronic data interchange.
D)a radio frequency identification system.
E)a just-in-time inventory system.

Question 25

If demand is unstable,as it often is in the introductory and growth stages of the product life cycle,it might be best for a firm to use a

A)push strategy.
B)supply strategy.
C)forecast strategy.
D)pull strategy.
E)demand strategy.

Question 26

Which element(s)of the four Ps of the marketing mix is/are affected by logistics?

A)product and place
B)place only
C)product,price,place,and promotion
D)product only
E)product,price,and place

Question 27

Pipeline inventory refers to

A)inventory that is produced or purchased to cover anticipated demand.
B)the inventory a firm needs to accommodate seasonal demand.
C)the inventory a firm needs in its pipeline to meet average demand.
D)inventory that is in transit between suppliers and customers.
E)inventory that has been over-ordered or that has expired.

Question 28

Outdoor Living is a manufacturer of patio dining sets and outdoor furniture.Typically,customers purchase the company's products as the summer season begins and as such,do not want to wait for the product to be manufactured.Which supply chain strategy would work best for Outdoor Living?

A)pull strategy
B)supply strategy
C)a forecast strategy
D)push strategy
E)demand strategy

Question 29

According to your text,the primary reason firms rely on inventory management is

A)to facilitate the movement of product from the warehouse to the end-customer.
B)so that customer service won't suffer from lack of product in any given location.
C)to be able to forecast future production runs of a product.
D)to avoid an abundance of stock sitting in a warehouse.
E)so they can predict how much product to manufacture at the lowest cost.

Question 30

Storage and handling expenses and service costs such as property taxes and insurance are what type of inventory costs?

A)distribution costs
B)purchasing costs
C)production costs
D)stockout costs
E)inventory carrying costs

Question 31

The part of supply chain management that plans,implements,and controls the flow of goods,services,and information between the point of origin and the final customer is called

A)warehousing.
B)value chain optimization.
C)supply chain management.
D)logistics.
E)production management.

Question 32

A company that forecasts sales,builds an inventory based on the forecast,holds the components in inventory until a customer order is received and then finalizes the product based on the order is using a

A)push-pull strategy.
B)demand strategy.
C)pull strategy.
D)supply strategy.
E)push strategy.

Question 33

Which of the following demonstrates how logistics has an effect on the product element of the marketing mix?

A)shipping goods in full rather than partial vehicles
B)deciding to reduce the amount of inventory in the warehouse
C)deciding which mode of transportation to employ
D)utilizing volume discounts
E)providing feedback on product packaging

Question 34

The type of inventory a firm needs to meet average demand is called

A)pipeline.
B)cyclical.
C)typical.
D)anticipative.
E)standard.

Question 35

Which type of supply chain strategy is demonstrated by the following sequence: (Step 1)forecast sales, (Step 2)plan production, (Step 3)order materials, (Step 4)customer orders, (Step 5)make product,and (Step 6)ship product?

A)a push-pull strategy
B)push strategy
C)supply strategy
D)pull strategy
E)demand strategy

Question 36

If cost reduction is part of a firm's strategy,which of the following systems will allow it to achieve cost savings through economies of scale in purchasing,manufacturing,and transportation?

A)push strategy
B)pull strategy
C)push-pull strategy
D)supply strategy
E)demand strategy

Question 37

Those activities that focus on delivering the right product,to the right place,to the right customer,at the right time,in the right quantity,in the right condition,and at the right price is referred to as

A)logistics.
B)distribution.
C)production management.
D)value chain optimization.
E)transportation management.

Question 38

A firm must track three types of costs to determine the correct level of inventory to keep in stock: purchasing costs,inventory carrying costs,and the costs incurred by

A)stockouts.
B)overruns.
C)distribution.
D)obsolete inventory.
E)customer returns.

Question 39

A company that outsources some or all of its logistics activities to other companies is engaged in

A)intermodal transportation.
B)enterprise resource planning.
C)third-party logistics.
D)just-in-time inventory management.
E)materials management.

Question 40

Taylor's toy shop bought a very large inventory of the newest superhero action figure.Because a new movie was supposed to come out featuring the superhero,Taylor didn't anticipate a problem selling the toy.However,production on the movie was halted and now Taylor is having a hard time selling the action figure.This represents what type of inventory?

A)obsolete
B)seasonal
C)cyclical
D)pipeline
E)anticipative

Question 41

When the distribution center mixes goods coming from multiple suppliers into outgoing orders so that each order includes a variety of goods rather than just one type of good,this is referred to as product

A)assortment.
B)picking.
C)accumulation.
D)sortation.
E)allocation.

Question 42

As noted in your text,managing ________ is one of the most important logistics function because it creates place and time utilities that are essential to keeping customers satisfied.

A)customer service
B)operating expenses
C)purchasing activities
D)transportation
E)inventory costs

Question 43

The distribution center function of product accumulation involves

A)mixing goods coming from multiple suppliers into outgoing orders so that each order includes a variety of goods rather than just one type of good.
B)picking available goods to fill customer orders whether it is a full pallet,full case,or individual item.
C)retrieving materials from storage and bringing them to manufacturing to fulfill a production order.
D)receiving goods from various suppliers,storing the goods until they're ordered by a customer and consolidating orders to achieve transportation economies of scale.
E)gathering goods with similar characteristics in one area of the distribution center to facilitate proper inventory control and effectively provide customer servicE.

Question 44

Purchasing is an important logistical function for all of the following reasons except

A)sourcing materials from reliable suppliers ensures that the flow of goods meets demand.
B)purchasing contracts protect the company from legal action.
C)purchasing can help improve product design and time to market.
D)it is a major factor in the quality of both goods and services.
E)savings in purchase costs can add significantly to a company's profits.

Question 45

Warehouse activities can be organized into which three basic functions?

A)storage,shipping,and restocking
B)production,assembly,and storage
C)storage,movement,and production
D)receiving,storing,and movement
E)sorting,allocating,and movement

Question 46

What is the term for the situation in which a company does not have enough inventory available to fill an order?

A)obsolete inventory
B)put-away
C)stockout
D)shortage
E)overrun

Question 47

Keegan is a purchasing manager for a large auto manufacturer.The contract with the company's steel provider is just about to expire,so Keegan is negotiating the terms and condition of a new contract with his supplier.Keegan is satisfied with the negotiations,so he takes the next step of drawing up a legal obligation to buy the negotiated amount of steel at the price and delivery date agreed upon by himself and his supplier.This legal obligation is otherwise known as

A)a bill of sale.
B)the cost of goods sold.
C)a purchase order.
D)a contract amendment.
E)an agreement.

Question 48

Damages,inconsistent service and lack of accessibility are all disadvantages of

A)cyberspace.
B)pipelines.
C)motor transportation.
D)rail transportation.
E)air transportation.

Question 49

The number of times a firm's entire inventory is sold and replaced is referred to as

A)inventory supply.
B)days of stock.
C)stockout.
D)days of supply.
E)inventory turns.

Question 50

Lucy works in a distribution center for a vitamin and nutritional supplement company.Part of her job entails gathering all goods with similar characteristics in one area of the distribution center.From there,she can facilitate the proper inventory controls to ensure that no expired vitamins or supplements are shipped to stores for sale.Lucy's job involves product

A)assortment.
B)sortation.
C)accumulation.
D)allocation.
E)picking.

Question 51

What is the term used for the inbound movement and storage of materials in preparation for those materials to enter and flow through the manufacturing process?

A)supply chain management
B)warehouse management
C)materials management
D)distribution channel management
E)intermodal transportation

Question 52

Dividing the inventory on hand by the average daily usage or sales is the calculation for

A)inventory supply.
B)days of supply.
C)stockout.
D)days of stock.
E)inventory turns.

Question 53

Which of the following is not a job function of a purchasing manager as outlined in your text?

A)place purchase orders
B)monitor supplier performance
C)manage warehouse inventory
D)negotiate contracts
E)select appropriate suppliers

Question 54

What is the warehouse activity that involves retrieving materials from storage and bringing them to manufacturing to fulfill a production order,or retrieving finishing goods from storage and preparing them for shipment to fulfill a customer order?

A)put-away
B)picking
C)movement
D)stocking
E)logistics

Question 55

A legal obligation to buy a certain amount of product at a certain price from a supplier to be delivered at a specified date is referred to as

A)a bill of sale.
B)a contract.
C)the cost of goods sold.
D)an agreement.
E)a purchase order.

Question 56

Which person is responsible for establishing performance expectations for suppliers and developing ways to measure their performance?

A)salesperson
B)plant manager
C)distribution channel manager
D)warehouse manager
E)purchasing manager

Question 57

Coordinating the supply and demand for materials and ensuring that stored or recently received materials get to the production floor when needed are jobs of the

A)materials manager.
B)purchasing manager.
C)plant manager.
D)supply chain manager.
E)production manager.

Question 58

The ability of a distribution center to pick available goods down to a single piece allows customers to buy in quantities that make sense for their business.This exemplifies the function of product

A)assortment.
B)picking.
C)accumulation.
D)sortation.
E)allocation.

Question 59

A distribution center functions much like a warehouse,but performs additional activities.Which of the following is not one of the activities performed by a distribution center?

A)product assortment
B)product accumulation
C)product sortation
D)product removal
E)product allocation

Question 60

Alejandro works in a warehouse.His job is to assemble store displays and refurbish goods that have been returned by customers.What warehouse function is Alejandro responsible for?

A)movement
B)picking
C)logistics
D)production
E)put-away

Question 61

In a _____ strategy,customer orders drive(s)manufacturing and distribution operations.

Question 62

All of the following are factors that affect a company's sustainability profile except

A)sourcing of materials and goods.
B)transportation mode selection.
C)the extent of its supply chain as a closed-loop system.
D)initiatives taken by competitors regarding sustainability.
E)facility locations.

Question 63

The set of activities a firm takes to coordinate the various flows within a supply chain is referred to as _____ _____ _____.

Question 64

Compare the various modes of transportation.Which one has a low cost and very high capacity,but is slow in delivery?

A)rail transportation
B)motor transportation via trucks
C)air transportation
D)water transportation
E)cyberspace

Question 65

While on vacation in Europe,Maria purchased an antique porcelain vase valued at $25,000.She needs to have it delivered to her home in Kentucky.What would be the best mode of transportation for this item?

A)water transportation
B)air transportation
C)railroad
D)cyberspace
E)pipeline

Question 66

A _____ _____ delivers value to the end customer by leveraging the resources and skills of its various component firms.

Question 67

A company that practices disintermediation is doing which of the following?

A)estimating inventory based on forecasts of average demand
B)using several distribution centers to streamline its delivery process
C)utilizing data management systems to speed up the delivery process
D)purchasing materials and goods from countries that are outside of the country's base operations
E)eliminating intermediaries in the delivery of its products to consumers

Question 68

A _____ _____ _____ is a management philosophy that guides the actions of company members toward the goal of actively managing the upstream and downstream flows of goods,services,finances,and information across the supply chain.

Question 69

In a supply chain,the flow of products travels downstream through _______ channels such as wholesalers,distributors,and retailers.

Question 70

If a company's marketing strategy includes objectives related to cost competitiveness and good customer service,it should consider using a _______ supply chain strategy.

Question 71

A British company manufactures specialty teas and sells them to a retailer in Estes Park,Colorado.In order to get the product to the end-user,the teas are shipped via ocean liner to a port in the Gulf of Mexico and then placed on a railway car to Denver,Colorado.From Denver,the tea is placed on a truck and taken to the retailer in Estes Park.This is an example of

A)common carrier transportation.
B)intermodal transportation.
C)international transportation.
D)just-in-time delivery.
E)contract carrier transportation.

Question 72

What is intermodal transportation?

A)using several types of transportation for the same shipment
B)transportation from one warehouse or distribution center to another
C)transportation that is performed by a contract carrier
D)transportation of goods to overseas destinations
E)transportation that crosses state lines

Question 73

_____ _____ _____ are the costs required to make or buy a product,including risk of obsolescence,taxes,insurance,and warehousing space used to store the goods.

Question 74

A set of three or more companies directly linked by one or more of the upstream and downstream flows of products,services,finances,and information from a source to a customer is referred to as a _____ _____.

Question 75

The attempt by companies to reduce the amount of products that end up in a land fill by repairing returned goods or finding new buyers for products that are unwanted by retailers has what type of supply chain?

A)closed-loop
B)open-loop
C)open-shop
D)sustainable-loop
E)closed-shop

Question 76

A commitment to adopting a lifestyle that meets the needs of the present without compromising the ability of future generations to meet their own needs is referred to as

A)sustainability.
B)eco-management.
C)consumerism.
D)environmentalism.
E)green marketing.

Question 77

The process of purchasing goods and services that takes into account the long-term impact on people,profits,and planet is called

A)green purchasing.
B)sustainable procurement.
C)environmental consumption.
D)green acquisition.
E)sustainable sourcing.

Question 78

For an integrated supply chain to work,companies must be willing to embrace ______-based strategies.

Question 79

According to your text,all of the following are factors that companies must consider in choosing a transportation mode except

A)overall cost.
B)ability to store the product until shipment.
C)transit times.
D)mode accessibility.
E)ability to meet lead time requirements.

Question 80

Jared's company is based in the United States and practices sustainable sourcing.Because his company gets materials and finished products from Canada and Mexico,its sourcing is referred to as

A)un-shoring.
B)near-shoring.
C)outsourcing.
D)onshoring.
E)onsourcing.