Deck 17: Sustainability and the Supply Chain

Question 1

In general, the reverse logistics function for a manufacturer is more expensive to operate on a per unit basis than the forward logistics function that sends the products to market.

Answer 1

TRUE

Question 2

The primary reason for the general lack of design for remanufacturing is that remanufacturing is more expensive for a manufacturer.

Answer 2

FALSE

Question 3

For most firms, the extent of direct emissions is typically only a small fraction of the extent of indirect emissions in the supply chain.

Answer 3

TRUE

Question 4

The Intergovernmental Panel on Climate Change, a United Nations body that has been assessing global warming since 1990, has written that even though most of the buildup of carbon dioxide in the atmosphere has come from the United States and Western Europe, it is poorer countries that are closer to the equator that are likely to pay the biggest price.

Question 5

Customers have usually backed up words about the importance of sustainability with a willingness to pay more for sustainable products.

Question 6

Surveys in sustainable farming have revealed that the typical consumer is willing to pay 25% more for sustainable fare.

Question 7

A firm's new sustainability improvement initiative is best begun by focusing on resource reduction activities.

Question 8

Facilities often offer the best opportunity to simultaneously improve the environmental and financial performance through innovation.

Question 9

Hardin (1968) described the tragedy of the commons as a dilemma arising when the common good does not align perfectly with the good of individual entities.

Question 10

A carbon tax system is computed by multiplying the tax rate by the carbon emissions.

Question 11

A focus on sustainability allows a supply chain to better serve more environmentally conscious customers while often improving supply chain performance.

Question 12

Under a cap-and-trade system, a firm that emits more than its share of carbon can buy allowances from a firm that emits less than its share.

Question 13

There is greater environmental impact in the extended supply chain than there is within the main plant for most manufacturers.

Question 14

Most supply chain design innovations that lower transportation costs paradoxically tend to increase fuel consumption and emissions.

Question 15

Walmart started its focus on sustainability as a defensive move given the beating it was taking from environmental activists.

Question 16

If garbage collection services were billed based on the weight of refuse collected, most people would find a way to discard less and recycle more.

Question 17

In reality, there are no actions in a supply chain that improve both sustainability and supply chain surplus.

Question 18

The social pillar measures a firm's ability to address issues that are important for its workforce, customers, and society.

Question 19

Simple awareness of what your own electricity consumption is usually reduces a consumer's electricity use by between 10% and 15%.

Question 20

An example of a relative measure of emission output is pounds of CO? per gallon of diesel fuel.

Question 21

In the context of greenhouse gas emission, direct emissions

A) are controlled by the reporting entity.
B) are created through waste disposal.
C) come from utility-based services.
D) come from employee-based travel.

Question 22

________ is a social arrangement that encourages all participants to behave such that they do not contribute to the tragedy of the commons.

A) A zero sum game
B) Escalation of commitment
C) Mutual coercion
D) Barzini Red

Question 23

Metrics that would typically be in corporate social responsibility (CSR) reports would contain

A) revenue.
B) social.
C) environmental.
D) Both B and C

Question 24

Much less success for sustainability initiatives has been driven by

A) increased revenue for sustainability initiatives.
B) customer demand.
C) attracted customers who value sustainability.
D) reduced risk and improving the financial performance of the supply chain.

Question 25

A(n) ________ measure of performance is more effective at capturing improvement.

A) scope
B) relative
C) absolute
D) statistical

Question 26

A(n) ________ measure of performance is more effective at capturing sustainability improvement.

A) scope
B) relative
C) absolute
D) statistical

Question 27

The phenomenon where each actor is incentivized to maximize his gain from a public asset at the expense of all others is

A) the tragedy of the commons.
B) cap-and-trade.
C) the closed loop.
D) the social pillar.

Question 28

Almost 40 percent of ________ could be achieved at negative marginal costs, meaning that investing in these options would generate positive economic returns over their life cycle.

A) greenhouse gas abatement
B) fuel consumption initiatives
C) increased customer base
D) improved company reputation

Question 29

In the textbook, a detailed analysis by Abbott indicated that their indirect emissions were about ________ times their direct emissions.

A) 1 to 5
B) 6 to 14
C) 15 to 19
D) 20 to 22

Question 30

In the context of greenhouse gas emission, the GHG protocol initiative defines levels of scope. This level refers to indirect emissions from grid-sourced electricity and other utility services of heat, steam and cooling.

A) Scope 1
B) Scope 2
C) Scope 3
D) Scope 4

Question 31

Unilever, the Dutch-British consumer goods giant, has invested significant effort to help emerging economies such as Brazil and India wrestle with poverty, water scarcity and climate change. The company sees ________ of its sales and the majority of its growth coming from emerging economies.

A) almost 25%
B) almost 50%
C) almost 60%
D) almost 75%

Question 32

________ is a mechanism that constrains the aggregate emissions by creating a limited number of tradeable emission allowances, which emission sources must secure and surrender in proportion to their emissions.

A) Command-and-control
B) Cap-and-trade
C) Cap-and-control
D) Emissions tax

Question 33

In the context of greenhouse gas emission, the GHG protocol initiative defines three levels of scope. The following scope is referred to as direct emissions.

A) This scope refers to emissions from GHG sources that are owned or controlled by the reporting entity.
B) This scope refers to indirect emissions from grid-sourced electricity and other utility services of heat, steam and cooling.
C) This scope refers to the inclusion of other indirect emissions coming from sources such as the production of purchased materials, outsourced activities, contractor owned vehicles, waste disposal, and employee business travel.
D) This scope refers to the corporate responsibility for direct discharging of emissions into public water systems.

Question 34

In the context of greenhouse gas emission, the GHG protocol initiative defines levels of scope. This level refers to emissions from GHG sources that are owned or controlled by the reporting entity.

A) Scope 1
B) Scope 2
C) Scope 3
D) Scope 4

Question 35

Most concrete action has been observed primarily when a focus on sustainability

A) increases revenue for sustainability initiatives.
B) makes the world more sustainable.
C) attracts customers who value sustainability.
D) reduces risk and improving the financial performance of the supply chain.

Question 36

In the context of greenhouse gas emission, the GHG protocol initiative defines levels of scope. This level refers to the inclusion of other indirect emissions coming from sources such as the production of purchased materials, outsourced activities, contractor owned vehicles, waste disposal, and employee business travel.

A) Scope 1
B) Scope 2
C) Scope 3
D) Scope 4

Question 37

In the short to medium term, an improved focus on sustainability provides benefits that

A) are shared but costs that may be local to a firm.
B) are local to firms but a cost that is global.
C) are shared and costs that are global.
D) are local and costs that are global.

Question 38

The disadvantage of using a(n) ________ measure is that a drop in supply chain sales and production (for example in a downturn) will show an improved absolute measure of energy consumption even though the company may not have changed anything.

A) scope
B) relative
C) absolute
D) statistical

Question 39

________ tend to be significant consumers of energy and water and emitters of waste and greenhouse gases and thus offer significant opportunities for profitable improvement.

A) Employees
B) Production processes
C) Facilities
D) Vehicles

Question 40

Walmart reduced its energy consumption by

A) adding skylights for natural light.
B) reducing packaging.
C) milk jug redesign.
D) better transportation routing of trucks.

Question 41

________ continues to be one of the biggest challenges to improved supply chain sustainability.

A) Good information
B) Waste generation
C) Water consumption
D) Reducing packaging

Question 42

________ reduced the amount of harmful phosphates in laundry and dish detergents in the Americas region by 14.5 percent in 2011 with a goal of reaching a reduction of 70 percent.

A) Walmart
B) BASF
C) 3M
D) Procter & Gamble

Question 43

The goal of every supply chain should be to track its

A) landfill inventory.
B) transportation utilization.
C) water consumption.
D) packaging materials.

Question 44

The polluter pays principle dictates that

A) recycling efforts are best aimed at the designer of the product.
B) the entity causing the pollution must bear the cost to society.
C) the recycler should receive compensation from the end user of the product.
D) the recycler should receive compensation from the designer of the product.

Question 45

________ has worked hard to reuse heat energy from boilers in its production process and reduce its total water footprint.

A) Walmart
B) Coca-Cola
C) IBM
D) Starbucks

Question 46

________ worked with their equipment supplier, Siemens VAI, to create a new production process that cut costs and emissions by using local iron ore that was of lower quality but cheaper.

A) Walmart
B) Coca-Cola
C) Posco
D) Starbucks

Question 47

According to its 2011 CSR report, ________ has designed and opened a viable store prototype that is up to 25 to 30 percent more energy efficient and produces up to 30 percent fewer greenhouse gas emissions compared to the 2005 baseline.

A) Starbucks
B) TJ Maxx
C) Walmart
D) Kmart

Question 48

Walmart has worked to convert ________ at its stores from a cost to a profit generator.

A) energy usage
B) waste generation
C) water consumption
D) reduced packaging

Question 49

The major deterrent to remanufacturing is

A) the comparatively low margin of remanufactured to newly-produced products.
B) the comparatively high cost of remanufacturing to newly-produced products.
C) the fear that remanufactured products will be purchased instead of newly-produced products.
D) the loss of recycling volume from remanufactured products that do not enter the recycling stream.

Question 50

Walmart implemented a web-based scorecard that evaluated the packaging of each product along nine metrics which included

A) cube utilization.
B) distance traveled.
C) recycled content.
D) Both A and C

Question 51

The sustainability damage from landfill additives comes in which form?

A) Potential energy lost
B) Materials lost
C) Terrible smell
D) Both A and B

Question 52

Remanufacturing helps improve profits as long as

A) the comparatively low margin of remanufactured to newly-produced products exists.
B) the comparatively high cost of remanufacturing to newly-produced products exists.
C) the fear exists that remanufactured products will be purchased instead of newly-produced products.
D) two distinct segments of demand exist for the product - one for new and one for old products.

Question 53

________ can be used to assess the environmental impacts associated with a product's life from cradle to grave.

A) CRM
B) SRM
C) LCA
D) MRP

Question 54

What type of inventory is one of the most damaging from a sustainability perspective?

A) Raw materials
B) Work in process
C) Finished goods
D) Landfill

Question 55

Walmart reported that in California, over ________ percent of waste has been diverted from landfills and made into something else that produces revenue.

A) 25
B) 40
C) 60
D) 80

Question 56

________ has always worked hard to design products that can be shipped flat to achieve high volume and weight density during transportation. As a result, the company not only lowers its transportation costs, it also reduces emissions and energy use.

A) Walmart
B) IKEA
C) 3M
D) Procter & Gamble

Question 57

The presence of lead paint in some of its most popular toys forced ________ to recall hundreds of thousands of toys sold between April and July of 2007.

A) Walmart
B) Hasbro
C) Mattel
D) Remco

Question 58

McDonough and Braungart (2002) discuss the importance of ________ design if we are to truly limit the landfill inventory generated by a supply chain.

A) cradle to grave
B) cradle to cradle
C) manageable sustainability
D) recyclable content

Question 59

This company has not hit its targets for the use of renewable energy because these sources have higher costs compared to other sources of energy. In general, the public has not been willing to pay for the added costs.

A) Walmart
B) IKEA
C) IBM
D) 3M

Question 60

These two companies have also set aggressive targets for their suppliers to improve overall supply chain sustainability.

A) Walmart and IKEA
B) IBM and 3M
C) Mattel and Hasbro
D) Apple and Starbucks

Question 61

What are some metrics that can be used to measure sustainability for a supply chain?

Question 62

For individuals and firms to focus on sustainability, it is crucial that they

A) reject the model of maximization of shareholder wealth as the firm objective.
B) adhere to ISO 14000 standards.
C) internalize the monetary value of the social/environmental cost of their actions.
D) include language in the corporate mission, vision, and values statements about sustainability.

Question 63

A cap and trade system can achieve price stability as long as

A) a price floor is established.
B) intertemporal banking of emission allowances is allowed.
C) both a price floor and intertemporal banking of emissions allowances are allowed.
D) both a price floor and a price ceiling are established.

Question 64

What are the challenges to greater sustainability posed by the tragedy of the commons?

Question 65

An energy exporting country stands to gain

A) under a cap and trade system if the supply of crude is kept below the level achieved with a price on emissions.
B) under a cap and trade system if the supply of crude is kept over the level achieved with a price on emissions.
C) under a carbon tax system if the supply of crude is kept below the level achieved with a price on emissions.
D) under a carbon tax system if the supply of crude is kept over the level achieved with a price on emissions.

Question 66

What are some opportunities for improved sustainability in various supply chain drivers?

Question 67

Much of the actual cost of recycling or remanufacturing is directly linked to:

A) the repair.
B) the logistics.
C) the production.
D) the design.

Question 68

Reducing greenhouse gas emissions was most cost effectively achieved by

A) rejecting the model of maximization of shareholder wealth as the firm objective.
B) adherence to ISO 14000 standards.
C) subsidizing companies that
D) charging for emissions.

Question 69

The Pay as You Throw (PAYT) model is designed to

A) increase recycling.
B) decrease throwing.
C) increase consumption.
D) decrease consumption.

Question 70

Discuss the factors driving an increased focus on sustainability.

Question 71

Under a cap and trade system, the price of emissions is

A) determined directly as a function of the output.
B) determined indirectly and can change.
C) determined indirectly and is invariant.
D) determined directly and is invariant.

Question 72

The market for carbon allowances

A) does not exist in a hybrid cap and trade system.
B) is a key element of a carbon tax system.
C) can result in a heavier polluter buying allowances from a company with lower carbon output.
D) is set by the regulatory authority.

Question 73

Discuss the role of sustainability supply chains.

Question 74

Under a carbon tax system, the price of emissions is

A) the tax rate set directly by the regulatory authority.
B) decided by the emitters.
C) determined by the fraction of total carbon assignable to the company.
D) agreed upon by all firms competing for the same pool of customers.

Question 75

One advantage of a carbon tax system over a cap and trade system is

A) the carbon tax system is less expensive.
B) the carbon tax system is more expensive.
C) that emissions under the cap and trade system cannot be monitored by outside agencies.
D) the carbon tax system displays more price stability.