Name:
Class:
Date:
chapter 6
Indicate whether the statement is true or false.
1. The center-of-gravity method increases the weighted distance between the facility to be located and its supply and
demand points.
a. True
b. False
2. Supply chain optimization includes minimizing the total costs of manufacturing and transportation, which might
consider sourcing, distribution, and placement of inventory throughout the supply chain.
a. True
b. False
3. In the context of intellectual property of multinational enterprises, patents protect services.
a. True
b. False
4. In the context of sourcing, a single supplier often provides economies of scale and the ability to form close partnerships.
a. True
b. False
5. Zara’s value chain model focuses on two basic rules: “Give customers what they want, and get it to them faster than
anyone else.”
a. True
b. False
6. Third-party logistics providers can leverage business intelligence and analytics to create efficiencies and economies of
scale in the supply chain.
a. True
b. False
7. Supply chain optimization includes minimizing the total costs of manufacturing and transportation.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
8. In location decision process, community location decision involves:
a. evaluating international monetary policies and cultural practices.
b. coping with issues such as tariffs, customs, and trade restrictions.
c. choosing a general region of a country.
d. selecting a specific city in which to locate.
9. Which of the following statements is true of outsourcing decisions?
a. Break-even analysis can be used to provide insight into outsourcing decisions.
b. The simplest outsourcing decision is a single supplier versus multiple suppliers.
Name:
Class:
Date:
chapter 6
c. If a company decides to make a part in–house, it does not incur any fixed costs.
d. If a company outsources its work to external supplier, the variable cost per unit will be low.
10. Which of the following statements is true of a responsive supply chain?
a. It works best when demand is stable and predictable.
b. It works best when product life cycles are short and change often because of innovation.
c. It works best when customers require standardization rather than customization.
d. It works best when contribution margins are low.
11. _____ is a noneconomic factor in location decisions.
a. Construction
b. Availability of labor
c. Depreciation and maintenance
d. Insurance
12. A firm that specializes in certain types of goods-producing activities, such as customized design, manufacturing,
assembly, and packaging, and works under contract for end users is called a _____.
a. third-party logistics provider
b. contract manufacturer
c. distribution center
d. vendor-managed inventory supplier
13. The “Wi” typically used in the numerator and denominator of the center-of-gravity equations represents the _____
location i.
a. quality of goods or services moved to or from
b. x coordinate of
c. volume of goods or services moved to or from
d. y coordinate of
14. In the context of supply chain design trade-offs, which of the following is true of a push system?
a. It works best when there are a large number of distribution centers.
b. It is more appropriate for make-to-order items.
c. It has an advantage of immediate availability of goods to consumers.
d. It works best with variable sales patterns.
15. At Blyrie Apparels, the apparel stocks in the firm’s outlets are changed every week. This is based on the changing
fashion preferences of its customers. Its managers also coordinate in real-time among its other stores and satisfy its
customers’ requirements. In this case, Blyrie Apparels most likely uses _____.
a. the center-of-gravity method
b. the push-pull boundary
c. an efficient supply chain
d. a responsive supply chain
16. _____ is the process of having suppliers provide goods and services that were previously provided internally.
a. Insourcing
b. Outsourcing
Name:
Class:
Date:
chapter 6
c. Backward integration
d. Forward integration
17. Fourlotts Corp. provide integrated services that include storing manufactured goods, packaging, and delivering it to
the dealers or customers. Given this information, Fourlotts Corp. is most likely a _____.
a. third-party logistics provider
b. contract manufacturer
c. distribution center
d. supplier
18. In the context of sourcing, multiple suppliers:
a. often provide the ability to form close partnerships.
b. often provide economies of scale.
c. lower the risk of supply disruption.
d. lower the chances of using a push or pull system.
19. Greyon Suits, a company that specializes in making hand-made suits, moved its sourcing and operations from Lumeria
back to its home country. This led to easier management and decreased carbon footprint. In this case, Greyon Suits is
involved in _____.
a. offshoring
b. reshoring
c. insourcing
d. outsourcing
20. Which of the following is a disadvantage of push systems?
a. They are not effective when sales patterns are consistent.
b. They are not effective when there are few distribution centers and products.
c. They increase transportation costs in a supply chain.
d. They result in higher costs when forecasting sales is difficult.
21. Unlike firms that outsource, firms engaged in offshoring:
a. manage to reduce travel expenses.
b. are able to enforce intellectual property rights easily.
c. maintain ownership of the facility in another country.
d. have better control on quality.
22. A _____ produces only what is needed at upstream stages in the supply chain in response to customer demand signals
from downstream stages.
a. third-party logistics provider
b. push system
c. pull system
d. distribution center
23. _____ refers to acquiring capabilities toward distribution, or even customers.
a. Contract manufacturing
b. Outsourcing
Name:
Class:
Date:
chapter 6
c. Backward integration
d. Forward integration
24. A difference between efficient supply chains and responsive supply chains is that responsive supply chains _____.
a. focus on flexibility and responsive service
b. focus on maximizing efficiencies in process flow
c. seek to balance capacity and demand, resulting in low levels of inventory
d. seek to minimize cost of routing products from factory to customers
25. Rues and West Inc. is an automobile manufacturing firm. It produces and assembles all the parts of automobiles in its
factory and, later, ships the finished products to its storehouses. The managers at the storehouses distribute the goods to
wholesalers. Customers then buy the products from the wholesalers. In this scenario, the push–pull boundary for Rues and
West Inc. is at the _____.
a. factory
b. wholesalers
c. storehouses
d. assembly section
26. One advantage of a distributive system, such as blockchain technology, is that:
a. accountability among value chain participants are dependent on a single supplier.
b. transactions cannot be traced back to the original source.
c. control of information is in the hands of one individual, rather than multiple people.
d. no single individual or organization has total control of the information.
27. Which of the following statements is true of Inditex‘s supply chain?
a. It can deliver most goods in 24 hours in Europe and the United States.
b. It can be viewed as a push system.
c. It is efficient rather than responsive.
d. It avoids proximity sourcing as its products are expensive.
28. Which of the following is an advantage of pull systems?
a. They are efficient even when schedules are missed.
b. They minimize inventory and production costs.
c. They forecast changes in customer demand.
d. They reduce transportation costs.
29. In location decision process, which of the following factors are considered in local site location decision?
a. International monetary policy
b. Time zones
c. Sustainability issues
d. Foreign languages
30. The center-of-gravity method is often used to locate _____.
a. availability of raw materials
b. demand markets
c. site locations
Name:
Class:
Date:
chapter 6
d. service facilities
31. Identify a true statement about responsive supply chains.
a. They use only a few, large distribution centers to generate economies of scale.
b. They use optimization models that minimize costs of routing products from factory through distribution centers to
retail stores and customers.
c. They are designed for efficiency and low cost by minimizing inventory and maximizing efficiencies in process
flow.
d. They are supported by information technology that provides real-time information to managers across the supply
chain.
32. Which of the following is considered economic factors in location decisions?
a. Community attitudes
b. Operating costs
c. Transportation services
d. Climatic conditions
33. White & Checker is releasing a new power drill that requires the manufacturing of a new part. They are considering
whether they should manufacture the part in-house or outsource it from a supplier. The demand forecast is 1,355 units.
They calculate the break-even quantity as 1,750 parts. What decision should White & Checker make?
a. The product should not be released, as the demand is not high enough.
b. A percentage of the product should be manufactured in–house, and the rest should be outsourced.
c. The part should be outsourced.
d. The part should be manufactured in–house.
Name:
Class:
Date:
chapter 6
Answer Key
Name:
Class:
Date:
chapter 6