OM 300 EXAM 3 | UPDATED Questions with 100% Verified Answers
Question: Supply Chain Management
Answer:
objective is to structure the supply chain to maximize its competitive advantage (better/cheaper/faster) and
benefits to the ultimate consumer
Question: Components of Supply Chain
Answer:
Suppliers (sourcing) - Manufacturers ((or service providers) production) - Warehousing (storage) -
Transportation (Logistics) - Distribution (wholesalers AKA middle man/retailers direct) - Customers (end
users)
Question: Supply Chain's Strategic Importance
Answer:
Coordination of all activities (raw materials to satisfied computer); includes suppliers/manufacturers/service
providers/distributors/wholesalers/retailers/final customers, supplier relationships increasingly integrated and
long term; improve innovation, speed design, reduce costs. (data, dollars, durables, deliverables)
Question: Six Sourcing Strategies
Answer:
Many suppliers, few suppliers, vertical integration, joint ventures, Keiretsu networks, virtual companies
Question: Many Suppliers
, Answer:
Company uses many competing suppliers and focuses on low cost and competition. Commonly used for
commodity products, purchasing is based on price, suppliers compete with another, supplier is responsible for
technology expertise forecasting cost quality and delivery
Question: Few Suppliers
Answer:
Company uses a small number of long-term suppliers and focuses on strong relationships and reliability. Buyer
forms longer term relationships with fewer suppliers, create value through economies of scale and learning
curve improvements, suppliers more willing to participate in JIT and contribute design/tech expertise. HUGE
cost of changing, trade secrets and other alliances may be at risk
Question: Vertical integration
Answer:
Forward (own distribution) or backward (own suppliers), company owns multiple steps of supply chain.
Developing the ability to produce goods or services previously purchased, integration may be forward (towards
customer) or backward (toward supplier)
Question: Joint ventures
Answer:
Two + companies partner to share resources, risk or expertise. Formal collaboration (enhance skills, secure
supply, reduce costs). Challenge is cooperation without diluting brand or conceding competitive advantage,
used to be competitors
Question: Keiretsu Networks
Answer:
Network of suppliers linked to a company (partial ownership), common in Japan, balance between few
suppliers + vertical integration. Long-term relationships, Honda and Mazda
Question: Virtual companies
Answer:
Company outsources most operations and focuses on core competencies, flexible and cost efficient. Rely on a
variety of supplier relations to provide services ON DEMAND. May be short/long term. Netflix
Question: Supply Chain risk
Answer:
More reliance means more risk, fewer suppliers increases dependence. OM must anticipate, evaluate, mitigate,
and eliminate risk within supply chain
Question: Supply Chain Management
Answer:
objective is to structure the supply chain to maximize its competitive advantage (better/cheaper/faster) and
benefits to the ultimate consumer
Question: Components of Supply Chain
Answer:
Suppliers (sourcing) - Manufacturers ((or service providers) production) - Warehousing (storage) -
Transportation (Logistics) - Distribution (wholesalers AKA middle man/retailers direct) - Customers (end
users)
Question: Supply Chain's Strategic Importance
Answer:
Coordination of all activities (raw materials to satisfied computer); includes suppliers/manufacturers/service
providers/distributors/wholesalers/retailers/final customers, supplier relationships increasingly integrated and
long term; improve innovation, speed design, reduce costs. (data, dollars, durables, deliverables)
Question: Six Sourcing Strategies
Answer:
Many suppliers, few suppliers, vertical integration, joint ventures, Keiretsu networks, virtual companies
Question: Many Suppliers
, Answer:
Company uses many competing suppliers and focuses on low cost and competition. Commonly used for
commodity products, purchasing is based on price, suppliers compete with another, supplier is responsible for
technology expertise forecasting cost quality and delivery
Question: Few Suppliers
Answer:
Company uses a small number of long-term suppliers and focuses on strong relationships and reliability. Buyer
forms longer term relationships with fewer suppliers, create value through economies of scale and learning
curve improvements, suppliers more willing to participate in JIT and contribute design/tech expertise. HUGE
cost of changing, trade secrets and other alliances may be at risk
Question: Vertical integration
Answer:
Forward (own distribution) or backward (own suppliers), company owns multiple steps of supply chain.
Developing the ability to produce goods or services previously purchased, integration may be forward (towards
customer) or backward (toward supplier)
Question: Joint ventures
Answer:
Two + companies partner to share resources, risk or expertise. Formal collaboration (enhance skills, secure
supply, reduce costs). Challenge is cooperation without diluting brand or conceding competitive advantage,
used to be competitors
Question: Keiretsu Networks
Answer:
Network of suppliers linked to a company (partial ownership), common in Japan, balance between few
suppliers + vertical integration. Long-term relationships, Honda and Mazda
Question: Virtual companies
Answer:
Company outsources most operations and focuses on core competencies, flexible and cost efficient. Rely on a
variety of supplier relations to provide services ON DEMAND. May be short/long term. Netflix
Question: Supply Chain risk
Answer:
More reliance means more risk, fewer suppliers increases dependence. OM must anticipate, evaluate, mitigate,
and eliminate risk within supply chain
