Deck 10: Coordination in a Supply Chain

Question 1

Supply chain coordination requires each stage of the supply chain to take into account the impact its actions have on other stages.

Answer 1

True

Question 2

Supply chain coordination improves if all stages of the chain take actions that are aligned and together increase total supply chain surplus.

Answer 2

True

Question 3

A reduction of lot sizes increases the amount of fluctuation that can accumulate between any pair of stages of a supply chain,thus increasing the bullwhip effect.

Answer 3

False

Question 4

Pricing obstacles refer to situations in which the pricing policies for a product lead to an increase in variability of orders placed.

Question 5

The bullwhip effect moves a supply chain away from the efficient frontier by increasing cost and decreasing responsiveness.

Question 6

Behavioral obstacles are often related to the way the supply chain is structured and reduce the bullwhip effect.

Question 7

When a single stage controls replenishment decisions for the entire chain,the problem of multiple forecasts is magnified and coordination within the supply chain follows.

Question 8

Managers can encourage the bullwhip effect by devising pricing strategies that encourage retailers to order in smaller lots and reduce forward buying.

Question 9

Measuring performance based on sell-through is often justified on the grounds that the manufacturer's sales force does not control sell-in.

Question 10

Incentive obstacles refer to situations where incentives offered to different stages or participants in a supply chain lead to actions that increase variability and reduce total supply chain profits.

Question 11

With an uncoordinated supply chain each stage tries to maximize its own profits,resulting in actions that often diminish total supply chain profits.

Question 12

Improperly structured sales force incentives are a significant obstacle to coordination in the supply chain.

Question 13

Tying allocation to past sales removes any incentive a retailer may have to inflate orders,as a result dampening the bullwhip effect.

Question 14

Trade promotions and other short-term discounts offered by a manufacturer result in large orders during the promotion period followed by very small orders after that.

Question 15

Lot size based quantity discounts reduce the bullwhip effect within the supply chain.

Question 16

The bullwhip effect reduces the profitability of a supply chain by making it simpler to provide a given level of product availability.

Question 17

The bullwhip effect enables different stages of the supply chain to have a consistent estimate of what demand looks like.

Question 18

A lack of coordination occurs either because different stages of the supply chain have objectives that conflict or because information moving between stages gets delayed and distorted.

Question 19

Sharing of POS data helps reduce the bullwhip effect because it allows each stage of the supply chain to use orders from the previous stage to forecast future demand.

Question 20

The lack of information sharing between the retailer and manufacturer leads to a large fluctuation in manufacturer orders.

Question 21

Situations where incentives offered to different stages or participants in a supply chain lead to actions that increase variability and reduce total supply chain profits are referred to as

A)incentive obstacles.
B)information processing obstacles.
C)operational obstacles.
D)behavioral obstacles.

Question 22

The lack of coordination within a supply chain will result in a decrease in

A)manufacturing cost.
B)inventory cost.
C)replenishment lead time.
D)level of product availability.

Question 23

Long-term boom and bust cycles that mimic the bullwhip effect include

A)calendars and greeting cards.
B)the length of hemlines.
C)university textbooks.
D)memory chips for personal computers.

Question 24

Retail event collaboration is a special case of CPFR.

Question 25

Incentives that focus only on the local impact of an action result in decisions that

A)do not maximize total supply chain profits.
B)maximize total supply chain profits.
C)minimize total supply chain profits.
D)minimize total supply chain cost.

Question 26

Information distortion can be dampened by practices that assign replenishment responsibility across the supply chain to a single entity.

Question 27

The lack of supply chain coordination on various measures of performance has costs associated with it.Which of the following is one of these costs?

A)Quality
B)Reliability
C)Manufacturing
D)Pricing

Question 28

A Computer Processing Factory Rationing (CPFR)system is used to assign inventory in a supply chain when supply is disrupted.

Question 29

The bullwhip effect

A)positively impacts performance at every stage.
B)hurts the relationships between different stages of the supply chain.
C)enhances the relationships between different stages of the supply chain.
D)results in improved on-time order delivery.

Question 30

The situation in which fluctuations in orders increase as they move up the supply chain from retailers to wholesalers to manufacturers to suppliers is known as

A)market fluctuations.
B)the whiplash effect.
C)the bullwhip effect.
D)the butterfly effect.

Question 31

The bullwhip effect moves a supply chain

A)away from the efficient frontier by increasing cost and decreasing responsiveness.
B)away from the efficient frontier by decreasing cost and increasing responsiveness.
C)toward the efficient frontier by increasing cost and decreasing responsiveness.
D)toward the efficient frontier by increasing cost and increasing responsiveness.

Question 32

The bullwhip effect decreases

A)product availability.
B)manufacturing cost.
C)replenishment lead time.
D)transportation cost.

Question 33

Dollar General switches to VMI for two different producers of beef jerky.It is likely that the overall inventory level of beef jerky in the store will increase over levels before they went to VMI.

Question 34

The impact of the lack of coordination on supply chain processes decreases for the following measure.

A)Manufacturing cost
B)Level of product availability
C)Transportation cost
D)Replenishment lead time

Question 35

Information distortion is exaggerated by the fact that

A)supply chains today produce a large amount of product variety.
B)supply chains today produce a small amount of product variety.
C)the telephone effect is extreme in situations where technology is in use.
D)different stages of supply chains send excessive data.

Question 36

The bullwhip effect causes

A)maximization of supply chain surplus.
B)improved accuracy of demand information within the supply chain.
C)different stages of the supply chain to have a very different estimate of what demand looks like.
D)less need for aggregate planning.

Question 37

A Computer Processing Factory Rationing (CPFR)is dependent on technology.

Question 38

The lack of coordination within a supply chain will result in an increase in

A)profitability.
B)inventory accuracy.
C)replenishment lead time.
D)level of product availability.

Question 39

The bullwhip effect decreases

A)transportation cost.
B)profitability.
C)replenishment lead time.
D)shipping and receiving cost.

Question 40

The lack of supply chain coordination on various measures of performance has costs associated with it.Which of the following is NOT one of these costs?

A)Inventory
B)Reliability
C)Transportation
D)Quality

Question 41

Coordination requires every stage of the supply chain to focus on

A)the functional revenues for each supply chain member.
B)the functional profits for each supply chain member.
C)the functional costs for each supply chain member.
D)supply chain surplus.

Question 42

Actions taken in the course of placing and filling orders that lead to an increase in variability are referred to as

A)incentive obstacles.
B)information processing obstacles.
C)operational obstacles.
D)pricing obstacles.

Question 43

The fact that each stage in a supply chain forecasts demand based on the stream of orders received from the downstream stage results in

A)forecasts based on actual consumer demand patterns.
B)a reduction in demand as we move up the supply chain from the retailer to the manufacturer.
C)a magnification of fluctuations in demand as we move up the supply chain from the retailer to the manufacturer.
D)an increase in forecast accuracy.

Question 44

When a firm places orders in lot sizes that are much larger than the lot sizes in which demand arises,

A)variability of orders is minimized up the supply chain.
B)variability of orders is magnified up the supply chain.
C)suppliers gain better visibility of consumer demand.
D)suppliers gain a more stable demand pattern.

Question 45

Operational improvements that reduce lot sizes can dampen the bullwhip effect by

A)decreasing the uncertainty of demand during the lead time.
B)decreasing the amount of fluctuation that can accumulate between any pair of stages of a supply chain.
C)discouraging retailers from artificially inflating their orders in the case of a shortage.
D)allocating the available supply based on past retailer sales.

Question 46

All transportation decisions should be evaluated based on their effect on

A)transportation costs.
B)fuel costs.
C)total costs.
D)sales revenue.

Question 47

Situations in which the pricing policies for a product lead to an increase in variability of orders placed are referred to as

A)incentive obstacles.
B)information processing obstacles.
C)operational obstacles.
D)pricing obstacles.

Question 48

A manufacturer with significant market power should use

A)two-part tariffs and volume discounts to achieve coordination.
B)lot-size-based quantity discounts to achieve coordination.
C)forward-buying with retail coupons to achieve coordination.
D)liquidators and reverse-buying to achieve coordination.

Question 49

Stefan's compensation plan rewards his hard work by paying him ten cents per mile driven while he delivers orders to the downstream members of his supply chain.Some managers view this reward as counterproductive since there is a temptation to take the longest route between two points rather than making more deliveries.This obstacle to supply chain coordination falls into the category of

A)incentive obstacles.
B)information processing obstacles.
C)operational obstacles.
D)behavioral obstacles.

Question 50

The sales typically measured by a manufacturer are

A)the quantity sold to final customers (sell-through).
B)the quantity sold to distributors or retailers (sell-in).
C)the quantity reported by the salesperson.
D)based on the quantity of supplies purchased from key suppliers.

Question 51

Improperly structured sales force incentives

A)help create stable demand.
B)have very little effect on the timing of customer orders.
C)tend to create spikes in customer orders.
D)ensure that orders are quickly and accurately entered and communicated to other affected supply chain processes.

Question 52

Problems in learning within organizations that contribute to the bullwhip effect are referred to as

A)incentive obstacles.
B)information processing obstacles.
C)pricing obstacles.
D)behavioral obstacles.

Question 53

Geoff receives course transfer requests on a continual basis from student advisors throughout the week.His policy has always been to sign the accumulated course transfer requests on Friday afternoons.Once he signs them,they are forwarded to his assistant and then on to the student advisor for that student's major.The Friday afternoon procedure is creating a(n):

A)incentive obstacles.
B)information processing obstacles.
C)operational obstacles.
D)pricing obstacles.

Question 54

Managers can improve coordination within the supply chain by

A)holding product in inventory but off official inventory records.
B)listing product in inventory without actually holding the physical goods.
C)aligning goals and incentives.
D)decreasing product visibility.

Question 55

Which of these changes will serve to break order synchronization?

A)Have each customer order once a week on Mondays rather than the 1st and 15th of each month.
B)Have each customer order on their date,with 20% of your customers ordering each day of the week.
C)Have each customer order on Mondays or Fridays rather than Monday through Friday.
D)Have each customer order on the last day of the month.

Question 56

The lack of information sharing between the retailer and manufacturer

A)improves supply chain coordination.
B)minimizes the fluctuation in manufacturer orders.
C)leads to a large fluctuation in manufacturer orders.
D)leads to smaller fluctuations in suppliers' orders.

Question 57

The practice of combining shipments for several retailers on the same truck is known as

A)a milk run.
B)a less than truckload shipment.
C)a truckload shipment.
D)an ASN.

Question 58

Situations where demand information is distorted as it moves between different stages of the supply chain,leading to increased variability in orders within the supply chain are referred to as

A)incentive obstacles.
B)information processing obstacles.
C)operational obstacles.
D)behavioral obstacles.

Question 59

Customer Rick places orders with retailer Negan,who orders from Dwight,who orders from Simon,who orders from Regina.Simon is a whiz at statistics and makes his forecast for the coming year based on the orders he receives from Dwight.Simon's process is creating a(n)

A)incentive obstacle.
B)operational obstacle.
C)information processing obstacle.
D)behavioral obstacle.

Question 60

Forward buying results in

A)a stabilized buying pattern.
B)small orders during the promotion period followed by very small orders after that.
C)small orders during the promotion period followed by large orders after that.
D)large orders during the promotion period followed by very small orders after that.

Question 61

One replenishment system that assigns replenishment responsibility to a single entity in a supply chain is

A)vendor managed inventory.
B)coordinated stocking.
C)a sell-in to sell-through system.
D)owner-managed inventory.

Question 62

In a CRP system,inventory at the retailer is owned by

A)the retailer.
B)the supplier.
C)the customer.
D)no one.

Question 63

A fundamental aspect of successful collaboration is

A)sharing product designs.
B)identification and resolution of exceptions.
C)no stock outs.
D)a duplication of effort.

Question 64

One of the best ways to solve coordination problems is

A)through teams comprised of different members of the supply chain.
B)through investments in cutting edge information technology.
C)by institution penalties for supply chain members that don't cooperate.
D)by implementing a supply chain resource planning module.

Question 65

In most instances,CRP systems are driven by

A)the withdrawal of inventory from distributor warehouses.
B)the withdrawal of materials from supplier warehouses.
C)the withdrawal of goods customer pantry shelves.
D)the withdrawals of inventory from retailer warehouses.

Question 66

Mickey the manager reviewed his company's customers' orders for the past year and compared the variability of those orders with the variability of the orders he placed with his suppliers.This comparison allowed him to estimate his own company's contribution to

A)the forecast.
B)supply chain surplus.
C)market demand.
D)the bullwhip effect.

Question 67

Vendor managed inventory and continuous replenishment systems both serve to

A)minimize channel confusion.
B)minimize information distortion.
C)maximize information quality.
D)maximize information flow.

Question 68

The replenishment decision in a VMI system is owned by the

A)manufacturer.
B)retailer.
C)customer.
D)cloud.

Question 69

What is the responsibility of a designated category leader?

A)The category leader manages replenishment decisions for all suppliers.
B)The category leader manages purchasing decisions for all retailers.
C)The category leader manages purchasing decisions for all customers.
D)The category leader manages replenishment decisions for all retailers.

Question 70

If demand is uncertain,a manufacturer can incentivize retailers to provide high levels of product availability by using

A)high fixed costs.
B)buyback contracts.
C)low fixed costs.
D)zero-cost contracts.

Question 71

One replenishment system that assigns replenishment responsibility to a single entity in a supply chain is

A)coordinated stocking.
B)a sell-in to sell-through system.
C)owner-managed inventory.
D)a continuous replenishment program.

Question 72

Successful collaborative planning,forecasting and replenishment must be built on a foundation of

A)a common logistics carrier and data synchronization.
B)a single forecasting approach and a common logistics carrier.
C)data synchronization and established standards for exchanging information.
D)established standards for exchanging information and a single forecasting approach.

Question 73

If retailers sell products from competing manufacturers in a VMI system,

A)inventory at the manufacturer will be lower than optimal.
B)inventory at the manufacturer will be higher than optimal.
C)sales at the retailer will be lower than optimal.
D)inventory at the retailer will be higher than optimal.

Question 74

In a continuous replenishment program,the wholesaler or manufacturer replenishes a retailer regularly based on

A)the POS data of the wholesaler.
B)the forecast of the retailer.
C)the POS data of the retailer.
D)the forecast of the manufacturer.

Question 75

Which method would serve to reduce the information distortion in a supply chain consisting of a fabricator,manufacturer,supplier,and a retailer?

A)Make both the fabricator and retailer responsible for all decisions regarding product inventories at the retailer.
B)Make the manufacturer responsible for all decisions regarding product inventories at the retailer.
C)Make the supplier responsible for all decisions regarding product inventories at the retailer.
D)Make the customer responsible for all decisions regarding product inventories at the retailer.

Question 76

Allocating existing supply based on past retailer sales rather than current retailer orders is known as

A)spurn and fern.
B)yearn and kern.
C)churn and burn.
D)turn and earn.

Question 77

In a VMI system,the ________ must share demand information with the ________.

A)manufacturer;customer
B)customer;retailer
C)retailer;manufacturer
D)manufacturer;designer

Question 78

Quite often in a VMI system,the inventory is

A)owned by the retailer before it is shipped by the supplier.
B)owned by the supplier until it is sold by the retailer.
C)sold by the supplier before it is owned by the retailer.
D)sold by the retailer before it is shipped by the supplier.

Question 79

One appropriate measure to reduce replenishment lead times is to

A)reduce flexibility.
B)increase the planning horizon.
C)order electronically.
D)average the aggregate plans from each supply chain member.

Question 80

The full benefit of coordination is achieved when

A)all adjacent pairs of supply chain partners are coordinated.
B)the entire supply chain network is coordinated.
C)the POS data is shared with the manufacturer.
D)the POS data is shared with the retailer.