30) ________ typically measures the cost of bringing product into a facility as a percentage of
sales or cost of goods sold (COGS).
A) Average outbound transportation cost
B) Average inbound transportation cost
C) Average incoming shipment size
D) Average inbound transportation cost per shipment
31) Which of the following are key components of information that must be analyzed to increase
efficiency and improve effectiveness in a supply chain?
A) Software selection
B) Source selection
C) Warehouse selection
D) Forecasting and aggregate planning
32) When all the different stages of a supply chain work toward the objective of maximizing
total supply chain profitability, rather than each stage devoting itself to its own profitability
without considering total supply chain profit, it is known as
A) supply chain coordination.
B) forecasting.
C) aggregate planning.
D) revenue management.
33) The art and science of making projections about what future demand and conditions will be
is
A) supply chain coordination.
B) forecasting.
C) aggregate planning.
D) revenue management.
34) Transforming forecasts into plans of activity to satisfy the projected demand is known as
A) supply chain coordination.
B) forecasting.
C) aggregate planning.
D) revenue management.
35) The process by which a firm decides how much to charge customers for its goods and
services is
A) supply chain coordination.
B) forecasting.
C) sales and operations planning.
D) pricing.
36) ________ identifies the difference between the planned production/inventories and the actual
values.
A) Supplier reliability
B) Forecast error
C) Variance from plan
D) Supply quality
37) ________ measures the average time between when an order is placed and the product
arrives.
A) Supplier reliability
B) Supply lead time
C) Fraction of on-time deliveries
D) Supply quality
38) Zara sources basic products such as white t-shirts from low cost countries because demand is
predictable. For trendy products for which demand is unpredictable, Zara sources from company-
owned higher cost factories in Europe. For the predictable demand, Zara strives for ________
and for the unpredictable demand, Zara hopes to achieve ________.
A) social responsibility, quality
B) flexibility, social responsibility
C) efficiency, flexibility
D) quality, efficiency
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39) The most significant sourcing decision for a firm is
A) whether to locate a plant close to customers or locate a plant close to sources of raw materials
or suppliers.
B) whether to use highly automate processes or manual labor.
C) whether to use traditional inventory methods or adopt a just in time approach to stocking.
D) whether to perform a task in-house or outsource it to a third party.
40) Lisa rented her goats out to anyone interested in clearing underbrush the natural way on their
acreage. She received a call from her client Mary on June 21 and delivered her herd of goats to
the site on June 24. The goats were done on June 30 and Lisa presented Mary with an invoice the
same day. Mary wrote Lisa a check on July 18 and Lisa cashed it on July 21. What was Lisa’s
days payable outstanding for Mary’s job?
A) 18 days
B) 24 days
C) 27 days
D) 30 days
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41) Over the past two months, Lisa has received several orders for goat grazing services. The
order date, promise date, and delivery dates are shown in the table below.
Order Date
Promise Date
Delivery Date
June 1
June 2
June 3
June 1
June 4
June 4
June 6
June 7
June 7
June 13
June 15
June 15
June 15
June 16
June 18
June 15
June 18
June 20
June 18
June 22
June 22
June 19
June 25
June 25
June 20
June 27
June 27
June 22
June 29
June 29
June 24
June 28
June 30
June 26
July 4
July 4
June 28
July 8
July 7
June 30
July 8
July 9
What is Lisa’s percentage of on-time deliveries?
A) 75%
B) 64%
C) 56%
D) 51%
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42) Over the past two months, Lisa has had to supplement her goats’ diet with some 14% protein
feed. Her order date, the number of sacks of feed and the total cost are exhibited in the table.
Order Date
Number of
Bags
Total Cost
June 1
3
45.33
June 8
2
28.44
June 15
3
44.25
June 22
4
60.92
June 29
4
61.80
July 6
3
47.34
What is Lisa’s average purchase price for 14% protein feed?
A) $15.09
B) $48.01
C) $15.16
D) $50.44
43) The ________ strategy results in a peak during the discount week, often followed by a steep
drop in demand during the following weeks.
A) Everyday low pricing
B) High-low pricing
C) Fixed price
D) Menu pricing
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44) ________ measures the incremental costs that are independent of the size of the order.
A) Average sale price
B) Incremental variable cost per unit
C) Incremental fixed cost per order
D) Incremental indirect cost per order
45) Economies of scale are illustrated by
A) a company declaring that they will not have sales, but will maintain very low prices all the
time.
B) the price of a taxi ride service increasing after 2 a.m.
C) a supplier using a third party logistics firm.
D) a supplier waiting until enough demand has built up to send a full truckload shipment to their
customer.
46) On a recent road trip to the Big Easy, the absentee landlord recorded his gasoline purchases
in a logbook that he intended to support his rental expenses for the year. The entries are in the
table below:
Gallons
Total Cost
15
$44.40
16
$36.32
13.5
$34.70
18
$45.90
8
$23.36
12
$30.72
What is the average sale price of the gasoline?
A) $2.61
B) $2.64
C) $2.67
D) $2.70
47) On a recent road trip to the Big Easy, the absentee landlord recorded his gasoline purchases
in a logbook that he intended to support his rental expenses for the year. The entries are in the
table below:
Gallons
Total Cost
15
$44.40
16
$36.32
13.5
$34.70
18
$45.90
8
$23.36
12
$30.72
What is the average order size of the gasoline?
A) 15.00
B) 13.75
C) 14.25
D) 14.75
48) On a recent road trip to the Big Easy, the absentee landlord recorded his gasoline purchases
in a logbook that he intended to support his rental expenses for the year. The entries are in the
table below:
Gallons
Total Cost
15
$44.40
16
$36.32
13.5
$34.70
18
$45.90
8
$23.36
12
$30.72
What is the range of sale price of the gasoline per gallon?
A) 7.51
B) 10
C) 0.69
D) 22.54
49) Amazon uses different prices for the products that are purchased from the company – often
for the speed of the shipping. What is the name of this pricing scheme?
A) Everyday low pricing
B) High-low pricing
C) Fixed price
D) Menu pricing
3.3 Essay Questions
1) List and define the six major drivers of supply chain performance.
2) Explain the supply chain decision-making framework and the role of the four major drivers.
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3) Explain the basic trade-off between responsiveness and efficiency for each of the major
drivers of supply chain performance.
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4) Explain the role of each of the major drivers of supply chain performance.
Answer: Facilities are the where of the supply chain if we think of inventory as what is being
passed along the supply chain and transportation as how it is passed along. They are the locations
5) Explain the role of each of the major drivers of supply chain performance in the competitive
strategy.