MGSC 487 GAFFNEY EXAM 1 | QUESTIONS
AND ANSWERS | WITH COMPLETE SOLUTION
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)
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%
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)
AND ANSWERS | WITH COMPLETE SOLUTION
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)
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%
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)
