Operations Management: Processes and Supply Chains, 12e (Krajewski)
Chapter 14 Supply Chain Integration
1) Supply chain integration is the effective coordination of supply chain processes through the seamless
flow of information to suppliers, but does not include customers, such as distributors and retailers.
2) Supply chain integration is the effective coordination of supply chain processes through the seamless
flow of information to suppliers, up and down the supply chain.
3) A supply chain can be thought of as a river that flows from raw material suppliers to consumers.
4) The finished goods of one firm may actually be the raw materials for another firm.
5) The bullwhip effect says that in any supply chain, the ordering patterns experience increasing variance
as you move closer to the end customer.
6) A common disruption of the external supply chain is product and service mix changes.
7) A common disruption of the external supply chain is engineering changes.
8) A common disruption of the supply chain resulting from internal causes is order batching.
9) A common disruption of the supply chain resulting from internal causes is demand volume changes.
10) The SCOR model provides guidelines for how materials are to be delivered along a supply chain.
11) The SCOR model focuses on the supply chain processes of planning, making, sourcing, delivering,
and returning.
12) Which of the following is not a component of the supply chain?
A) order fulfillment
B) materials
C) customer relationship
D) competitors
13) The bullwhip effect is characterized by:
A) ordering patterns that experience increasing variance as you proceed downstream in the chain.
B) ordering patterns that experience increasing variance as you proceed upstream in the chain.
C) purchasing patterns that experience increasing variance downstream in the chain.
D) purchasing patterns that experience decreasing variance as you proceed upstream in the chain.
14) Which of the following changes would decrease the likelihood of the bullwhip effect?
A) changing the mix of items in an order
B) sending partial shipments of an order
C) instituting a policy of no discounts or promotions
D) sending late deliveries of an order
15) Which of the following changes would increase the likelihood of a supply chain experiencing the
bullwhip effect?
A) engineering changes to the design of a product
B) instituting a more accurate materials management information system
C) closely coordinating promotions with the internal marketing department and suppliers
D) using a more reliable delivery company
16) Which of the following is not an internal cause of supply chain disruptions?
A) engineering changes
B) batching of orders
C) service or product promotions
D) underfilled shipments
17) Which of the following is not an external cause of supply chain disruptions?
A) late deliveries
B) new service or product introductions
C) customer service or product mix changes
D) underfilled shipments
18) An internal cause of disruption in the supply chain is:
A) forecast error.
B) underfilled shipments.
C) volume changes.
D) late deliveries.
19) An external cause of disruption caused in the supply chain is:
A) product or sales promotions.
B) new product or service introduction.
C) late deliveries.
D) engineering changes.
20) Possible internal causes of supply chain disruptions are:
A) late deliveries.
B) machine breakdowns or inexperienced workers.
C) product and service mix changes.
D) underfilled shipments.
21) The SCOR model focuses on the basic supply chain processes of:
A) source, control, operate, return.
B) plan source, make deliver, return.
C) purchase, operate, control, logistics.
D) operations, marketing, finance.
22) The SCOR model requires a:
A) three-tier supply chain.
B) point of reference.
C) make-to–order or assemble-to-order product.
D) process view.
23) The bullwhip effect results in greater demand variability at the ________ end of the supply chain and
lesser demand variability at the ________ end of the supply chain.
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24) The ________ model focuses on the supply chain processes plan, source, make, deliver, and return.
25) Draw a graph illustrating the bullwhip effect and discuss its impact on the measures of supply chain
performance.
Answer: Sketches will vary slightly, but should illustrate increased variability upstream in the supply
chain. The inventory measures of supply chain performance, average aggregate inventory value, weeks
Learning Obj.: Identify the major causes of disruptions in a supply chain.
26) List and describe external causes of disruptions to supply chains.
Answer: Typical disruptions include volume changes, product and service mix changes, late deliveries,
and underfilled shipments. Volume changes occur when customers change the quantity of the product or
27) List and describe internal causes of disruptions to supply chains.
Answer: Typical disruptions include internally generated shortages, engineering changes, new product
28) What are the elements of the SCOR model?
1) Additive manufacturing is a disruptive technology that should not be incorporated into supply chains.
2) One of the benefits of additive manufacturing is its ability to reduce time and resources required for
design and development of new products.
3) The more sophisticated the application of additive manufacturing becomes, the lesser the company
will need skilled employees and workforce planning.
4) The adoption of additive manufacturing (AM) requires an increase in material inputs and complex
production processes.
5) Currently, the greatest challenge in using additive manufacturing is:
A) process.
B) intellectual property rights.
C) quality assurance.
D) talented workforce.
6) Which of the following statements is true regarding additive manufacturing (AM) design programs,
and specialized designers?
A) The need for skilled CAD designers has decreased since the implementation of AM.
B) The original CAD programs were not built to consider unique features of AM.
C) There is an abundance of AM specialized designers.
D) CAD programs are fully integrated with AM.
7) Additive manufacturing could be used to offer highly ________ products, which may yield an increase
in customers’ perceived product value and willingness to pay.
8) Additive manufacturing poses severe risks to the ________ with respect to safeguarding product
designs from those who want to copy them.
9) Describe some of the benefits for companies to integrate additive manufacturing technology into its
supply chain.
1) Reduced material inputs (and reduced costs), particularly for complex products, due to decreased
2) Simplified production due to reductions in labor, tooling, and work-in-process inventory holding costs,
but highly skilled AM labor is necessary. Rapid testing of various designs and prototyping are also
3) Production and supply chain flexibility because AM technology allows for rapid responses to changing
4) Decentralized, distributed production networks, which allow for customers to fabricate projects at or
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14.3 New Service or Product Development Process
1) Concurrent engineering is the term used to describe a firm’s development of a new product after it has
been discovered that a competitor is engineering a similar product for launch.
2) Concurrent engineering helps firms avoid the costly mismatch between the design of a new offering
and the capability of the processes required to produce it.
3) The ramp-up stage of the development process precedes the full launch stage.
4) A strain is placed on the supply chain during the ramp-up stage of the development process due to
changing volumes, quality issues and last minute design changes.
5) Which of the following is not a stage in the New Service / Product Development Process?
A) development
B) design
C) maintenance
D) analysis
6) The stage of new product or service development that links the creation of new services or products to
the corporate strategy of the firm is called:
A) design.
B) analysis.
C) development.
D) full launch.
7) The product development team ensures compatibility of the proposed product with corporate strategy
and regulatory standards in the:
A) design stage.
B) analysis stage.
C) development stage.
D) full launch stage.
8) The stage of new service or product development at which personnel are trained and some pilot runs
can be conducted to look for possible problems in production is called:
A) design.
B) analysis.
C) development.
D) full launch.
9) A new product development team that is composed of product and process engineers, marketers,
quality specialists, and buyers that work together to make sure the new product can actually be built is
engaging in:
A) concurrent engineering.
B) joint application development.
C) reverse logistics.
D) core process design.
10) ________ brings product engineers, process engineers, marketers, buyers, information specialists,
quality specialists and suppliers together to work jointly to design a product and all its processes.
1) In presourcing, suppliers are selected early in the concept-development stage.
2) Once certified, a supplier can be used by the purchasing department without the purchaser having to
make background checks.
3) Value analysis is a systematic effort to reduce the cost or improve the performance of a service or
product.
4) Electronic Data Interchange enables the transmission of routine, standardized business documents
from computer to computer over telephone or direct leased lines.
5) Green purchasing involves identifying, assessing, and managing the flow of environmental waste and
finding ways to reduce it and minimize its impact on the environment.
6) The competitive orientation to supplier relations is that the buyer and supplier are partners.
7) In a competitive orientation to negotiations between buyer and supplier, the buyer does not always
possess the power in the relationship–the supplier sometimes holds the power and can exercise this
power during negotiations with the buyer.
8) The traditional form of e-purchasing today is electronic data interchange.
9) A catalog hub is a central distribution point where buyers may purchase items directly from
manufacturers before the items are shipped to retailers.
10) An electronic market that brings together textbook sellers, office supply companies, apparel vendors,
and students is an example of an exchange.
11) Early supplier involvement is a program that allows suppliers to fill orders prior to the customer
placing them.
12) Which one of the following statements is true about sourcing?
A) Purchasing’s primary role is to satisfy the firm’s long-term supply needs.
B) Purchasing’s primary role should be placing and tracking orders.
C) Purchasing’s primary role is to negotiate lower prices.
D) Purchasing‘s primary role is to negotiate prices and delivery dates.
Table 14.1
Alison’s Accessories is a high volume worldwide fashion house with outlets in 65 countries. Kalil, the
supply chain manager is conducting her usual thorough analysis of her final four candidates for supplier
and has developed the following tables of pertinent costs and other shipping metrics. Regardless of
supplier, Alison’s Accessories will operate 220 days per year and has forecast annual demand of 250,000
units. Kalil has obtained quotes for three different shipment sizes (Freight Costs table). All costs are in US
Dollars.
Unit costs
Supplier
Price/Unit
Carrying Cost
A
123
22
B
125
19
C
126
18
D
100
40
Freight Costs
Supplier
15,000 units
25,000 units
50,000 units
A
380,000
260,000
237,000
B
615,000
547,000
470,000
C
285,000
240,000
200,000
D
380,000
260,000
237,000
Other Costs
Supplier
Lead Time
Admin Costs
A
30
250,000
B
15
275,000
C
7
225,000
D
90
2,500,000
13) Use Table 14.1 to answer the question. Kalil believes that Alison’s would benefit most from smaller
shipments of accessories from their chosen supplier. Which supplier would result in the lowest total cost
using this criterion?
A) Supplier A
B) Supplier B
C) Supplier C
D) Supplier D
14) Use Table 14.1 to answer the question. Kalil believes that Alison’s would benefit most from medium
sized shipments of accessories from their chosen supplier. Which supplier would result in the lowest total
cost using this criterion?
A) Supplier A
B) Supplier B
C) Supplier C
D) Supplier D
15) Use Table 14.1 to answer the question. Kalil believes in buying in bulk, regardless of who the supplier
is. Which supplier would result in the lowest total cost using this criterion?
A) Supplier A
B) Supplier B
C) Supplier C
D) Supplier D
16) Use Table 14.1 to answer the question. Kalil has a sorority sister that works at Supplier A and would
like to help her out by awarding the supply contract. Which shipping volume should she choose in order
to rig the bid and give her sister’s company the contract?
A) 15,000 units
B) 25,000 units
C) 50,000 units
D) None of these, the shipping volume would need to be higher than the table goes.
17) Use Table 14.1 to answer the question. As shipping volume increases from 15,000 to 25,000 to 50,000,
which supplier experiences the smallest percentage increase in inventory cost?
A) Supplier A
B) Supplier B
C) Supplier C
D) Supplier D
18) Use Table 14.1 to answer the question. Kalil has a brother–in-law that works for Supplier B and as she
will soon be an aunt for the first time, she’d like to choose a shipping volume that awards Supplier B with
the contract with Alison Accessories. What shipping volume should she choose?
A) 15,000 units
B) 25,000 units
C) 50,000 units
D) Supplier B is never the best alternative.
Use the following to answer the questions below.
The Steele Bike Company has completed a total cost analysis for two suppliers of bicycle frames to
support their business. They also consider on-time speed, top quality and customization in their selection
process. Each criterion is given a weight (total = 100 points), and each supplier is scored on each criterion
(1 = poor, 10 = excellent). The data are shown in the following table.
CRITERION
WEIGHT
ACME
STATE
Total Cost
15
8
4
On-Time Delivery
20
5
7
Top Quality
30
7
6
Customization
35
4
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19) Refer to the instruction above. Using the preference matrix approach for selecting suppliers, what is
State’s total weighted score?
A) 570
B) 100
C) 23
D) 590
20) Refer to the instruction above. Using the preference matrix approach for selecting suppliers, what is
Acme’s total weighted score?
A) 100
B) 570
C) 24
D) 590
21) Refer to the instruction above. Using the preference matrix (total weighted score) approach for
selecting suppliers, which supplier should Steele select?
A) State
B) Acme
C) Either is acceptable–their preference matrix scores are the same.
D) More information is needed to make this decision.
22) The practice of selecting suppliers and giving them significant responsibility for the design of certain
components or systems of the product is called:
A) value analysis.
B) locus of control.
C) presourcing.
D) vendor-managed inventories.
23) A systematic effort to reduce the cost or improve the performance of services or products is known as:
A) presourcing.
B) cooperative orientation.
C) supplier certification.
D) value analysis.
24) Suppliers can gain power from a number of sources in the buyer / supplier relationship. When a
supplier values identification with a buyer, this is called a(n) ________ source of power.
A) expert
B) reward
C) referent
D) legal
25) Suppliers can gain power from a number of sources in the buyer / supplier relationship. When a
buyer has access to knowledge, information and skills desired by the supplier, this is called a(n) ________
source of power.
A) expert
B) reward
C) referent
D) coercive
26) Suppliers can gain power from a number of sources in the buyer / supplier relationship. When a
buyer can threaten to cancel future business unless the supplier adheres to the buyer‘s demands, this is
called a ________ source of power.
A) legal
B) reward
C) referent
D) coercive