Chapter 7 Supply Chain Management

5. Air transport can significantly reduce inventory and warehousing costs, as well as improve customer service.

6. Logistics includes the responsibility for acquiring the goods and services the organization needs, by any means.

7. Under sole-sourcing arrangements, customers involve suppliers from the design stage, asking for larger deliveries of higher quality items in large batches that enable greater savings.

8. Risk costs include interest on money invested in inventory and in the land, buildings, and equipment necessary to hold and maintain the inventory.

9. Some benefits of electronic data interchange include less redundancy, improved customer service, and better order tracing.

10. Intranets are private networks to allow the organization to securely interact with external parties.

11. Enterprise resource planning systems are designed to collect and interpret customer-based data.

Short Answer

1. Increasing global __________ is a major factor driving the need to better manage the supply chain.

2. Some outputs such as dams, roads, buildings and bridges may be relatively __________.

3. To ensure that contracted supplies will be available when needed, organizations periodically conduct supplier __________ of their vendors, checking for potential production or delivery problems, quality assurance, design, improvement procedures and corrective actions.