ch15ch15Student: ___________________________________________________________________________1.A company's supply chain involves the flow of materials and information from suppliers, through production, to the end users.TrueFalse2.In supply chain organizations, functions must operate independently of each other.TrueFalse3.In purchasing, one's only ethical obligation is to one's suppliers.TrueFalse4.Using third-party logistics involves using your organization's logistics function to ship to customers that aren't officially part of the supply chain.TrueFalse5.Every business organization is part of at least one supply chain.TrueFalse6.Frequent deliveries of small shipments can reduce inventory but also result in an increase in the transportation cost per unit.TrueFalse7.The materials in the supply chain flow toward the end of the chain, while the information and the dollars move toward the beginning of the chain.TrueFalse8.Managing supply chain visibility involves making sure that potential supply chain partners are aware of your organization's needs.TrueFalse9.The goal of supply chain management is to synchronize supply and demand of all of the organizations that are part of the chain.TrueFalse10.The need for supply chain management increases as globalization increases.TrueFalse11.The design of the supply chain and establishing partnerships with vendors and distributors are examples of operating issues in a supply chain.TrueFalse12.Traffic management refers to truck movement within our parking areas.TrueFalse13.One of the major reasons for a company to adopt third-party logistics is to concentrate on one's core business.TrueFalse14.E-commerce refers to the use of electronic technology to facilitate business transactions.TrueFalse15.E-commerce involves business-to-business (B2B) interaction only.TrueFalse16.Disintermediation refers to the phenomenon that the traditional retailer or service provider is reduced or eliminated in a supply chain.TrueFalse17.Most people working for a business organization are somehow involved with the supply chain of that business.TrueFalse18.Strategic partnering is encouraged when two or more business organizations have complementary products or services that would benefit the others.TrueFalse19.Forming strategic partnerships is beneficial for two or more business organizations that have the same products or services.TrueFalse20.Inventory velocity refers to the average speed (in miles/hour) of material handling equipment in a warehouse.TrueFalse21.Global supply chains make purchasing easier because of more options.TrueFalse22.Centralized or decentralized purchasing is directly related to the size of an organization.TrueFalse23.The optimization of the supply chain uses a mathematical model to determine the optimal number of business organizations to be included in the chain.TrueFalse24.Information technology is the key to success of global supply chains.TrueFalse25.Bullwhip effect refers to a phenomenon that demand variations that exist at the customer end of the supply chain are magnified as orders are generated back through the supply chain.TrueFalse26.Starting with the final customer and moving backward through the supply chain, batch sizes and the level of safety stock tend to decrease.TrueFalse27.Scheduling and maintaining equipment are operational decisions.TrueFalse28.To prevent temporary storage in a warehouse, cross docking can be used.TrueFalse29.Delayed differentiation is a means of increasing product variety without building the customized product from scratch or keeping large inventories of custom products.TrueFalse30.Returned goods are part of reverse logistics.TrueFalse31.A 30% reduction in product and service variety won't really affect the efficiency of a supply chain.TrueFalse32.The service function of purchasing interfaces with many area including legal, accounting, and engineering functions.TrueFalse33.Gate keeping manages the cost of shipping returned goods.TrueFalse34.Outsourcing logistics gives a company less flexibility because it forces them to focus more on core businesses.TrueFalse35.Vendor analysis examines the function of purchased parts and materials with a view towards improvement or cost reduction.TrueFalse36.Using third-party fulfillment means losing control of fulfillment.TrueFalse37.Price is the primary determining factor in choosing a vendor since most products are essentially the same.TrueFalse38.RFID eliminates the need for counting and bar-code scanning.TrueFalse39.The importance of purchasing relates only to the cost of parts and materials purchased, which is often 60% or more of the cost of finished goods.TrueFalse40.The importance of purchasing is the cost of goods purchased, the quality of goods and services, and the timing of deliveries of goods or services.TrueFalse41.Vendor analysis is the process that evaluates the source of supply in terms of price, quality, reputation, and service.TrueFalse42.In e-commerce, the front-end design is significantly more important than the back-end design.TrueFalse43.One disadvantage to RFID is that they require a line of sight' for reading.TrueFalse44.Decentralized purchasing can usually offer quicker response than centralized purchasing.TrueFalse45.Some firms have structured their procurement function to include both centralized and decentralized purchasing.TrueFalse46.Creating an effective supply chain requires linking the marketing, distribution, and supplier channels.TrueFalse47.An advantage of decentralized purchasing is the attention given to local needs.TrueFalse48.Event management is the advanced planning required for major performances such as concerts or conferences.TrueFalse49.Supplier certification is the first step required in a supplier audit program.TrueFalse50.Design and purchasing people should work closely because changes in design, specifications, or materials can impact future purchase requirements.TrueFalse51.The purchasing cycle ends when the purchasing department is notified that the supplier has shipped the items.TrueFalse52.Producing and shipping in large lots may reduce costs but increase lead times.TrueFalse53.Variations create uncertainty, thereby causing inefficiencies in a supply chain.TrueFalse54.Disintermediation is the refusal of one party to use mediators for price negotiation.TrueFalse55.Which of the following is not a goal of supply chain management?A.fewer suppliers and long-term relationshipB.small lot sizesC.on time deliveriesD.lowest possible transportation costsE.delivery often to the place of use56.Logistics includes all of these except:A.the movement of materials within a production facilityB.incoming shipments of goods or materialsC.outgoing shipments of goods or materialsD.customer selectionE.returned goods processing57.Small changes in consumer demand can result in large variations in orders placed because of the A.Supply chainB.Safety stock requirementC.Lead time effectD.Bullwhip effectE.FCFS scheduling58.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 keepingA.II and III onlyB.I and II onlyC.II, III, and IVD.I, II, and IVE.IV only59.Which of the following is not a benefit of RFID?A.increased productivityB.elimination of paper workC.frequent deliveries of smaller shipmentsD.reduction in clerical laborE.increased accuracy60.A factor that makes it desirable for business organizations to actively manage their supply chains is:A.more potential vendorsB.increasing globalizationC.downsizingD.the internetE.RFID's61.Which of the following is not a benefit of effective supply chain management?A.lower inventory costsB.higher productivityC.shorter lead timesD.greater customer loyaltyE.larger number of suppliers62.Which of the following is not a measure of the reliability of the supply chain?A.supply chain response timeB.on-time deliveryC.fill rateD.lead time variabilityE.improving e-fulfillment statistics63.The automatic identification of material is part of/facilitated by:A.holding costsB.RFIDC.working capital reductionD.net present value calculationsE.vendor analysis64.Which of the following is not an application of E-business?A.internet buying and sellingB.e-mailC.order and shipment trackingD.electronic data interchange (EDI)E.universal product codes65.Which of the following is an advantage of E-business?(I) reduction of transaction costs(II) shortened supply chain response time(III) greater customer loyaltyA.IB.IIC.I and IID.II and IIIE.I, II, and III66.Which of the following is a barrier to integration of separate organizations in the supply chain?(I) conflicting objectives of the companies in the chain.(II) different level of capacity of the companies in the chain.(III) reluctance of the organizations in the chain to allow other organizations access to their data.A.I onlyB.I and IIC.II and IIID.I and IIIE.I, II and III67._________ has helped business concentrate on their core business.A.Supply ChainsB.SchedulingC.OutsourcingD.ERPE.Lean Production68.Outsourcing followed by __________ is not simple.A.IntegrationB.UnionizationC.BacksourcingD.ComputerizationE.Just-in-time69.The interface between the firm and its suppliers is:A.purchasingB.productionC.distributionD.engineeringE.accounting70.The two types of decisions that are relevant to supply chain management are:A.Short, long termB.Domestic, internationalC.Location, layoutD.In-source, out-sourceE.Tactical, operational71.One important objective of purchasing is to:A.set quality standards for purchased itemsB.be knowledgeable about new productsC.maintain numerous sources of supplyD.obtain the lowest prices on all purchased itemsE.determine the processes that should be used72.The purchasing cycle begins with:A.selecting a supplierB.placing an orderC.evaluating potential vendorsD.conducting a value analysisE.receiving a requisition73.Examination of the sources of supply for purchased parts or materials in order to improve performance is called:A.vendor analysisB.value analysisC.negotiated purchasingD.reverse engineeringE.disintegration74.Vendor analysis has the greatest potential for savings for items which have:A.low cost per unitB.low annual cost-volumeC.high cost per unitD.high annual usageE.high annual cost-volume75.Which of the following is not true of vendor analysis?A.It involves an examination of the function of purchased parts or raw materials.B.Its purpose is to reduce costs and/or improve performance of purchased goods or services.C.It is usually performed only periodically.D.Representatives from design and operations may work with purchasing.E.If improvements are identified, purchasing implements those that purchasing agrees are justified.76.Which of the following is not a performance driver?A.QualityB.CostC.StabilityD.VelocityE.Flexibility77.Which of the following would not usually be a main factor in selecting a vendor?A.locationB.priceC.qualityD.inventory turnoverE.vendor services78.Which of the following is part of the purchasing cycle?(I) Purchasing selects a supplier.(II) Orders from vendors are received.(III) Purchasing receives a requisition.A.II and IIIB.I, II, and IIIC.I onlyD.I and IIE.I and III79.Which of the following is least likely to be a key consideration when a company chooses a supplier?A.lead time and on-time deliveryB.reputation and financial stabilityC.value analysisD.quality and Quality assuranceE.flexibility of design change80.Which of the following is not a benefit of centralized purchasing?A.potential for quantity discountsB.better service from suppliersC.quick response to local needsD.potential for use of purchasing specialistsE.supplier research81.The purchasing perspective of the supplier as a partner is characterized by:A.an emphasis on low pricesB.one or a few suppliersC.low flexibilityD.100% inspection for qualityE.low volume82.Vendor Analysis is the examination of the _________ of purchased materials.A.FunctionB.SourceC.QualityD.CycleE.Quantity83.Last quarter, a retailer sold 8,000 t-shirts, 7,000 of which were sold directly from on-hand inventory. This retailer's ________ was 88%.A.fill rateB.inventory yieldC.profit marginD.inventory turnoverE.none of the above84.Which of the following is a principle required for ethical behavior in purchasing?A.loyalty to employer.B.justice to those you deal with.C.faith in your profession.D.all of the above.E.none of the above.85.The activity which begins with a request from within the organization is:A.Outsourcing searchB.Purchasing cycleC.Supplier selectionD.Order receiptE.Supply chain management86.Our organization can obtain visibility to potential trading partners on the internet by using:A.C2CB.B2CC.B2BD.C2BE.None of the above87.Real time information about product movement on store shelves could benefit from the use of:A.batch processingB.economic order quantitiesC.statistical process controlD.radio frequency identification tagsE.infrared remote scanners88.The website and order fulfillment are essential features of:A.delayed differentiationB.e-commerceC.internet service providersD.inventory balancingE.market segmentation89.A given inventory item has a per-year holding cost of $500. One method of shipping this item is three days faster than the other, but it is $2.50 more per unit. Using the slower method would be __________ more expensive overall than using the faster method.A.$1.08B.$1.16C.$2.37D.$2.73E.$1.61ch15 Key1.A company's supply chain involves the flow of materials and information from suppliers, through production, to the end users.TRUEFlow of materials and information are the central focus of supply chain management.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 15-01 Discuss the key issues of supply chain management.Stevenson - Chapter 15 #1Topic Area: Introduction2.In supply chain organizations, functions must operate independently of each other.FALSEFunctions should be integrated.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #2Topic Area: Creating an Effective Supply Chain3.In purchasing, one's only ethical obligation is to one's suppliers.FALSEPurchasing personnel have ethical obligations with regard to a variety of stakeholders, primarily the organizations that employ them.AACSB: EthicsBlooms: UnderstandDifficulty: EasyLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #3Topic Area: Procurement4.Using third-party logistics involves using your organization's logistics function to ship to customers that aren't officially part of the supply chain.FALSEUsing third-party logistics involves outsourcing the logistics function.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #4Topic Area: Logistics5.Every business organization is part of at least one supply chain.TRUEEither the business organization is a complete supply chain or it is a player in a supply chain.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-01 Discuss the key issues of supply chain management.Stevenson - Chapter 15 #5Topic Area: Introduction6.Frequent deliveries of small shipments can reduce inventory but also result in an increase in the transportation cost per unit.TRUEThis is one of the tradeoffs inherent in supply chain management.AACSB: Reflective ThinkingBlooms: UnderstandDifficulty: MediumLearning Objective: 15-04 State some of the complexities that are involved with global supply chains.Stevenson - Chapter 15 #6Topic Area: Creating an Effective Supply Chain7.The materials in the supply chain flow toward the end of the chain, while the information and the dollars move toward the beginning of the chain.FALSEMaterial flows toward the final consumer and information and dollars flow upstream.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-01 Discuss the key issues of supply chain management.Stevenson - Chapter 15 #7Topic Area: Introduction8.Managing supply chain visibility involves making sure that potential supply chain partners are aware of your organization's needs.FALSESupply chain visibility has to do with making sure that current trading partners have access to needed data in real time.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-04 State some of the complexities that are involved with global supply chains.Stevenson - Chapter 15 #8Topic Area: Creating an Effective Supply Chain9.The goal of supply chain management is to synchronize supply and demand of all of the organizations that are part of the chain.TRUESynchronizing multiple organizations is one of the difficulties of supply chain management.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #9Topic Area: Strategy10.The need for supply chain management increases as globalization increases.TRUEAs globalization increases supply chain management is becoming more important.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-04 State some of the complexities that are involved with global supply chains.Stevenson - Chapter 15 #10Topic Area: Global Supply Chains11.The design of the supply chain and establishing partnerships with vendors and distributors are examples of operating issues in a supply chain.FALSEThese are tactical responsibilities.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-05 List some of the strategic; tactical; and operational responsibilities of supply chain management.Stevenson - Chapter 15 #11Topic Area: Management Responsibilities12.Traffic management refers to truck movement within our parking areas.FALSETraffic management is the management of the shipment of incoming and outgoing goods.AACSB: Reflective ThinkingBlooms: RememberDifficulty: HardLearning Objective: 15-01 Discuss the key issues of supply chain management.Stevenson - Chapter 15 #12Topic Area: Logistics13.One of the major reasons for a company to adopt third-party logistics is to concentrate on one's core business.TRUEOutsourcing logistics to third parties enables a company to focus on its core business.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #13Topic Area: Logistics14.E-commerce refers to the use of electronic technology to facilitate business transactions.TRUEE-commerce is a growing trend in supply chain management.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 15-02 Name the recent trends in supply chain management.Stevenson - Chapter 15 #14Topic Area: E-Business15.E-commerce involves business-to-business (B2B) interaction only.FALSEE-commerce can also involve business-to-consumer (B2C) interactions.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 15-02 Name the recent trends in supply chain management.Stevenson - Chapter 15 #15Topic Area: E-Business16.Disintermediation refers to the phenomenon that the traditional retailer or service provider is reduced or eliminated in a supply chain.TRUEDisintermediation involves reducing one or more steps in a supply chain by cutting out intermediaries.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-10 Name some of the challenges in creating an effective supply chain.Stevenson - Chapter 15 #16Topic Area: Creating an Effective Supply Chain17.Most people working for a business organization are somehow involved with the supply chain of that business.TRUEMost people working for a business organization are involved in the flow of materials, money or information.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 15-01 Discuss the key issues of supply chain management.Stevenson - Chapter 15 #17Topic Area: Introduction18.Strategic partnering is encouraged when two or more business organizations have complementary products or services that would benefit the others.TRUEComplementarity is key to successful strategic partnering.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 15-07 Explain the importance of supplier partnerships.Stevenson - Chapter 15 #18Topic Area: Supplier Management19.Forming strategic partnerships is beneficial for two or more business organizations that have the same products or services.FALSEComplementarity is key to successful strategic partnering.AACSB: Reflective ThinkingBlooms: UnderstandDifficulty: MediumLearning Objective: 15-07 Explain the importance of supplier partnerships.Stevenson - Chapter 15 #19Topic Area: Supplier Management20.Inventory velocity refers to the average speed (in miles/hour) of material handling equipment in a warehouse.FALSEVelocity refers to the rate at which goods pass through a supply chain.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 15-01 Discuss the key issues of supply chain management.Stevenson - Chapter 15 #20Topic Area: Inventory Management21.Global supply chains make purchasing easier because of more options.FALSEGlobal purchasing is more complex because of the variety of issues and risks that must be considered.AACSB: Reflective ThinkingBlooms: RememberDifficulty: HardLearning Objective: 15-04 State some of the complexities that are involved with global supply chains.Stevenson - Chapter 15 #21Topic Area: Global Supply Chains22.Centralized or decentralized purchasing is directly related to the size of an organization.FALSEThe use of centralized or decentralized purchasing is independent of organization size.AACSB: Reflective ThinkingBlooms: UnderstandDifficulty: HardLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #22Topic Area: Procurement23.The optimization of the supply chain uses a mathematical model to determine the optimal number of business organizations to be included in the chain.FALSEOptimizing a supply chain through mathematical models is typically not feasible.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #23Topic Area: Strategy24.Information technology is the key to success of global supply chains.TRUEGlobal supply chains are made possible by the use of information technology.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 15-02 Name the recent trends in supply chain management.Stevenson - Chapter 15 #24Topic Area: E-Business25.Bullwhip effect refers to a phenomenon that demand variations that exist at the customer end of the supply chain are magnified as orders are generated back through the supply chain.TRUEThe effect of demand variations grows as it works its way back through the supply chain.AACSB: Reflective ThinkingBlooms: UnderstandDifficulty: MediumLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #25Topic Area: Inventory Management26.Starting with the final customer and moving backward through the supply chain, batch sizes and the level of safety stock tend to decrease.FALSESafety stock might increase, but batch sizes won't.AACSB: Reflective ThinkingBlooms: UnderstandDifficulty: MediumLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #26Topic Area: Inventory Management27.Scheduling and maintaining equipment are operational decisions.TRUEMaintenance would be a form of corrective or preventative action to ensure the continued availability of capacity.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 15-05 List some of the strategic; tactical; and operational responsibilities of supply chain management.Stevenson - Chapter 15 #27Topic Area: Management Responsibilities28.To prevent temporary storage in a warehouse, cross docking can be used.TRUEIn cross-docking, inbound goods are moved directly onto outbound trucks.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #28Topic Area: Logistics29.Delayed differentiation is a means of increasing product variety without building the customized product from scratch or keeping large inventories of custom products.TRUEDelayed differentiation is used to create customized output without large inventories.AACSB: Reflective ThinkingBlooms: RememberDifficulty: HardLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #29Topic Area: Creating an Effective Supply Chain30.Returned goods are part of reverse logistics.TRUEReverse logistics involves managing the flow of goods back up the supply chain.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-08 Discuss the issues involved in managing returns.Stevenson - Chapter 15 #30Topic Area: Creating an Effective Supply Chain31.A 30% reduction in product and service variety won't really affect the efficiency of a supply chain.FALSEReducing variety is a prominent means of increasing efficiency.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #31Topic Area: Creating an Effective Supply Chain32.The service function of purchasing interfaces with many area including legal, accounting, and engineering functions.TRUEPurchasing interfaces with a wide variety of areas.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 15-05 List some of the strategic; tactical; and operational responsibilities of supply chain management.Stevenson - Chapter 15 #32Topic Area: Procurement33.Gate keeping manages the cost of shipping returned goods.FALSEGate keeping manages the cost of dealing with inappropriately returned goods.AACSB: Reflective ThinkingBlooms: RememberDifficulty: HardLearning Objective: 15-08 Discuss the issues involved in managing returns.Stevenson - Chapter 15 #33Topic Area: Creating an Effective Supply Chain34.Outsourcing logistics gives a company less flexibility because it forces them to focus more on core businesses.FALSEOutsourcing logistics can lead to more flexibility.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #34Topic Area: Logistics35.Vendor analysis examines the function of purchased parts and materials with a view towards improvement or cost reduction.FALSEVendor analysis evaluates sources of supply with respect to price, quality, reputation and service.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #35Topic Area: Supplier Management36.Using third-party fulfillment means losing control of fulfillment.TRUEOutsource this key function means a loss of control.AACSB: Reflective ThinkingBlooms: UnderstandDifficulty: MediumLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #36Topic Area: Logistics37.Price is the primary determining factor in choosing a vendor since most products are essentially the same.FALSEWith vendor analysis, price is just one of many considerations.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #37Topic Area: Supplier Management38.RFID eliminates the need for counting and bar-code scanning.TRUERFID does away with the need for counting and bar-code scanning.AACSB: TechnologyBlooms: RememberDifficulty: MediumLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #38Topic Area: Logistics39.The importance of purchasing relates only to the cost of parts and materials purchased, which is often 60% or more of the cost of finished goods.FALSEPurchasing is important because other costs resulting from the purchase of parts and materials are highly consequential.AACSB: Reflective ThinkingBlooms: UnderstandDifficulty: EasyLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #39Topic Area: Procurement40.The importance of purchasing is the cost of goods purchased, the quality of goods and services, and the timing of deliveries of goods or services.TRUEThese costs resulting from the purchase of parts and materials are highly consequential.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #40Topic Area: Procurement41.Vendor analysis is the process that evaluates the source of supply in terms of price, quality, reputation, and service.TRUEEvaluating sources of terms of price, quality, reputation, and service is vendor analysis.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #41Topic Area: Procurement42.In e-commerce, the front-end design is significantly more important than the back-end design.FALSEBack-end design is often more consequential in e-commerce.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-06 Give examples of some advantages of e-business.Stevenson - Chapter 15 #42Topic Area: E-Business43.One disadvantage to RFID is that they require a line of sight' for reading.FALSERFID doesn't need a line of sight' reading.AACSB: TechnologyBlooms: RememberDifficulty: HardLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #43Topic Area: Logistics44.Decentralized purchasing can usually offer quicker response than centralized purchasing.TRUECentralized purchasing can be more efficient, but decentralized purchasing can offer faster response.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #44Topic Area: Procurement45.Some firms have structured their procurement function to include both centralized and decentralized purchasing.TRUEGood purchasing can involve both centralized and decentralized elements.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #45Topic Area: Procurement46.Creating an effective supply chain requires linking the marketing, distribution, and supplier channels.TRUEThese need to be synchronized if the supply chain is to be effective.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #46Topic Area: Creating an Effective Supply Chain47.An advantage of decentralized purchasing is the attention given to local needs.TRUEDecentralized purchasing is more responsive to specific needs.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #47Topic Area: Procurement48.Event management is the advanced planning required for major performances such as concerts or conferences.FALSEEvent management involves detecting and responding to unplanned events.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #48Topic Area: Creating an Effective Supply Chain49.Supplier certification is the first step required in a supplier audit program.FALSEEven uncertified suppliers are potential targets in a supplier audit program.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #49Topic Area: Supplier Management50.Design and purchasing people should work closely because changes in design, specifications, or materials can impact future purchase requirements.TRUEPurchasing interfaces with a wide variety of functional areas.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #50Topic Area: Procurement51.The purchasing cycle ends when the purchasing department is notified that the supplier has shipped the items.FALSEThe purchasing cycle ends when the shipment has been received in satisfactory condition.AACSB: Reflective ThinkingBlooms: RememberDifficulty: HardLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #51Topic Area: Procurement52.Producing and shipping in large lots may reduce costs but increase lead times.TRUEThis is one of the tradeoffs in supply chain management.AACSB: Reflective ThinkingBlooms: UnderstandDifficulty: MediumLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #52Topic Area: Strategy53.Variations create uncertainty, thereby causing inefficiencies in a supply chain.TRUEReductions in disruptions helps improve supply chain efficiencies.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #53Topic Area: Strategy54.Disintermediation is the refusal of one party to use mediators for price negotiation.FALSEDisintermediation involves reducing one or more steps in a supply chain by cutting out intermediaries.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #54Topic Area: Creating an Effective Supply Chain55.Which of the following is not a goal of supply chain management?A.fewer suppliers and long-term relationshipB.small lot sizesC.on time deliveriesD.lowest possible transportation costsE.delivery often to the place of useMinimizing transportation costs might lead to an unacceptable tradeoff elsewhere.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 15-01 Discuss the key issues of supply chain management.Stevenson - Chapter 15 #55Topic Area: Introduction56.Logistics includes all of these except:A.the movement of materials within a production facilityB.incoming shipments of goods or materialsC.outgoing shipments of goods or materialsD.customer selectionE.returned goods processingLogistics involves moving goods.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-05 List some of the strategic; tactical; and operational responsibilities of supply chain management.Stevenson - Chapter 15 #56Topic Area: Logistics57.Small changes in consumer demand can result in large variations in orders placed because of the A.Supply chainB.Safety stock requirementC.Lead time effectD.Bullwhip effectE.FCFS schedulingVariations are amplified as they move backwards in the supply chain.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-01 Discuss the key issues of supply chain management.Stevenson - Chapter 15 #57Topic Area: Inventory Management58.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 keepingA.II and III onlyB.I and II onlyC.II, III, and IVD.I, II, and IVE.IV onlyRFID chips do not contain special instructions.AACSB: TechnologyBlooms: RememberDifficulty: MediumLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #58Topic Area: Logistics59.Which of the following is not a benefit of RFID?A.increased productivityB.elimination of paper workC.frequent deliveries of smaller shipmentsD.reduction in clerical laborE.increased accuracyRFID does little to facilitate the cost reductions required to make frequent, small deliveries feasible.AACSB: TechnologyBlooms: RememberDifficulty: HardLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #59Topic Area: Logistics60.A factor that makes it desirable for business organizations to actively manage their supply chains is:A.more potential vendorsB.increasing globalizationC.downsizingD.the internetE.RFID'sGlobalization is making supply chain management more important.AACSB: Reflective ThinkingBlooms: RememberDifficulty: HardLearning Objective: 15-02 Name the recent trends in supply chain management.Stevenson - Chapter 15 #60Topic Area: Global Supply Chains61.Which of the following is not a benefit of effective supply chain management?A.lower inventory costsB.higher productivityC.shorter lead timesD.greater customer loyaltyE.larger number of suppliersSupply chain management often results in fewer suppliers.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-01 Discuss the key issues of supply chain management.Stevenson - Chapter 15 #61Topic Area: Creating an Effective Supply Chain62.Which of the following is not a measure of the reliability of the supply chain?A.supply chain response timeB.on-time deliveryC.fill rateD.lead time variabilityE.improving e-fulfillment statisticsResponse time is a measure of supply chain effectiveness.AACSB: Reflective ThinkingBlooms: UnderstandDifficulty: HardLearning Objective: 15-01 Discuss the key issues of supply chain management.Stevenson - Chapter 15 #62Topic Area: Creating an Effective Supply Chain63.The automatic identification of material is part of/facilitated by:A.holding costsB.RFIDC.working capital reductionD.net present value calculationsE.vendor analysisRFID facilitates the automatic identification of material.AACSB: TechnologyBlooms: RememberDifficulty: MediumLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #63Topic Area: Logistics64.Which of the following is not an application of E-business?A.internet buying and sellingB.e-mailC.order and shipment trackingD.electronic data interchange (EDI)E.universal product codesUniversal product codes are not part of E-business.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-06 Give examples of some advantages of e-business.Stevenson - Chapter 15 #64Topic Area: E-Business65.Which of the following is an advantage of E-business?(I) reduction of transaction costs(II) shortened supply chain response time(III) greater customer loyaltyA.IB.IIC.I and IID.II and IIIE.I, II, and IIIGaining and maintaining customer loyalty is even more difficult once a firm is involved in E-business.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-06 Give examples of some advantages of e-business.Stevenson - Chapter 15 #65Topic Area: E-Business66.Which of the following is a barrier to integration of separate organizations in the supply chain?(I) conflicting objectives of the companies in the chain.(II) different level of capacity of the companies in the chain.(III) reluctance of the organizations in the chain to allow other organizations access to their data.A.I onlyB.I and IIC.II and IIID.I and IIIE.I, II and IIICapacity imbalances can be overcome, but conflicting objectives and mistrust are substantial barriers.AACSB: Reflective ThinkingBlooms: RememberDifficulty: HardLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #66Topic Area: Strategy67._________ has helped business concentrate on their core business.A.Supply ChainsB.SchedulingC.OutsourcingD.ERPE.Lean ProductionOutsourcing enables firms to focus on what they do, or should do, best.AACSB: Reflective ThinkingBlooms: RememberDifficulty: HardLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #67Topic Area: Trends in Supply Chain Management68.Outsourcing followed by __________ is not simple.A.IntegrationB.UnionizationC.BacksourcingD.ComputerizationE.Just-in-timeBacksourcing is difficult to implement effectively if outsourcing has been done.AACSB: Reflective ThinkingBlooms: RememberDifficulty: HardLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #68Topic Area: Trends in Supply Chain Management69.The interface between the firm and its suppliers is:A.purchasingB.productionC.distributionD.engineeringE.accountingThe purchasing function bridges the organization and its suppliers.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #69Topic Area: Procurement70.The two types of decisions that are relevant to supply chain management are:A.Short, long termB.Domestic, internationalC.Location, layoutD.In-source, out-sourceE.Tactical, operationalDecision-making in supply chain management falls into either tactical or operational areas.AACSB: Reflective ThinkingBlooms: RememberDifficulty: HardLearning Objective: 15-05 List some of the strategic; tactical; and operational responsibilities of supply chain management.Stevenson - Chapter 15 #70Topic Area: Management Responsibilities71.One important objective of purchasing is to:A.set quality standards for purchased itemsB.be knowledgeable about new productsC.maintain numerous sources of supplyD.obtain the lowest prices on all purchased itemsE.determine the processes that should be usedPurchasing can play a crucial role by helping solidify the supplier base for a new product.AACSB: Reflective ThinkingBlooms: RememberDifficulty: HardLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #71Topic Area: Procurement72.The purchasing cycle begins with:A.selecting a supplierB.placing an orderC.evaluating potential vendorsD.conducting a value analysisE.receiving a requisitionThe requisition notes what is needed, in what quantity, and when it is needed.AACSB: Reflective ThinkingBlooms: RememberDifficulty: EasyLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #72Topic Area: Procurement73.Examination of the sources of supply for purchased parts or materials in order to improve performance is called:A.vendor analysisB.value analysisC.negotiated purchasingD.reverse engineeringE.disintegrationPerformance can be evaluated with respect to price, quality, reputation or service.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #73Topic Area: Supplier Management74.Vendor analysis has the greatest potential for savings for items which have:A.low cost per unitB.low annual cost-volumeC.high cost per unitD.high annual usageE.high annual cost-volumeThese represent the bulk of purchasing costs.AACSB: Reflective ThinkingBlooms: UnderstandDifficulty: HardLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #74Topic Area: Supplier Management75.Which of the following is not true of vendor analysis?A.It involves an examination of the function of purchased parts or raw materials.B.Its purpose is to reduce costs and/or improve performance of purchased goods or services.C.It is usually performed only periodically.D.Representatives from design and operations may work with purchasing.E.If improvements are identified, purchasing implements those that purchasing agrees are justified.The function of purchased parts or raw materials would be done by the procuring department.AACSB: Reflective ThinkingBlooms: UnderstandDifficulty: HardLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #75Topic Area: Supplier Management76.Which of the following is not a performance driver?A.QualityB.CostC.StabilityD.VelocityE.FlexibilityStability is not a performance driver.AACSB: Reflective ThinkingBlooms: RememberDifficulty: HardLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #76Topic Area: Creating an Effective Supply Chain77.Which of the following would not usually be a main factor in selecting a vendor?A.locationB.priceC.qualityD.inventory turnoverE.vendor servicesTurnover would only rarely be associated with the vendor that is selected.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #77Topic Area: Supplier Management78.Which of the following is part of the purchasing cycle?(I) Purchasing selects a supplier.(II) Orders from vendors are received.(III) Purchasing receives a requisition.A.II and IIIB.I, II, and IIIC.I onlyD.I and IIE.I and IIIThese are all part of the purchasing cycle.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #78Topic Area: Procurement79.Which of the following is least likely to be a key consideration when a company chooses a supplier?A.lead time and on-time deliveryB.reputation and financial stabilityC.value analysisD.quality and Quality assuranceE.flexibility of design changeAll the others are highly likely to be considered in supplier selection.AACSB: Reflective ThinkingBlooms: RememberDifficulty: HardLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #79Topic Area: Supplier Management80.Which of the following is not a benefit of centralized purchasing?A.potential for quantity discountsB.better service from suppliersC.quick response to local needsD.potential for use of purchasing specialistsE.supplier researchQuick response to local needs is a benefit of decentralized purchasing.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #80Topic Area: Procurement81.The purchasing perspective of the supplier as a partner is characterized by:A.an emphasis on low pricesB.one or a few suppliersC.low flexibilityD.100% inspection for qualityE.low volumeFewer suppliers enhance the chances of building real partnerships.AACSB: Reflective ThinkingBlooms: UnderstandDifficulty: MediumLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #81Topic Area: Supplier Management82.Vendor Analysis is the examination of the _________ of purchased materials.A.FunctionB.SourceC.QualityD.CycleE.QuantitySources of supply are evaluated in vendor analysis.AACSB: Reflective ThinkingBlooms: RememberDifficulty: HardLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #82Topic Area: Supplier Management83.Last quarter, a retailer sold 8,000 t-shirts, 7,000 of which were sold directly from on-hand inventory. This retailer's ________ was 88%.A.fill rateB.inventory yieldC.profit marginD.inventory turnoverE.none of the aboveThis retailer's fill rate was 88%.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #83Topic Area: Creating an Effective Supply Chain84.Which of the following is a principle required for ethical behavior in purchasing?A.loyalty to employer.B.justice to those you deal with.C.faith in your profession.D.all of the above.E.none of the above.All of these are ethical principles in purchasing.AACSB: EthicsBlooms: RememberDifficulty: EasyLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #84Topic Area: Procurement85.The activity which begins with a request from within the organization is:A.Outsourcing searchB.Purchasing cycleC.Supplier selectionD.Order receiptE.Supply chain managementThe purchasing cycle begins with a requisition.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-03 Summarize the motivations and risks of outsourcing as a strategy.Stevenson - Chapter 15 #85Topic Area: Procurement86.Our organization can obtain visibility to potential trading partners on the internet by using:A.C2CB.B2CC.B2BD.C2BE.None of the aboveB2B helps the organization let the market know of the organization's needs.AACSB: Reflective ThinkingBlooms: RememberDifficulty: MediumLearning Objective: 15-06 Give examples of some advantages of e-business.Stevenson - Chapter 15 #86Topic Area: E-Business87.Real time information about product movement on store shelves could benefit from the use of:A.batch processingB.economic order quantitiesC.statistical process controlD.radio frequency identification tagsE.infrared remote scannersRFID facilitates real-time data gathering.AACSB: TechnologyBlooms: RememberDifficulty: MediumLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #87Topic Area: Logistics88.The website and order fulfillment are essential features of:A.delayed differentiationB.e-commerceC.internet service providersD.inventory balancingE.market segmentationThese are front-end and back-end facets of e-commerce.AACSB: TechnologyBlooms: RememberDifficulty: MediumLearning Objective: 15-06 Give examples of some advantages of e-business.Stevenson - Chapter 15 #88Topic Area: E-Business89.A given inventory item has a per-year holding cost of $500. One method of shipping this item is three days faster than the other, but it is $2.50 more per unit. Using the slower method would be __________ more expensive overall than using the faster method.A.$1.08B.$1.16C.$2.37D.$2.73E.$1.61Multiply the holding cost by the speed differential, then divide by 365. Compare this to the actual shipping cost difference.AACSB: AnalyticBlooms: ApplyDifficulty: MediumLearning Objective: 15-09 List the requirements of an effective supply chain.Stevenson - Chapter 15 #89Topic Area: Logisticsch15 SummaryCategory#ofQuestionsAACSB:Analytic1AACSB:Ethics2AACSB:ReflectiveThinking79AACSB:Technology7Blooms:Apply1Blooms:Remember75Blooms:Understand13Difficulty:Easy22Difficulty:Hard20Difficulty:Medium47LearningObjective:15-01Discussthekeyissuesofsupplychainmanagement.10LearningObjective:15-02Nametherecenttrendsinsupplychainmanagement.4LearningObjective:15-03Summarizethemotivationsandrisksofoutsourcingasastrategy.26LearningObjective:15-04Statesomeofthecomplexitiesthatareinvolvedwithglobalsupplychains.4LearningObjective:15-05Listsomeofthestrategic;tactical;andoperationalresponsibilitiesofsupplychainmanagement.5LearningObjective:15-06Giveexamplesofsomeadvantagesofe-business.5LearningObjective:15-07Explaintheimportanceofsupplierpartnerships.2LearningObjective:15-08Discusstheissuesinvolvedinmanagingreturns.2LearningObjective:15-09Listtherequirementsofaneffectivesupplychain.30LearningObjective:15-10Namesomeofthechallengesincreatinganeffectivesupplychain.1Stevenson-Chapter1589TopicArea:CreatinganEffectiveSupplyChain15TopicArea:E-Business8TopicArea:GlobalSupplyChains3TopicArea:Introduction5TopicArea:InventoryManagement4TopicArea:Logistics14TopicArea:ManagementResponsibilities3TopicArea:Procurement18TopicArea:Strategy5TopicArea:SupplierManagement12TopicArea:TrendsinSupplyChainManagement2