Supply Chain Management: Strategy, Planning, and Operation, 7e (Chopra)
Chapter 17 Sustainability and the Supply Chain
17.1 True/False Questions
1) A focus on sustainability allows a supply chain to better serve more environmentally
conscious customers while often improving supply chain performance.
2) Walmart started its focus on sustainability as a defensive move given the beating it was taking
from environmental activists.
3) Customers have usually backed up words about the importance of sustainability with a
willingness to pay more for sustainable products.
4) It is more difficult to focus on sustainability at the supply chain level than at the individual
firm level.
5) In the short to medium term, a focus on supply chain sustainability tends to provide costs that
are shared but benefits that are local to a firm or individual.
6) Hardin (1968) described the tragedy of the commons as a dilemma arising when the common
good does not align perfectly with the good of individual entities.
7) The Intergovernmental Panel on Climate Change, a United Nations body that has been
assessing global warming since 1990, has written that even though most of the buildup of carbon
dioxide in the atmosphere has come from the United States and Western Europe, it is poorer
countries that are closer to the equator that are likely to pay the biggest price.
8) In a command-and-control approach, the government or regulators help the common good by
setting standards that everyone must adhere to.
9) In a cap-and-trade approach, the government creates an infinite number of tradeable emission
allowances that must be surrendered to the companies generating the largest emissions.
10) An emissions tax is characterized as a progressive tax because it charges each entity a tax
proportional to their environmental emissions.
11) In reality, there are no actions in a supply chain that improve both sustainability and supply
chain surplus.
12) An example of a relative measure of emission output is pounds of CO2 per gallon of diesel
fuel.
13) The social pillar measures a firm’s ability to address issues that are important for its
workforce, customers, and society.
14) A firm’s new sustainability improvement initiative is best begun by focusing on resource
reduction activities.
15) For most firms, the extent of direct emissions is typically only a small fraction of the extent
of indirect emissions in the supply chain.
16) Facilities often offer the best opportunity to simultaneously improve the environmental and
financial performance through innovation.
17) Most supply chain design innovations that lower transportation costs paradoxically tend to
increase fuel consumption and emissions.
18) There is greater environmental impact in the extended supply chain than there is within the
main plant for most manufacturers.
19) Simple awareness of what your own electricity consumption is usually reduces a consumer’s
electricity use by between 10% and 15%.
20) Surveys in sustainable farming have revealed that the typical consumer is willing to pay 25%
more for sustainable fare.
21) The primary reason for the general lack of design for remanufacturing is that
remanufacturing is more expensive for a manufacturer.
22) In general, the reverse logistics function for a manufacturer is more expensive to operate on a
per unit basis than the forward logistics function that sends the products to market.
23) If garbage collection services were billed based on the weight of refuse collected, most
people would find a way to discard less and recycle more.
24) A carbon tax system is computed by multiplying the tax rate by the carbon emissions.
25) Under a cap-and-trade system, a firm that emits more than its share of carbon can buy
allowances from a firm that emits less than its share.
17.2 Multiple Choice Questions
1) Most concrete action has been observed primarily when a focus on sustainability
A) increases revenue for sustainability initiatives.
B) makes the world more sustainable.
C) attracts customers who value sustainability.
D) reduces risk and improving the financial performance of the supply chain.
2) Much less success for sustainability initiatives has been driven by
A) increased revenue for sustainability initiatives.
B) customer demand.
C) attracted customers who value sustainability.
D) reduced risk and improving the financial performance of the supply chain.
3) Almost 40 percent of ________ could be achieved at negative marginal costs, meaning that
investing in these options would generate positive economic returns over their life cycle.
A) greenhouse gas abatement
B) fuel consumption initiatives
C) increased customer base
D) improved company reputation
4) Unilever, the Dutch-British consumer goods giant, has invested significant effort to help
emerging economies such as Brazil and India wrestle with poverty, water scarcity and climate
change. The company sees ________ of its sales and the majority of its growth coming from
emerging economies.
A) almost 25%
B) almost 50%
C) almost 60%
D) almost 75%
5) Walmart reduced its energy consumption by
A) adding skylights for natural light.
B) increasing packaging.
C) redesigning their logo.
D) routing trucks to make only right turns.
6) Which of these sustainability initiatives has NOT been a success for Starbucks?
A) Managing waste and conserving water and energy
B) Ensuring that working conditions are safe and humane
C) Reducing agrochemical use
D) Encouraging customers to bring a reusable coffee cup
7) Which of these tends to hinder a firm’s implementation of sustainability measures?
A) Willingness of customers to pay more for sustainable goods
B) Insufficient return on investment
C) Ease of evaluating sustainability across a product life cycle
D) Creation of trade barriers
8) Which of these statements is best?
A) Benefits and costs of sustainability programs fall equally across all supply chain members
throughout most initiatives.
B) Customers tend to be vocal about sustainability and back up those words with their purchase
decisions.
C) It is more difficult to maintain a focus on sustainability for a supply chain than for an
individual firm.
D) Sustainability programs typically offer a clear and substantive ROI figure throughout their
development and deployment.
9) In the short to medium term, an improved focus on sustainability provides benefits that
A) are shared but costs that may be local to a firm.
B) are local to firms but a cost that is global.
C) are shared and costs that are global.
D) are local and costs that are global.
10) The phenomenon where each actor is incentivized to maximize his gain from a public asset
at the expense of all others is
A) the tragedy of the commons.
B) cap-and-trade.
C) the closed loop.
D) the social pillar.
11) Which of these illustrates the tragedy of the commons?
A) A major automotive manufacturer receives a shipment of faulty air bags and installs them
anyway since most drivers don’t have accidents.
B) Major industrialized nations generate the most pollution but poorer countries near the equator
are most affected.
C) Each apartment dweller has a kitchen trash bag and carries it to a common dumpster in the
apartment complex when it is full.
D) A bachelor has an impressive saltwater tank of tropical fish and feeds all of them from the
same dispenser of fish food.
12) ________ is a social arrangement that encourages all participants to behave such that they do
not contribute to the tragedy of the commons.
A) A zero sum game
B) Escalation of commitment
C) Mutual coercion
D) Barzini Red
13) A ________ approach requires a government or regulatory agency to establish and enforce
standards.
A) slap and tickle
B) superior-inferior
C) laissez faire
D) command and control
14) ________ is a mechanism that constrains the aggregate emissions by creating a limited
number of tradeable emission allowances, which emission sources must secure and surrender in
proportion to their emissions.
A) Command-and-control
B) Cap-and-trade
C) Cap-and-control
D) Emissions tax
15) Which of these approaches to solving the tragedy of the commons is considered a market
approach?
A) Command-and-control
B) Mean absolute deviation
C) Cap-and-trade
D) Mutual coercion
16) Which of these approaches to solving the tragedy of the commons is considered a market
approach?
A) Command-and-control
B) Dollar days
C) Mutual coercion
D) Emissions tax
17) Metrics that would typically be in corporate social responsibility (CSR) reports would
contain
A) revenue.
B) social.
C) environmental.
D) both social and environmental.
18) In the context of greenhouse gas emission, the GHG protocol initiative defines three levels of
scope. The following scope is referred to as direct emissions.
A) This scope refers to emissions from GHG sources that are owned or controlled by the
reporting entity.
B) This scope refers to indirect emissions from grid-sourced electricity and other utility services
of heat, steam and cooling.
C) This scope refers to the inclusion of other indirect emissions coming from sources such as the
production of purchased materials, outsourced activities, contractor owned vehicles, waste
disposal, and employee business travel.
D) This scope refers to the corporate responsibility for direct discharging of emissions into
public water systems.
19) A(n) ________ measure of performance is more effective at capturing sustainability
improvement.
A) scope
B) relative
C) absolute
D) statistical
20) Which of these is a relative measurement?
A) Tons
B) Kilowatt-hours
C) Parts per million
D) Kelvin
21) Which of these is an absolute measurement?
A) Pounds per metric ton
B) Kilowatt-hours
C) Parts per million
D) Emissions per ton of output
22) In general, it is better for firms to measure and report their performance using
A) absolute measurements.
B) relative measurements.
C) both absolute and relative measurements.
D) descriptive prose rather than numbers.
23) In the context of greenhouse gas emission, the GHG protocol initiative defines levels of
scope. This level refers to emissions from GHG sources that are owned or controlled by the
reporting entity.
A) Scope 1
B) Scope 2
C) Scope 3
D) Scope 4
24) In the context of greenhouse gas emission, the GHG protocol initiative defines levels of
scope. This level refers to the inclusion of other indirect emissions coming from sources such as
the production of purchased materials, outsourced activities, contractor owned vehicles, waste
disposal, and employee business travel.
A) Scope 1
B) Scope 2
C) Scope 3
D) Scope 4
25) In the context of greenhouse gas emission, the GHG protocol initiative defines levels of
scope. This level refers to indirect emissions from grid-sourced electricity and other utility
services of heat, steam and cooling.
A) Scope 1
B) Scope 2
C) Scope 3
D) Scope 4
26) In the context of greenhouse gas emission, direct emissions
A) are controlled by the reporting entity.
B) are created through waste disposal.
C) come from utility-based services.
D) come from employee-based travel.
27) In the textbook, a detailed analysis by Abbott indicated that their indirect emissions were
about ________ times their direct emissions.
A) 1 to 5
B) 6 to 14
C) 15 to 19
D) 20 to 22
28) The disadvantage of using a(n) ________ measure is that a drop in supply chain sales and
production (for example in a downturn) will show an improved absolute measure of energy
consumption even though the company may not have changed anything.
A) scope
B) relative
C) absolute
D) statistical
29) In general, it is better for firms to measure and report both ________ and ________
measures of performance in order to capture improvement.
A) breadth; depth
B) relative; absolute
C) scope; sequence
D) statistical; qualitative