Chapter 7 Supply Chain Management

1. Which of the following statements about Supply Chain Management (SCM) is correct?

a) SCM programs are putting ever greater emphasis on the finance function

b) SCM coordinates and integrates several activities into a process by linking the most important partners in the chain

c) The goal of SCM is to deliver the right product at the right time, while yielding the lowest possible costs

d) SCM enables manufacturers to actively plan and collaborate across a distributed supply chain

2. Which of the following is FALSE about supply chains?

a) Just-in-time deliveries (JIT) and lean manufacturing dictate a demand chain

b) When customers of a service are also suppliers, they should be attracted

c) A supply chain is suggestive of a system of production in which the customer “pulls” the product

d) Suppliers that are not customers must be chosen carefully

3. 3PL companies:

a) Offer their products in a most efficient manner

b) Are also known as third-place location firms

c) Have chosen to outsource at least portions of their supply chain management function

d) Provide services including handling product distribution and returns, receiving materials and managing warehouses

4. Which of the following is NOT a factor that is increasing the need to better manage the supply chain?

a) Optimization of their own value by most segments in the supply chain

b) Global competition and outsourcing

c) E-commerce and telecommunications

d) Outsourcing and shorter life cycles

5. Suppose that you have found the AAIV (aggregate inventory value on average for the year) to be $400 million. The daily cost of good sold was estimated at $80 million, what is the estimated days of supply?

a) 5

b) 8

c) 32

d) 48

6. Logistics consist(s) of the following, EXCEPT:

a) Compensation and incentives

b) Storage and warehousing

c) Transportation and information processing

d) Inventories and distribution

7. Which of the following is TRUE about the bullwhip effect?

a) Variability in demand increases from the factory stage downstream to the customer stage

b) This cycle is prevalent in just about every industry

c) Lead times between the stages of the supply chain tend to be very short

d) Information lags stemming from large lot sizes with infrequent orders may be a cause

8. What is the least expensive transportation mode?

a) Air

b) Trucking

c) Railroads

d) Water

9. Organizations that process natural or basic resources as raw materials or other essential inputs to obtain their outputs will locate near their resources if one of the following conditions holds:

a) High economies of scale exist for the product

b) The raw material can be shipped long distance before being processed

c) There is a large loss in size or weight during processing.

d) Both A and C

10. Purchasing tends to follow three practices; which of the following is NOT one of them?

a) They leverage their buying power

b) They work with and help suppliers reduce costs

c) They commit to a small number of dependable suppliers

d) All of the above are practices followed by purchasing in highly effective organizations