Q&A Hero

Q: Distribution management focuses on which of the following? A) the outbound flow of products B) incoming materials C) allocation of demand among suppliers D) setting dividend rates E) balancing an assembly line

Q: Ellen is a dentist and has decided to develop a harvest plan. She wants her efforts to be successful and effective. Discuss suggestions for crafting an effective exit strategy.

Q: Once revenue and total logistics costs are considered together, the optimal number of facilities in a distribution network may decrease compared to the optimal number of facilities based on total logistics costs only.

Q: List and briefly explain the four basic harvest strategies for the small business.

Q: Designing distribution networks to meet customer expectations suggests three criteria: (1) rapid response, (2) cost, and (3) service.

Q: Todd's small company, Nimbus, developed a video game called Combat Skill that took off among gamers. Farbase EAD is a large video game developer with its own gaming system that has offered to buy Nimbus. Explain this type of harvest transaction and what motivations Farbase EAD may have for purchasing Nimbus.

Q: As the number of facilities increases, total logistics costs tend to follow a curve that first rises, then declines.

Q: What are professional and personal issues an entrepreneur may face in the period of time from when the harvest is announced and it is completed?

Q: What are several advantages of shipping by truck?

Q: Supply chain managers outsource logistics to meet what three goals?

Q: Name four benefits of using an IPO as a harvesting method..

Q: Paul and Vivian have decided to create a harvest plan for their landscaping business. They recognize selling the company will affect them since they wont be going to work every day but have asked you for advice on what to expect as to the impact and how to best proceed. What will you say to them?

Q: Why is channel assembly popular in the personal computer industry?

Q: What is the trucking industry doing to improve efficiency?

Q: John is developing a harvest plan and figuring the value of his art gallery. What two issues are of importance?

Q: A method by which a firm is sold either in part or in total to its employees

Q: ________ is an approach that seeks efficiency of operations through the integration of all material acquisition, movement, and storage activities.

Q: ________ postpones final assembly of a product so the distribution channel can assemble it.

Q: The first sale of shares of a companys stock to the public

Q: Warehouses sometimes perform certain other functions besides storing goods. Which of the following is NOT typically one of those functions? A) purchasing B) postponement C) break-bulk activities D) consolidation point E) cross-docking

Q: A professional who assists in the buying and selling of a business

Q: While freight rates are often based on very complicated pricing systems, in general, the primary freight price factor is based on which of the following attributes? A) damage record B) on-time delivery C) door-to-door service D) speed of shipment E) consolidation capabilities

Q: A leveraged buyout in which the firms top managers become significant shareholders in the acquired firm

Q: By which distribution system is more than 90 percent of U.S. coal shipped? A) railroads B) trucks C) waterways D) pipelines E) none of the above

Q: Financing in which the seller accepts a note from the buyer in lieu of cash in partial payment for a business

Q: Which one of the following distribution systems offers speed and reliability when emergency supplies are needed overseas? A) trucking B) railroads C) airfreight D) waterways E) pipelines

Q: A leveraged buyout involving the purchase of a company with the intent of selling off its assets

Q: What term is used to describe the outsourcing of logistics? A) e-logistics B) shipper-managed inventory (SMI) C) hollow logistics D) sub-logistics E) third-party logistics (3PL)

Q: The process used by entrepreneurs and investors to reap the value of a business when they leave it

Q: Logistics management can provide a competitive advantage through improved customer service.

Q: The rate of return that could be earned on another investment of similar risk

Q: A leveraged buy out involving the purchase of a group of similar companies with the intent of making the firms into one larger company for eventual sale

Q: Waterways are an attractive distribution system when speed is more important than shipping cost.

Q: An infusion of equity from private investors that allows an entrepreneur to cash out a portion of his investment while possibly continuing to operate the business

Q: Channel assembly, which sends components and modules to be assembled by a distributor, treats these distributors as manufacturing partners.

Q: Describe a reverse auction (also known as a Dutch auction).

Q: Taxation of income that occurs twice--first as corporate earnings and then as stockholder dividends

Q: Before he executes his exit strategy, Arthur should: a. understand why he wants out. b. make sure his heirs approve his exit strategy. c. find a hobby to occupy his time. d. plan his budget based on the sudden inflow of cash. Match the term with its definition. a. Build-up LBO b. Business broker c. Bust-up LBO d. Double taxation e. Employee Stock Ownership Plan f. Harvesting g. Initial public offering h. Leveraged buyout i. Management buyout j. Opportunity cost of funds k. Private equity recapitalization l. Seller financing

Q: Identify three common features of contracts between buyers and suppliers.

Q: In earlier years, leveraged buyouts became synonymous with the ____ LBO. a. bust-up b. build-up c. owner-financed d. publicly funded

Q: Identify the four stages of supplier selection.

Q: Netties Knits, Inc. paid taxes on its net income then distributed part of the earnings as dividends to investors. These investors paid tax on the dividends they received. This practice is know as: a. initial public offering. b. double taxation. c. twice taxation. d. harvesting taxation.

Q: What are the three classic negotiation strategies? Briefly describe each of them.

Q: What is e-procurement?

Q: Arthurs company is doing well but he has grown a bit tired of the daily grind. The idea of selling is appealing to him. What would you recommend Arthur do next? a. Ask his advisory board for their opinions. b. Ask a business broker what his business is worth. c. Go public. d. Get advice from someone who has sold a business.

Q: Suppliers are also known as ________.

Q: Jacob has worked for the past five years to build his business but wants to travel more, so he is thinking it is time to harvest. Harvesting refers to a. starting a business. b. managing the growth of a business. c. exiting a business. d. diversifying a business.

Q: Of the four stages of supplier selection, the stage at which the factor weighting approach would be used is ________.

Q: Jill is purchasing a web design company that has patented a new form of technology. Which purchase would be best for her in relation to the web design companys liabilities? a. Buy the firms assets. b. Buy the firms stock. c. Merge the company with her present company. d. Any of the above three would be acceptable.

Q: Valerie is beginning to think of harvesting her company. Which question should be asked first? a. Why does she want to harvest? b. What is the value of her firm? c. Does the firm have a leadership succession plan in the event that the firm sells? d. What will be the method of payment?

Q: ________ is the term describing purchasing facilitated through the Internet.

Q: Leonard wants to sell his business but the bank will not lend the buyer enough money. Between personal savings and the bank loan, the buyer has about 70% of the asking price. Which of the following options would be best for Steve in this situation? a. Look for a different buyer. b. Lower the asking price. c. Retain a 30% ownership in the business and a seat on the advisory board. d. Offer to finance the remaining 30%, accepting payments over the next few years.

Q: In what type of auction does a buyer initiate the process by submitting a description of the desired product or service? A) traditional B) buyer C) Dutch D) French E) Mexican

Q: Which group is always concerned about how to exit a business? a. Investors b. Entrepreneurs c. Employees of the firm d. Investment bankers

Q: Which of the following is NOT a typical benefit of centralized purchasing? A) leverage purchase volume for better pricing B) develop specialized staff expertise C) reduce the duplication of tasks D) reduce lead times E) promote standardization

Q: One of the big financial questions associated with selling a business is: a. To whom should I sell the business? b. How much should I ask for the business? c. Should I offer the business to my employees? d. Would it be better to liquidate the assets?

Q: Which of the following would NOT be subject to negotiation between a buyer and supplier? A) price B) credit and delivery terms C) quality standards D) cooperative advertising agreements E) All of the above could be negotiated.

Q: An IPO occurs when a company offers its stock to a. investment practitioner organizations. b. family. c. intrastate private investors. d. the general public.

Q: What are the four stages of supplier selection? A) supplier evaluation, supplier development, negotiations, and contracting B) supplier evaluation, negotiations, supplier acquisition, and supplier development C) introduction, growth, maturity, and decline D) supplier evaluation, supplier development, negotiations, and centralized purchasing E) negotiations, contracting, centralized purchasing, and E-procurement

Q: In a harvest situation, the exiting owners are usually paid in cash or a. tangible assets. b. imputed goodwill. c. favorable publicity. d. stock.

Q: What are the three classic types of negotiation strategies? A) supplier evaluation, supplier development, and supplier selection B) Theory X, Theory Y, and Theory Z C) many suppliers, few suppliers, and keiretsu D) cost-based price model, market-based price model, and competitive bidding E) traditional auctions, reverse auctions, and online exchanges

Q: Matt owns a car dealership that is very profitable. Since he plans to retire in 5-10 years, Matt has decided to retain ownership for now, but without continuing to grow the business. This change would also allow him to invest for retirement some of the cash that the business is now generating. Which harvesting method does this example illustrate? a. A delayed sellout b. A strategy to release the firm's free cash flows to the owners c. Offering stock to the public through an IPO d. Issuing a private placement of stock

Q: E-procurement: A) works best in long-term contract situations but is not suited for auctions. B) is the same thing as Internet purchasing. C) has many benefits but requires a lot of paperwork. D) is illegal in all states except Nevada and New Jersey. E) All of the above are true of e-procurement.

Q: Strategic buyers evaluate acquisition candidates according to the a. stand-along, cash-generating potential of a target business. b. synergies they think the target business will create. c. potential of the target business to preserve employment. d. quality of the business strategy of the target firm.

Q: What type of negotiating strategy requires the supplier to open its books to the purchasers? A) cost-based price model B) market-based price model C) competitive bidding D) price-based model E) transparent negotiations

Q: As a financial buyer, Ted is likely to evaluate acquisition candidates according to their: a. stand-alone, cash generating potential of a target business. b. synergies they think the target business will create. c. potential of the target business to preserve employment. d. level of debt the target business has accumulated.

Q: While the prices that consumers pay are often inflexible, a significant number of final prices paid in business-to-business transactions are negotiated.

Q: Charles and Nancy have decided to sell their family business and would like to transfer ownership to the next generation. Which harvesting form would be best? a. cash flow distribution b. initial public offering c. private placement d. selling to a strategic buyer

Q: One classic type of negotiation strategy is the market-based price model.

Q: Which statement best characterizes business valuation? a. Valuation is almost a perfect science. b. Since there are so many intangibles, valuation is mostly an art. c. The buyer determines the value of a business. d. Negotiation skills play an important part in valuation.

Q: Operations managers are finding online auctions a fertile area for disposing of discontinued inventory.

Q: Going public can be beneficial to a firm by helping it a. create a liquid currency to fund future acquisitions. b. avoid becoming a takeover target in the future. c. erect a shield against the fluctuations of the stock market. d. offer better compensation packages to attract superior management talent.

Q: Define EDI.

Q: Identify three common occurrences that contribute to distortions of information about what is really occurring in the supply chain.

Q: Paul is approaching retirement and has decided to siphon off funds from his company rather than sell it. From his perspective, the advantage of systematically withdrawing cash from the firm is: a. retaining control b. preserving cash for later reinvestment c. greater latitude in seeking out a buyer for the firm d. increasing long-term returns from the business

Q: Describe vendor-managed inventory (VMI). How is it related to outsourcing? Cite an example from your experiences as a shopper.

Q: A build-up leveraged buyout involves a. developing the business to make it an attractive takeover target. b. acquiring businesses that occupy a higher level in the market channel. c. a longer time horizon than a bust-up leveraged buyout. d. constructing a larger enterprise to be taken public via an IPO.

Q: Identify the ten opportunities in managing the integrated supply chain.

Q: Marvin is planning to sell his company to his management team. Marvin will be financing part of the purchase. This type of arrangement is a form of: a. ESOP b. IPO c. PPO d. LBO

Q: ________ involves reducing the number of variations in materials and components as an aid to cost management.