Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
TEST BANK
CHAPTER 3: STRATEGIC AND FINANCIAL LOGISTICS
Multiple Choice Questions (correct answers are bolded)
1. Depending on industry and product type, reverse logistics costs as a percent of revenue can
range between ___________ and ___________ percent.
2. Which of the following is not a level at which strategy can be formulated?
3. ___________ strategy is focused on determining the goals for the company, the types of
businesses in which the company should compete, and the way the company will be managed.
4. Strategy at a ___________ level is primarily focused on the products and services provided to
customers and on finding ways to develop and maintain a sustainable competitive advantage
with these customers.
5. Which of the following is not one of the generic strategies that can be pursued by an
organization, as identified by strategist Michael Porter?
6. A ___________ strategy entails an organization developing a product and/or service that
offers unique attributes that are valued by customers and that the customer perceives to be
distinct from competitor offerings.
7. Which generic strategy concentrates an organization’s effort on a narrowly defined market to
achieve either a cost leadership or differentiation strategy?
8. A(n) ___________ entails the functional units of an organization providing input into the
other levels of strategy formulation.
3
9. Which of the following represents the preferred hierarchy of strategy (i.e., from the first
strategy to be developed to the last to be developed)?
10. ___________ strategy decisions involve issues such as the number and location of
warehouses and the selection of appropriate transportation modes.
11. Which of the following is not a potential type of logistics strategy decision?
12. When developing logistics strategy, a(n) ___________ strategy refers to the management of
logistics activities with a focus on costs.
13. A(n) ___________ strategy refers to management of logistical activities with a goal of
achieving coordination and collaboration through the channel.
14. A(n) ___________ strategy allows retail customers to order products anywhere, any time,
and on any device, while also allowing them to take delivery when and where they want.
15. The ___________ shows revenues, expenses, and profit for a period of time.
16. In general, the ___________ measures the profitability of the products and/or services
provided by a company.
17. The ___________ reflects the assets, liabilities, and owners’ equity at a given point in time.
18. The balance sheet reflects the assets, liabilities, and ___________ at a given point in time.
19. Which of the following does not appear on the balance sheet?
20. Which of the following does not affect cash flows within an organization?
21. The ___________ Act has implications for logistics managers in terms of internal controls,
off balance sheet obligations, and timely reporting of material events.
6
22. The current ratio is calculated by dividing ___________ by ___________.
23. Which of the following is a common measure of organizational financial success?
24. What provides the framework for conducting return on assets (ROA) analysis by
incorporating revenues and expenses to generate net profit margin, as well as inclusion of assets
to measure asset turnover?
25. Return on assets (ROA) equals:
26. Suppose that a logistics manager is able to eliminate some unnecessary inventory, which
reduces the value of current assets as well as total asset value. What is the corresponding impact
on inventory turnover and return on assets (ROA)?
27. What is the formula for net profit margin?
28. With respect to net profit margin, the most relevant categories for logistics managers to
consider are:
activities; Moderate; Synthesis; AACSB Category 3: Analytical thinking]
29. What is the formula for asset turnover?
30. With respect to asset turnover, ___________ is typically the most relevant logistics asset.
8
31. The Balanced Scorecard (BSC) approach is based on the belief that management should
evaluate their business from ___________ distinct perspectives.
32. The ___________ is based on the belief that management should evaluate their business
from four different perspectives.
33. Logistics measurement systems have been traditionally designed to include information on
how many types of performance?
34. Performance measurement in ___________ is used to identify design and operations options
that provide benefits in terms of increased speed or reduced costs.
35. ___________ looks at how long an organization’s cash is tied up in receivables, payables,
and inventory.
True-False Questions
2. Developing financial fluency is a critical skill for contemporary logistics managers.
[LO: material at beginning of the chapter; Moderate; Application; AACSB Category 3:
Analytical thinking]
3. Logistics performance is important for achieving competitive advantage for many firms.
financial outcomes; Easy; Application; AACSB Category 3: Analytical thinking]
4. Strategy can be formulated at a corporate level, a business unit level, and a functional
financial outcomes; Moderate; Synthesis; AACSB Category 3: Analytical thinking]
5. Strategy at a business unit level is primarily focused on the types of businesses in which
10
[LO 3.1: To understand how logistics decisions can influence an organization’s strategic
financial outcomes; Moderate; Concept; AACSB Category 3: Analytical thinking]
6. Strategist Michael Porter identified three generic strategies that can be pursued by an
[LO 3.1: To understand how logistics decisions can influence an organization’s strategic
financial outcomes; Moderate; Synthesis; AACSB Category 3: Analytical thinking]
7. A differentiation strategy entails an organization developing a product and/or service that
offers unique attributes that are valued by customers and that customers perceive to be distinct
financial outcomes; Moderate; Concept; AACSB Category 3: Analytical thinking]
8. The hierarchy of strategy entails the functional units of an organization providing input
financial outcomes; Moderate; Concept; AACSB Category 3: Analytical thinking]
financial outcomes; Moderate; Application; AACSB Category 3: Analytical thinking]
10. Marketing goals in areas such as product availability, desired customer service levels, and
[LO 3.1: To understand how logistics decisions can influence an organization’s strategic
financial outcomes; Moderate; Application; AACSB Category 3: Analytical thinking]
11. A process strategy refers to management of logistics activities across business units with
[LO 3.1: To understand how logistics decisions can influence an organization’s strategic
financial outcomes; Easy; Concept; AACSB Category 3: Analytical thinking]
12. Research indicates a positive benefit to aligning functional strategies, such as marketing
[LO 3.1: To understand how logistics decisions can influence an organization’s strategic
financial outcomes; Moderate; Application; AACSB Category 3: Analytical thinking]
11
13. An omnichannel strategy allows retail customers to order products anywhere, any time,
[LO 3.1: To understand how logistics decisions can influence an organization’s strategic
financial outcomes; Easy; Concept; AACSB Category 3: Analytical thinking]
14. An understanding of financial terminology can help logisticians to manage logistical
[LO 3.2: To review basic financial terminology used by logistics managers; Moderate;
Application; AACSB category 3: Analytical thinking]
[LO 3.2: To review basic financial terminology used by logistics managers; Moderate;
Application; AACSB category 3: Analytical thinking]
16. In general, the income statement measures the profitability of the products and/or service
AACSB Category 3: Analytical thinking]
17. Superior logistics service can have a positive influence on an organization’s financial
Application; AACSB Category 3: Analytical thinking]
18. The balance sheet reflects the assets, liabilities, and costs of goods sold at a given point in
AACSB category 3: Analytical thinking]
[LO 3.2: To review basic financial terminology used by logistics managers; Easy; Concept;
AACSB Category 3: Analytical thinking]
20. Owners’ equity is the difference between what a company owns and what it owes at any
[LO 3.2: To review basic financial terminology used by logistics managers; Easy; Concept;
AACSB Category 3: Analytical thinking]
21. The income statement details how an organization generates cash and where cash is used
[LO 3.2: To review basic financial terminology used by logistics managers; Easy; Concept;
AACSB Category 3: Analytical thinking]
22. In terms of the statement of cash flows, the connections between logistics activities and
[LO 3.2: To review basic financial terminology used by logistics managers; Moderate;
Application; AACSB Category 3: Analytical thinking]
23. Three primary areas where the Sarbanes-Oxley Act (SOX) has implications for logistics
managers are internal controls, off balance sheet obligations, and timely reporting of material
activities; Moderate; Synthesis; AACSB Category 3: Analytical thinking]
24. The current ratio is calculated by dividing total current liabilities by total current assets.
activities; Easy; Concept; AACSB Category 3: Analytical thinking]
25. A common measure of organizational financial success is return on investment (ROI).
activities; Moderate; Application; AACSB Category 3: Analytical thinking]
[LO 3.4: To employ the strategic profit model to highlight the financial impact of logistics
activities; Easy; Concept; AACSB Category 3: Analytical thinking]
27. The Balanced Scorecard (BSC) provides the framework for conducting return on assets
[LO 3.4: To employ the strategic profit model to highlight the financial impact of logistics
activities; Moderate; Concept; AACSB Category 3: Analytical thinking]
28. A reduction in inventory would increase inventory turnover, which means an increase in
13
[LO 3.4: To employ the strategic profit model to highlight the financial impact of logistics
activities; Moderate; Application; AACSB Category 3: Analytical thinking]
[LO 3.4: To employ the strategic profit model to highlight the financial impact of logistics
activities; Moderate; Concept; AACSB Category 3: Analytical thinking]
30. With respect to net profit margin, the most relevant categories for logistics managers to
[LO 3.4: To employ the strategic profit model to highlight the financial impact of logistics
activities; Moderate; Synthesis; AACSB Category 3: Analytical thinking]
31. The primary influence of logistics activities on sales would be through the improvement
activities; Moderate; Application; AACSB Category 3: Analytical thinking]
[LO 3.4: To employ the strategic profit model to highlight the financial impact of logistics
activities; Easy; Concept; AACSB Category 3: Analytical thinking]
33. With respect to asset turnover, inventory is typically the most relevant logistics asset.
activities; Moderate; Application; AACSB Category 3: Analytical thinking]
34. A decision to invest in an electronic data interchange system that would increase invoice
[LO 3.4: To employ the strategic profit model to highlight the financial impact of logistics
activities; Moderate; Application; AACSB Category 3: Analytical thinking]
35. The Balanced Scorecard (BSC) is based on the belief that management should evaluate
[LO 3.5: To consider the value of utilizing the Balanced Scorecard approach for examining the
performance of a logistics system; Moderate; Application; AACSB Category 3: Analytical
thinking]
14
36. According to the Balanced Scorecard (BSC) approach, the financial perspective is
considered the best indicator of whether or not logistics strategy is being properly implemented
[LO 3.5: To consider the value of utilizing the Balanced Scorecard approach for examining the
performance of a logistics system; Moderate; Application; AACSB Category 3: Analytical
thinking]
37. The measures associated with the Balanced Scorecard (BSC) can be at a strategic or
[LO 3.5: To consider the value of utilizing the Balanced Scorecard approach for examining the
performance of a logistics system; Moderate; Synthesis; AACSB Category 3: Analytical
thinking]
38. Best in Class companies tend to use transportation scorecards less frequently than other
Moderate; Synthesis; AACSB Category 3: Analytical thinking]
39. The cash-to-cash cycle looks at how long an organization’s cash is tied up in receivables,
Moderate; Concept; AACSB Category 3: Analytical thinking]
40. When applying performance measures to logistics activities, determination of the key
[LO 3.6: To compare some of the common performance measures for logistics activities;
Moderate; Synthesis; AACSB Category 3: Analytical thinking]
