SCM 300 Arizona State University - Exam 1 Study Guide Questions
with Correct Answers (Grade A+)
Question 1: Supply chain management
Answer: extracting materials from the ground, selling them to raw material manufacturers, turn raw
materials into materials that are usable by component manufacturers, then final manufacturers make and sell
intermediate components, the final manufacturers assemble finished products and sell them to wholesalers
or distributors, resell them to retailers who sell to end customers Thus, the series of companies that
eventually make products and services available to consumers, including all of the functions enabling the
production, delivery, and recycling of materials, components, end products, and services, is called a supply
chain
Question 2: Primary goals of SCM
Answer: sustainable long term profits and maximize ROI
Question 3: Value
Answer: customer perspective-what do I get?/what is the price?
Question 4: Productivity
Answer: organizational perspective-outputs/inputs
Question 5: Shigeo Shingo's-7 Types of Waste
Answer: 1. Defects 2. Overproduction- production used to mask shortcomings 3. Transportation- no added
value 4. Motion- movement of employees and machines 5. Waiting- wasted resources during waiting 6.
Inventory (not providing a return)- excess inventory is not providing a return 7. Over processing- more work
than required is done in creating a service/good
Question 6: Competitive Priorities
Answer: cost, quality, speed/time, and flexibility
Question 7: Business models
Answer: a mechanism by which a business intends to generate revenue and profits. Summary of how a
company plans to serve its customers at a strategic level
Page 1
,Question 8: B2C
Answer: business to consumer- Amazon, Best Buy, Dillards
Question 9: B2B
Answer: business to business- DHL, Boeing, Consulting/marketing agencies
Question 10: Both B2B and B2C
Answer: Apple, Dell, Ford, and Verizon Brick and Mortar- land based commerce only Internet retailer only-
Amazon
Question 11: Click and Mortar
Answer: both land based and internet (Best Buy, Barnes and Noble)
Question 12: P&G Example
Answer: 3 priorities= reliable service, agile, demand driven supply, and affordable differentiation
Question 13: Vertically integrated firm
Answer: a firm whose business boundaries include one-time suppliers and/or customers What is occurring
at many of these firms today is an effort to par down the organization to focus more on core capabilities
while trying to create alliances or strategic partnerships with suppliers, transportation and warehousing
companies, distributors, and other customers who are good at what they do. This team approach to making
and distributing products and services to customers is becoming the most effective and efficient way for
businesses to stay successful -and is central to the practice of SCM.
Question 14: Supplier Management
Answer: this means getting your firm's suppliers to do what you want, and there are a number of ways to do
this. This involves assessing your suppliers' current capabilities and then figuring out how to improve them
Question 15: Supplier Evaluation
Answer: determining the capabilities of suppliers. This occurs both when potential suppliers are being
evaluated for a future purchase and when existing suppliers are periodically evaluated for performance
purposes
Page 2
, Question 16: Strategic partnerships
Answer: organizations creating alliances, one of the foundations of SCM
Question 17: Reverse logistics activities
Answer: along the supply chain, intermediate and end customers may need to return products, obtain
warranty repairs, or may just throw products away or recycle them
Question 18: Focal firm
Answer: end product manufacturer, Ex. Coca-Cola, Boeing, General Motors
Question 19: 1st tier suppliers/customers
Answer: - First tier supplier supplies a business directly. (EA Sports distributes Madden to Best Buy; EA is
a 1st tier supplier to Best Buy).
Question 20: 2nd tier suppliers/customers
Answer: the suppliers' suppliers and the customers' customers. (Hershey's buys cocoa from an American
company who bought it from a Brazilian company, The Brazilian company is a 2nd tier supplier to
Hershey's).
Question 21: Grebson Example
Answer: Grebson is experiencing the bullwhip effect, meaning there is a problem in safety stock,
forecasting, and production problem. Grebson is not sure on how many units they demand, they ultimately
affects the supply chain in a major way.
Question 22: Business process re-engineering (BPR)
Answer: the radical rethinking and redesigning of business processes to reduce waste and increase
performance, was introduced in the early 1990s and was the result of a growing interest during this time in
the need for cost reductions and a return to an emphasis on the key competencies
Question 23: 3PLs (third party logistics providers)
Answer: firms use them to ensure a continuous, uninterrupted supply of goods Wal-Mart Example-
-inventory turnover has risen from 4.1 to 7.6 from 1990-2005 -Wal-Mart has no work-in-process or finished
goods inventories, all purchased materials -Developed cross docking, a truckload of an incoming item goes
not into storage but directly into multiple trucks in small lots for immediate transfer to retail stores
-Wal-Mart developed the best SCM IT system saving them millions of dollars, increasing profit margins
Page 3
with Correct Answers (Grade A+)
Question 1: Supply chain management
Answer: extracting materials from the ground, selling them to raw material manufacturers, turn raw
materials into materials that are usable by component manufacturers, then final manufacturers make and sell
intermediate components, the final manufacturers assemble finished products and sell them to wholesalers
or distributors, resell them to retailers who sell to end customers Thus, the series of companies that
eventually make products and services available to consumers, including all of the functions enabling the
production, delivery, and recycling of materials, components, end products, and services, is called a supply
chain
Question 2: Primary goals of SCM
Answer: sustainable long term profits and maximize ROI
Question 3: Value
Answer: customer perspective-what do I get?/what is the price?
Question 4: Productivity
Answer: organizational perspective-outputs/inputs
Question 5: Shigeo Shingo's-7 Types of Waste
Answer: 1. Defects 2. Overproduction- production used to mask shortcomings 3. Transportation- no added
value 4. Motion- movement of employees and machines 5. Waiting- wasted resources during waiting 6.
Inventory (not providing a return)- excess inventory is not providing a return 7. Over processing- more work
than required is done in creating a service/good
Question 6: Competitive Priorities
Answer: cost, quality, speed/time, and flexibility
Question 7: Business models
Answer: a mechanism by which a business intends to generate revenue and profits. Summary of how a
company plans to serve its customers at a strategic level
Page 1
,Question 8: B2C
Answer: business to consumer- Amazon, Best Buy, Dillards
Question 9: B2B
Answer: business to business- DHL, Boeing, Consulting/marketing agencies
Question 10: Both B2B and B2C
Answer: Apple, Dell, Ford, and Verizon Brick and Mortar- land based commerce only Internet retailer only-
Amazon
Question 11: Click and Mortar
Answer: both land based and internet (Best Buy, Barnes and Noble)
Question 12: P&G Example
Answer: 3 priorities= reliable service, agile, demand driven supply, and affordable differentiation
Question 13: Vertically integrated firm
Answer: a firm whose business boundaries include one-time suppliers and/or customers What is occurring
at many of these firms today is an effort to par down the organization to focus more on core capabilities
while trying to create alliances or strategic partnerships with suppliers, transportation and warehousing
companies, distributors, and other customers who are good at what they do. This team approach to making
and distributing products and services to customers is becoming the most effective and efficient way for
businesses to stay successful -and is central to the practice of SCM.
Question 14: Supplier Management
Answer: this means getting your firm's suppliers to do what you want, and there are a number of ways to do
this. This involves assessing your suppliers' current capabilities and then figuring out how to improve them
Question 15: Supplier Evaluation
Answer: determining the capabilities of suppliers. This occurs both when potential suppliers are being
evaluated for a future purchase and when existing suppliers are periodically evaluated for performance
purposes
Page 2
, Question 16: Strategic partnerships
Answer: organizations creating alliances, one of the foundations of SCM
Question 17: Reverse logistics activities
Answer: along the supply chain, intermediate and end customers may need to return products, obtain
warranty repairs, or may just throw products away or recycle them
Question 18: Focal firm
Answer: end product manufacturer, Ex. Coca-Cola, Boeing, General Motors
Question 19: 1st tier suppliers/customers
Answer: - First tier supplier supplies a business directly. (EA Sports distributes Madden to Best Buy; EA is
a 1st tier supplier to Best Buy).
Question 20: 2nd tier suppliers/customers
Answer: the suppliers' suppliers and the customers' customers. (Hershey's buys cocoa from an American
company who bought it from a Brazilian company, The Brazilian company is a 2nd tier supplier to
Hershey's).
Question 21: Grebson Example
Answer: Grebson is experiencing the bullwhip effect, meaning there is a problem in safety stock,
forecasting, and production problem. Grebson is not sure on how many units they demand, they ultimately
affects the supply chain in a major way.
Question 22: Business process re-engineering (BPR)
Answer: the radical rethinking and redesigning of business processes to reduce waste and increase
performance, was introduced in the early 1990s and was the result of a growing interest during this time in
the need for cost reductions and a return to an emphasis on the key competencies
Question 23: 3PLs (third party logistics providers)
Answer: firms use them to ensure a continuous, uninterrupted supply of goods Wal-Mart Example-
-inventory turnover has risen from 4.1 to 7.6 from 1990-2005 -Wal-Mart has no work-in-process or finished
goods inventories, all purchased materials -Developed cross docking, a truckload of an incoming item goes
not into storage but directly into multiple trucks in small lots for immediate transfer to retail stores
-Wal-Mart developed the best SCM IT system saving them millions of dollars, increasing profit margins
Page 3
