Supply Chain Exam 2 (Chapter 11) | Questions with Verified Answers

Supply Chain Exam 2 (Chapter 11) | Questions with Verified Answers Even though a firm may have a low cost strategy, supply-chain strategy can select suppliers primarily on response or differentiation. FALSE The supply chain for a brewery would include raw ingredients such as hops and barley but not the manufactured goods such as bottles and cans. FALSE When using the low-cost strategy for supply chain management, a firm should use buffer stocks to ensure speedy supply. FALSE Savings in the supply chain exert more leverage as the firm's net profit margin decreases. TRUE A firm that employs a response strategy should minimize inventory throughout the supply chain. FALSE Supply chain decisions are not generally strategic in nature, because purchasing is not a large expense for most firms. FALSE Because service firms do not acquire goods and services externally, their supply chain management issues are insignificant. FALSE Which of the following characteristics is NOT common to all four of Darden Restaurants' supply channels? A) supplier qualification B) product tracking C) independent audits D) refrigeration E) just-in-time delivery Which of the following would NOT typically be considered as part of a manufacturing firm's supply chain? A) suppliers B) distributors C) wholesalers D) retailers E) landscaping contractors In most manufacturing industries, which of the following would likely represent the largest cost to the firm? A) transportation B) purchasing C) insurance D) financing E) advertising Among which of the following industries are purchasing costs the LOWEST percentage of sales? A) automobiles B) petroleum C) restaurants D) lumber E) chemicals Which of the following is a primary supplier selection criterion for a firm pursuing a differentiation strategy? A) product development skills B) cost C) capacity D) speed E) flexibility For which corporate strategy(ies) should supply chain inventory be minimized? A) low cost B) response C) differentiation D) low cost and response E) low cost and differentiation Which of the following statements is true regarding the leverage of supply chain savings? A) Supply chain leverage is about the same for all industries. B) Supply chain savings exert more leverage as the firm's purchases are a smaller percent of sales. C) Supply chain savings exert more leverage as the firm's net profit margin decreases. D) Supply chain leverage depends only upon the percent of sales spent in the supply chain. E) None of the above is true. Outsourcing refers to transferring a firm's activities that have traditionally been internal to external suppliers. TRUE Outsourcing is a form of specialization that allows the outsourcing firm to focus on its key success factors. TRUE The objective of the make-or-buy decision is to help identify the products and services that can be obtained externally. TRUE Outsourcing: A) transfers traditional internal activities to outside vendors. B) utilizes the efficiency that comes with specialization. C) allows the outsourcing firm to focus on its key success factors. D) All of the above are true of outsourcing. E) None of the above is true of outsourcing. The transfer of some of what are traditional internal activities and resources of a firm to outside vendors is: A) a standard use of the make-or-buy decision. B) not allowed by the ethics code of the Supply Management Institute. C) offshoring. D) outsourcing. E) keiretsu. With the "many suppliers" sourcing strategy, the order usually goes to the supplier that offers the highest quality. FALSE Vertical integration, whether forward or backward, requires the firm to become more specialized. FALSE A fast-food retailer that acquired a spice manufacturer would be practicing backward integration. TRUE Keiretsu refers to a company coalition that is part collaboration, part purchasing from many suppliers, and part vertical integration. FALSE Which one of the following is NOT one of the six sourcing strategies? A) negotiation with many suppliers B) vertical integration C) keiretsu D) short-term relationships with few suppliers E) virtual companies A disadvantage of the "few suppliers" sourcing strategy is: A) the risk of not being ready for technological change. B) the lack of cost savings for customers and suppliers. C) possible violations of the Sherman Antitrust Act. D) the high cost of changing partners. E) the suppliers are less likely to understand the broad objectives of the procuring firm and the end customer. Which sourcing strategy is particularly common when the products being sourced are commodities? A) few suppliers B) many suppliers C) keiretsu D) vertical integration E) virtual companies Which of the following is NOT an advantage of the "few suppliers" sourcing strategy? A) suppliers have a learning curve that yields lower transaction and production costs B) suppliers are more likely to understand the broad objectives of the end customer C) less vulnerable trade secrets D) creation of value by allowing suppliers to have economies of scale E) suppliers' willingness to provide technological expertise Which of the following is NOT a condition that favors the success of vertical integration? A) availability of capital B) availability of managerial talent C) sufficiently high demand D) small market share E) All of the above favor the success of vertical integration. Which of the following best describes vertical integration? A) sell products to a supplier or a distributor B) develop the ability to produce products that complement the original product C) produce goods or services previously purchased D) develop the ability to produce the specified good more efficiently than before E) build long-term partnerships with a few suppliers A fried chicken fast-food chain that acquired feed mills and poultry farms has performed which of the following? A) horizontal integration B) forward integration C) backward integration D) current transformation E) job expansion Vertical integration appears particularly advantageous when the organization has: A) a very specialized product. B) a large market share. C) a very common, undifferentiated product. D) little experience operating an acquired vendor. E) purchases that are a relatively small percent of sales. A rice mill in south Louisiana purchases the trucking firm that transports packaged rice to distributors. This is an example of which of the following? A) horizontal integration B) forward integration C) backward integration D) current transformation E) keiretsu Japanese manufacturers often pursue a strategy that is part collaboration, part purchasing from a few suppliers, and part vertical integration. What is this approach called? A) kanban B) keiretsu C) samurai D) poka-yoke E) kaizen The Japanese concept of a company coalition of suppliers is: A) poka-yoke. B) kaizen. C) keiretsu. D) dim sum. E) illegal. Which of the following is NOT an advantage of a virtual company? A) speed B) total control over every aspect of the organization C) specialized management expertise D) low capital investment E) flexibility When Daimler and BMW pooled resources to develop standardized auto components, the sourcing strategy could best be described by which of the following? A) keiretsu B) virtual companies C) joint venture D) vertical integration E) few suppliers Which of the following best describes Vizio's sourcing strategy? A) few suppliers B) keiretsu C) joint venture D) vertical integration E) virtual company Use of a diversified supply base represents one of the most common supply chain risk reduction tactics for several different supply chain risk categories. TRUE The new model of a tight, fast, low-inventory supply chain, operating across political and cultural boundaries, has reduced the overall level of supply chain risk. FALSE Cross-sourcing describes the practice of having two suppliers provide every component. FALSE Improvements in security, especially regarding the millions of shipping containers that enter the U.S. each year, are being held back by the lack of technological advances. FALSE