Supply Chain Management: Strategy, Planning, and Operation, 7e (Chopra)
Chapter 2 Achieving Strategic Fit in a Supply Chain
2.1 True/False Questions
1) A company’s competitive strategy defines the set of customer needs that it seeks to satisfy
through its products and services.
2) The value chain emphasizes the close relationship between all the functional strategies within
a company.
3) A company’s product development strategy defines the set of customer needs that it seeks to
satisfy through its products and services.
4) A company’s product development strategy specifies the portfolio of new products that it will
try to develop.
5) Supply chain strategy specifies what the operations, distribution, and service functions,
whether performed in-house or outsourced, should do particularly well.
6) A company’s supply chain strategy determines the nature of procurement and transportation of
materials as well as the manufacture and distribution of the product.
7) The degree of supply chain responsiveness should be consistent with the implied uncertainty.
8) To achieve complete strategic fit, a firm must ensure that all functions in the value chain have
diverse strategies that support functional goals.
9) Because demand and supply characteristics change, the supply chain strategy must change
over the product life cycle if a company is to continue achieving strategic fit.
10) To retain strategic fit, supply chain strategy must be adjusted over the life cycle of a product
and as the competitive landscape changes.
11) The intercompany scope of strategic fit is no longer relevant today because the competitive
playing field has shifted from company versus company to supply chain versus supply chain.
12) Having far more capacity than demand is helpful for a supply chain dealing with uncertainty.
13) Operating with low levels of inventory helps a supply chain facing uncertainty because there
is that much less product to flush out of the system before filling today’s order.
14) Uncertainty is nothing but an absence of the right information.
15) The interoperation scope has each stage of the supply chain devising its strategy
independently.
16) Intraoperation scope resulted in minimal supply chain surplus.
17) An example of intrafunctional scope is that outsourcing a key component is reasonable if the
savings in staying current in technology results in improved performance in other areas of R&D
that permit improved overall performance.
18) If all functional strategies are deliberately aligned with each other and with the overall
competitive strategy, then the company profit will be maximized.
19) Intercompany scope is broader than intrafunctional scope.
20) Monolithic Lumber has purchased timber from Bunyan Axe, the same wholly-owned
subsidiary, for the last two centuries and plans to do so for another two centuries. It is crucial that
Monolithic continue to demonstrate an agile company scope.
2.2 Multiple Choice Questions
1) A company’s competitive strategy
A) defines the set of customer needs that it seeks to satisfy through its products and services.
B) specifies the portfolio of new products that it will try to develop.
C) specifies how the market will be segmented and how the product will be positioned, priced,
and promoted.
D) determines the nature of procurement and transportation of materials as well as manufacture
and distribution of the product.
2) The value that potential customers place on product cost and delivery time determines a
company’s
A) customer needs.
B) competitive strategy.
C) supply chain surplus.
D) product life cycle.
3) The value chain in a company begins with
A) the customer.
B) marketing and sales.
C) new product development.
D) operations.
4) Seven-Eleven in Japan’s operations and distribution strategy focuses on
A) convenience in the form of easy access to stores.
B) constantly adding new products and services.
C) low cost for gasoline, which drives traffic to the store.
D) being responsive and having an excellent information infrastructure.
5) Which element in the value chain is responsible for transforming inputs into outputs?
A) Operations
B) Marketing
C) Distribution
D) All elements of the value chain do this.
6) Which of these services facilitates the function of the value chain but is not considered a core
element of the supply chain?
A) Marketing
B) Information Technology
C) Distribution
D) Service
7) A company’s product development strategy
A) defines the set of customer needs that it seeks to satisfy through its products and services.
B) specifies the portfolio of new products that it will try to develop.
C) specifies how the market will be segmented and how the product will be positioned, priced,
and promoted.
D) determines the nature of procurement and transportation of materials as well as manufacture
and distribution of the product.
8) A company’s marketing and sales strategy
A) defines the set of customer needs that it seeks to satisfy through its products and services.
B) specifies the portfolio of new products that it will try to develop.
C) specifies how the market will be segmented and how the product will be positioned, priced,
and promoted.
D) determines the nature of procurement and transportation of materials as well as manufacture
and distribution of the product.
9) A company’s supply chain strategy
A) defines the set of customer needs that it seeks to satisfy through its products and services.
B) specifies the portfolio of new products that it will try to develop.
C) specifies how the market will be segmented and how the product will be positioned, priced,
and promoted.
D) determines the nature of procurement and transportation of materials as well as manufacture
and distribution of the product.
10) The value chain consists of direct and indirect activities. Which of the following is an
indirect activity for an enterprise?
A) Marketing
B) Distribution
C) Human Resources
D) Service
11) A ________ strategy specifies the portfolio of new products that a company will try to
develop.
A) Product Development
B) Marketing and Sales
C) Supply Chain
D) Finance
12) A ________ strategy specifies how the market will be segmented and how the product will
be positioned, priced, and promoted.
A) Product Development
B) Marketing and Sales
C) Supply Chain
D) Finance
13) Which of the following determines the nature of procurement of raw materials, transportation
of materials to and from the company, manufacture of the product or operation to provide the
service, and distribution of the product to the customer along with follow-up service?
A) Competitive strategy
B) Product development strategy
C) Marketing and sales strategy
D) Supply chain strategy
14) Which of the following defines the set of customer needs that a company seeks to satisfy
through its products and services?
A) Competitive strategy
B) Product development strategy
C) Marketing and sales strategy
D) Supply chain strategy
15) Which of the following specifies the portfolio of new products that a company will try to
develop?
A) Competitive strategy
B) Product development strategy
C) Marketing and sales strategy
D) Supply chain strategy
16) A supply chain strategy involves decisions regarding all of the following except
A) inventory.
B) transportation.
C) new product development.
D) operating facilities.
17) The uncertainty of customer demand for a product is the
A) rate of strategic uncertainty.
B) demand uncertainty.
C) implied demand uncertainty.
D) average forecast error.
18) The uncertainty that exists due to the portion of demand that the supply chain is required to
meet is the
A) rate of strategic uncertainty.
B) demand uncertainty.
C) implied demand uncertainty.
D) average forecast error.
19) Which of the following customer needs will cause implied uncertainty of demand to
increase?
A) Product margin
B) Lead time decreases
C) Average stockout rate
D) Average forced season end markdown
20) The first step in achieving strategic fit between competitive and supply chain strategies is to
A) understand the supply chain and map it on the responsiveness spectrum.
B) understand customers and supply chain uncertainty.
C) match supply chain responsiveness with the implied uncertainty of demand.
D) ensure that all functional strategies within the supply chain support the supply chain’s level of
responsiveness.
21) The second step in achieving strategic fit between competitive and supply chain strategies is
to
A) understand the supply chain and map it on the responsiveness spectrum.
B) understand customers and supply chain uncertainty.
C) match supply chain responsiveness with the implied uncertainty of demand.
D) ensure that all functional strategies within the supply chain support the supply chain’s level of
responsiveness.
22) The final step in achieving strategic fit between competitive and supply chain strategies is to
A) understand the supply chain and map it on the responsiveness spectrum.
B) understand customers and supply chain uncertainty.
C) match supply chain responsiveness with the implied uncertainty of demand.
D) combine customer and supply chain uncertainty and map it on the implied uncertainty
spectrum.
23) Supply chain responsiveness includes the ability to do which of the following?
A) Handle supply uncertainty
B) Ship product in larger quantities than your competitors
C) Substitute similar products to fill orders when the desired products are unavailable
D) Ensure that all functional strategies within the supply chain are reviewed annually
24) Supply chain responsiveness includes the ability to do which of the following?
A) Report financial results with a high degree of accuracy
B) Meet a very high service level
C) Ship product in larger quantities than your competitors
D) Substitute similar products to fill orders when the desired products are unavailable
25) Supply chain responsiveness includes the ability to do which of the following?
A) Ship product in larger quantities than your competitors
B) Substitute similar products to fill orders when the desired products are unavailable
C) Meet short lead times
D) Ensure that due dates are met regardless of accuracy of the fulfillment process
26) The cost of making and delivering a product to the customer is referred to as
A) supply chain responsiveness.
B) supply chain efficiency.
C) cost-responsiveness efficient frontier.
D) implied uncertainty.