A company’s ability to find a balance between responsiveness and efficiency that best
matches the needs of the customer it is targeting is the key to achieving strategic fit.
The major disadvantage of a distribution network with local storage is the increased
inventory and facility costs.
The bullwhip effect moves a supply chain away from the efficient frontier by increasing
cost and decreasing responsiveness.
As the replenishment lead time from a supplier grows, the amount of safety inventory
that needs to be held by the buyer also grows in direct proportion to the replenishment
lead time.
The disadvantage of building up inventory during the off season to keep production
stable year round is the expensive capacity that would go unused during most months
when demand was lower.
Firms can significantly reduce the safety inventory they require by physically
aggregating inventories in one location, which will also decrease transportation cost.
Supply chain coordination improves if all stages of the chain take actions that are
aligned and together increase total supply chain surplus.
The drawback of Zara’s responsive supply chain is that it tends to sell more products at
markdown than most of its competitors.
A supply chain includes only the organizations directly involved in supplying
components needed for manufacturing.
The push/pull view of a supply chain holds that the processes in a supply chain are
divided into 2 categories depending on whether they are initiated in response to or in
anticipation of customer orders.
Capital, growth strategy, existing networks and global competition mostly affect which
of the four Global Network Design Decisions?
A) Phase I – Supply Chain Strategy
B) Phase II – Regional Facility Configuration
C) Phase III – Desirable Sites
D) Phase IV – Location Choices
The fundamental trade-off between selling in bulk or on the spot market is
A) different from the situation where a firm serves two market segments.
B) similar to the case when a firm serves two market segments.
C) similar to the case where a firm must deal with seasonal demand.
D) similar to the case where a firm has a perishable asset.
Customer order entry is
A) the point in time when the customer has access to choices and makes a decision
regarding a purchase.
B) the customer informing the retailer of what they want to purchase and the retailer
allocating product to the customer.
C) the process where product is prepared and sent to the customer.
D) the process where the customer receives the product and takes ownership.
Supply chain responsiveness includes the ability to do which of the following?
A) Understand customers and supply chain
B) Match supply chain responsiveness with the implied uncertainty of demand
C) Meet short lead times
D) Ensure that all functional strategies within the supply chain support the supply
chain’s level of responsiveness
A global supply chain with offshoring
A) reduces the duration of the cash flow and reduces the length of the product flow.
B) increases the length of the product flow and increases the duration of the information
flow.
C) increases the duration of the cash flow but reduces the duration of the information
flow.
D) reduces the length of the product flow and reduces the length of the information
flow.
All transportation decisions should be evaluated based on their effect on
A) transportation costs.
B) fuel costs.
C) total costs.
D) sales revenue.
Which of the following specifies the portfolio of new products that a company will try
to develop?
A) Competitive strategy
B) Product development strategy
C) Marketing and sales strategy
D) Supply chain strategy
Information distortion is exaggerated by the fact that
A) supply chains today produce a large amount of product variety.
B) supply chains today produce a small amount of product variety.
C) the telephone effect is extreme in situations where technology is in use.
D) different stages of supply chains send excessive data.
The cost of a capacity shortage is
A) the reduction in margin that results from having to go to a backup source.
B) the margin that would have been generated if the capacity had been used for
production.
C) the productivity increase generated when the capacity is used for production.
D) the sales potential of excess capacity kept in reserve for emergency production.
Which of the following would result in an improvement in the C2C cycle for Katz if all
other entries in their selected financial data were held constant?
A) An increase in accounts payable turnover
B) An increase weeks payable
C) An increase in weeks receivable
D) An increase in weeks in inventory
With a fixed cost of $100 per order, Nathan decided it was vital to get his money’s
worth. His monthly demand for energy drinks was 10,000 bottles and holding cost was
estimated at 20% of unit cost. The mail order company offered him a couple of
possibilities – he could pay $4.00 per bottle for orders of up to 10,000 bottles. After that
threshold, he would pay only $3.98 per bottle, and if he ordered 20,00 or more bottles
in an order, he would pay only $3.96 per bottle.
Which cost takes into account the return demanded on the firm’s equity and the amount
the firm must pay on its debt?
A) Cost of capital
B) Obsolescence (spoilage) cost
C) Handling cost
D) Occupancy cost
When faced with a network design decision, the goal of a manager is to design a
network that
A) maximizes the firm’s profits.
B) minimizes the firm’s costs.
C) satisfies customer needs in terms of demand and responsiveness.
D) maximizes the firm’s profits while satisfying customer needs in terms of demand and
responsiveness.
Effective differential pricing over time will generally
A) decrease the level of product availability for the consumer willing to pay full price
and also decrease total profits for the retailer.
B) decrease the level of product availability for the consumer willing to pay full price
but will increase total profits for the retailer.
C) increase the level of product availability for the consumer willing to pay full price
and also increase total profits for the retailer.
D) increase the level of product availability for the consumer willing to pay full price
but will decrease total profits for the retailer.
The price paid per unit is referred to as
A) the material cost and is denoted by C.
B) the fixed ordering cost and is denoted by S.
C) the holding cost and is denoted by H.
D) the purchase price and is denoted by P.
Themajor deterrent to remanufacturing is
A) the comparatively low margin of remanufactured to newly-produced products.
B) the comparatively high cost of remanufacturing to newly-produced products.
C) the fear that remanufactured products will be purchased instead of newly-produced
products.
D) the loss of recycling volume from remanufactured products that do not enter the
recycling stream.
Total logistics costs are a sum of the
A) inventory and facility costs.
B) transportation and facility costs.
C) inventory and transportation costs.
D) inventory, transportation, and facility costs.