Finance

Q: The Japanese concept of a company coalition of suppliers is A) poka-yoke B) kaizen C) keiretsu D) dim sum E) illegal

Q: Japanese manufacturers often take a middle ground between purchasing from a few suppliers and vertical integration. This approach is A) kanban B) keiretsu C) samurai D) poka-yoke E) kaizen

Q: A rice mill in south Louisiana purchases the trucking firm that transports packaged rice to distributors. This is an example of A) horizontal integration B) forward integration C) backward integration D) current transformation E) keiretsu

Q: Vertical integration appears particularly advantageous when the organization has A) a very specialized product B) a large market share C) a very common, undifferentiated product D) little experience operating an acquired vendor E) purchases that are a relatively small percent of sales

Q: A fried chicken fast-food chain that acquired feed mills and poultry farms has performed A) horizontal integration B) forward integration C) backward integration D) current transformation E) job expansion

Q: Which of the following best describes vertical integration? A) to sell products to a supplier or a distributor B) to develop the ability to produce products which complement the original product C) to produce goods or services previously purchased D) to develop the ability to produce the specified good more efficiently than before E) to build long-term partnerships with a few suppliers

Q: Which of the following is not a condition that favors the success of vertical integration? A) availability of capital B) availability of managerial talent C) required demand D) small market share E) All of the above favor the success of vertical integration.

Q: Which of the following supply-chain strategies creates value by allowing suppliers to have economies of scale? A) suppliers becoming part of a company coalition B) vertical integration C) long-term partnering with a few suppliers D) negotiating with many suppliers E) developing virtual companies

Q: Which of the following is not an advantage of the "few suppliers" concept? A) suppliers' willingness to participate in JIT systems B) trust C) vulnerability of trade secrets D) creation of value by allowing suppliers to have economies of scale E) suppliers' willingness to provide technological expertise

Q: The purchasing approach that holds the suppliers responsible for maintaining the necessary technology, expertise, and forecasting ability plus cost, quality, and delivery competencies is A) few suppliers B) many suppliers C) Keiretsu D) vertical integration E) virtual companies

Q: A disadvantage of the "few suppliers" strategy is A) the risk of not being ready for technological change B) the lack of cost savings for customers and suppliers C) possible violations of the Sherman Antitrust Act D) the high cost of changing partners E) All of the above are disadvantages of the "few suppliers" strategy.

Q: Which one of the following is not a supply-chain strategy? A) negotiation with many suppliers B) vertical integration C) keiretsu D) short-term relationships with few suppliers E) virtual companies

Q: Keeping a product generic as long as possible before customizing is known as A) postponement B) keiretsu C) vendor-managed inventory D) forward integration E) backward integration

Q: In supply-chain management, ethical issues A) are particularly important because of the enormous opportunities for abuse B) may be guided by company rules and codes of conduct C) become more complex the more global is the supply chain D) may be guided by the principles and standards of the Institute for Supply Management E) All of the above are true.

Q: The Institute for Supply Management A) establishes laws and regulations for supply management B) is an agency of the United Nations charged with promoting ethical conduct globally C) publishes the principles and standards for ethical supply management conduct D) prohibits backward integration into developing economies E) All of the above are true.

Q: The transfer of some of what are traditional internal activities and resources of a firm to outside vendors is A) a standard use of the make or buy decision B) not allowed by the ethics code of the Supply Management Institute C) offshoring D) outsourcing E) keiretsu

Q: Outsourcing A) transfers traditional internal activities to outside vendors B) utilizes the efficiency which comes with specialization C) lets the outsourcing firm focus on its key success factors D) None of the above are true of outsourcing. E) All of the above are true of outsourcing.

Q: Which one of the following statements about purchasing is true? A) The cost of purchases as a percent of sales is often small. B) Purchasing provides a major opportunity for price increases. C) Purchasing is always more efficient than making an item. D) Purchasing has an impact on the quality of the goods and services sold. E) Competitive bidding is a major factor in long-term cost reductions.

Q: One dollar saved in purchasing is A) equivalent to a dollar earned in sales revenue B) worth even more than a dollar earned in sales revenue C) worth slightly more than a dollar earned because of taxes D) worth from 35% in the technical instrument industry to 70% in the food products industry E) only worthwhile if you are in the 50% tax bracket and still have a low profit margin

Q: Which of the following statements is true regarding the leverage of supply-chain savings? A) Supply chain leverage is about the same for all industries. B) Supply chain savings exert more leverage as the firm's purchases are a smaller percent of sales. C) Supply chain savings exert more leverage as the firm has a lower net profit margin. D) Supply chain leverage depends only upon the percent of sales spent in the supply chain. E) None of the above is true.

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) none of the above

Q: McDonald's Russian "food town" is to __________ risk as Hard Rock Caf's franchising in diverse political and cultural environments to overcome barriers is to __________ risk. A) process, environmental B) control, environmental C) control, process D) process, control E) environmental, control

Q: Toyota's policy of having two suppliers per component after its experience with fire and earthquakes is similar to Hark Rock Caf's franchising in societies that have significant cultural or environmental barriers because A) both companies are coping with environmental supply-chain risks B) both companies are coping with process supply-chain risks C) both companies are coping with control supply-chain risks D) both companies are addressing outsourcing E) None of the above accurately reflect the main similarity

Q: Which of the following is an aspect of environmental risk in supply-chain management? A) political issues B) management metrics C) secure financial transactions D) raw material availability E) All of the above are environmental risks.

Q: Which of the following is not a concern of the supply chain? A) warehousing and inventory levels B) credit and cash transfers C) suppliers D) distributors and banks E) maintenance scheduling

Q: Visibility throughout the supply chain is a requirement among supply-chain members for A) mutual agreement on goals B) mutual trust C) compatible organizational cultures D) local optimization E) the bullwhip effect

Q: The three major variations of online catalogs are A) catalogs by vendors, catalogs by intermediaries, and exchanges provided by buyers B) EDI, ERP, and ASN C) cost-based, market-based, and competitive bidding D) drop shipping, channel assembly, and postponement E) all auction-based

Q: Benchmark firms have driven down costs of supply-chain performance.

Q: Improvements in security, especially regarding the millions of shipping containers that enter the U.S. each year, are being held back by the lack of technological advances.

Q: With the growth of just-in-time practices, railroads have made large gains in the share of the nation's transport that they haul.

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

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

Q: Bar code and radio frequency technology, like that used to track UPS or FedEx packages on their global journeys, can also be used to track objects within the boundaries of a warehouse or shop.

Q: Blanket orders are a long-term purchase commitment to a supplier for items that are to be delivered against short-term releases to ship.

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

Q: The supply-chain management opportunity called postponement involves delaying deliveries to avoid accumulation of inventory at the customer's site.

Q: Drop shipping results in time and shipping cost savings.

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

Q: In the vendor evaluation phase, most companies will use the same list of criteria and the same criteria weights.

Q: Vendor-Managed Inventory is a form of outsourcing.

Q: The bullwhip effect refers to the increasing fluctuations in orders that often occur as orders move through the supply chain.

Q: In several industries, online exchanges have been created by buyers.

Q: Keiretsus offer a middle ground between few suppliers and vertical integration.

Q: A fast-food retailer that acquired a spice manufacturer would be practicing backward integration.

Q: Vertical integration, whether forward or backward, requires the firm to become more specialized.

Q: Developing long-term, "partnering" relationships with a few suppliers is a long-standing American purchasing strategy.

Q: With the many-suppliers strategy, the order usually goes to the supplier that offers the best quality.

Q: Because the supply chain has become so electronic and automated, opportunities for unethical behavior have been greatly reduced.

Q: Because service firms do not acquire goods and services externally, their supply-chain management issues are insignificant.

Q: The objective of the make-or-buy decision is to help identify the products and services that can be obtained externally.

Q: Supply-chain decisions are not generally strategic in nature, because purchasing is an ordinary expense to most firms.

Q: Outsourcing is a form of specialization that allows the outsourcing firm to focus on its key success factors.

Q: Outsourcing refers to transferring a firm's activities that have traditionally been internal to external suppliers.

Q: A firm that employs a response strategy should minimize inventory throughout the supply chain.

Q: Savings in the supply chain exert more leverage as the firm has a lower net profit margin.

Q: When using the low-cost strategy for supply chain-management, the firm should invest aggressively to reduce production lead time.

Q: McDonald's was able to utilize existing plants and transportation systems in preparing the supply chain for opening its stores in Moscow.

Q: Supply-chain management faces additional challenges, such as those related to quality production and distribution systems, when companies enter growing global markets.

Q: The supply chain for a brewery would include raw ingredients such as hops and barley but not the manufactured goods such as bottles and cans.

Q: Even though a firm may have a low cost strategy, supply-chain strategy can select suppliers primarily on response or differentiation.

Q: The key to effective supply-chain management is to get many suppliers to compete with each other, in order to drive down prices.

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

Q: A container of ball-bearings valued at $25,000, currently located in Houston, TX, needs to be delivered to the Morton, IL, plant. The standard shipment method takes two days. However, for an additional charge of $500, the container can be sent overnight. The annual holding cost rate for this type of item has been estimated at 28%. What option is more economical?

Q: A manufacturing plant had $.74 of raw materials, $.23 of in-progress inventory, and $1.03 of finished goods inventory at month's end. If monthly sales were $10, what is the turnover? (assume all units are in thousands, i.e. $1 is actually $1000)

Q: A car dealer is trying to reduce the number of days of inventory held at any given time on the lot. Assume that he projects the daily sales rate as the last two months averaged. Assume that the monthly sales rate for August was 12 cars/day, September was 14 cars/day, October was 12 cars/day, and November was 8 cars/day. Given an inventory of 500 cars at the start of November and 400 at the start of December, determine the number of days of inventory on hand at the start of November and December (also assume each month has EXACTLY 30 days of sales).

Q: A company is deciding where to assign its summer intern. The manager estimates that the intern can save the company $10,000 in supply chain costs. What increase in sales (revenue) by the intern is required to show an equal profit? Supply Chain costs Variable Costs (materials) Profits % of current sales (revenue) 35 25 40

Q: A company is deciding where to assign its summer intern. The manager estimates that the intern can save $10,000 in the supply chain or increase sales (revenue) by $25,000. If sales (revenue) is divided into the three categories shown in the table where should the manager assign the intern to maximize profits? Supply Chain costs Variable Costs (materials) Profits % of current sales (revenue) 35 25 40

Q: A grocery chain is interested in exploring the impact effective supply-chain management would have. Suppose that for every $1 of sales 4% is profit, 50% is spent in the supply chain, and the remaining 46% is evenly divided between fixed and variable costs. If the chain can save $1 in the supply chain it would take how many dollars of increased sales to have the same increase in profit? Assume that fixed costs are fixed so that the portion of increased sales allocated to fixed costs is instead profit (27% profit margin combined now).

Q: The following data are pulled from a recent Walsh Manufacturing annual report. Assets Raw material inventory $120,000 Work-in-process inventory $50,000 Finished goods inventory $300,000 Property, plant & equipment $500,000 Other assets $200,000 Total assets $1,170,000 Condensed Income Statement Revenue $2,000,000 Cost of goods sold $600,000 Other expenses $1,000,000 Net income $400,000 Calculate: (a) Percent invested in inventory, (b) Inventory turnover, and (c) Weeks of supply.

Q: A company is about to select a vendor for the outsourcing of all of its engineering, environmental, and CAD requirements. It has identified four criteria critical to the selection. These criteria, and their importance weights, appear below. Three firms, A, C, and E, have indicated that they are interested in this position. The company has scored each of the three candidates on these criteria, using a 1-10 scale, where 10 is best. Candidate A scored 7, 7, 7, and 5 on the four criteria. Candidate C scored 9, 4, 8, and 6. Candidate E scored 5, 10, 10, and 7. Which vendor has the highest composite score? Criterion Weight Engineering expertise .40 Financial and managerial strength .20 Integrity .15 Staff experience and qualifications .25

Q: A transportation firm spends 60 percent of its sales in the supply chain, and has a net profit margin of 6 percent. The company is about to invest $100,000 in one of two ventures. One venture is advertising-based, and is expected to increase revenues (sales) by $600,000 (after spending the $100,000). The other venture applies the money in supply-chain efficiencies that are expected to save $200,000 (again, after spending the $100,000). Which of these two ventures offers the larger increase in profit to the firm? Use Table 11.3, reproduced below.

Q: A shipment of parts valued at $75,000 needs to be shipped from Tampa, FL, to Chicago, IL. They could be shipped by rail, taking 15 days at a cost of $1,575, or by truck, taking 4 days at a cost of $2,640. The annual holding cost rate for this type of item has been estimated at 22%. What option is more economical?

Q: A regional grocery chain spends 70 percent of its sales in the supply chain, and has a net profit margin of 2 percent. They have just initiated an Internet-based inventory management program that is expected to save the chain $500,000 per year. What is the equivalent increase in sales to this saving? Use Table 11.3, reproduced below.

Q: The following schedule reflects shows the first month's transactions of the Green Construction Company Inc. :The following schedule reflects shows the first month's transactions of the Green Construction Company Inc. : Accounts Accounts Cash+Receivable+Supplies +Equipment=Payable + Stockholders' Equity1)+20,000 +20,0002)"5,000 +5,000 3) +$1,500 +1,500 4)+3,000 +3,0005)+1,000 +1,500 +2,5006)"750 "750 7)+500 "500 8) "400 "4009)"2,000 "2,000 Provide descriptions for each transaction.

Q: Identify some technological advances that can serve to improve logistics management and also improve shipping security.

Q: What are the advantages of shipping by truck?

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