Ch10 Test Bank Docx + Supply Chain Management Strategy And

Chapter 10:
Supply Chain Management: Strategy and Design

True/False

1. Supply chains for services are easier to define than supply chains for manufactured goods.

Difficulty: Easy

Learning Objective: LO 1

1. The supply chain for a service tends to be more compacted and less extended than a supply chain for a manufactured good.

Difficulty: Moderate

Learning Objective: LO 1

1. Because value chain and supply chain have similar meanings, they are often used interchangeably.

Difficulty: Moderate

Learning Objective: LO 1

1. Globalization and advances in information technology are primary reasons why supply chain management has become a competitive priority for companies.

Difficulty: Easy

Learning Objective: LO 1

1. A supply chain is sometimes referred to as a demand-driven value chain.

Difficulty: Moderate

Learning Objective: LO 1

1. A supply chain encompasses only the activities associated with the flow of goods.

Difficulty: Easy

Learning Objective: LO 1

1. Suppliers are upstream members of a supply chain.

Difficulty: Easy

Learning Objective: LO 1

1. An ongoing risk management process builds resiliency into the supply chain.

Difficulty: Moderate

Learning Objective: LO 1

1. Final end-use customers are upstream members of a supply chain.

Difficulty: Easy

Learning Objective: LO 1

1. Traditionally, each supply chain member was viewed as a separate, stand-alone entity focused on its own goals.

Difficulty: Moderate

Learning Objective: LO 1

1. Supply chain uncertainty and variability may result in incomplete and late orders.

Difficulty: Moderate

Learning Objective: LO 1

1. Companies address uncertainty in their supply chains by .

a. Increasing the bull whip effect

b. Decreasing inventory

c. Increasing inventory

d. Increasing transportation distances

Difficulty: Moderate

Learning Objective: LO 1

1. Supply chain management focuses managing

a. customer demand

b. suppliers for manufactured products

c. the flow of manufactured goods, services, and related information.

d. customer uncertainty

Difficulty: Moderate

Learning Objective: LO 1

1. Suppliers and customers rarely participate in the design of a supply chain.

Difficulty: Moderate

Learning Objective: LO 1

1. The bullwhip effect occurs when

a. slight to moderate demand variability becomes magnified as demand information is transmitted back upstream.

b. slight to moderate demand variability becomes magnified as supply information is transmitted back upstream.

c. slight to moderate demand variability becomes magnified as demand information is transmitted back downstream.

d. slight to moderate demand variability becomes magnified as supply information is transmitted back downstream.

Difficulty: Moderate

Learning Objective: LO 1

1. Increasing supply chain transparency only magnifies the bullwhip effect.

Difficulty: Moderate

Learning Objective: LO 1

1. A supply chain consists of an integrated group of processes to source, make, and store products.

Difficulty: Easy

Learning Objective: LO 1

1. One way to cope with the bullwhip effect is for supply chain members to share demand information.

Difficulty: Moderate

Learning Objective: LO 1

19. Sustainability is defined by the United Nations as

a. sacrificing the present needs to ensure the needs of future generations are not met.

b. sacrificing the present needs to ensure the needs of future generations met.

c. meeting the present needs to ensure the needs of future generations are not met.

d. meeting the present needs to ensure the needs of future generations are met.

Difficulty: Moderate

Learning Objective: LO 2

19. Going green has become one of the most visible recent trends in operations and supply chain management.
Difficulty: Easy

Learning Objective: LO 2

20. Where does the impetus for sustainability in the supply come from?

a. Upstream

b. Downstream

c. Within the company

d. Government regulations
Difficulty: Easy

Learning Objective: LO 2

21. The same quality management program on reducing waste can also be used to meet sustainability goals.
Difficulty: Easy

Learning Objective: LO 2

22. ____________ is the essential link for coordination among all supply chain members.

a. Customers

b. Suppliers

c. Risk management

d. Information

Difficulty: Easy

Learning Objective: LO 3

23. E-business replaces physical exchange processes with electronic ones.

Difficulty: Easy

Learning Objective: LO 3

24. A computer-to-computer exchange of business documents in a standard format is known as

a. radio frequency identification (RFID)

b. electronic data interchange (EDI)

c. collaborative planning forecasting and replenishment (CPFR)

d. internet of things (IoT)

Difficulty: Easy

Learning Objective: LO 3

25. What technology allows for the wireless transfer of data?

a. Internet of things (IoT)

b. Electronic data interchange (EDI)

c. Radio frequency identification (RFID)

d. Point of sale

Difficulty: Moderate

Learning Objective: LO 3

26. What software helps integrate many of the supply chain components by sharing and organizing information and data among supply chain members.

a. Collaborative planning, forecasting, and replenishment (CPFR)

b. Radio frequency identification (RFID)

c. Blockchains

d. Enterprise resource planning (ERP)

Difficulty: Moderate

Learning Objective: LO 3

1. Getting the members of a supply chain to collaborate and work together is called supply chain integration.

Difficulty: Easy

Learning Objective: LO 3

1. Collaborative planning, forecasting and replenishment (CFPR) is a process where the more influential member of the supply chain dictates schedules to ensure customer demand is satisfied.

Difficulty: Easy

Learning Objective: LO 3

1. Collaborative planning, forecasting, and replenishment (CPFR) is a useful tool supporting supply chain integration.

Difficulty: Moderate

Learning Objective: LO 3

1. Company resource plan (CRP) is a software that integrates the components of a company by sharing and organizing information and data.

Difficulty: Moderate

Learning Objective: LO 3

1. Fill rate is one of the three key performance indicators in measuring supply chain performance.

Difficulty: Moderate

Learning Objective: LO 4

1. What is the purpose of the supply chain operations reference (SCOR) model?

a. Provide internal metrics for the supply chain for customers

b. Provide internal metrics for customers for supply chain management

c. Provide a cross-industry standards for supply chain management

d. Provide a cross-industry standards for customers

Difficulty: Moderate

Learning Objective: LO 4

Multiple Choice

1. The suppliers in a supply chain are referred to as ______________ supply chain members.
2. downstream
3. midstream
4. upstream
5. None of these answer choices is correct.

Difficulty: Easy

Learning Objective: LO 1

1. Distributors, warehouses, and retailers are referred to as _____________ supply chain members.
2. downstream
3. upstream
4. procurement
5. None of these answer choices is correct.

Difficulty: Easy

Learning Objective: LO 1

1. The purchasing of goods and services from suppliers is called
2. sourcing.
3. offshoring.
4. procurement.
5. None of these choices is correct.

Difficulty: Easy

Learning Objective: LO 1

1. A demand-driven value chain is considered to be a global supply chain that is organized according to all the following overlapping areas of responsibility except
   a. supply management.
   b. demand management.
   c. product management.
   d. process management.

Difficulty: Hard


Learning Objective: LO 1

1. Supply chain processes include
2. procurement.
3. production.
4. distribution.
5. All of these answer choices are correct.

Difficulty: Moderate

Learning Objective: LO 1

1. Which of the following refers to an approach to risk management that aggregates risk?
   a. Risk pooling

b. Risk optimizing
c. Risk capturing
d. None of these answer choices is correct.

Difficulty: Moderate

Learning Objective: LO 1

1. Supply chain management focuses on integrating and managing the flow of
2. services.
3. information.
4. goods.
5. All of these answer choices are correct.

Difficulty: Moderate

Learning Objective: LO 1

1. The bullwhip effect can
2. increase inventories.
3. increase demand.
4. increase customer service levels.
5. increase capacity.

Difficulty: Moderate

Learning Objective: LO 1

1. All the following are approaches used in risk pooling within a supply chain except
2. reducing the number and variety of parts.
3. encouraging large orders.
4. combining inventories from multiple locations into one location.
5. None of these answer choices is correct.

Difficulty: Moderate

Learning Objective: LO 1

1. Information sharing among supply chain members will typically result in all of the following except
2. faster response times.
3. early problem detection.
4. an increased bullwhip effect.
5. greater trust and confidence among supply chain members.

Difficulty: Easy

Learning Objective: LO 1

1. One way to reduce the bullwhip effect is for supply chain members to
2. make ordering decisions independently of each other.
3. create demand forecasts independently of other supply chain members.
4. share demand forecasts with other supply chain members.
5. restrict information flows between supply chain members.

Difficulty: Moderate

Learning Objective: LO 1

1. Which of the following is not a key to effective supply chain management?
2. communication among members
3. independence among members
4. collaboration among members
5. trust among members

Difficulty: Easy

Learning Objective: LO 1

1. Increased uncertainty and variability in a supply chain typically results in
2. faster deliveries.
3. more accurate order fulfillment.
4. larger inventories.
5. lower costs.

Difficulty: Moderate

Learning Objective: LO 1

1. The United Nations defines sustainability as meeting _________ needs without compromising the ability of ______ generations to meet their needs.
   a. future, present
   b. present, future
   c. present, present
   d. future, future
   Difficulty: Easy
   
   Learning Objective: LO 2

1. Sustainability is also referred to as
   a. going green.
   b. keeping green.
   c. sustaining green.
   d. None of these answer choices is correct.

Ans. A
Difficulty: Easy

Learning Objective: LO 2

1. A common misconception of U.S. companies is that requiring suppliers in developing countries to use green practices is not feasible because
   a. developing countries do not face the same governmental, social and cultural pressures.
   b. green manufacturing methods will require costly new equipment and processes.
   c. the customer market for products designed for green attributes is soft.
   d. All of these answer choices are correct.

Ans. D
Difficulty: Moderate

Learning Objective: LO 2

1. Companies resist establishing green supply chains for all the following reasons except that
2. the market is soft for products with green attributes.
3. green manufacturing requires costly new equipment and practice.
4. green initiatives lower costs because fewer resources are consumed.
5. green practices face additional government, societal and cultural pressures.

Difficulty: Moderate

Learning Objective: LO 2

1. The impetus for commitment to sustainability generally comes from ____________ in the supply chain and moves __________ to suppliers.
   a. upstream, downstream
   b. downstream, upstream
   c. midstream, upstream
   d. downstream, midstream

Ans. B
Difficulty: Moderate

Learning Objective: LO 2

1. Which of the following is not one of the three key performance indicators (KPI) used to measure supply chain performance?
2. inventory turnover
3. postponement rate
4. inventory days of supply
5. fill rate

Difficulty: Moderate

Learning Objective: LO 4

1. A computer-to-computer exchange of business documents in a standard format is known as
2. e-business.
3. electronic data interchange (EDI).
4. radio frequency identification (RFID).
5. point-of-sale data.

Difficulty: Easy

Learning Objective: LO 3

1. All the following are enablers of efficient supply chain management except
2. bar codes.
3. price tags.
4. RFID tags.
5. the Internet.

Difficulty: Moderate

Learning Objective: LO 3

1. E-business replaces _________ processes with ___________ ones.
   a. physical, electronic
   b. electronic, physical
   c. physical, physical
   d. electronic, electronic

Difficulty: Easy

Learning Objective: LO 3

1. In general, it can be said of a modern supply chain that ________ information has the effect of ________ inventory.
   a. increasing, decreasing
   b. decreasing, increasing
   c. increasing, increasing
   d. decreasing, decreasing

Difficulty: Easy

Learning Objective: LO 3

1. _______________________ is not a perceived advantage of radio frequency identification (RFID) technology.
2. Loss of personal privacy
3. Reduced stock-outs
4. Prevention of fraud or theft
5. Lower distribution costs

Difficulty: Moderate

Learning Objective: LO 3

1. Supply chain integration does not involve __________________ among supply chain members.
2. providing information
3. collaborating on replenishment
4. reducing competition
5. coordinating work flows

Difficulty: Moderate

Learning Objective: LO 3

1. Information technology supports supply chain integration through
   a. information sharing and collaborative planning.
   b. workflow coordination.
   c. adoption of new methods and technologies.
   d. All of these answer choices are correct.

Difficulty: Moderate

Learning Objective: LO 3

1. Information sharing in support of supply chain integration includes all the following types except
   a. demand data.
   b. inventory stocks.
   c. cost and profit data.
   d. production and shipping schedules.

Difficulty: Easy

Learning Objective: LO 3

1. Inventory turnover is computed by
2. dividing the cost of goods sold by the average aggregate inventory value.
3. dividing the average aggregate inventory value by costs of goods sold.
4. multiplying the average aggregate inventory value by cost of goods sold.
5. subtracting cost of goods sold from the average aggregate inventory value.

Difficulty: Hard

Learning Objective: LO 4

1. A company that produces small electric motors for treadmills had cost of goods sold last year of $241,000,000. The average value of inventory for raw materials, work-in-process, and finished goods are shown in the table below:

If the company operates 365 days a year, the days of supply being held in inventory is

1. 44.4 days.
2. 27.4 days.
3. 8.2 days.
4. 0.1 day.

Difficulty: Hard

Solution: Days of supply=$29,285,000/($241,000,000/365 days)=44.4 days

Learning Objective: LO 4

1. A company that produces specialized video equipment had cost of goods sold last year of $127,000,000. The average value of inventory for raw materials, work-in-process, and finished goods are shown in the table below:

If the company operates 50 weeks per year, then the number of inventory turns would be

1. 1.4 turns.
2. 4.4 turns.
3. 9.0 turns.
4. 10.2 turns.

Difficulty: Hard

Solution: Inventory turns=$127,000,000/$12,440,000=10.2 turns

Learning Objective: LO 4

1. A company that produces specialized video equipment had cost of goods sold last year of $127,000,000. The average value of inventory for raw materials, work-in-process, and finished goods are shown in the table below:

If the company operates 50 weeks per year, then the weeks of supply in inventory would be

1. 4.9 weeks.
2. 0.1 week.
3. 10.2 weeks.
4. 35.8 weeks.

Difficulty: Hard

Solution: Weeks of supply=$12,440,000/($127,000,000/50 weeks)=4.9 weeks

Learning Objective: LO 4

1. A company that produces printer cartridges had cost of goods sold last year of $629,462,423. The average value of inventory for raw materials, work-in-process, and finished goods are shown in the table below:

If the company operates 50 weeks per year, then the number of inventory turns would be

1. 3.7 turns.
2. 2.5 turns.
3. 13.5 turns.
4. 28.3 turns.

Difficulty: Hard

Solution: Number of turns=$629,462,423/$46,784,211=13.5 turns

Learning Objective: LO 4

1. A company that produces printer cartridges had cost of goods sold last year of $629,462,423. The average value of inventory for raw materials, work-in-process, and finished goods are shown in the table below:

If the company operates 50 weeks per year, then the weeks of supply in inventory would be

1. 3.7 weeks.
2. 2.5 weeks.
3. 13.5 weeks.
4. 28.3 weeks.

Difficulty: Hard

Solution: Weeks of supply=$46,784,211/($629,462,423/50 weeks)=3.7 weeks

Learning Objective: LO 3

1. The fraction of orders filled by a distribution center or warehouse within a specific time period is referred to as the
2. inventory turnover.
3. inventory supply time.
4. fill rate.
5. aggregate orders processed.

Difficulty: Moderate

Learning Objective: LO 4

1. Which of the following is not a key performance indicator used in supply chain management?
2. Fill rate
3. Days of supply
4. Cost of goods
5. Inventory turns

Difficulty: Moderate

Learning Objective: LO 4

1. All of the following are performance metrics in the SCOR system, except
2. perfect order fulfillment.
3. production flexibility.
4. value-added productivity.
5. asset fulfillment.

Difficulty: Hard

Learning Objective: LO 4

Short Answer Questions

1. What is a supply chain?

Difficulty: Easy

Learning Objective: LO 1

1. Who are the upstream and downstream supply chain members?

Difficulty: Moderate

Learning Objective: LO 1

1. What processes comprise the supply chain and how are the processes integrated?

Difficulty: Moderate

Learning Objective: LO 1

1. List and define four information technology supply chain enablers.
   1. Electronic data interchange (EDI) that links supply chain members for order processing, accounting, inventory control and distribution.
   2. Radio frequency identification (RFID) that uses radio waves to transfer data between a scanner and an item such as a package or shipping container.
   3. Barcodes which contain identifying information about products as they flow through the supply chain including product description, item number, source and destination, handling procedures, etc.
   4. Internet that allows companies to communicate with suppliers, customers, shippers and other businesses around the world, instantaneously.

Difficulty: Moderate

Learning Objective: LO 3

1. List and explain the three key supply chain performance indicators.

Difficulty: Moderate

Learning Objective: LO 1

1. What is the bullwhip effect and how does it occur?

Difficulty: Moderate

Learning Objective: LO 1

1. What is the role of information and information technology in managing the supply chain?

Difficulty: Moderate

Learning Objective: LO 3

76. Which of the following assertions is not true about RFID technology?

a) it is costlier than using barcodes

b) recently it has been standardized

c) it works through radio waves, which don’t go through metal

d) All of the above are correct.

77. All of the following were estimated benefits from the use of RFID technology except __________.

a) prevention of product shrinkage, vendor fraud

b) inventory visibility, which would enable a 50% reduction in inventory levels

c) reduction of distribution center costs

d) on-shelf monitoring, which would decrease stock-outs in stores

78. All of the following are reasons that explain why the Internet has the biggest impact of all technologies on supply chain management, except __________.

a) It has eliminated geographic barriers.

b) It adds speed and accessibility to the supply chain.

c) It has shifted the advantage in the transaction process from the buyer to the seller, because it makes it easier for suppliers to reach more clients.

d) It allows companies to reduce uncertainty and inventory.

79. Which of the following choices is not true about DELL build-to-order model?

a) DELL sends out orders to suppliers through the Internet every few hours or less.

b) DELL suppliers are able to access the company’s inventories and production plans.

c) DELL suppliers receive weekly feedback on how well they are meeting shipping schedules.

d) DELL allows the customer to follow their purchase in real time from order to delivery.

80. Collaborative planning, forecasting, and replenishment (CPFR) __________.

a) allows mass customization

b) allows early detection of problems

c) builds trust and confidence

d) allows higher capacity utilization

81. If costs of goods sold for a fiscal year are $125,000,000, markup is 10%, and inventory turns are 32.5, then its average aggregate value of inventory was $__________.

a) 3,461,538

b) 3,846,154

c) 4,230,769

d) None of these figures is correct.

82. If the average aggregate value of the inventory is $38,716,000, the markup is 10%, and the days of supply are 36.7, then the cost of goods sold is $__________.

a) 311,850,000

b) 346,500,000

c) 385,000,000

d) 423,500,000

83. The supply chain operations reference model __________.

a) was pioneered by DELL

b) is based on the use of RFID technology

c) is a supply chain diagnostic tool

d) is a forecasting tool that allows reduced inventory

84. Which of the following choices is not true about the supply chain operations reference model?

a) The open-ended nature of its processes makes it similar to kaizen.

b) It’s purpose is to define a company’s current supply chain process and compare it to other companies’.

c) It is organized around a set of six primary management processes.

d) There are over 250 SCOR metrics organized within a three-tiered hierarchy

85. The SCOR mark __________.

a) is a methodology to control inventory widely used in the electronics industry

b) is a set of standards for use of RFID technology

c) benchmarks a company’s current supply chain performance against its competitors’ metrics

d) is an alternative to the Six Sigma DMAIC steps