True or False #5 Flashcards
Supply chain network design decisions include the location of manufacturing, storage, or transportation-related facilities and the allocation of capacity and roles to each facility.
True
Decisions concerning the role of each facility are significant because they determine the amount of rigidity the supply chain has in changing the way it meets demand.
False
Facility location decisions have a long-term impact on a supply chain’s performance because it is cost effective to shut down a facility or move it to a different location.
False
Capacity allocation decisions have a significant impact on supply chain performance because they tend to stay in place for several years.
True
The allocation of supply sources and markets to facilities has a significant impact on performance because it affects total production, inventory, and transportation costs incurred by the supply chain to satisfy customer demand.
True
The allocation of supply sources and markets to facilities does not need to be reconsidered on a regular basis so that the allocation can be changed as market conditions or plant capacities change.
True
Network design decisions have a significant impact on performance because they determine the supply chain configuration and set constraints within which inventory, transportation, and information can be used to either decrease supply chain cost or increase responsiveness.
True
Firms focusing on cost leadership tend to find the lowest cost location for their manufacturing facilities, but only if that means locating very far from the markets they serve.
False
If production technology displays significant economies of scale, many local locations are the most effective.
False
If facilities have lower fixed costs, many local facilities are preferred because this helps lower transportation costs.
True
If the production technology is very inflexible and product requirements vary from one country to another, a firm has to set up local facilities to serve the market in each country.
True
If the technology is flexible, it becomes more difficult to consolidate manufacturing in a few large facilities.
False
Tariffs have a minor influence on location decisions within a supply chain.
False
High tariffs lead to more production locations within a supply chain network, with each location having a lower allocated capacity.
True
When designing supply chain networks, companies must build appropriate flexibility to help counter fluctuations in exchange rates and demand across different countries.
True
