SCM 300 Module 3 Exam Questions with Verified Solutions Graded A+
Key Issues Manufacturing layout - Answers • Labor - Wages, technical skills, work ethic, culture,
language • Facility, infrastructure, and utilities - Are the site and available facilities adequate for
the intended purpose?
• Laws - Labor, Intellectual property, environmental regulations, criminal
• Resource availability - Supplies, raw materials, fuel, energy • Local risks - Crime, law
enforcement, politics,
• Climate - Will the temperature and weather conditions be appropriate for the product,
machines, and employees?
• Transportation and transportation infrastructure
• Trade agreements, tariffs, and quotas
Established channels of distribution - Answers Channels of distribution represent the chain of
organizations that help bring a product into the hands of the end user. This might include
packaging companies, delivery companies, warehouses, distribution centers, and perhaps even
suppliers. So, established channels of distribution implies that a certain chain of organizations
have an established history of working together and perhaps coordinating supply chain actions.
This advanced relationship might imply that transactions occur regularly and perhaps more
fluidly.
Established Supplier Base - Answers A company's supplier base is the collection of companies
from which an organization presently purchases products and/or services. So, an established
supplier base implies that an organization has a group of companies with which they have
developed a working relationship. This advanced relationship might imply that transactions
occur regularly and perhaps more fluidly.
Hyper competitive markets - Answers This can refer to an industry that is heavily concentrated
in a particular region, where the companies compete fiercely. This intense and concentrated
competition may result in rapid innovation but short cycles of competitive advantage.
relationship between design, marketing, and SCM - Answers Marketing identifies a target
market. Designers and engineers work to develop products that satisfy the needs of the target
market. Supply chain must then buy parts, manufacture hundreds or thousands of those end
items, and then deliver them into the hands of the customer.
Without the coordination of marketing, design, and supply chain, companies may manufacture a
great product that is not valued by their target market.
• Perhaps a company may know their target market, but designers fail to consider their desires
and preferences. Imagine if Starbucks started selling a line of premium deli meats. Starbucks
, customers may love deli meats, but they just may not want to buy them at Starbucks, nor are
Starbucks facilities equipped to store and sell deli meats.
• Imagine if McDonald's developed a premium half-pound make-to-order hamburger that costs
$10 and took 10 minutes to prepare. What might be the impact on the kitchen, the drive-thru
lines, etc. • Perhaps, Apple creates beautiful cell phones with wonderful features their target
market desires, but the parts are low-quality and the phones are neither durable nor reliable. In
modern companies coordination and integration are vital to long-term success.
strategic decisions - Answers Decisions made at the highest levels of the organization. These
decisions provide direction for the company by identifying target markets, business models, and
potentially product or service categories in which the company would like to compete. These
decisions typically provide the organization and its primary functional areas long-range goals.
design decisions - Answers Decisions that seek to satisfy a target market in a particular product
or service category. Decisions that provide a more specific road map to satisfying strategic
goals.
operating decisions - Answers Decisions that impact the organization in the short-term.
Typically operating decisions relate to the daily operations that are performed in a company on
a routine basis.
Line Flow - Answers Line flow is a manufacturing strategy and layout that typically works well in
producing end items (or services) that have relatively high demand and that require very little (if
any) customization. The work centers are located in a linear path. Items begin on one end of the
line and continue in a linear path to the last work center. Each work center performs the exact
same work to every unit that passes through that work center.
Assembly line - These line flow systems can typically be stopped at any time without
compromising the inventory flowing through the system. In other words, stopping the line during
the employees' lunchtime will not cause the work-in-process items on the line to spoil. (Cars,
trucks, digital devices would all likely utilize an assembly line system)
Continuous flow systems - These line flow systems must run to completion once the process
has been started. Loaves of common sliced sandwich bread might be an example of a product
that might utilize a continuous flow system. Imagine having a large batch of dough and then
putting hundreds of loaf-sized chunks into an oven. Then, while the loaves are baking, the
manager shuts down the oven until the next morning when workers return for their next shift.
The partially baked bread in the oven would be ruined. Continuous flow systems must finish
their cycle.
Key Issues Manufacturing layout - Answers • Labor - Wages, technical skills, work ethic, culture,
language • Facility, infrastructure, and utilities - Are the site and available facilities adequate for
the intended purpose?
• Laws - Labor, Intellectual property, environmental regulations, criminal
• Resource availability - Supplies, raw materials, fuel, energy • Local risks - Crime, law
enforcement, politics,
• Climate - Will the temperature and weather conditions be appropriate for the product,
machines, and employees?
• Transportation and transportation infrastructure
• Trade agreements, tariffs, and quotas
Established channels of distribution - Answers Channels of distribution represent the chain of
organizations that help bring a product into the hands of the end user. This might include
packaging companies, delivery companies, warehouses, distribution centers, and perhaps even
suppliers. So, established channels of distribution implies that a certain chain of organizations
have an established history of working together and perhaps coordinating supply chain actions.
This advanced relationship might imply that transactions occur regularly and perhaps more
fluidly.
Established Supplier Base - Answers A company's supplier base is the collection of companies
from which an organization presently purchases products and/or services. So, an established
supplier base implies that an organization has a group of companies with which they have
developed a working relationship. This advanced relationship might imply that transactions
occur regularly and perhaps more fluidly.
Hyper competitive markets - Answers This can refer to an industry that is heavily concentrated
in a particular region, where the companies compete fiercely. This intense and concentrated
competition may result in rapid innovation but short cycles of competitive advantage.
relationship between design, marketing, and SCM - Answers Marketing identifies a target
market. Designers and engineers work to develop products that satisfy the needs of the target
market. Supply chain must then buy parts, manufacture hundreds or thousands of those end
items, and then deliver them into the hands of the customer.
Without the coordination of marketing, design, and supply chain, companies may manufacture a
great product that is not valued by their target market.
• Perhaps a company may know their target market, but designers fail to consider their desires
and preferences. Imagine if Starbucks started selling a line of premium deli meats. Starbucks
, customers may love deli meats, but they just may not want to buy them at Starbucks, nor are
Starbucks facilities equipped to store and sell deli meats.
• Imagine if McDonald's developed a premium half-pound make-to-order hamburger that costs
$10 and took 10 minutes to prepare. What might be the impact on the kitchen, the drive-thru
lines, etc. • Perhaps, Apple creates beautiful cell phones with wonderful features their target
market desires, but the parts are low-quality and the phones are neither durable nor reliable. In
modern companies coordination and integration are vital to long-term success.
strategic decisions - Answers Decisions made at the highest levels of the organization. These
decisions provide direction for the company by identifying target markets, business models, and
potentially product or service categories in which the company would like to compete. These
decisions typically provide the organization and its primary functional areas long-range goals.
design decisions - Answers Decisions that seek to satisfy a target market in a particular product
or service category. Decisions that provide a more specific road map to satisfying strategic
goals.
operating decisions - Answers Decisions that impact the organization in the short-term.
Typically operating decisions relate to the daily operations that are performed in a company on
a routine basis.
Line Flow - Answers Line flow is a manufacturing strategy and layout that typically works well in
producing end items (or services) that have relatively high demand and that require very little (if
any) customization. The work centers are located in a linear path. Items begin on one end of the
line and continue in a linear path to the last work center. Each work center performs the exact
same work to every unit that passes through that work center.
Assembly line - These line flow systems can typically be stopped at any time without
compromising the inventory flowing through the system. In other words, stopping the line during
the employees' lunchtime will not cause the work-in-process items on the line to spoil. (Cars,
trucks, digital devices would all likely utilize an assembly line system)
Continuous flow systems - These line flow systems must run to completion once the process
has been started. Loaves of common sliced sandwich bread might be an example of a product
that might utilize a continuous flow system. Imagine having a large batch of dough and then
putting hundreds of loaf-sized chunks into an oven. Then, while the loaves are baking, the
manager shuts down the oven until the next morning when workers return for their next shift.
The partially baked bread in the oven would be ruined. Continuous flow systems must finish
their cycle.
