Chapter 14—Supply Chain Management
TRUE/FALSE
1. Supply chain management is completely producer-driven.
2. Companies that use supply chain management techniques typically also use a push promotional
strategy.
3. Supply chain management is a key means of differentiation for a firm and a critical component in
marketing and corporate strategy.
4. Management practices that reflect a highly coordinated effort between supply chain partners are said to
be “integrated.”
5. High role specificity means each firm in the supply chain has clarity in terms of knowing which firm is
the leader, which firms are the followers, and which responsibilities are assigned to each firm.
6. Zambelli International Fireworks uses an accounting method that assesses the costs associated with
each supply chain activity, which is known as base-line costing.
7. Supplier integration occurs when multiple firms in a supply chain coordinate their activities and
processes so that they are seamlessly linked to one another in an effort to satisfy the customer.
8. It is illegal for companies to knowingly provide better service to their most profitable customers.
9. Business processes are bundles of interconnected activities that stretch across firms in the supply
chain.
10. The demand management process seeks to align supply and demand throughout the supply chain by
anticipating customer requirements at each level of creating demand-related plans of action prior to
actual customer purchasing behavior.
11. The goals of the manufacturing flow management process are centered on generating, filing,
delivering, and providing on-the-spot service for customer orders.
12. Products and marketplaces differ substantially in their core characteristics so supply chain
management strategies should be selected according to the situation at hand.
13. The lean supply chain management strategy embraces removal of waste from the supply chain system
in whatever form it is found.
14. A successful apparel company found that significant demand existed among buyers who needed to
place a number of small orders rather than a few big orders. The company most likely succeeded
because of the use of agile supply chain management strategies.
15. Vertical structure refers to the number of tiers in the supply chain.
16. EDI is often used to replace paper documents with electronic documents containing the same
information.
17. Managing inventory from the supplier to the manufacturer is called distribution resource planning
(DRP).
18. Cross-docking allows for companies to load and off-load products with minimal warehousing—often
in the same day.
19. The six criteria important in selecting a transportation mode are relative cost, transit time, reliability,
capability, accessibility, and traceability.
20. Water transportation is by far the most expensive mode of transportation, but it is also the most
reliable.
21. Traceability with respect to transporting modes refers to the relative ease with which a shipment can
be located and transferred.
22. Many industry experts regard on-time delivery and shipment of products as the single most important
supply chain management criteria leading to customer satisfaction.
23. Customer satisfaction ratings, orders picked from the warehouse per hour, and the ratio of operating
assets to income are examples of metrics that can be used to repeatedly assess supply-chain
performance.
24. The ABC Approach is a measurement system used to evaluate overall supply chain performance.
25. Manufacturers who require suppliers to meet certain environmental standards are implementing green
supply chain management.
26. A sustainable supply chain is one that employes renewable natural resources whenever possible.
27. One of the most critical global supply issues for importers of any size is coping with the legalities of
trade in other countries.
28. One disadvantage of the use of RFID tags is increased inventory management costs.
29. Another name for outsourcing is contract logistics.
30. Digital distribution is a distribution technique that includes any kind of product or service that can be
distributed electronically.
31. Managing supply chain disruptions begins with putting controls in place to monitor dangerous of
volatile situations.
MULTIPLE CHOICE
1. The connected chain of all of the business entities, both internal and external to the company, that
perform or support the logistics function is known as the:
a.
channel of distribution
b.
intermediary link
c.
physical distribution integration
d.
reseller network
e.
supply chain
2. _____ coordinates and integrates all of the activities performed by channel members into a seamless
process, from the source to the point of consumption, resulting in enhanced customer and economic
value.
a.
Yield management
b.
Channel power
c.
Materials handling
d.
Supply chain management
e.
Physical distribution
3. All of the following accurately describe modern supply chain management EXCEPT:
a.
physical flow process
b.
customer-driven
c.
provides enhanced customer and economic value
d.
plays the role of communicator of customer demand
e.
relies on a “push” strategy
4. Peachtree Windows does not make a window until an order is received. It can promise delivery in five
working days because of the excellent relationships it has established with its suppliers. The partnering
relationship that Peachtree Windows has established with its suppliers indicates the use of:
a.
supply chain management
b.
yield management
c.
channel networks
d.
horizontal marketing channels
e.
intensive distribution strategy
5. A large automotive after-market business wanted to improve its current situation, which is
characterized by excessive inventory, incomplete information, high logistics costs, slow reactions to
environmental change, and lost profits at the retail level. Would supply chain management be of any
help to the business?
a.
Yes, supply chain management is designed to coordinate and integrate all the activities
from raw materials to product consumption.
b.
No, supply chain management is only applicable to distribution strategies for products
being sold to the consumer market.
c.
Yes, supply chain management would be very useful because it relies so heavily on
benchmarking.
d.
Yes, supply chain management would alleviate all channel conflict.
e.
No, supply chain management requires an expensive investment of time and resources to
make it worthwhile.
6. Supply chain managers are responsible for all of the following EXCEPT:
a.
the management of information that flows through the supply chain
b.
auditing the accounting practices of suppliers to ensure compliance with ABC accounting
c.
coordinating the relationships between the company and its external partners
d.
coordinating customer service activities
e.
coordinating the sourcing and procurement of raw materials
7. All of the following are benefits of supply chain management EXCEPT:
a.
increased flexibility of supply chain activities
b.
improved customer service
c.
reduced supply chain costs
d.
decreased cash flow
e.
decreased inventory
8. Which of the following is a key principle of supply chain management that means multiple firms work
together to perform tasks as a single unified system, rather than as several individual companies acting
in isolation?
a.
Pareto principle
b.
80/20 principle
c.
Systems approach
d.
Win-win approach
e.
Integrative approach
9. _____ occurs when all the firms and business units participating in the supply chain appear as though
they are reading from the same script.
a.
Strategic channel operation
b.
Supply chain integration
c.
Strategic MRP
d.
Demand management
e.
EDI (Extensive distribution integration
10. When the Boeing Co. announced it would delay the introduction of its new 787, the CEO blamed the
problem on the company’s supply chain. Airplanes use thousands of individual parts and in an attempt
to relieve the smaller, individual supply chain quandary, Boeing used major suppliers to construct
large pieces of the plane. Boeing would have benefited from more _____ integration.
a.
channel
b.
supply chain
c.
MRP
d.
functional
e.
tactical distribution
11. Which of the following is an example of one of the six types of integration that are sought by firms
interested in providing top-level service to their customers?
a.
Strategic integration
b.
Hierarchical integration
c.
Internal operations integration
d.
Global integration
e.
All of the above
12. In terms of firm-to–firm social interactions, _____ integration provides important benefits.
a.
relationship
b.
measurement
c.
customer
d.
production
e.
technology and planning
13. _____ integration is the ability of two or more companies to develop social connections that serve to
guide their interactions when working together.
a.
Social
b.
Relationship
c.
Customer
d.
Materials and service supplier
e.
Role
14. When each firm in a supply chain has clarity in terms of knowing which firm is the leader, which are
the followers, and which responsibilities are assigned to each firm, role _____ is evident.
a.
specificity
b.
complexity
c.
ambiguity
d.
confidence
e.
hierarchy
15. Walmart, Inc. has selected nine Bell Buckle products from two of the Company’s award-winning
brands for placement in its Dallas regional division stores. Because Walmart is the leader, Bell Buckle
and its distributors are the follower, and each knows its role(s), this is an example of _____ within a
channel.
a.
a hierarchical relationship
b.
role complexity
c.
role specificity
d.
task ambiguity
e.
a functional relationship
16. A positive action or behavior that occurs between firms that is not part of the formal agreement and is
discretionary is called:
a.
interconnective behavior
b.
interdependence
c.
relationship marketing
d.
interorganizational citizenship behavior
e.
relationship functionality
17. Which type of integration implies the performance assessment of the supply chain should be taken as a
whole while also holding each member of the supply chain accountable for meeting its own goals?
a.
Accountability
b.
Benchmarking
c.
Social
d.
Planning
e.
Measurement
18. All of the following have been identified as helpful in generating measurement integration across the
supply chain EXCEPT:
a.
functional assessment
b.
resource-based perspective
c.
activity-based costing (ABC)
d.
total cost perspective
e.
agreed-upon metrics
19. The vice president of logistics for a salty-snack food manufacturer applied activity-based costing to
convenience stores and found it a very cost-effective technique for making sure that the right products
were on the shelves when consumers wanted them. In other words, he used _____ integration to make
more effective operational decisions.
a.
relationship
b.
social
c.
functional
d.
planning
e.
measurement
20. Which of the following assists supply chain members in achieving measurement integration by
assessing the costs associated with each supply chain activity?
a.
Electronic data interchange
b.
Role specificity
c.
Benchmarking
d.
ABC segmentation
e.
Activity-based costing
21. By achieving _____ integration across their supply chains, firms can gain the information needed to
execute short-term and long-term planning, and thereby make better operational decisions.
a.
relationship
b.
social
c.
functional
d.
technology and planning
e.
internal operations
22. Through the use of automatic shipping notices, Ace Hardware is effective at removing unnecessary
costs from its supply chain. According to a vice-president of inventory for the retailer, “Information
gathering that used to take three or four phone calls now is available immediately.” This is an example
of the use of _____ integration.
a.
relationship
b.
social
c.
functional
d.
technology and planning
e.
internal operations
23. Food producers love big boxes because they serve as billboards on store shelves. Wal-Mart wants to
change this practice and promises suppliers that their shelf spaces won’t shrink even if their boxes do.
As a result, some of its vendors have reengineered their packaging. This is an example of _____
integration.
a.
relationship
b.
social
c.
functional
d.
operational
e.
material and service supplier
24. For true supplier integration to occur, all of the following must occur EXCEPT:
a.
firms must choose their suppliers carefully
b.
supply chain partners must interact in ways that minimize waste and redundancy
c.
firms need to adopt a “push” system rather than a “pull” system of supply chain
management
d.
firms must monitor each supplier’s strategic goals and operational capabilities
e.
both firms must have a stake in the outcomes of their interactions
25. _____ integration requires firms within a supply chain to link seamlessly so that they can streamline
work processes and thereby provide smooth, high-quality customer experiences.
a.
Relationship
b.
Social
c.
Functional
d.
Internal operations
e.
Material and service supplier
26. Nabisco has reduced product inventory requirements from 49 days to 22 days. This frees up cash and
warehouse space, adding flexibility to the plant. This seamless linking of Nabisco’s strategic business
units is accomplished through _____ integration.
a.
relationship
b.
social
c.
functional
d.
hierarchical
e.
internal operations
27. Sobha Developers is the only company in India and possibly the world that manufactures almost
everything that goes into its buildings. It is this backward integration that gives Sobha absolute control
over quality at every level. Sobha has the highest possible _____ integration.
a.
relationship
b.
social
c.
functional
d.
operational
e.
internal operations
28. All of the following activity groups are related closely to internal operations integration success
EXCEPT:
a.
the use of cross-functional teams
b.
activity-based costing
c.
standardization of work processes across work groups
d.
simplification of all work processes as much as possible
e.
a reconfiguration of the physical assets the company owns
29. The standards set by measuring the best, quickest, and most efficient work practices are called:
a.
benchmarks
b.
zero points
c.
reference points
d.
paradigms
e.
process norms
30. After examining performance data, the Queen City Awning Company has determined that each
employee should be able to manufacture ten canvas awnings each day. This is an example of an
internal:
a.
paradigm
b.
yardstick
c.
prototype
d.
process norm
e.
benchmark
31. _____ integration is a competency that enables firms to offer long-lasting, distinctive, value-added
offerings to those customers who represent the greatest value to the firm or supply chain.
a.
Customer
b.
Social
c.
Measurement
d.
Departmental
e.
Internal operations
32. The process of ABC segmentation is a critical process if _____ integration is to be successful.
a.
functional
b.
social
c.
customer
d.
operational
e.
internal operations
33. _____ are composed of bundles of interconnected activities that stretch across firms in the supply
chain.
a.
ABC segmentation strategies
b.
Activity-based costing activities
c.
Customer relationship management strategies
d.
Business processes
e.
Customer service activities
34. There are eight critical business processes on which supply chain managers must focus. Which of the
following is one of those processes?
a.
Sales promotion activities
b.
Returns management
c.
Distribution intensity
d.
Public relations activities
e.
Environmental assessments
35. Of the eight critical business processes on which supply chain managers must focus, which process
allows companies to prioritize their marketing focus on different customer groups according to each
group’s long-term value to the company or the supply chain?
a.
Customer relationship management
b.
Returns management
c.
Product development and commercialization
d.
Order fulfillment
e.
Demand management
36. Of the eight critical business processes on which supply chain managers must focus, the _____ process
presents a multi-company, unified response system to the customer whenever complaints, concerns,
questions, or comments are voiced.
a.
manufacturing flow management
b.
customer service management
c.
product development and commercialization
d.
order fulfillment
e.
demand management
37. By working closely with its suppliers and listening to its customers, Target has improved the service
encounter to a level that was not thought possible in mass retailing. This is an example of which of the
eight critical processes performed by supply managers?
a.
Manufacturing flow management
b.
Customer service management
c.
Product development and commercialization
d.
Order fulfillment
e.
Demand management
38. The _____ process seeks to align supply and demand throughout the supply chain by anticipating
customer requirements at each level and creating demand-related plans of action prior to actual
customer purchasing behavior.
a.
manufacturing flow management
b.
demand management
c.
product development and commercialization
d.
order fulfillment
e.
customer service management
39. The activities that enable the demand management process to work include:
a.
customer data collection
b.
forecasting of future demand
c.
sales and operations planning
d.
the development of activities that tend to “smooth out” demand
e.
All of the above.
40. The order fulfillment process involves all of the following activities EXCEPT:
a.
order filling and delivery
b.
order processing and document handling
c.
materials handling
d.
updating account status
e.
order generation
41. The amount of time between order placement, receipt of the customer’s payment, and order shipment
is known as the:
a.
3PL cycle
b.
product life cycle
c.
purchase cycle
d.
order-to-cash cycle
e.
float
42. A firm that specialize in the order fulfillment process is called a(n):
a.
third party logistics firm (3PL)
b.
intermediate distributor
c.
industrial distributor
d.
merchant wholesaler
e.
ABC firm
43. ProLog is a firm that specializes in warehousing and fulfilling orders for firms as diverse as those
supplying parts for manufacturers of complicated missile defense systems to those manufacturing pet
care products. Firms contract ProLog to manage part of all of their order fulfillment process.
ProLog is an example of a:
a.
merchant wholesaler
b.
retailer
c.
distributor
d.
third party logistics firm (3PL)
e.
manufacturing flow process manager
44. Which business process ensures that firms in the supply chain have the resources they need?
a.
Manufacturing flow management
b.
Customer service management
c.
Product development and commercialization
d.
Order fulfillment
e.
Demand management
45. All of the following are activities related to the manufacturing flow process EXCEPT:
a.
the determination of a supply’s route and velocity through manufacturing
b.
updating account status following shipment
c.
materials planning
d.
quality management
e.
inventory management for both parts and finished goods
46. Which business process supports manufacturing flow by identifying and maintaining relationships
with highly valued suppliers?
a.
Supplier relationship management
b.
Customer service management
c.
Product development and commercialization
d.
Order fulfillment
e.
Demand management
47. Specialty Blades designs precision cutting devices for varied applications. On one recent project they
worked closely with a medical device company, developing a combination scalpel and stapler that
slices tissue very neatly close to the staples, which resulted in less traumatic procedures, and quicker
patient recoveries. This is an example of which of the eight critical processes performed by supply
chain managers?
a.
Supplier relationship management
b.
Customer service management
c.
Product development and commercialization
d.
Order fulfillment
e.
Demand management
48. New product idea generation and screening is related to which of the following processes?
a.
Demand management
b.
Order fulfillment
c.
Customer service management
d.
Product development and commercialization
e.
Customer relationship management
49. Mattel, the world’s biggest toymaker, ordered 18 million toys made in China to be recalled because of
hazards such as the use of lead paint. Mattel’s _____ process allowed it to handle the product recall
efficiently.
a.
order fulfillment
b.
returns management
c.
product commercialization
d.
demand management
e.
product fulfillment
50. Returns average about _____ percent of sales in most cases.
a.
2
b.
6
c.
10
d.
25
e.
40
51. Which of the following technology is an automatic identification method that works with scanned bar
codes to identify products?
a.
Radio-frequency identification (RFID)
b.
Third party logistic identifiers (3PL)
c.
Global positioning system (GPS)
d.
Electronic data interchange (EDI)
e.
Network identification systems (NIS)
52. Which supply chain strategy embraces the removal of waste from the supply chain system in whatever
form it may be found?
a.
Lean supply chain management
b.
Reactive supply chain management
c.
Agile supply chain management
d.
Proactive supply chain management
e.
Leagile supply chain management
53. Arrow Electronics serves as a supply channel partner for more than 600 suppliers and 150,000 original
equipment manufacturers, contract manufacturers, and commercial customers. Arrow works with its
supply chain partners to eliminate waste in whatever form it may be found. Which of the following
supply chain strategies has Arrow embraced in order to help its customers and suppliers?
a.
Lean supply chain management
b.
Reactive supply chain management
c.
Agile supply chain management
d.
Proactive supply chain management
e.
Leagile supply chain management
54. Which supply chain strategy focuses primarily on the ability of the firm to fulfill customer demand,
even if this means somewhat higher costs?
a.
Lean supply chain management
b.
Reactive supply chain management
c.
Agile supply chain management
d.
Proactive supply chain management
e.
Leagile supply chain management