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Chapter 10 Supply Chain Strategy
Chapter
10Part 3: Managing Value Chains
Supply Chain Strategy
TRUE/FALSE
1. Supply chain management is the strategy of organizing, motivating and controlling a firms processes
and those of its suppliers to match the flow of materials, services, and information with customer
demand.Answer: True
Reference: Introduction
Difficulty: Moderate
Keywords: supply, chain, management, supplier, customer
2. or!"in"process inventory is considered an input to the transformation processes of the firm.
Answer: #alse
Reference: Supply $hains for Services and Manufacturing
Difficulty: Moderate
Keywords: I%, wor!, process, input
&. The finished goods of one firm may actually 'e the raw materials for another firm.
Answer: True
Reference: Supply $hains for Services and Manufacturing
Difficulty: Moderate
Keywords: finished, good, raw, material
(. Inventory turnover is o'tained 'y dividing the average aggregate inventory value 'y sales per wee! at
cost.
Answer: #alse
Reference: Measures of Supply $hain %erformance
Difficulty: Moderate
Keywords: inventory, turnover
). Increasing the percentage of on"time deliveries to customers actually reduces the total revenue of a
firm.
Answer: #alse
Reference: Measures of Supply $hain %erformance
Difficulty: Moderate
Keywords: on"time, delivery, revenue
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Chapter 10 Supply Chain Strategy
*. The 'ullwhip effect says that in any supply chain, the ordering patterns e+perience increasing
variance as you move closer to the end customer.
Answer: #alse
Reference: Supply $hain ynamics
Difficulty: Moderate
Keywords:'ullwhip, variance
-. common disruption of the e+ternal supply chain is product and service mi+ changes.
Answer: True
Reference: Supply $hain ynamics
Difficulty: Moderate
Keywords: disruption, e+ternal, supply, chain, mi+
/. common disruption of the e+ternal supply chain is engineering changes.
Answer: #alse
Reference: Supply $hain ynamics
Difficulty: ModerateKeywords: e+ternal, supply, chain, engineering, change
0. istri'ution is the management of the transformation process devoted to producing the product or
service.
Answer: #alse
Reference: Supply $hain ynamics
Difficulty: Moderate
Keywords: distri'ution, transformation, management
1. ne of the concerns of material management deals with staffing patterns.
Answer: True
Reference: Supply $hain ynamicsDifficulty: Moderate
Keywords: material, management, staffing
11. ne of the concerns of material management deals with production levels.
Answer: True
Reference: Supply $hain ynamics
Difficulty: Moderate
Keywords: material, management, production, level
12. The order"fulfillment process involves the activities to deliver a product or service to the customer.
Answer: True
Reference: The rder #ulfillment %rocessDifficulty: Moderate
Keywords: order, fulfillment, deliver, customer
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Chapter 10 Supply Chain Strategy
1&. #orward placement is a reduction in inventory and safety stoc! 'ecause of the merging of varia'le
demands from customers.
Answer: #alse
Reference: The rder #ulfillment %rocess
Difficulty: Moderate
Keywords: forward, placement, inventory
1(. 3endor"managed inventories are an e+ample of the forward"placement tactic.
Answer: True
Reference: The rder #ulfillment %rocess
Difficulty: Moderate
Keywords: vendor, managed, inventories, forward, placement
1). rop shipping occurs when a retailer passes customer orders directly to a wholesaler or manufacturer,
which then ships the order directly to the customer with the retailers la'el on it.
Answer: True
Reference: Supply $hain StrategiesDifficulty: Moderate
Keywords: drop, shipping
1*. $hannel assem'ly is the process of using mem'ers of the distri'ution channel as if they were
assem'ly stations in the factory.
Answer: True
Reference: Supply $hain Strategies
Difficulty: Moderate
Keywords: channel, assem'ly, distri'ution
1-. 3irtual supply chains tend to have lower costs due to economies of scale.
Answer: TrueReference: Supply $hain Strategies
Difficulty: Moderate
Keywords: virtual, supply, chain
1/. It is 'etter to !eep the order fulfillment process in"house than to use a virtual supply chain when sales
volumes are high.
Answer: True
Reference: : Supply $hain Strategies
Difficulty: Moderate
Keywords: virtual, supply, chain, traditional
10. hen high service or product variety is important, the traditional order fulfillment method isprefera'le to a virtual supply"chain approach.
Answer: #alse
Reference: : Supply $hain Strategies
Difficulty: Moderate
Keywords: virtual, supply, chain, traditional
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Chapter 10 Supply Chain Strategy
2. colla'orative planning, forecasting, and replenishment program is an iterative process 'etween the
supplier and customer to develop replenishment 4uantities 5ointly.
Answer: True
Reference: The rder #ulfillment %rocess
Difficulty: Moderate
Keywords: colla'orative, planning, forecasting, replenishment, $%#6
21. cross"doc!ing warehouse holds inventory from manufacturers until retailers are prepared to sell the
items.
Answer: #alse
Reference: The rder #ulfillment %rocess
Difficulty: 7asy
Keywords: cross"doc!ing, warehouse
22. The negotiation process e+ecutes the actual procurement of the service or material from the supplier.
Answer: #alse
Reference: Supplier 6elationship %rocessDifficulty: Moderate
Keywords: negotiation, procurement, supplier
2&. 8reen purchasing involves identifying, assessing, and managing the flow of environmental waste and
finding ways to reduce it and minimize its impact on the environment.
Answer: True
Reference: Supplier 6elationship %rocess
Difficulty: Moderate
Keywords: green, purchasing, environment
2(. The competitive orientation to supplier relations is that the 'uyer and supplier are partners.
Answer: #alseReference: Supplier 6elationship %rocess
Difficulty: Moderate
Keywords: competitive, orientation, supplier, 'uyer
2). The most used form of e"purchasing today is electronic data interchange.
Answer: True
Reference: Supplier 6elationship %rocess
Difficulty: Moderate
Keywords: electronic, data, interchange, 7I
2*. catalog hu' is a central distri'ution point where 'uyers may purchase items directly from
manufacturers 'efore the items are shipped to retailers.Answer: #alse
Reference: Supplier 6elationship %rocess
Difficulty: 7asy
Keywords: catalog. hu'
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Chapter 10 Supply Chain Strategy
2-. n electronic mar!et that 'rings together te+t'oo! sellers, office supply companies, apparel vendors,
and students is an e+ample of an e+change.
Answer: True
Reference: Supplier 6elationship %rocess
Difficulty: 7asy
Keywords: e+change, electronic, 'uyer, seller
2/. 6educing the num'er of suppliers for an item carries an increased ris! of interruption in supply.
Answer: True
Reference: Supplier 6elationship %rocess
Difficulty: Moderate
Keywords: sourcing, ris!, supply
20. 3alue analysis is a systematic effort to reduce the cost or improve the performance of products or
services.
Answer: True
Reference: Supplier 6elationship %rocessDifficulty: Moderate
Keywords: value, analysis, improve
&. 7arly supplier involvement is a program that allows suppliers to fill orders prior to the customer
placing them.
Answer: #alse
Reference: Supplier 6elationship %rocess
Difficulty: Moderate
Keywords: early, supplier, involvement
&1. In presourcing, suppliers are selected early in the concept"development stage.
Answer: TrueReference: Supplier 6elationship %rocess
Difficulty: moderate
Keywords:presourcing, development
&2. 6esponsive supply chains wor! 'est when fre4uent product introduction e+ists.
Answer: True
Reference: Supply $hain Strategies
Difficulty: Moderate
Keywords: responsive, product, introduction
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Chapter 10 Supply Chain Strategy
&&. 7fficient supply chains wor! 'est when contri'ution margins are high.
Answer: #alse
Reference: Supply $hain Strategies
Difficulty: Moderate
Keywords: efficient, supply, chain, contri'ution
&(. 7fficient supply chains use low capacity cushions.
Answer: True
Reference: Supply $hain Strategies
Difficulty: Moderate
Keywords: efficient, chain, cushion, supply
&). 6esponsive supply chains wor! 'est when firms offer a low variety of services or products and
demand predicta'ility is high.
Answer: #alse
Reference: Supply $hain Strategies
Difficulty: ModerateKeywords: responsive, supply, chains, variety, predicta'ility
&*. ell, a wildly successful computer company, can configure e+actly the computer you want than!s to
their mass production system.
Answer: #alse
Reference: Supply $hain Strategies
Difficulty: 7asy
Keywords: mass, customization
&-. %ostponement is an organizational concept where'y mem'ers of the distri'ution channel are used as
if they were assem'ly stations in the factory.
Answer: #alseReference: Supply $hain Strategies
Difficulty: Moderate
Keywords:postponement, delay
&/. 9ac!ward integration is a firms erroneous movement towards having suppliers and distri'utors
perform processes and provide material and services.
Answer: #alse
Reference: Supply $hain Strategies
Difficulty: Moderate
Keywords:'ac!ward, vertical, integration
&0. ffshoring is a supply chain strategy that involves moving processes to another country.Answer: True
Reference: Supply $hain Strategies
Difficulty: Moderate
Keywords: offshoring
0
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Chapter 10 Supply Chain Strategy
(. virtual supply chain allows for greater product variety and lower costs due to economies of scale.
Answer: True
Reference: Supply $hain Strategies
Difficulty: Moderate
Keywords: virtual, supply, chain
!ULT"#LE C$%"CE
(1. The 'asic purpose of supply chain management is to:a. create an e+clusive set of suppliers who will not supply your competitors.'. lin! your customers together so that the flow of materials remains under control.c. synchronize the operations of all suppliers with those of purchasing, production, distri'ution, and
customers.d. reduce the inventory 'y proper selection of customers and transportation modes.
Answer: c
Reference: IntroductionDifficulty: 7asyKeywords: supply, chain
(2. hich of the following is ;T a component of the supply chainB2,,>)C L /.-) wee!s
Inventory turnover L annual sales Bat costC>average aggregate inventory value L
2 million>&.) million L ).-1Reference: Measures of Supply $hain %erformanceDifficulty: ModerateKeywords: turnover, supply, wee!s, aggregate, inventory, value
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Chapter 10 Supply Chain Strategy
12&. $hampion $ooling $ompany remanufactures window air conditioners during the off"seasonmonths for sales during the scorching months of Kune, Kuly, and ugust in the !lahoma $ity area.Their average inventory of air conditioners is shown in the following ta'le. The company operates )wee!s a year and has average wee!ly sales of A&,-) and e+pects to sell A1&), worth of product ina year.
Unit Type Avg. Inventory(at cost)
Value of ac!
11 3olts *) A2)
1/, 9T= or smaller 22 3olts 0 A&)
?arger than 1/, 9T= ) A)
a. hat is their average aggregate inventory value