ISDS DSM Ch 11

Question 1

The four stages of supplier selection, in order, are __________.

a. supplier evaluation, negotiations, supplier certification, and supplier development

b. supplier evaluation, supplier development, negotiations, and contracting

c. supplier development, supplier evaluation, central purchasing, and negotiations

Answer 1

b. supplier evaluation, supplier development, negotiations, and contracting

Question 2

A disadvantage of the “few suppliers” strategy is __________.

a. the lack of cost savings for customers and suppliers

b. the high cost of changing partners

c. the possible violation of the Sherman antitrust act

Answer 2

b. the high cost of changing partners

Question 3

Which one of the following distribution systems offers quickness and reliability when emergency supplies are needed overseas?

a. Waterways

b. Trucking

c. airfreight

Answer 3

c. airfreight

Question 4

Which one of the following is not a supply-chain strategy?

a. Short-term relationship with few suppliers

b. Negotiation with many suppliers

c. Vertical integration

Answer 4

a. Short-term relationship with few suppliers

Question 5

With the growth of the JIT, which of the following distribution systems has been the biggest loser?

a. Airfreight

b. Trucking

c. Railroads

Answer 5

c. Railroads

Question 6

Which of the following is not an advantage of the “few suppliers” concept?

a. Sharing trade secrets between firms

b. Suppliers’ willingness to provide technological expertise

c. Suppliers’ willingness to participate in JIT systems

Answer 6

a. Sharing trade secrets between firms

Question 7

Which one of the following performance measures is not true of a world class firm?

a. Short time placing an order

b. Long lead time

c. High percentage of on-time deliveries

Answer 7

b. Long lead time

Question 8

Which of the following is not a concern of the supply chain?

a. Warehousing and inventory levels

b. Maintenance scheduling

c. Credit and cash transfers

Answer 8

b. Maintenance scheduling

Question 9

Keeping a product generic as long as possible before customizing is known as __________.

a. forward integration

b. backward integration

c. postponement

Answer 9

c. postponement

Question 10

Consider a firm with a 2018 net income of $20 million, revenue of $60 million, and cost of goods sold of $25 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant, and equipment, how many weeks of supply does the firm hold?

a. 4.16 weeks

b. 2.60 weeks

c. 5.20 weeks

Answer 10

a. 4.16 weeks

Question 11

The three classic types of negotiation strategies are __________.

a. many suppliers, few suppliers, and vendor selection

b. distributive bargaining, arbitrative bargaining, mediated bargaining

c. cost-based price model, market-based price model, and competitive bidding

Answer 11

c. cost-based price model, market-based price model, and competitive bidding

Question 12

Which of the following best describes vertical integration?

a. To produce goods or services previously purchased

b. To develop the ability to produce products which complement the original product

c. To build long-term partnerships with a few suppliers

Answer 12

a. To produce goods or services previously purchased

Question 13

What type of negotiation strategy requires the supplier to open its books to the purchasers?

a. Market-based price model

b. Cost-based price model

c. Competitive bidding

Answer 13

b. Cost-based price model

Question 14

A furniture maker has delivered a dining set to the end consumer rather than to the furniture store. The furniture maker is practicing __________.

a. channel assembly

b. drop shipping

c. postponement

Answer 14

b. drop shipping

Question 15

Which of the following supply-chain strategies creates value by allowing suppliers to have economies of scale?

a. Long-term partnering with a few suppliers

b. Vertical integration

c. Negotiating with many suppliers

Answer 15

a. Long-term partnering with a few suppliers

Question 16

The transfer of some of what are traditional internal activities and resources of a firm to outside vendors is __________.

a. a make-or-buy decision

b. outsourcing

c. Keiretsu

Answer 16

b. outsourcing

Question 17

The approach that holds the suppliers responsible for maintaining the necessary technology, expertise, and forecasting ability plus cost, quality, and delivery competencies is __________.

a. few suppliers

b. Keiretsu

c. many suppliers

Answer 17

c. many suppliers

Question 18

A restaurant runs a special promotion on lobster and plans to sell twice as many lobsters as usual. When this large order is sent to the distributer, the distributer assumes the large size is a trend, not a one-time event. The distributer, therefore, places an even larger order with the lobsterman. This is the result of __________.

a. a pass-through facility

b. vendor-managed inventory

c. the bullwhip effect

Answer 18

c. the bullwhip effect

Question 19

What term is used to describe the outsourcing of logistics?

a. Third-Party Logistics

b. Shipper Managed Inventory

c. Outside Logistics

Answer 19

a. Third-Party Logistics

Question 20

Maximizing local profit or minimizing cost in a supply chain is best described as __________.

a. incentives

b. the bullwhip effect

c. local optimization

Answer 20

c. local optimization

Question 21

The trucking industry is establishing technologies, which let shippers and truckers find each other in order to ________.

a. regulate pricing

b. improve logistics efficiency

c. find the most efficient routes

Answer 21

b. improve logistics efficiency

Question 22

The three major variations of online catalogs are grouped by __________.

a. vendors, intermediaries, and buyer exchange systems

b. cost-based, market-based, and competitive bidding systems

c. EDI, ERP, and ASN systems

Answer 22

a. vendors, intermediaries, and buyer exchange systems

Question 23

Last year, a vendor cost of goods sold was $8,000 and average inventory investment was $500. This vendor’s ________ was 16.

a. fill rate

b. inventory turnover

c. weeks of supply

Answer 23

b. inventory turnover

Question 24

Which of the following is an aspect of environmental risk in supply-chain management?

a. Political issues

b. Secure financial transactions

c. Raw material availability

Answer 24

a. Political issues

Question 25

__________________ is the technique where a manufacturer sends individual components (rather than assembled units) to a distributor.

a. Multistage control of replenishment

b. The bullwhip effect

c. Channel assembly

Answer 25

c. Channel assembly