MGSC 487 EXAM 1 – GAFFNEY QUESTIONS AND
ANSWERS | LATEST UPDATE
In today's "sourcing sandbox" _________ are at the center - Answers - customers
In a supply chain, information flows __________ from the customers to the
suppliers/raw materials, and materials and products flow ____________ from the
materials stage to the customers - Answers - backward; forward
Supply Chain: - Answers - the integration of sequentially related firms' inbound and
outbound logistics, together with operations (manufacturing and service), and
supporting information systems
Profit Leverage Effect - Answers - the increase in corporate profit obtained by
decreasing purchase spend; measured by determining the increase in profit obtained by
a decrease in purchase spend (ex. in the book shows that in order to achieve increased
revenue of $6mil, the company could either increase sales by 75% or decrease
purchase spend by 10%); more realistic in firms that have neglected supply and given
sales a lot of attention already
better to dec spending than inc sales
Return on Assets (ROA) - Answers - displayed as a percentage; an indicator of how
profitable a company is relative to its total assets - gives an idea as to how efficient
management is at using its assets to generate earnings (higher is better, in terms of
attractiveness to investors)
__________________________ as a percentage of total revenues is a good indicator
of supply's financial impact - Answers - dollars spent with suppliers
Increased ______________ over the last decade has increased sourcing spend
significantly - Answers - outsourcing
In almost all manufacturing organizations, the __________ area represents by far the
largest single category of spend, ranging from about _____________ of revenue -
Answers - supply; 50-80%
Collectively, private and public organizations in North America spend at least
________________ with suppliers - Answers - $29 trillion (about 1.5 the combined
GDPs)
Evolution of the Supply Function: Early 1900s - Answers - clerical and tactical, focused
on policies and procedures
, key challenges: availability of supply and cost management
Evolution of the Supply Function: Early 21st Century - Answers - strategy orientation,
global supply chains, executive level leadership
key challenges: sustainability, security, globalization, risk management
Supply in railroads in the 1900s: clerical - Answers - recognized as an important
function, regarded by most firms as primarily a clerical activity (ADMINISTRATIVE)
Supply in WWII factories: market unlimited - Answers - market was pretty much
unlimited.. not dependent on sales, so ability to obtain materials, supplies, and services
from suppliers became the key determinant of organizational success; attention was
given to the organization, policies, and procedures of the supply function; emerged as a
recognized managerial activity (TRANSPORTATION)
Supply in the 1970s: supply shortages - Answers - organizations faced an international
shortage of almost all basic raw materials and a rate of price increase far above the
norm; Middle East oil embargo in 1973 intensified these issues.. put the spotlight on
supply because their ability to obtain necessary items at realistic prices determined
success or failure (NEGOTIATION)
Supply in the 1990s: low cost labor - Answers - became clear that companies must
have efficient and effective supply chain to compete in the global marketplace
(ORGANIZATIONAL STRATEGY)
Supply today: ethics, sustainability & risk - Answers - the early 21st century has brought
new challenges in areas such as sustainability, supply chain security, and risk
management (BUSINESS LEADERSHIP)
Spending in the Supply Chain - Answers - lead times are usually in months, value add
times as very small percentages
The ________________ case study illustrates the logistics considerations of supplying
multiple locations - Answers - Qmont Mining
The 3 major perspectives on how supply contributes to organizational goals and
strategies - Answers - 1. operational vs. strategic
2. direct & indirect
3. negative, neutral, & positive
Operational (troubleshooter) context of supply - Answers - the most familiar context -
characterized as trouble avoidance; focuses on existing current tasks as designed
(transactional, day-to-day, quality, quantity, delivery)
ANSWERS | LATEST UPDATE
In today's "sourcing sandbox" _________ are at the center - Answers - customers
In a supply chain, information flows __________ from the customers to the
suppliers/raw materials, and materials and products flow ____________ from the
materials stage to the customers - Answers - backward; forward
Supply Chain: - Answers - the integration of sequentially related firms' inbound and
outbound logistics, together with operations (manufacturing and service), and
supporting information systems
Profit Leverage Effect - Answers - the increase in corporate profit obtained by
decreasing purchase spend; measured by determining the increase in profit obtained by
a decrease in purchase spend (ex. in the book shows that in order to achieve increased
revenue of $6mil, the company could either increase sales by 75% or decrease
purchase spend by 10%); more realistic in firms that have neglected supply and given
sales a lot of attention already
better to dec spending than inc sales
Return on Assets (ROA) - Answers - displayed as a percentage; an indicator of how
profitable a company is relative to its total assets - gives an idea as to how efficient
management is at using its assets to generate earnings (higher is better, in terms of
attractiveness to investors)
__________________________ as a percentage of total revenues is a good indicator
of supply's financial impact - Answers - dollars spent with suppliers
Increased ______________ over the last decade has increased sourcing spend
significantly - Answers - outsourcing
In almost all manufacturing organizations, the __________ area represents by far the
largest single category of spend, ranging from about _____________ of revenue -
Answers - supply; 50-80%
Collectively, private and public organizations in North America spend at least
________________ with suppliers - Answers - $29 trillion (about 1.5 the combined
GDPs)
Evolution of the Supply Function: Early 1900s - Answers - clerical and tactical, focused
on policies and procedures
, key challenges: availability of supply and cost management
Evolution of the Supply Function: Early 21st Century - Answers - strategy orientation,
global supply chains, executive level leadership
key challenges: sustainability, security, globalization, risk management
Supply in railroads in the 1900s: clerical - Answers - recognized as an important
function, regarded by most firms as primarily a clerical activity (ADMINISTRATIVE)
Supply in WWII factories: market unlimited - Answers - market was pretty much
unlimited.. not dependent on sales, so ability to obtain materials, supplies, and services
from suppliers became the key determinant of organizational success; attention was
given to the organization, policies, and procedures of the supply function; emerged as a
recognized managerial activity (TRANSPORTATION)
Supply in the 1970s: supply shortages - Answers - organizations faced an international
shortage of almost all basic raw materials and a rate of price increase far above the
norm; Middle East oil embargo in 1973 intensified these issues.. put the spotlight on
supply because their ability to obtain necessary items at realistic prices determined
success or failure (NEGOTIATION)
Supply in the 1990s: low cost labor - Answers - became clear that companies must
have efficient and effective supply chain to compete in the global marketplace
(ORGANIZATIONAL STRATEGY)
Supply today: ethics, sustainability & risk - Answers - the early 21st century has brought
new challenges in areas such as sustainability, supply chain security, and risk
management (BUSINESS LEADERSHIP)
Spending in the Supply Chain - Answers - lead times are usually in months, value add
times as very small percentages
The ________________ case study illustrates the logistics considerations of supplying
multiple locations - Answers - Qmont Mining
The 3 major perspectives on how supply contributes to organizational goals and
strategies - Answers - 1. operational vs. strategic
2. direct & indirect
3. negative, neutral, & positive
Operational (troubleshooter) context of supply - Answers - the most familiar context -
characterized as trouble avoidance; focuses on existing current tasks as designed
(transactional, day-to-day, quality, quantity, delivery)
