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TEST BANK
CHAPTER 7: DEMAND MANAGEMENT, ORDER MANAGEMENT
AND CUSTOMER SERVICE
Multiple Choice Questions (correct answers are bolded)
1. The creation across the supply chain and its markets of a coordinated flow of demand is the
definition of ___________.
2. ___________ refers to finished goods that are produced prior to receiving a customer order.
3. ___________ refers to finished goods that are produced after receiving a customer order.
4. Which of the following is not a basic type of demand forecasting model?
2
5. Surveys and analog techniques are examples of ___________ forecasting.
6. An underlying assumption of ___________ forecasting is that future demand is dependent on
past demand.
7. Which forecasting technique assumes that one or more factors are related to demand and that
this relationship can be used to estimate future demand?
8. Which forecasting technique tends to be appropriate when there is little or no historical data?
9. ___________ suggests that supply chain partners will be working from a collectively agreed-
to single demand forecast number as opposed to each member working off its own demand
forecast projection.
10. ___________ refers to the management of various activities associated with the order cycle.
11. The order cycle is ___________.
12. The order cycle is composed of each of the following except:
4
14. Order transmittal is ___________.
15. In general, there are ___________ possible ways to transmit orders.
16. ___________ and electronic ordering are order transmittal techniques that have emerged
over the last 30 years.
17. What is the second phase of the order cycle?
18. ___________ refers to the time from when the seller receives an order until an appropriate
location is authorized to fill the order.
19. Classifying orders according to pre-established guidelines so that a company can prioritize
how orders are to be filled refers to ___________.
20. Order picking and assembly is ___________.
21. The text suggests that ___________ often represents the best opportunity to improve the
effectiveness and efficiency of an order cycle.
22. Which of the following is not a characteristic of contemporary voice-based order picking
systems?
[LO 7.2: Order Management; Difficult; Synthesis; AACSB Category 3: Analytical thinking]
23. Which of the following is not a benefit of voice-based order picking?
24. The final phase of the order cycle is called order ___________.
25. The time span within which an order must arrive refers to ___________.
7
26. A commonly used rule of thumb is that it costs approximately ___________ times as much
to get a new customer as it does to keep an existing customer.
27. An unhappy customer will tell ___________ other people about her/his unhappiness.
28. The ability of logistics management to satisfy users in terms of time, dependability,
communication, and convenience is the definition of ___________.
29. The order cycle is an excellent example of the ___________ dimension of customer service.
30. The percentage of orders that can be completely and immediately filled from existing stock is
the ___________ rate.
8
31. What component of customer service focuses on the ease of doing business with a seller?
32. What are multichannel marketing systems?
33. Objectives should be SMART—that is, ___________, measurable, achievable, realistic, and
timely.
34. Which of the following statements is false?
9
35. ___________ refers to a process that continuously identifies, understands, and adapts
outstanding processes inside and outside an organization.
36. ___________ is the process of taking corrective action when measurements indicate that the
goals and objectives of customer service are not being achieved.
37. Which statement about measuring customer service is true?
38. ___________ refers to the allocation of revenues and costs to customer segments or
individual customers to calculate the profitability of the segments or customers.
10
39. Which of the following statements is false?
True-False Questions
1. Demand management is important because efficient and effective supply chains have learned
[LO: Beginning of the chapter material; Moderate; Application; AACSB Category 3: Analytical
thinking]
2. In make-to-order situations, finished goods are produced after receiving a customer order.
[LO 7.1: To explain demand management and demand forecasting models; Easy; Concept;
AACSB Category 3: Analytical thinking]
3. Simple moving averages and weighted moving averages are examples of judgmental
[LO 7.1: To explain demand management and demand forecasting models; Moderate;
Application; AACSB Category 3: Analytical thinking]
[LO 7.1: To explain demand management and demand forecasting models; Moderate;
Application; AACSB Category 3: Analytical thinking]
5. Forecasting accuracy refers to the relationship between the actual and forecasted demand.
[LO 7.1: To explain demand management and demand forecasting models; Easy; Concept;
AACSB Category 3: Analytical thinking]
6. Demand chain management is where supply chain partners share planning and forecasting
AACSB Category 3: Analytical thinking]
7. In general terms, order management refers to management of the various activities associated
[LO 7.2: To examine the order cycle and its four components; Easy; Concept; AACSB Category
3: Analytical thinking]
8. The order cycle is usually the time from when a customer places an order to when the firm
[LO 7.2: To examine the order cycle and its four components; Moderate; Concept; AACSB
Category 3: Analytical thinking]
[LO 7.2: To examine the order cycle and its four components; Moderate; Application; AACSB
Category 3: Analytical thinking]
10. Order information is checked for completeness and accuracy in the order processing
[LO 7.2: To examine the order cycle and its four components; Moderate; Synthesis; AACSB
Category 3: Analytical thinking]
11. The order triage function refers to correcting mistakes that may occur with order picking.
[LO 7.2: To examine the order cycle and its four components; Moderate; Concept; AACSB
Category 3: Analytical thinking]
12. A commonsense approach is to fill an order from the facility location that is closest to the
customer, with the idea that this should generate lower transportation costs as well as a
[LO 7.2: To examine the order cycle and its four components; Easy; Application; AACSB
Category 3: Analytical thinking]
13. Order processing often represents the best opportunity to improve the effectiveness and
12
[LO 7.2: To examine the order cycle and its four components; Moderate; Application; AACSB
Category 3: Analytical thinking]
[LO 7.2: To examine the order cycle and its four components; Moderate; Synthesis; AACSB
Category 3: Analytical thinking]
15. Pick-to-light technology is an order picking technique that has grown in popularity in recent
[LO 7.2: To examine the order cycle and its four components; Moderate; Application; AACSB
Category 3: Analytical thinking]
[LO 7.2: To examine the order cycle and its four components; Moderate; Synthesis; AACSB
Category 3: Analytical thinking]
17. A key change in the order delivery component of the order cycle is that more and more
[LO 7.2: To examine the order cycle and its four components; Moderate; Application; AACSB
Category 3: Analytical thinking]
18. It costs about five times as much to get a new customer as it does to keep an existing
[LO 7.3: To understand the four dimensions of customer service as they pertain to logistics;
Easy; Application; AACSB Category 3: Analytical thinking]
[LO 7.3: To understand the four dimensions of customer service as they pertain to logistics;
Moderate; Synthesis; AACSB Category 3: Analytical thinking]
20. The increased use of vendor quality-control programs necessitates higher levels of customer
Moderate; Synthesis; AACSB Category 3: Analytical thinking]
21. Customer service can be defined as the ability of logistics management to satisfy users in
[LO 7.3: To understand the four dimensions of customer service as they pertain to logistics;
Moderate; Concept; AACSB Category 3: Analytical thinking]
22. Dependability consists of consistent order cycles, safe delivery, and complete delivery.
[LO 7.3: To understand the four dimensions of customer service as they pertain to logistics;
Moderate; Synthesis; AACSB Category 3: Analytical thinking]
23. Companies today will not accept slower order cycles in exchange for higher order cycle
[LO 7.3: To understand the four dimensions of customer service as they pertain to logistics;
Moderate; Synthesis; AACSB Category 3: Analytical thinking]
24. Order fill rate is the percentage of orders that can be completely and immediately filled from
[LO 7.3: To understand the four dimensions of customer service as they pertain to logistics;
Easy; Concept; AACSB Category 3: Analytical thinking]
25. Text messaging and the Internet have lessened the need for telephone interaction and face-to-
[LO 7.3: To understand the four dimensions of customer service as they pertain to logistics;
Moderate; Synthesis; AACSB Category 3: Analytical thinking]
26. The convenience component of customer service focuses on the ease of doing business with a
[LO 7.3: To understand the four dimensions of customer service as they pertain to logistics;
Easy; Concept; AACSB Category 3: Analytical thinking]
27. Today’s customer likes to have multiple purchasing options at her/his disposal, and
organizations have responded by developing hybrid marketing channels—that is, separate
[LO 7.3: To understand the four dimensions of customer service as they pertain to logistics;
Moderate; Concept; AACSB Category 3: Analytical thinking]
[LO 7.4: To familiarize you with select managerial issues associated with customer service;
Moderate; Concept; AACSB Category 3: Analytical thinking]
14
[LO 7.4: To familiarize you with select managerial issues associated with customer service;
Moderate; Synthesis; AACSB Category 3: Analytical thinking]
30. Continuous improvement refers to a process that continuously identifies, understands, and
Moderate; Concept; AACSB Category 3: Analytical thinking]
[LO 7.4: To familiarize you with select managerial issues associated with customer service;
Moderate; Synthesis; AACSB Category 3: Analytical thinking]
32. The nature of the product can affect the level of customer service that should be offered.
[LO 7.4: To familiarize you with select managerial issues associated with customer service;
Moderate; Synthesis; AACSB Category 3: Analytical thinking]
33. A product just being introduced needs a different level of service support than one that is in a
[LO 7.4: To familiarize you with select managerial issues associated with customer service;
Moderate; Synthesis; AACSB Category 3: Analytical thinking]
34. Leadership is the process of taking corrective action when measurements indicate that the
[LO 7.4: To familiarize you with select managerial issues associated with customer service;
Moderate; Concept; AACSB Category 3: Analytical thinking]
35. The customer service metrics that are chosen should be relevant and important from the
[LO 7.4: To familiarize you with select managerial issues associated with customer service;
Moderate; Synthesis; AACSB Category 3: Analytical thinking]
36. It is possible for organizations to use only one customer service metric to measure customer
[LO 7.4: To familiarize you with select managerial issues associated with customer service;
Easy; Application; AACSB Category 3: Analytical thinking
15
37. Customer profitability analysis explicitly recognizes that all customers are not the same and
[LO 7.4: To familiarize you with select managerial issues associated with customer service;
Moderate; Concept; AACSB Category 3: Analytical thinking]
38. Customer profitability analysis is grounded in traditional accounting cost allocation methods.
[LO 7.4: To familiarize you with select managerial issues associated with customer service;
Moderate; Application; AACSB Category 3: Analytical thinking]
[LO 7.4: To familiarize you with select managerial issues associated with customer service;
Moderate; Synthesis; AACSB Category 3: Analytical thinking]
40. In the service recovery paradox, a customer holds the responsible company in higher regard
[LO 7.4: To familiarize you with select managerial issues associated with customer service;
Moderate; Application; AACSB Category 3: Analytical thinking]
