Supply Chain Management: Strategy, Planning, and Operation, 7e (Chopra)
Chapter 1 Understanding the Supply Chain
1.1 True/False Questions
1) A supply chain could be more accurately described as a supply network or supply web.
2) All stages of an enterprise are involved, either directly or indirectly, in fulfilling a customer
request.
3) A supply chain includes only the organizations directly involved in supplying components
needed for manufacturing.
4) The objective of every supply chain is to maximize the net value generated.
5) The objective of the customer arrival process is to ensure that orders are quickly and
accurately entered and communicated to other affected supply chain processes.
6) The objective of customer order entry is to maintain a record of product receipt and complete
payment.
7) The difference between the value of the product and its price remains with the customer as
consumer surplus.
8) The supply chain planning phase exceeds the supply chain design phase in duration.
9) The goal during the supply chain operation phase is to exploit the reduction of uncertainty and
optimize performance.
10) The replenishment cycle occurs at the retailer/distributor interface.
11) The manufacturing cycle occurs at the distributor/manufacturer interface.
12) The push/pull view of a supply chain holds that the processes in a supply chain are divided
into 2 categories depending on whether they are initiated in response to or in anticipation of
customer orders.
13) The production scheduling process in the manufacturing cycle is similar to the order entry
process in the replenishment cycle.
14) The cycle view of a supply chain holds that the processes in a supply chain are divided into 2
categories depending on whether they are initiated in response to or in anticipation of customer
orders.
15) The procurement cycle occurs at the manufacturer/supplier interface.
16) The cycle view of the supply chain is useful when considering operational decisions, because
it specifies the roles and responsibilities of each member of the supply chain.
17) Push processes may also be referred to as speculative processes.
18) All supply chain activities within a firm belong to one of three macro processes — CRM,
ISCM and SRM.
19) CRM systems typically include capabilities for sourcing and negotiating as well as design
and supply collaboration.
20) There is a close connection between the design and management of supply chain flows and
the success of a supply chain.
21) The drawback of Zara’s responsive supply chain is that it tends to sell more products at
markdown than most of its competitors.
22) Amazon’s operations are completely online.
23) Good strategic decisions cannot be made without access to relevant analytics.
24) All analytics should be designed to support decision making.
1) Each stage in a supply chain is connected through the flow of products, information, and
funds. These flows often occur in both directions and are usually managed by
A) pricing department.
B) one of the stages.
C) upper management.
D) engineering department.
2) A supply chain features a constant flow of
A) information, product and funds.
B) personnel, information, and policies.
C) processes, funds, and product.
D) product, processes, and support.
3) Which of these words best describes a typical supply chain structure?
A) Static
B) Customer
C) Cyclical
D) Network
4) Which statement about supply chains is best?
A) New product development is not a supply chain function.
B) If a supplier uses a shipping company to send product to a customer, the shipping company is
technically not a supply chain member.
C) Funds in a supply chain flow upstream only.
D) Flows in a supply chain may be managed by an intermediary.
5) Which sequence of stages is typical for product flow in a supply chain?
A) Supplier → Manufacturer → Distributor
B) Retailer → Distributor → Customer
C) Manufacturer → Retailer → Distributor
D) Supplier → Customer → Retailer
6) Supply chain surplus involves what two parts?
A) Manufacturing cost and selling price
B) Customer value and supply chain cost
C) Customer value and high quality products
D) Reliable transportation and supply chain cost
7) For any supply chain, the source of revenue is generated by
A) efficient operations.
B) information flows.
C) the customer.
D) product flows.
8) Customer value is
A) the sum of the supply chain surplus and supply chain cost.
B) the remainder after supply chain cost is subtracted from supply chain surplus.
C) the remainder after supply chain surplus is subtracted from supply chain cost.
D) supply chain profitability minus the supply chain cost.
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9) The objective of every supply chain is to
A) minimize the overall cost generated.
B) maximize the net value generated.
C) minimize the cost to the manufacturer.
D) maximize the profit of the manufacturer.
10) Retailing in the United States is largely
A) push/pull.
B) profitable.
C) consolidated.
D) centralized.
11) For any supply chain,
A) management rests solely in the hands of the manufacturer.
B) management rests solely in the hands of the distributor.
C) if each member focuses on profitability, the overall supply chain profit will be maximized.
D) there is only one source of revenue, the customer.
12) Webvan designed a supply chain with large warehouses in several major cities in the United
States, from which groceries were delivered to customer homes. They failed partly because of
A) low demand for their service.
B) slow inventory turnover compared to industry averages.
C) higher labor costs for picking orders.
D) poor quality products.
13) A key issue facing Toyota is
A) developing an Internet marketing system.
B) whether to specialize in a particular market.
C) design of its global production and distribution network.
D) how to implement model changes.
14) Walmart’s supply chain features clusters of stores around distribution centers, which
facilitates
A) high transportation costs.
B) frequent but inexpensive replenishment at the stores.
C) rapid design cycles from their R&D group.
D) sharing of information with suppliers.
15) Which of these statements about Dell’s supply chain is best?
A) Dell’s supply chain surplus was largely driven by their negative shipping model.
B) Dell’s initial success was largely driven by the ability to accurately forecast what customers
wanted and supply those models to retail outlets that carried their computers.
C) Dell’s initial success was largely driven by their Assembly → Customer supply chain linkage.
D) Dell’s supply chain consists of only two members, Dell and the customer.
16) The decision phases in a supply chain include
A) production scheduling.
B) customer relationship management.
C) supply chain operation.
D) supply chain orientation.
17) A company would decide whether to outsource or perform a supply chain function in-house
during the
A) planning phase.
B) design phase.
C) tactical phase.
D) operation phase.
18) The supply chain strategy category would include a decision about
A) which items in the warehouse will be shipped to Malibu.
B) which warehouse will supply the Surf City location.
C) when the order should be shipped to the little old lady from Pasadena.
D) how large the warehouse in Kokomo should be.
19) A decision made about which markets will be serviced by which locations falls in the supply
chain ________ phase
A) conceptualization
B) design
C) operation
D) planning
20) The profitability of a supply chain is impacted primarily by
A) the design, planning and operation categories of decisions.
B) only the operation category of decisions.
C) only the design and planning categories of decisions.
D) only the planning and operation categories of decisions.
21) The time horizon of the operation phase is typically
A) quarterly or yearly.
B) weekly or daily.
C) monthly or quarterly.
D) over the next several years.
22) Handling customer orders in the best possible manner is the goal of supply chain
A) strategy.
B) planning.
C) operations.
D) design.
23) The cycle view of a supply chain holds that
A) the processes in a supply chain are divided into 2 categories.
B) the processes in a supply chain are divided into a series of activities performed at the interface
between successive stages.
C) all processes in a supply chain are initiated in response to a customer order.
D) all processes in a supply chain are performed in anticipation of customer orders.
24) The push/pull view of a supply chain holds that
A) the processes in a supply chain are divided into a series of activities performed at the interface
between successive stages.
B) all processes in a supply chain are initiated in response to a customer order.
C) all responses in a supply chain are performed in anticipation of customer orders.
D) the processes in a supply chain are divided into 2 categories depending on whether they are
initiated in response to or in anticipation of customer orders.
25) The customer order cycle occurs at the
A) customer/retailer interface.
B) retailer/distributor interface.
C) distributor/manufacturer interface.
D) manufacturer/supplier interface.
26) Customer order arrival refers to
A) the point in time when the customer has access to choices and makes a decision regarding a
purchase.
B) the customer informing the retailer of what they want to purchase and the retailer allocating
product to the customer.
C) the process where product is prepared and sent to the customer.
D) the process where the customer receives the product and takes ownership.