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SCM > First Midterm > Flashcards

First Midterm Flashcards

1
Q

A supply chain features a constant flow of:

A

Information, product, and funds

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2
Q

Supply chain surplus involves what two parts?

A

Customer value and supply chain cost

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3
Q

Customer value is:

A

The sum of the supply chain surplus and supply chain cost

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4
Q

The objective of every supply chain is to:

A

Maximize the net value generated

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5
Q

Walmart’s supply chain features clusters of stores around distribution centers, which facilitates:

A

Frequent but inexpensive replenishment at the stores

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6
Q

The decision phases in a supply chain include:

A

Supply chain operations

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7
Q

A company would decide whether to outsource or perform a supply chain function in-house during the:

A

Design phase

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8
Q

A decision made about which markets will be serviced by which locations falls in the supply chain ______ phase.

A

Planning

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9
Q

The time horizon of the operation phase is typically:

A

Monthly or quarterly

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10
Q

The push/pull view of a supply chain holds that:

A

The processes in a supply chain are divided into two categories depending on whether they are initiated in response to or in anticipation of customer orders

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11
Q

Customer order arrival refers to:

A

The point in time when the customer has access to choices and makes a decision regarding a purchase

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12
Q

The objective of customer order entry is to:

A

Ensure that orders are quickly and accurately entered and communicated to other affected supply chain processes

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13
Q

The objective of customer order fulfillment is to:

A

Get the correct orders to customers by the promised due date at the lowest possible cost

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14
Q

The cycle view of the supply chain is useful when considering operational decisions because:

A

It specifies the roles and responsibilities of each member of the supply chain

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15
Q

Which of the following statements about pull process is accurate?

A

They may also be referred to as reactive Processes

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16
Q

A company’s competitive strategy:

A

Defines the set of customer needs that it seeks to satisfy through its products and services

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17
Q

The value that potential customers place on the product cost and delivery time determines a company’s:

A

Competitive strategy

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18
Q

A company’s marketing and sales strategy:

A

Specifies how the market will be segmented and how the product will be positioned, priced, and promoted

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19
Q

Which of the following determines the nature of procurement of raw materials, transportation of materials to and from the company, manufacture of the product or operation to provide the service, and distribution of the product to the customer along with follow-up service?

A

Supply chain strategy

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20
Q

The uncertainty that exists due to the portion of demand that the supply chain is required to meet is the:

A

Implied demand uncertainty

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21
Q

Which of the following customer needs will cause implied uncertainty of demand to increase?

A

Lead time decrease

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22
Q

Supply chain responsiveness includes the ability to do which of the following?

A

Handle supply uncertainty

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23
Q

The preferable supply chain strategy for a firm that sells multiple products and serves customer segments with very different needs is to:

A

Tailor the supply chain to best meet the needs of each product’s demand

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24
Q

Which of the following would be a demand and supply characteristic toward the beginning stage of a product life cycle?

A

Product availability is crucial to capturing the market

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25
Q

Efficient supply chains:

A

Maximize performance at a minimum cost

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26
Q

An aggressive investment in customer analytics represents the use of which lever to reduce supply chain uncertainty?

A

Information

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27
Q

The Boeing 747 was scheduled to take off from Will Rogers Airport bound for Galeao International in just two days and with only four seats booked, the holiday getaway appeared to be a money-losing proposition. Bob lowered the airfare 90% and hoped to make up the loss of logistical revenue by doubling the price of caipirinhas and samba drums throughout the trip. Bob has handled uncertainty using which tool?

A

Price

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28
Q

The functions and stages that devise an integrated strategy with an aligned objective are referred to as:

A

Scope of strategic fit

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29
Q

The key weakness of the ____ view is that different functions within a firm may have conflicting objectives.

A

Intrafunctional scope

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30
Q

Scope of strategic fit refers to both the:

A

Function within the firm and stages across the supply chain

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31
Q

Which of the following would result in lower return on assets for a company if all other entries in their selected financial data were held constant?

A

A reduction in earnings before interest and taxes

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32
Q

Which of the following would result in an improvement in the Cash-to-Cash (C2C) cycle for a company if all other entries in their selected financial data were held constant?

A

An increase in weeks payable

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33
Q

The places in the supply chain network where product is stored, assembled, or fabricated are known as:

A

Facilities

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34
Q

Which component of the supply chain decision-making framework would be established first?

A

Competitive strategy

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35
Q

Which component of the supply chain decision-making framework would be used to reach the performance level dictated by the supply-chain strategy?

A

Supply chain structure

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36
Q

Which of the following is a characteristic of a facility with excess capacity?

A

Will be likely be more responsive, but costly

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37
Q

The following warehousing methodology is one in which goods are not actually warehoused in a facility. Instead, trucks from suppliers, each carrying a different type of product, deliver goods to a facility. There the inventory is broken into smaller lots and quickly loaded onto store-bound trucks that carry a variety of products, some from each of the supplier trucks.

A

Cross-docking

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38
Q

The average amount of inventory used to satisfy demand between receipt of supplier shipments is referred to as:

A

Cycle inventory

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39
Q

The inventory held in case demand exceeds expectation in order to counter uncertainty is called:

A

Safety inventory

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40
Q

Although faster transportation is more expensive, a firm receives which benefit a result of the faster transportation?

A

Lower inventory

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41
Q

Blue Nile is an online retailer of diamonds that has used responsive transportation to ship diamonds to customers in the United States, Canada, and several countries in Europe and Asia. Which is the mode of transportation used with this strategy?

A

Air

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42
Q

When all the different stages of a supply chain work toward the objective of maximizing total supply chain profitability, rather than each stage devoting itself to its own profitability without considering total supply chain profit, it is known as:

A

Supply chain coordination

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43
Q

The art and science of making projections about what future demand and conditions will be called:

A

Forecasting

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44
Q

Transforming forecasts into supply chain schedules of activity to satisfy the projected demand is known as:

A

Aggregate planning

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45
Q

____ measures the average time between when an order is placed and the product arrives.

A

Supply lead time

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46
Q

Distribution is a key driver of the overall profitability of a firm because:

A

It directly impacts both the supply chain cost and the customer experience

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47
Q

The probability of having a product in stock when a customer order arrives is:

A

Product availability

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48
Q

As the number of facilities in a supply chain increases:

A

The inventory and resulting inventory costs also increase

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49
Q

As the response time desired by the customer decreases, the required number of facilities in the distribution network:

A

Increases

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50
Q

Total logistics costs for a supply chain network are a sum of:

A

Inventory, transportation, and facility costs

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51
Q

Which distribution network is also referred to as drop-shipping with product delivered directly from the manufacturer to the customer location?

A

Manufacturing storage with direct shipping

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52
Q

Which of the following would be a disadvantage of manufacturer storage with direct shipping?

A

Response times tend to be large because the order has to be transmitted from the retailer to the manufacturer and shipping distances are on average longer from the manufacturer’s centralized site

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53
Q

Which distribution network design is similar to pure drop-shipping, except that pieces of the order coming from different locations are combined so that the customer gets a single delivery?

A

Manufacturer storage with direct shipping and in-transit merge

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54
Q

Which distribution network design is being used when inventory is not held by manufacturers at the factories, but is held by distributors/retailers in intermediate warehouses and package carriers are used to transport products from the intermediate location to the final customer?

A

Distributor storage with package carrier delivery

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55
Q

Which distribution network design is being used when the distributor/retailer delivers the product to the customer’s home instead of using a package carrier?

A

Distributor storage with last mile delivery

56
Q

Which of the following is an advantage of manufacturer/distributor storage with customer pickup?

A

Transportation cost is lower than the use of package carriers, especially if using an existing delivery network

57
Q

Which of the following is a disadvantage of retail storage with customer pickup?

A

Inventory cost is higher than all other options

58
Q

In general, traditional brick and mortar retail sales outperform online sales along the dimension of:

A

Product returns

59
Q

Online sales increase ___ when compared to the performance of traditional brick and mortar retail stores.

A

Outbound transportation costs

60
Q

In order to reap the greatest return from the online channel for physical goods, firms should:

A

Integrate it with their existing supply chain networks

61
Q

Supply chain network design decisions include:

A

Both the location of manufacturing, storage, or transportation-related facilities and the allocation of capacity and roles to each facility

62
Q

Facility location decisions have a long-term impact on a supply chain’s performance because:

A

It is very expensive to shut down a facility or move it to a different location

63
Q

Allocating too little capacity results in:

A

Poor responsiveness if demand is not satisfied or high cost if demand is filled from a distant facility

64
Q

The allocation of supply sources and markets to facilities should be reconsidered on a regular basis so that:

A

The allocation can be changed as market conditions or planet capacities expand

65
Q

Network design decisions have a significant impact on performance because they:

A

Set constraints within which inventory, transportation, and information can be used to either decrease supply chain cost or increase responsiveness

66
Q

Firms focusing on cost leadership tend to:

A

Find the lowest cost location for their manufacturing facilities

67
Q

Firms focusing on responsiveness tend to:

A

Locate facilities close to the market they serve

68
Q

If facilities have lower fixed costs:

A

Many local facilities are preferred because this helps lower transportation costs

69
Q

If the production technology is very inflexible and product requirements vary from one country to another, a firm has to set up:

A

Local facilities to serve the market in each country

70
Q

___ costs increase as the number of facilities in a supply chain increases.

A

Inventory

71
Q

Capital, growth strategy, existing networks and global competition mostly affect which of the four Global Network Design Decisions?

A

Phase I - Supply chain strategy

72
Q

When faced with a network design decision, the goal of a manager is to design a network that:

A

Maximizes the firm’s profits while satisfying customer needs in terms of demand and responsiveness

73
Q

The objective of the second phase of network design is to:

A

Identify regions where facilities will be located, their potential roles, and their approximate capacity

74
Q

The objective of the third phase of network design is to:

A

Select a set of desirable sites within each region where facilities are to be located

75
Q

Models that minimize total cost are used:

A

From the start to make final location decision among the entire array of possibilities

76
Q

The opportunities from globalization are often accompanied by:

A

Significant additional risk

77
Q

Decisions made during the supply chain design phase regarding significant investments in the supply chain, such as the number and size of plants to build, the number of trucks to purchase or lease, and whether to build or lease warehouse space:

A

Define the boundaries within which the supply chain must compete

78
Q

A global supply chain with offshoring:

A

Increases the length of the product flow and increases the duration of the information flow

79
Q

A global supply chain with offshoring would tend to see which of these performance dimensions decrease?

A

Supply chain visibility

80
Q

A global supply chain with offshoring would tend to see which of these performance dimensions increase?

A

Minimum order quantity

81
Q

Offshoring to low-cost countries is most attractive for products with:

A

Large production volume

82
Q

The ability to produce a variety of products within a short period of time is called:

A

Mix flexibility

83
Q

As flexibility is increased:

A

The marginal benefit of additional flexibility is decreased

84
Q

When supply disruptions occur:

A

Smaller chains outperform a network with one long chain

85
Q

The present value of a future stream of cash flows is what the stream:

A

Is worth in today’s dollars

86
Q

A negative NPV for an option indicates that the option will:

A

Lose money for the supply chain

87
Q

Flexibility should be valued by taking into account uncertainty in demand and economic factors. In general, flexibility will tend to:

A

Increase in value with an increase in uncertainty

88
Q

The degree of demand and price uncertainty has:

A

A significant influence on the appropriate portfolio of long- and short-term warehousing space that a firm should carry

89
Q

If price and demand do vary over time in a global network:

A

Flexible production capacity can be reconfigured to maximize profits in the new environment

90
Q

Simulation methods are very good at evaluating decisions when:

A

There are different forms of uncertainty

91
Q

The process by which a company determines levels of capacity, production, subcontracting, inventory, stockouts, and even pricing over a specified time horizon is:

A

Aggregate planning

92
Q

The goal of aggregate planning is to:

A

Satisfy demand in a way that maximizes profit

93
Q

Aggregate planning, to be effective, requires inputs from:

A

Throughout the supply chain

94
Q

The operational parameter concerned with the number of units completed per unit time (such as per week or per month) is:

A

Production rate

95
Q

Aggregate planning is concerned with determining

A

The production level, inventory level, and capacity for each period

96
Q

The length of the planning horizon in aggregate planning is usually between:

A

Three and eighteen months

97
Q

The fundamental trade-offs available to an aggregate planner are between:

A

Capacity, inventory, and backlog costs

98
Q

The strategy where the production rate is synchronized with the demand rate by varying machine capacity or hiring and laying off employees as the demand rate varies is the:

A

Chase strategy

99
Q

The strategy where workforce (capacity) is kept stable but the number of hours worked is varied over time in an effort to synchronize production with demand is the:

A

Flexibility strategy

100
Q

The strategy where a stable machine capacity and workforce are maintained with a constant output rate, with inventory levels fluctuating over time, is the:

A

Level strategy

101
Q

A highly effective tool for a company to use when it tries to maximize profits while being subjected to a series of constraints is:

A

Linear programming

102
Q

What is the name of the plan that breaks apart the aggregate plan into distinct product families?

A

Rough master production schedule

103
Q

When formulating aggregate plans:

A

Forecast errors must be considered

104
Q

The aggregate plan needs to:

A

Have some flexibility built into it because forecasts are always wrong

105
Q

The success of advanced planning systems is highly dependent on:

A

Data accuracy

106
Q

Predictable variability is:

A

Change in demand that can be forecasted

107
Q

The advantage of maintaining enough manufacturing capacity to meet demand in any period is:

A

Very low inventory costs because no inventory needs to be carried from period to period

108
Q

The advantage of building up inventory during the off season to meet demand during peak seasons and keep production stable year round is:

A

In the fact that a firm could get by with a smaller, less expensive factory

109
Q

The advantage of offering a price promotion during periods of low demand to shift some of the demand into a slow period is:

A

A demand pattern that is less expensive to supply

110
Q

With supply and demand management decisions being made independently:

A

It is increasingly difficult to coordinate the supply chain, thereby decreasing profit

111
Q

A firm can vary supply of product by controlling:

A

Capacity

112
Q

In this approach to managing capacity, a firm uses flexible work hours by the workforce to manage capacity to better meet demand

A

Time flexibility from workforce

113
Q

In this approach to managing capacity, a firm purchases peak production so that internal production remains level and can be done cheaply

A

Use of subcontracting

114
Q

A firm can vary supply of product by controlling:

A

Production capacity and inventory

115
Q

Which of the following is an approach that firms can use when managing inventory to meet predictable demand variability?

A

Use common components across multiple products

116
Q

When most of the products a firm produces have the same peak demand season, in order to meet predictable variability with inventory, it must:

A

Build inventory of high demand or predictable demand products

117
Q

The promotion and pricing decisions made by marketing and sales typically have the objective of:

A

Maximizing revenue

118
Q

Pricing decisions based only on revenue considerations often results in:

A

A decrease in overall profitability

119
Q

In general, as the fraction of increased demand coming from forward buying grows, offering the promotion during the peak demand period becomes:

A

Less attractive

120
Q

Which factor favors promotion during low-demand periods?

A

High forward buying

121
Q

The situation in which fluctuations in orders increase as they move up the supply chain from retailers to wholesalers to manufacturers to suppliers is known as:

A

The bullwhip effect

122
Q

The lack of coordination within a supply chain will result in an increase in:

A

Replenishment lead time

123
Q

Situations where incentives offered to different stages or participants in a supply chain lead to actions that increase variability and reduce total supply chain profits are referred to as:

A

Incentive obstacles

124
Q

The impact of the lack of coordination on supply chain processes decreases for the following measure:

A

Level of product availability

125
Q

Improperly structured sales force incentives:

A

Tend to create spikes in customer orders

126
Q

Situations where demand information is distorted as it moves between different stages of the supply chain, leading to increased variability in orders within the supply chain are referred to as:

A

Information processing obstacles

127
Q

The fact that each stage in a supply chain forecasts demand based on the stream of orders received from the downstream stage results in:

A

A magnification of fluctuations in demand as we move up the supply chain from the retailer to the manufacturer

128
Q

When a firm places orders in lot sizes that are much larger than the lot sizes in which demand arises:

A

Variability of orders is magnified up the supply chain

129
Q

Managers can improve coordination within the supply chain by:

A

Aligning goals and incentives

130
Q

Coordination requires every stage of the supply chain to focus on:

A

Supply chain surplus

131
Q

One appropriate measure to reduce replenishment lead time is to:

A

Order electronically

132
Q

Which method would serve to reduce the information distortion in a supply chain consisting of a fabricator, manufacturer, supplier, and a retailer?

A

Make the manufacturer responsible for all decisions regarding product inventories at the retailer

133
Q

Vendor managed inventory and continuous replenishment systems both serve to:

A

Minimize information distortion

134
Q

In a continuous replenishment program, the wholesaler or manufacturer replenishes a retailer regularly based on:

A

The POS data of the retailer

135
Q

Successful collaborative planning, forecasting and replenishment (CPFR) initiative must be built on a foundation of:

A

Data synchronization and established standards for exchanging information

SCM (1 decks)

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