Q&A Hero

Q: One important objective of purchasing is to: A. set quality standards for purchased items. B. be knowledgeable about new products. C. maintain numerous sources of supply. D. obtain the lowest prices on all purchased items. E. determine the processes that should be used.

Q: The two types of decisions that are relevant to supply chain management are: A. short- and long-term. B. domestic and international. C. location and layout. D. in-sourcing and outsourcing. E. tactical and operational.

Q: The interface between the firm and its suppliers is: A. purchasing. B. production. C. distribution. D. engineering. E. accounting.

Q: Outsourcing followed by __________ is not simple. A. integration B. unionization C. backsourcing D. computerization E. just-in-time

Q: _________ has/have helped firms to concentrate on their core business. A. Supply chains B. Scheduling C. Outsourcing D. ERP E. Lean production

Q: Which of the following is a barrier to the integration of separate organizations in the supply chain? (I) conflicting objectives of the companies in the chain (II) different capacity levels of the companies in the chain (III) reluctance of the organizations in the chain to allow other organizations access to their data A. I only B. I and II C. II and III D. I and III E. I, II, and III

Q: Which of the following is an advantage of E-business? (I) reduction of transaction costs (II) shortened supply chain response time (III) greater customer loyalty A. I B. II C. I and II D. II and III E. I, II, and III

Q: Which of the following is not an application of E-business? A. Internet buying and selling B. e-mail C. order and shipment tracking D. electronic data interchange (EDI) E. universal product codes

Q: The automatic identification of material is part of/facilitated by: A. holding costs. B. RFID. C. working capital reduction. D. net present value calculations. E. vendor analysis.

Q: Which of the following is not a measure of the reliability of the supply chain? A. supply chain response time B. on-time delivery C. fill rate D. lead time variability E. improving e-fulfillment statistics

Q: Which of the following is not a benefit of effective supply chain management? A. lower inventory costs B. higher productivity C. shorter lead times D. greater customer loyalty E. larger number of suppliers

Q: A factor that makes it desirable for business organizations to actively manage their supply chains is: A. more potential vendors. B. increasing globalization. C. downsizing. D. the Internet. E. RFIDs.

Q: Which of the following is not a benefit of RFID? A. increased productivity B. elimination of paperwork C. frequent deliveries of smaller shipments D. reduction in clerical labor E. increased accuracy

Q: 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 keeping. A. II and III only B. I and II only C. II, III, and IV D. I, II, and IV E. IV only

Q: Small changes in consumer demand can result in large variations in orders placed because of the: A. supply chain. B. safety stock requirement. C. lead time effect. D. bullwhip effect. E. FCFS scheduling.

Q: Logistics includes all of these except: A. the movement of materials within a production facility. B. incoming shipments of goods or materials. C. outgoing shipments of goods or materials. D. customer selection. E. returned goods processing.

Q: Which of the following is not a goal of supply chain management? A. fewer suppliers and long-term relationships B. small lot sizes C. on-time deliveries D. lowest possible transportation costs E. delivery often to the place of use

Q: Which of these aspects of supply chain management are especially concerning to small business? (I) customer reliability (II) inventory management (III) purchasing costs (IV) risk management (V) international trade A. III, IV, and V only B. I, II, and III only C. I, III, and IV only D. I and II only E. II, IV, and V only

Q: It is especially the case for small businesses that closer interactions and increased agility make __________ relatively more attractive. A. domestic suppliers B. centralized purchasing C. global suppliers D. decentralized purchasing E. risk transfer

Q: The more __________ a company's supply chain, the more difficult it is to ensure that the supply chain is managed ethically. A. interconnected B. global C. visible D. shortened E. competitive

Q: One of the biggest ethical risks in supply chain management is that the __________ supply chain member tends to be the one that suffers the blame and/or lost goodwill when something goes wrong. A. most responsible B. buying C. most visible D. supplying E. most ethical

Q: Which of the following, while desirable from some perspectives, might actually increase the risk of supply chain reductions? (I) fewer supply chain partners (II) a shorter supply chain (III) greater supply chain visibility A. I and II only B. II and III only C. I and III only D. I only E. I, II, and III

Q: Strategies to address supply chain risks include: (I) risk avoidance. (II) risk reduction. (III) risk projection. (IV) risk sharing. A. I, II, and IV only B. II and III only C. I and IV only D. II and IV only E. I, II, III, and IV

Q: Event management is the advanced planning required for major performances such as concerts or conferences.

Q: An advantage of decentralized purchasing is the attention given to local needs.

Q: Creating an effective supply chain requires linking the marketing, distribution, and supplier channels.

Q: Some firms have structured their procurement function to include both centralized and decentralized purchasing.

Q: Decentralized purchasing can usually offer quicker response than centralized purchasing.

Q: One disadvantage to RFID is that it requires a clear "line of sight" to operate.

Q: In e-commerce, the front-end design is significantly more important than the back-end design.

Q: Vendor analysis is the process that evaluates the source of supply in terms of price, quality, reputation, and service.

Q: Important factors in purchasing include the cost of goods purchased, the quality of goods and services, and the timing of deliveries of goods or services.

Q: The importance of purchasing relates only to the cost of parts and materials purchased, which is often 60 percent or more of the cost of finished goods.

Q: RFID eliminates the need for counting and bar-code scanning.

Q: Price is the primary determining factor in choosing a vendor since most products are essentially the same.

Q: Using third-party fulfillment means losing control of fulfillment.

Q: Vendor analysis examines the function of purchased parts and materials with a view toward improvement or cost reduction.

Q: Outsourcing logistics gives a company less flexibility because it forces them to focus more on core businesses.

Q: Gatekeeping manages the cost of shipping returned goods.

Q: The service function of purchasing interfaces with many areas, including legal, accounting, and engineering functions.

Q: A 30 percent reduction in product and service variety will not affect the efficiency of a supply chain.

Q: Returned goods are part of reverse logistics.

Q: Delayed differentiation is a means of increasing product variety without building the customized product from scratch or keeping large inventories of custom products.

Q: To avoid temporary storage in a warehouse, cross-docking can be used.

Q: Scheduling and maintaining equipment are operational decisions.

Q: Starting with the final customer and moving backward through the supply chain, batch sizes and the level of safety stock tend to decrease.

Q: Bullwhip effect refers to a phenomenon in which demand variations that exist at the customer end of the supply chain are magnified as orders are generated back through the supply chain.

Q: Information technology is the key to success of global supply chains.

Q: The optimization of the supply chain uses a mathematical model to determine the optimal number of business organizations to be included in the chain.

Q: Centralized or decentralized purchasing is directly related to the size of an organization.

Q: Global supply chains make purchasing easier because there are more options.

Q: Inventory velocity refers to the average speed (in miles/hour) of material handling equipment in a warehouse.

Q: Forming strategic partnerships is beneficial for two or more business organizations that have the same products or services.

Q: Strategic partnering is encouraged when two or more business organizations have complementary products or services that would benefit the others.

Q: Most people working for a business organization are somehow involved with the supply chain of that business.

Q: Disintermediation refers to the phenomenon that the traditional retailer or service provider is reduced or eliminated in a supply chain.

Q: E-commerce involves business-to-business (B2B) interaction only.

Q: E-commerce refers to the use of electronic technology to facilitate business transactions.

Q: One of the major reasons for a company to adopt third-party logistics is to concentrate on one's core business.

Q: Traffic management refers to truck movement within our parking areas.

Q: The design of the supply chain and establishing partnerships with vendors and distributors are examples of operational issues in a supply chain.

Q: The need for supply chain management increases as globalization increases.

Q: The goal of supply chain management is to synchronize supply and demand of all of the organizations that are part of the chain.

Q: Managing supply chain visibility involves making sure that potential supply chain partners are aware of your organization's needs.

Q: 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.

Q: Frequent deliveries of small shipments can reduce inventory but also result in an increase in the transportation cost per unit.

Q: Every business organization is part of at least one supply chain.

Q: Using third-party logistics involves using your organization's logistics function to ship to customers that are not officially part of the supply chain.

Q: In purchasing, one's only ethical obligation is to one's suppliers.

Q: In supply chain organizations, functions must operate independently of each other.

Q: A company's supply chain involves the flow of materials and information from suppliers, through production, to the end users.

Q: Engineering changes should not be made in the six-month period following the introduction of a new product.

Q: Limited WIP lowers inventory carrying costs but reduces flexibility.

Q: In a pull system, a quantity of inventory in front of a workstation indicates problems at that workstation.

Q: In lean operations, when work is completed at one work center, it is important to immediately move the completed work to the next work center to minimize idle time.

Q: In lean operations, a responsibility of the cross-trained worker is to check the quality of the work of others.

Q: A fundamental tenet of the lean philosophy is that workers are paid based on seniority.

Q: Preventive maintenance will eliminate the need to carry supplies of spare parts.

Q: The lean philosophy recognizes that some work-in-process inventories are a necessary investment to allow for smooth work flow.

Q: A real advantage of the lean philosophy is the reduction of coordination effort required.