Chapter B3 Supply Chain Management

Multiple Choice Questions

1. What uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain? A) Supply chain planning B) Supply chain execution C) Supply chain D) Selling chain management Answer: A Level: Easy Page: 251 Response: This is the definition of SCP.

2. What automates the different steps and stages of the supply chain? A) Supply chain planning B) Supply chain execution C) Supply chain D) Selling chain management Answer: B Level: Easy Page: 251 Response: This is the definition of SCE.

3. What are the four primary drivers of supply chain management? A) Facilities, inventory, transportation, e-business B) Facilities, investment, transportation, e-business C) Facilities, inventory, transportation, information D) Inventory, investment, transportation, e-business Answer: C Level: Easy Page: 252 Response: Facilities, inventory, transportation, and information are the four drivers of SCM.

4. What can an organization's supply chain focus on? A) Efficiency B) Effectiveness C) Efficiency or effectiveness D) None of the above Answer: C Level: Easy Page: 252 Response: An organization's supply chain can focus on either efficiency or effectiveness.

5. What strategy does Toyota stress in its facilities? A) Efficiency B) Effectiveness C) Inventory

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D) None of the above Answer: B Level: Medium Page: 252 Response: Toyota uses an effectiveness facilities strategy.

Test Bank, Chapter B3

6. What are the three primary components an organization should consider when determining its facilities strategy? A) Location, inventory, transportation B) Location, capacity, operational design C) Capacity, operational design, information D) Capacity, operational design, transportation Answer: B Level: Easy Page: 252 Response: Location, capacity, and operational design determine an organization facilities strategy.

7. Which of the following would an organization choose if it wants to pursue an efficiency strategy for its location driver? A) Centralize the location to gain economies of scale B) Decentralize the locations to be closer to the customers C) All of the above D) None of the above Answer: A Level: Medium Page: 253 Response: An efficiency location is centralized.

8. Which of the following would an organization choose if it wants to pursue an effectiveness strategy for its location driver? A) Centralize the location to gain economies of scale B) Decentralize the locations to be closer to the customers C) All of the above D) None of the above Answer: B Level: Medium Page: 253 Response: An effective location is decentralized.

9. Which of the following increases effectiveness for the facilities driver? A) Few facilities B) Centralized facilities C) Minimal amounts of excess capacity D) Functional focus operational design Answer: D Level: Medium Page: 253 Response: A facility that has a functional focus is effective.

10. Which of the following increases efficiency for the facilities driver? A) Decentralized facilities B) Large amounts of excess capacity C) Functional focus operational design D) Product focus operational design Answer: D Level: Medium Page: 253 Response: A product focus operational design is efficient.

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11. Which strategy is Dillard's department store following for its inventory driver? A) Efficiency B) Effectiveness C) Cycle inventory D) None of the above Answer: B Level: Medium Page: 253 Response: Dillard's follows a highly-effective SCM strategy.

12. What is the average amount of inventory held to satisfy customer demands between inventory deliveries? A) Safety inventory B) Cycle inventory C) Performance inventory D) Capacity inventory Answer: B Level: Easy Page: 253 Response: This is the definition of cycle inventory.

13. What is extra inventory held in the event demand exceeds supply? A) Safety inventory B) Cycle inventory C) Performance inventory D) Capacity inventory Answer: A Level: Easy Page: 254 Response: This is the definition of safety inventory.

14. What is it called if a toy store holds extra inventory for the Christmas season? A) Safety inventory B) Cycle inventory C) Performance inventory D) Capacity inventory Answer: A Level: Easy Page: 254 Response: Holding extra inventory for high fluctuations in demand is safety inventory.

15. How will an organization use its transportation driver if it focuses on a highly effective supply chain? A) Increase the price of its products by using slower, less expensive transportation methods B) Decrease the price of its products by using slower, less expensive transportation methods C) Increase the price of its products by using faster, more costly transportation methods D) Decrease the price of its products by using faster, more costly transportation methods Answer: C Level: Medium Page: 254 Response: Effective methods of transportation are expensive and speedy.

Test Bank, Chapter B3

16. How will an organization use its transportation driver if it focuses on a highly efficient supply chain? A) Increase the price of its products by using slower, less expensive transportation methods B) Decrease the price of its products by using slower, less expensive transportation methods C) Increase the price of its products by using faster, more costly transportation methods D) Decrease the price of its products by using faster, more costly transportation methods Answer: B Level: Medium Page: 254 Response: Efficient methods of transportation are inexpensive and slow.

17. What are the transportation components that an organization should consider when determining its transportation strategy? A) Method of transportation, transportation effectiveness B) Transportation route, method of transportation C) Transportation route by air, truck, or ship D) Method of transportation by air, truck, or ship Answer: B Level: Easy Page: 254 Response: Method of transportation and transportation route are the two components of the transportation driver.

18. What would an organization choose that focuses on transportation efficiency? A) Ship its products directly to its customers B) Ship its products to a distributor that ships the products to customers C) Ship its products to a distributor by air only D) Ship its products to its customers by boat Answer: B Level: Medium Page: 254 Response: An efficient transportation route ships goods to a distributor who ships the goods to the customers.

19. What would an organization choose that focuses on transportation effectiveness? A) Ship its products directly to its customers B) Ship its products to a distributor that ships the products to customers C) Ship its products to a distributor by air only D) Ship its products to a distributor by boat only Answer: A Level: Medium Page: 254 Response: An effective transportation route ships goods directly to its customers.

20. What would an organization choose that focuses on information efficiency? A) Freely share lots of information B) Share only selected information C) Charge others for access to its information D) All of the above Answer: A Level: Medium Page: 255 Response: An efficient information strategy freely shares lots of information.

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21. What would an organization choose that focuses on information effectiveness? A) Freely share lots of information B) Share only selected information C) Charge others for access to its information D) All of the above Answer: B Level: Medium Page: 255 Response: An effective information sharing strategy shares only selected information.

22. What happens to information in a push technology environment? A) Receive information B) Get information C) Send information D) Request information Answer: C Level: Easy Page: 255 Response: A push environment sends information.

23. What does Wal-Mart's supply chain facilities driver focuses on? A) Efficiency B) Effectiveness C) All of the above D) None of the above Answer: A Level: Easy Page: 256 Response: Wal-Mart's facilities driver focus on efficiency.

24. What does Wal-Mart's inventory driver focus on? A) Efficiency B) Effectiveness C) All of the above D) None of the above Answer: A Level: Easy Page: 256 Response: Wal-Mart's inventory driver focuses on efficiency.

25. What does Wal-Mart's transportation driver focus on? A) Efficiency B) Effectiveness C) All of the above D) None of the above Answer: B Level: Easy Page: 256 Response: Wal-Mart's transportation driver focuses on effectiveness.

Test Bank, Chapter B3

26. What does Wal-Mart's information driver focus on? A) Efficiency B) Effectiveness C) All of the above D) None of the above Answer: A Level: Easy Page: 256 Response: Wal-Mart's information driver focuses on efficiency.

27. What enables an organization to react more quickly to resolve supply chain issues? A) Supply chain event management B) Selling chain management C) Collaborative engineering D) Collaborative demand planning Answer: A Level: Easy Page: 257 Response: This is the definition of SCEM.

28. What applies technology to the activities in the order life cycle from inquiry to sale? A) Supply chain event management B) Selling chain management C) Collaborative engineering D) Collaborative demand planning Answer: B Level: Easy Page: 257 Response: This is the definition of selling chain management.

29. What helps organizations reduce their investment in inventory, while improving customer satisfaction through product availability? A) Supply chain event management B) Selling chain management C) Collaborative engineering D) Collaborative demand planning Answer: D Level: Easy Page: 257 Response: This is the definition of collaborative demand planning.

30. What allows an organization to reduce the cost and time required during the design process of a product? A) Supply chain event management B) Selling chain management C) Collaborative engineering D) Collaborative demand planning Answer: C Level: Easy Page: 257 Response: This is the definition of collaborative engineering.

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