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practice 10

Electronic data interchange (EDI) is a set of activities and techniques firms employ to efficiently and effectively manage the flow of merchandise from the vendors to the retailer’s customers.
F
An advance shipping notice (ASN) is a document that tells the DC what specifically is being shipped and when it will be delivered.
T
Cross-docking is when vendors ship merchandise prepackaged in the quantity required for each store and when the products arrive to the distribution center, the products move to the staging area to be shipped to the designated stores.
T
The pick ticket is a document or display on a screen in a forklift truck that indicates how many cartons to get from specific storage areas.
T
In a pull supply chain, there is less likelihood of being overstocked or out of stock because the store requests for merchandise are based on customer demand.
T
Drop shipping is the process of capturing value from and/or properly disposing of merchandise returned by customers and/or stores.
F
The buildup of inventory in an uncoordinated channel is called the bell-curve effect.
F
Vendor-managed inventory (VMI) is an approach for improving supply chain efficiency in which the vendor is responsible for maintaining the retailer’s inventory levels.
T
Radio frequency identification (RFID) is a technology that allows an object or person to be identified at a distance by means of radio waves.
T
Pack verification happens after a worker has packed a case or carton, usually just before sealing it.
T
_____ is a set of activities and techniques firms employ to efficiently and effectively manage the flow of merchandise from the vendors to the retailer’s customers.
Supply chain management
Which of the following is a benefit of efficient supply chain management?
Increase in product availability
Which of the following is not a benefit of efficient supply chain management?
Better fashions
Which of the following is not a reason why an efficient supply chain is important to retailers?
Trendier merchandise
Fewer stockouts and tailored assortments translate into _____.
higher inventory turnover
A(n) _____ occurs when a stock keeping unit that a customer wants is not available.
stockout
Jane visits the local supermarket to purchase caviar for a dinner party. Upon enquiry, she finds out that caviar is sold out. Which of the following terms best describes this situation?
Stockout
Which of the following is a typical reaction that customers exhibit when experiencing multiple stockouts?
Switching to another retailer
Bloomsberry LLC, a fashion retailer, periodically keeps updating their collection of apparel. Woolen apparels are stocked during winter, and cotton apparels are stocked during summer. Which of the following is this an example of?
Tailored assortments
An efficient supply chain and information system can improve its return on assets (ROA) because the system _____.
increases sales and net profit margins, without increasing inventory
In an efficient supply chain and information system, net sales increase because _____.
customers are offered tailored assortments that are in stock
Which of the following statements is a method for improving net profit margin?
It can be improved by increasing the gross margin and lowering expenses.
When inventory levels, inventory investment, and total assets are low, _____.
asset and inventory turnovers are high
A(n) _____ is a document that tells the DC what specifically is being shipped and when it will be delivered.
Advanced shipping notice (ASN)
The place where the point of sale data is stored, and the organization uses to support its decisions is called a(n) _____.
data warehouse
When a regular customer calls a well-known pizza delivery restaurant, the order-taker types in the caller’s name. The computer screen shows the customer’s address, phone number, directions to his or her house, his or her usual order, and the date and frequency of orders. If the customer has not ordered during a two-month period, or the average number of orders has been down, then the pizza parlor mails them a coupon of their favorite pizza. Which of the following does the pizza parlor use?
Data warehouse
_____ is the computer-to-computer exchange of business documents from the retailer to the vendor, and vendor to retailer.
Electronic data interchange (EDI) system
How do retailers and vendors ensure that the information that passes back and forth between retailers and vendors is secure?
The system ensures that the information received has not been tampered with by ensuring that the communication is both authentic and authorized.
What are the rules that apply to activities involving computer and communication resources that belong to an organization?
Security policy
Which of the following statements is not a benefit of EDI to retailers and their vendors?
EDI increases the desirability of the product for the end consumer.
Which of the following statements best describes logistics?
It involves the activities undertaken in the retailer’s DC, in addition to managing inbound and outbound transportation.
_____ is the aspect of supply chain management which refers to the planning, implementation, and control of the efficient flow and storage of goods, services, and related information. It follows the process from the point of origin to the point of consumption to meet customers’ requirements.
Logistics
Which of the following statements is true of a dispatcher’s role?
Dispatchers coordinate deliveries to the distribution centers.
Sara, who works at WorldFly LLC, is responsible for coordinating deliveries to the distribution center. Which of the following terms best describes Sara’s role?
Dispatching
Which of the following is not a function of a distribution center?
Negotiating with vendors
Which of the following is a function of a distribution center?
Managing inbound transportation
The process where vendors ship the merchandise prepackaged to the distribution center in the quantities required for each store and then that merchandise is shipped to stores as soon as it is received is called _____.
cross-docking
Ali supervises the conveyor belts in a distribution center. Her job is to make sure the merchandise moves quickly from the receiving docks to the staging area in order for the trucks to load and deliver. No merchandise is stored as the vendors already prepared it specifically for the stores. Ali handles _____ at the distribution center.
cross-docking
Which of the following statements about receiving, checking, marking, and ticketing is true?
It is more efficient for a retailer to perform ticketing and marking at a DC than in its stores.
The retailer’s order is transmitted to the distribution system via computers. Then, the computer at the distribution center creates a _____, a document or display on a screen in the forklift truck that indicates how many cartons to get from specific storage areas.
pick ticket
Retailers can use _____ to arrange for the storage and shipping of their merchandise.
freight forwarders
Each time a customer makes a purchase at a Walmart store from the health and beauty area, data is transmitted to the nearest distribution center so the merchandise can be replenished and sent on the next truck delivery. Which of the following strategies does Walmart utilize?
Pull supply chain
A retailer whose orders are generated at the store level on the basis of sales data captured by point-of-sale terminals is said to employ a(n):
pull supply chain.
Which of the following statements does not describe the benefits of a pull strategy?
All of these statements are benefits of a pull strategy.
In a(n) _____, merchandise is allocated to stores on the basis of forecasted demand.
push supply chain
Retailers with less sophisticated forecasting and information systems tend to use a(n) _____.
push supply chain
An inventory planner notes that the inventory she is responsible for would be best managed by relying on consumer demand. She recommends to her management to implement a(n) _____ that would support being in a better stock position of her managed product by store location.
pull supply chain strategy
For fashion merchandise, where there is only one shipment of the product or collection, the best supply chain method to use is the _____.
push supply chain strategy
A vendor that employs sales associates for retailers to visit stores, analyze their business and inventory, and create displays of their products will most likely also utilize
what method of product delivery?
Direct store delivery
Which of the following statements describes the benefits of a pull strategy?
There is less likelihood of being overstocked or out of stock at each store.
Which of the following types of retailers is most likely to benefit from the use of direct store delivery?
A supermarket
Which of the following statements is an advantage of using distribution centers over direct store delivery?
The DCs enable the retailer to carry less overall inventory.
Which of the following statements does not describe the benefits of utilizing distribution centers over direct store delivery?
The use of distribution centers increases inventory investment.
Which of the following terms describe the process of moving returned goods to the retailer from the consumer to the DC and then to the vendor for the purpose of capturing value or proper disposal?
Reverse logistics
What is the process of moving merchandise through the channel from the customer to the store to the DC to the vendor?
Reverse logistics
When the law office of Dewey, Cheatham, and Howe received the case of legal paper it had ordered from an internet office supply retailer, the office manager was dismayed to find the paper was pink even though it was marked white. The office manager packed the paper and sent it back to the retailer who in turn sent it back to the vendor. This is an example of:
reverse logistics.
_____ is a method where retailers receive orders from customers and have the product shipped directly to the customer from the vendor.
Consumer direct fulfillment
From the retailers view, _____ reduces the retailer’s supply chain costs and investment because the vendor assumes the costs and risks of shipping the product to the customer.
drop shipping
Matthew made a purchase online of a Fender speaker system from a retailer. When the shipment of his purchase arrived at his home, he noticed that the product was shipped to him directly from Fender. The retailer and vendor are utilizing a system of _____.
drop shipping
What happens when retailers and vendors do not coordinate their supply chain management activities?
Excess inventory builds up in the system.
Which of the following does not cause the bullwhip effect in an uncoordinated supply chain?
Information sharing
_____ is a strategy used by fashion apparel retailers that offers customers inexpensive fashionable merchandise early in the fashion life cycle.
Fast fashion
The building up of inventory in an uncoordinated channel is called a(n):
bullwhip effect
Which of the following does not describes the ways to reduce the level of inventory in the supply chain and the number of stockouts in the stores?
Using reverse logistics
_____ is an approach for improving supply chain efficiency in which the vendor is responsible for maintaining the retailer’s inventory levels in each of its stores.
Vendor-managed inventory (VMI)
Because of the nature of vendor-managed inventory, _____.
retail buyers and planners no longer need to monitor inventory levels and place orders
Which of the following describes the limitations of vendor-managed inventory that retailers may encounter?
When the vendor coordinates the supply chain for its specific products, it does not know what other actions the retailer is taking that might affect the sales of its products in the future.
_____ is the sharing of forecasts and related business information between retailers and vendors to improve supply chain efficiency and product replenishment.
Collaborative planning, forecasting, and replenishment (CPFR)
CPFR partnerships require:
trust and commitment.
_____ are tags that transmit identifying information and are attached to individual items, shipping cartons, and containers.
Radio frequency identification devices
Which of the following statements is true of radio frequency identification devices?
They transmit data about the objects in which they are embedded.
Which of the following is the primary benefit of tagging individual items to retailers?
Real-time measure of inventory levels
What is an advantage of using RFID over traditional bar codes?
RFID holds more data stored on the device.
Which of the following is not a benefit of using RFID over traditional bar codes?
Reduced inventory turnover.
Which of the following statements is a reason why some vendors and retailers chose not to adopt RFID tagging?
They believe the additional costs do not benefit the return on investment.
____ happens after a worker has packed a case or carton, usually just before sealing it.
Pack verification
_____ happens as cartons are loaded onto the truck or onto a pallet.
Ship verification
List the three objectives that a supply chain security policy should meet.
The objectives of a security policy are:
Authentication: The system ensures or verifies that the person or computer at the other end of the communication really is who or what it claims to be.
Authorization: The system ensures that the person or computer at the other end of the communication has permission to carry out the request.
Integrity: The system ensures that the arriving information is the same as that sent, which means that the data have been protected from unauthorized changes or tampering through a data encryption process.
What are the activities that take place at a distribution center?
Coordinating inbound transportation, receiving merchandise, checking the merchandise for accuracy, storing the merchandise, cross-docking, getting the merchandise “floor-ready”, and coordinating outbound transportation are all activities that take place at a distribution center.
Identify what is “floor-ready” merchandise and describe the tasks that are completed at the distribution center to prepare merchandise to be “floor ready”.
Floor-ready merchandise is merchandise that is ready to be placed on the selling floor in a store
What is the bullwhip effect and what causes it in an uncoordinated supply chain?
The bullwhip effect is a buildup of inventory in an uncoordinated channel. The bullwhip effect is caused by (1) delays in transmitting orders and receiving merchandise, (2) overreacting to shortages, and (3) ordering in batches.
What are the benefits of RFID technology over traditional bar codes?
The RFID technology has two advantages over traditional bar codes. First, the devices can hold more data and update the data stored. For instance, the device can keep track of where an item has been in the supply chain and even where it is stored in a DC. Second, the data on the devices can be acquired without a visual line of sight. Thus, RFID enables the accurate, real-time tracking of every single product, from manufacturer to checkout in the store. It eliminates the manual point-and-read operations needed to get data from UPC bar codes.
Differentiate between pack verification and ship verification.
Pack verification happens after a worker has packed a case or carton, usually just before sealing it. All of the RFID tags in the case are read and compared against the ship order. Ship verification is similar, except that it happens as cartons are loaded onto the truck or onto a pallet. This confirms again that the right items are being loaded.

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