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Chapter 15 OPMT 303

In e-commerce, the front-end design is significantly more important than the back-end design.
True
False
False
Which of the following is not a measure of the reliability of the supply chain?

improving e-fulfillment statistics
lead time variability
fill rate
on-time delivery
supply chain response time

supply chain response time
Which of the following is least likely to be a key consideration when a company chooses a supplier?

value analysis
quality and quality assurance
flexibility of design change
reputation and financial stability
lead time and on-time delivery

value analysis
Information technology is the key to success of global supply chains.
True
False
True
(I) are used to track goods in distribution.
(II) are used to track job progress in production.
(III) are used to provide special instructions to operators.
(IV) can be used in inventory record keeping.
I, II, and IV
II and III only
I and II only
IV only
II, III, and IV
I, II, and IV
Which of the following is not a goal of supply chain management?

fewer suppliers and long-term relationships

on-time deliveries

lowest possible transportation costs

delivery often to the place of use

small lot sizes

lowest possible transportation costs
One disadvantage to RFID is that it requires a clear “line of sight” to operate.

True

False

False

RFID doesn’t need line-of-sight reading.

To avoid temporary storage in a warehouse, cross-docking can be used.
True
False
True
In cross-docking, inbound goods are moved directly onto outbound trucks.
The importance of purchasing relates only to the cost of parts and materials purchased, which is often 60 percent or more of the cost of finished goods.

True
False

False

Purchasing is important because other costs resulting from the purchase of parts and materials are highly consequential.

Which of the following is not a benefit of centralized purchasing?

potential for use of purchasing specialists
supplier research
quick response to local needs
potential for quantity discounts
better service from suppliers

quick response to local needs
_________ has/have helped firms to concentrate on their core business.
Supply chains
ERP
Scheduling
Outsourcing
Lean production
Outsourcing
An advantage of decentralized purchasing is the attention given to local needs.
True
False
True
One of the major reasons for a company to adopt third-party logistics is to concentrate on one’s core business.

True

False

True

Outsourcing logistics to third parties enables a company to focus on its core business.

The optimization of the supply chain uses a mathematical model to determine the optimal number of business organizations to be included in the chain.

True

False

False

Optimizing a supply chain through mathematical models is typically not feasible.

The service function of purchasing interfaces with many areas, including legal, accounting, and engineering functions.

True

False

True
The importance of purchasing relates only to the cost of parts and materials purchased, which is often 60 percent or more of the cost of finished goods.

True
False

False

Purchasing is important because other costs resulting from the purchase of parts and materials are highly consequential.

The two types of decisions that are relevant to supply chain management are:

location and layout.
domestic and international.
in-sourcing and outsourcing.
tactical and operational.
short- and long-term.

tactical and operational.

Decision making in supply chain management falls into either tactical or operational areas.

The goal of supply chain management is to synchronize supply and demand of all of the organizations that are part of the chain.

True
False

True

Synchronizing multiple organizations is one of the difficulties of supply chain management.

Using third-party fulfillment means losing control of fulfillment.

True
False

True

Outsourcing this key function means a loss of control.

Starting with the final customer and moving backward through the supply chain, batch sizes and the level of safety stock tend to decrease.

True
False

False
Which of the following is not a goal of supply chain management?

lowest possible transportation costs
delivery often to the place of use
small lot sizes
on-time deliveries
fewer suppliers and long-term relationships

lowest possible transportation costs

Minimizing transportation costs might lead to an unacceptable trade-off elsewhere.

Real-time information about product movement on store shelves could benefit from the use of:
radio frequency identification tags.
Small changes in consumer demand can result in large variations in orders placed because of the:

safety stock requirement.
FCFS scheduling.
lead time effect.
supply chain.
bullwhip effect.

Bullwhip effect
Event management is the advanced planning required for major performances such as concerts or conferences.

True
False

False

Event management involves detecting and responding to unplanned events.

Decentralized purchasing can usually offer quicker response than centralized purchasing.

True
False

True

Centralized purchasing can be more efficient, but decentralized purchasing can offer faster response.

The purchasing perspective of the supplier as a partner is characterized by:

low volume.
an emphasis on low prices.
100 percent inspection for quality.
one or a few suppliers.
low flexibility.

one or a few suppliers.

Fewer suppliers enhance the chances of building real partnerships.

Strategic partnering is encouraged when two or more business organizations have complementary products or services that would benefit the others.

True
False

True

Complementarity is key to successful strategic partnering.

E-commerce involves business-to-business (B2B) interaction only.

True
False

False
Inventory velocity refers to the average speed (in miles/hour) of material handling equipment in a warehouse.

True
False

False

Velocity refers to the rate at which goods pass through a supply chain.

Which of the following is not a measure of the reliability of the supply chain?

fill rate
supply chain response time
lead time variability
on-time delivery
improving e-fulfillment statistics

supply chain response time

Response time is a measure of supply chain effectiveness.

It is especially the case for small businesses that closer interactions and increased agility make __________ relatively more attractive.
domestic suppliers
risk transfer
decentralized purchasing
global suppliers
centralized purchasing
domestic suppliers
Using third-party logistics involves using your organization’s logistics function to ship to customers that are not officially part of the supply chain.

True
False

False

Using third-party logistics involves outsourcing the logistics function.

Disintermediation refers to the phenomenon that the traditional retailer or service provider is reduced or eliminated in a supply chain.
True
False
True

Disintermediation involves reducing one or more steps in a supply chain by cutting out intermediaries.

Which of the following is not a performance driver?

cost
flexibility
stability
quality
velocity

stability
The website and order fulfillment are essential features of:

e-commerce.
Internet service providers.
market segmentation.
inventory balancing.
delayed differentiation.

e-commerce.
Which of these aspects of supply chain management are especially concerning to small business?

(I) customer reliability
(II) inventory management
(III) purchasing costs
(IV) risk management
(V) international trade

I, III, and IV only
III, IV, and V only
I and II only
I, II, and III only
II, IV, and V only

II, IV, and V only

Three aspects of supply chain management that are often of concern to small businesses are: (1) inventory management; (2) reducing risks; and (3) international trade.

Traffic management refers to truck movement within our parking areas.

True
False

False

Traffic management is the management of the shipment of incoming and outgoing goods.

In purchasing, one’s only ethical obligation is to one’s suppliers.
True
False
False

Purchasing personnel have ethical obligations with regard to a variety of stakeholders, primarily the organizations that employ them.

The activity which begins with a request from within the organization is:

supply chain management.
purchasing cycle.
outsourcing search.
order receipt.
supplier selection.

purchasing cycle
The purchasing cycle begins with:

placing an order.
receiving a requisition.
selecting a supplier.
conducting a value analysis.
evaluating potential vendors.

receiving a requisition.
Which of the following would not usually be a main factor in selecting a vendor?

location
quality
inventory turnover
vendor services
price

inventory turnover
Vendor analysis is the process that evaluates the source of supply in terms of price, quality, reputation, and service.
True
False
True

Evaluating sources in terms of price, quality, reputation, and service is vendor analysis.

In supply chain organizations, functions must operate independently of each other.
True
False
False

Functions should be integrated.

Which of the following is not true of vendor analysis?

It is usually performed only periodically.

It involves an examination of the function of
purchased parts or raw materials.

Its purpose is to reduce costs and/or improve performance of purchased goods or services.

If improvements are identified, purchasing implements those that purchasing agrees are justified.

Representatives from design and operations may work with purchasing.

It involves an examination of the function of purchased parts or raw materials.
Which of the following is a principle required for ethical behavior in purchasing?

(I) loyalty to employer
(II) justice to those you deal with
(III) faith in your profession

II only
III only
I only
II and III only
I, II, and III

I, II, and III
Which of the following is an advantage of E-business?

(I) reduction of transaction costs
(II) shortened supply chain response time
(III) greater customer loyalty
I
I, II, and III
II
I and II
II and III

I and II

Gaining and maintaining customer loyalty is even more difficult once a firm is involved in E-business.

The interface between the firm and its suppliers is:

distribution.
accounting.
production.
purchasing.
engineering.

purchasing.
RFID chips:

(I) are used to track goods in distribution.
(II) are used to track job progress in production.
(III) are used to provide special instructions to operators.
(IV) can be used in inventory record keeping.
I, II, and IV
II and III only
II, III, and IV
I and II only
IV only

I, II, and IV

RFID chips do not contain special instructions.

Which of the following is not true of vendor analysis?

Its purpose is to reduce costs and/or improve performance of purchased goods or services.
It is usually performed only periodically.
Representatives from design and operations may work with purchasing.
If improvements are identified, purchasing implements those that purchasing agrees are justified.
It involves an examination of the function of purchased parts or raw materials.

It involves an examination of the function of purchased parts or raw materials.
Which of these aspects of supply chain management are especially concerning to small business?

(I) customer reliability
(II) inventory management
(III) purchasing costs
(IV) risk management
(V) international trade

I and II only
I, III, and IV only
III, IV, and V only
I, II, and III only
II, IV, and V only

Three aspects of supply chain management that are often of concern to small businesses are: (1) inventory management; (2) reducing risks; and (3) international trade.
MC Qu. 49 Strategies to address supply chain risks inc…
Strategies to address supply chain risks include:

(I) risk avoidance.
(II) risk reduction.
(III) risk projection.
(IV) risk sharing.

I, II, and IV only
II and III only
I, II, III, and IV
II and IV only
I and IV only

Risk management strategies include risk avoidance, risk reduction, and risk sharing with supply chain partners.
Vendor analysis has the greatest potential for savings for items which have:

low cost per unit.
high annual usage.
high annual cost-volume.
low annual cost-volume.
high cost per unit.

high annual cost-volume.
The more __________ a company’s supply chain, the more difficult it is to ensure that the supply chain is managed ethically.
visible
interconnected
competitive
global
shortened
global

Problems with supply chain ethics are particularly difficult to manage when supply chains are global.

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