MULTIPLE CHOICE
1. The connected chain of all of the business entities, both internal and external to the company, that perform or support the logistics function is known as the:
a.
|
channel of distribution
|
b.
|
intermediary link
|
c.
|
physical distribution integration
|
d.
|
reseller network
|
e.
|
supply chain
|
ANS: E
A company’s supply chain includes all of the companies involved in all of the upstream and downstream flows of products, services, finances, and information, from initial suppliers (point of origin) to the ultimate customer (point of consumption).
PTS: 1 REF: 217 OBJ: 14-1 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
2. _____ coordinates and integrates all of the activities performed by channel members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value.
a.
|
Yield management
|
b.
|
Channel power
|
c.
|
Materials handling
|
d.
|
Supply chain management
|
e.
|
Physical distribution
|
ANS: D
This is the definition of supply chain management.
PTS: 1 REF: 217 OBJ: 14-1 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
3. Peachtree Windows does not make a window until an order is received. It can promise delivery in five working days because of the excellent relationships it has established with its suppliers. The partnering relationship that Peachtree Windows has established with its suppliers indicates the use of:
a.
|
supply chain management
|
b.
|
yield management
|
c.
|
channel networks
|
d.
|
horizontal marketing channels
|
e.
|
intensive distribution strategy
|
ANS: A
Supply chain management coordinates and integrates all the activities from raw materials to product consumption.
PTS: 1 REF: 217 OBJ: 14-1 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Application
4. A large automotive after-market business wanted to improve its current situation, which is characterized by excessive inventory, incomplete information, high logistics costs, slow reactions to environmental change, and lost profits at the retail level. Would supply chain management be of any help to the business?
a.
|
Yes, supply chain management is designed to coordinate and integrate all the activities from raw materials to product consumption.
|
b.
|
No, supply chain management is only applicable to distribution strategies for products being sold to the consumer market.
|
c.
|
Yes, supply chain management would be very useful because it relies so heavily on benchmarking.
|
d.
|
Yes, supply chain management would alleviate all channel conflict.
|
e.
|
No, supply chain management requires an expensive investment of time and resources to make it worthwhile.
|
ANS: A
The correct answer contains the definition of supply chain management.
PTS: 1 REF: 217 OBJ: 14-1 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Application
5. All of the following accurately describe supply chain management EXCEPT:
a.
|
physical flow process
|
b.
|
customer driven
|
c.
|
provides enhanced customer and economic value
|
d.
|
plays the role of communicator of customer demand
|
e.
|
relies on a “push” strategy
|
ANS: E
In earlier days, standardized products were “pushed” down through the supply channel to the consumer, but now the system relies on customers to “pull” the product through the channel.
PTS: 1 REF: 217-218 OBJ: 14-1 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Analysis
6. All of the following are benefits of supply chain management EXCEPT:
a.
|
increased flexibility of supply chain activities
|
b.
|
improved customer service
|
c.
|
reduced supply chain costs
|
d.
|
decreased cash flow
|
e.
|
decreased inventory
|
ANS: D
Cash flow would likely be increased due to higher revenues.
PTS: 1 REF: 218 OBJ: 14-1 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Analysis
7. Which of the following is a key principle of supply chain management that means multiple firms work together to perform tasks as a single unified system rather than as several individual companies acting in isolation?
a.
|
Pareto principle
|
b.
|
80/20 principle
|
c.
|
Systems approach
|
d.
|
Win–win approach
|
e.
|
Integrative approach
|
ANS: C
This describes a systems approach.
PTS: 1 REF: 218 OBJ: 14-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
8. _____ occurs when all the firms and business units participating in the supply chain appear as though they are reading from the same script.
a.
|
Strategic channel operation
|
b.
|
Supply chain integration
|
c.
|
Strategic MRP
|
d.
|
Demand management
|
e.
|
Extensive distribution integration
|
ANS: B
Supply chain integration occurs when multiple firms in a supply chain coordinate their activities and processes so that they are seamlessly linked to one another in an effort to satisfy the customer.
PTS: 1 REF: 218 OBJ: 14-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
9. When the Boeing Co. announced it would delay the introduction of its new 787, the CEO blamed the problem on the company’s supply chain. Airplanes use thousands of individual parts, and in an attempt to relieve the smaller, individual supply chain quandary, Boeing used major suppliers to construct large pieces of the plane. Boeing would have benefited from more _____ integration.
a.
|
channel
|
b.
|
supply chain
|
c.
|
MRP
|
d.
|
functional
|
e.
|
tactical distribution
|
ANS: B
Supply chain integration occurs when multiple firms in a supply chain coordinate their activities and processes so that they are seamlessly linked to one another in an effort to satisfy the customer.
PTS: 1 REF: 218 OBJ: 14-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Application
10. _____ integration is the ability of two or more companies to develop social connections that serve to guide their interactions when working together.
a.
|
Relationship
|
b.
|
Social
|
c.
|
Customer
|
d.
|
Materials and service supplier
|
e.
|
Technology and planning integration
|
ANS: A
This is the definition of relationship integration.
PTS: 1 REF: 218 OBJ: 14-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
11. When each firm in a supply chain has clarity in terms of knowing which firm is the leader, which are the followers, and which responsibilities are assigned to each firm, _____ is (are) evident.
a.
|
specificity
|
b.
|
complexity
|
c.
|
ambiguity
|
d.
|
internal relationships
|
e.
|
hierarchy
|
ANS: A
Relationally integrated supply chains typically have high role specificity, that is, each firm has clarity of its role in the chain.
PTS: 1 REF: 218 OBJ: 14-3 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
12. Which type of integration implies the performance assessment of the supply chain should be taken as a whole while also holding each member of the supply chain accountable for meeting its own goals?
a.
|
Accountability
|
b.
|
Benchmarking
|
c.
|
Social
|
d.
|
Planning
|
e.
|
Measurement
|
ANS: E
Measurement integration reflects the idea that performance assessments should assess the performance of the supply chain as a whole while holding each individual firm or business unit accountable for meeting its own goals.
PTS: 1 REF: 218 OBJ: 14-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
13. Which of the following is an example of one of the six types of integration that are sought by firms interested in providing top-level service to their customers?
a.
|
Strategic integration
|
b.
|
Hierarchical integration
|
c.
|
Internal operations integration
|
d.
|
Global integration
|
e.
|
All of the above
|
ANS: C
The six types of integration are relationship integration, measurement integration, technology and planning integration, material and service supplier integration, internal operations integration, and customer integration.
PTS: 1 REF: 218-219 OBJ: 14-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
14. All of the following are types of integration sought by firms interested in providing top-level service to customers EXCEPT:
a.
|
relationship integration
|
b.
|
measurement integration
|
c.
|
customer integration
|
d.
|
production integration
|
e.
|
technology and planning integration
|
ANS: D
The six types of integration are relationship integration, measurement integration, technology and planning integration, material and service supplier integration, internal operations integration, and customer integration.
PTS: 1 REF: 218-219 OBJ: 14-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Analysis
15. By achieving _____ integration across their supply chains, firms can gain the information needed to execute short-term and long-term planning, and thereby make better operational decisions.
a.
|
relationship
|
b.
|
social
|
c.
|
functional
|
d.
|
technology and planning
|
e.
|
internal operations
|
ANS: D
Technology and planning integration is the creation and maintenance of information technology systems that connect managers across and through the firms in the supply chain, with the goal of supporting supply chain activities that best satisfy customer demands.
PTS: 1 REF: 219 OBJ: 14-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Comprehension
16. Through the use of automatic shipping notices, Ace Hardware is effective at removing unnecessary costs from its supply chain. According to a VP of inventory for the retailer, “Information gathering that used to take three or four phone calls now is available immediately.” This is an example of the use of _____ integration.
a.
|
relationship
|
b.
|
social
|
c.
|
functional
|
d.
|
technology and planning
|
e.
|
internal operations
|
ANS: D
By achieving technology and planning integration across their supply chains, firms can gain the information needed to execute short-term and long-term planning. The process is the creation and maintenance of information technology systems that connect managers across and through the firms in the supply chain, with the goal of supporting supply chain activities that best satisfy customer demands.
PTS: 1 REF: 219 OBJ: 14-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Application
17. Food producers love big boxes because they serve as billboards on store shelves. Walmart wants to change this practice and promises suppliers that their shelf spaces won’t shrink even if their boxes do. As a result, some of its vendors have reengineered their packaging. This is an example of _____ integration.
a.
|
relationship
|
b.
|
social
|
c.
|
functional
|
d.
|
operational
|
e.
|
materials and service supplier
|
ANS: E
Both the retailer and its suppliers have a common vision of the total value creation process.
PTS: 1 REF: 219 OBJ: 14-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Application
18. _____ integration requires firms within a supply chain to link seamlessly so that they can streamline work processes and thereby provide smooth, high-quality customer experiences.
a.
|
Relationship
|
b.
|
Social
|
c.
|
Functional
|
d.
|
Internal operations
|
e.
|
Material and service supplier
|
ANS: D
To provide a seamless and satisfying customer experience, everyone working within the firm must be “on the same page” in terms of daily operations.
PTS: 1 REF: 219 OBJ: 14-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
19. Nabisco has reduced product inventory requirements from 49 days to 22 days. This frees up cash and warehouse space, adding flexibility to the plant. This seamless linking of Nabisco’s strategic business units is accomplished through _____ integration.
a.
|
relationship
|
b.
|
social
|
c.
|
functional
|
d.
|
hierarchical
|
e.
|
internal operations
|
ANS: E
Internal operations integration is the result of capabilities developed toward the goal of linking internally performed work into a seamless process that stretches across functional and departmental boundaries.
PTS: 1 REF: 219 OBJ: 14-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Application
20. Sobha Developers is the only company in India and possibly the world that manufactures almost everything that goes into its buildings. It is this backward integration that gives Sobha absolute control over quality at every level. Sobha has the highest possible _____ integration.
a.
|
relationship
|
b.
|
social
|
c.
|
functional
|
d.
|
operational
|
e.
|
internal operations
|
ANS: E
Internal operations integration is the result of capabilities developed toward the goal of linking internally performed work into a seamless process that stretches across functional and departmental boundaries.
PTS: 1 REF: 219 OBJ: 14-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Application
21. _____ integration is a competency that enables firms to offer long-lasting, distinctive, value-added offerings to those customers who represent the greatest value to the firm or supply chain.
a.
|
Customer
|
b.
|
Social
|
c.
|
Measurement
|
d.
|
Departmental
|
e.
|
Internal operations
|
ANS: A
The best way to deliver value under profitability constraints is through customer integration.
PTS: 1 REF: 219 OBJ: 14-2 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution | CB&E Model Customer MSC: BLOOMS Knowledge
22. _____ is (are) composed of bundles of interconnected activities that stretch across firms in the supply chain.
a.
|
ABC segmentation strategies
|
b.
|
Activity-based costing
|
c.
|
Customer relationship management
|
d.
|
Business processes
|
e.
|
Customer service activities
|
ANS: D
This is the definition of business processes.
PTS: 1 REF: 219 OBJ: 14-3 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
23. There are eight critical business processes on which supply chain managers must focus. Which of the following is one of those processes?
a.
|
Returns management
|
b.
|
Sales promotion activities
|
c.
|
Distribution intensity
|
d.
|
Public relations activities
|
e.
|
Environmental assessments
|
ANS: A
Returns management is one of the eight critical business processes on which supply chain managers must focus.
PTS: 1 REF: 219 OBJ: 14-3 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Comprehension
24. Of the eight critical business processes on which supply chain managers must focus, which process allows companies to prioritize their marketing focus on different customer groups according to each group’s long-term value to the company or the supply chain?
a.
|
Customer relationship management
|
b.
|
Returns management
|
c.
|
Product development and commercialization
|
d.
|
Order fulfillment
|
e.
|
Demand management
|
ANS: A
Customer relationship management is designed to identify and build relationships with good customers.
PTS: 1 REF: 219 OBJ: 14-3 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
25. Of the eight critical business processes on which supply chain managers must focus, the _____ process presents a multi-company, unified response system to the customer whenever complaints, concerns, questions, or comments are voiced.
a.
|
manufacturing flow management
|
b.
|
customer service management
|
c.
|
product development and commercialization
|
d.
|
order fulfillment
|
e.
|
demand management
|
ANS: B
The customer service management process is designed to ensure that customer relationships remain strong.
PTS: 1 REF: 220 OBJ: 14-3 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution | CB&E Model Customer MSC: BLOOMS Knowledge
26. By working closely with its suppliers and listening to its customers, Target has improved the service encounter to a level that was not thought possible in mass retailing. This is an example of which of the eight critical processes performed by supply managers?
a.
|
Manufacturing flow management
|
b.
|
Customer service management
|
c.
|
Product development and commercialization
|
d.
|
Order fulfillment
|
e.
|
Demand management
|
ANS: B
Of the eight critical business processes on which supply chain managers must focus, the customer service management process presents a multi-company, unified response system to the customer whenever complaints, concerns, questions, or comments are voiced.
PTS: 1 REF: 220 OBJ: 14-3 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution | CB&E Model Customer MSC: BLOOMS Application
27. Which business process is based on the activities involved in customer data collection, forecasting of future demand, synchronization of supply and demand by comparing production capacity to forecasts, and the development of activities to “smooth out” demand?
a.
|
Manufacturing flow management
|
b.
|
Customer service management
|
c.
|
Product development and commercialization
|
d.
|
Order fulfillment
|
e.
|
Demand management
|
ANS: E
The demand management process is the alignment of supply and demand throughout the supply chain.
PTS: 1 REF: 220 OBJ: 14-3 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
28. The amount of time between order placement, receipt of the customer’s payment, and order shipment is known as the:
a.
|
3PL cycle
|
b.
|
product life cycle
|
c.
|
purchase cycle
|
d.
|
order-to-cash cycle
|
e.
|
float
|
ANS: D
When the order fulfillment process is managed diligently, the amount of time between order placement and receipt of the customer’s payment after order shipment, known as the order-to-cash cycle), is minimized as much as possible.
PTS: 1 REF: 221 OBJ: 14-3 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
29. A firm that specializes in the order fulfillment process is called a(n):
a.
|
third-party logistics firm (3PL)
|
b.
|
intermediate distributor
|
c.
|
industrial distributor
|
d.
|
merchant wholesaler
|
e.
|
ABC firm
|
ANS: A
Because many firms do not view order fulfillment as a core competency, they often outsource this function to a third-party logistics firm (3PL) that specializes in the order fulfillment process.
PTS: 1 REF: 221 OBJ: 14-3 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
30. ProLog is a firm that specializes in warehousing and fulfilling orders for firms as diverse as those supplying parts for manufacturers of complicated missile defense systems to those manufacturing pet-care products. Firms contract ProLog to manage part or all of their order fulfillment process. ProLog is an example of a:
a.
|
merchant wholesaler
|
b.
|
retailer
|
c.
|
distributor
|
d.
|
third-party logistics firm (3PL)
|
e.
|
manufacturing flow process manager
|
ANS: D
Third-party logistics firms (3PLs) are contracted to manage part or all of another firm’s order fulfillment process.
PTS: 1 REF: 221 OBJ: 14-3 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Application
31. Which business process ensures that firms in the supply chain have the resources they need?
a.
|
Manufacturing flow management
|
b.
|
Customer service management
|
c.
|
Product development and commercialization
|
d.
|
Order fulfillment
|
e.
|
Demand management
|
ANS: A
The manufacturing flow management process is concerned with ensuring that firms in the supply chain have the needed resources to manufacture with flexibility and to move products through a multi-stage production process.
PTS: 1 REF: 221 OBJ: 14-3 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
32. Which business process supports manufacturing flow by identifying and maintaining relationships with highly valued suppliers?
a.
|
Supplier relationship management
|
b.
|
Customer service management
|
c.
|
Product development and commercialization
|
d.
|
Order fulfillment
|
e.
|
Demand management
|
ANS: A
The supplier relationship management process is closely related to the manufacturing flow management process and contains several characteristics that parallel the customer relationship management process.
PTS: 1 REF: 221 OBJ: 14-3 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
33. Specialty Blades designs precision cutting devices for varied applications. On one recent project, they worked closely with a medical device company, developing a combination scalpel and stapler that slices tissue very neatly close to the staples, which results in less traumatic procedures and quicker patient recoveries. This is an example of which of the eight critical processes performed by supply chain managers?
a.
|
Supplier relationship management
|
b.
|
Customer service management
|
c.
|
Product development and commercialization
|
d.
|
Order fulfillment
|
e.
|
Demand management
|
ANS: C
The product development and commercialization process includes the group of activities that facilitates the joint development and marketing of new offerings among a group of supply chain partners.
PTS: 1 REF: 222 OBJ: 14-3 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Application
34. Mattel, the world’s biggest toymaker, ordered 18 million toys made in China to be recalled because of hazards such as the use of lead paint. Mattel’s _____ process allowed it to handle the product recall efficiently.
a.
|
order fulfillment
|
b.
|
returns management
|
c.
|
product commercialization
|
d.
|
demand management
|
e.
|
product fulfillment
|
ANS: B
The returns management process enables firms to manage the returned merchandise while minimizing returns-related costs.
PTS: 1 REF: 222 OBJ: 14-3 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Application
35. All of the following are logistics components of the supply chain EXCEPT:
a.
|
trade promotions
|
b.
|
production scheduling
|
c.
|
inventory control
|
d.
|
warehousing and materials handling
|
e.
|
order processing
|
ANS: A
The logistics function consists of several interrelated and integrated logistical components: (1) sourcing and procurement of raw materials and supplies, (2) production scheduling, (3) order processing, (4) inventory control, (5) warehousing and materials handling, and (6) transportation.
PTS: 1 REF: 222-223 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Analysis
36. Which of the following provides the technological link connecting all of the logistics components of the supply chain?
a.
|
Logistics information system
|
b.
|
Materials requirement plan
|
c.
|
EDI
|
d.
|
RFID chips
|
e.
|
Distribution resources strategy
|
ANS: A
The components of the system include software for materials acquisition and handling, warehouse-management and enterprise-wide solutions, data storage and integration in data warehouses, and so on.
PTS: 1 REF: 223 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
37. One-quarter of Ace’s 60,000 SKUs are vendor managed through software called the “Collaboration” program. This software allows certain vendors to go online to get information to build their forecasts. The result of this application is fewer shipments, fuller pallets, increased pallets per truck, and a reduction in freight. Collaboration is part of Ace’s:
a.
|
logistics information system
|
b.
|
materials requirement plan
|
c.
|
EDI
|
d.
|
RFID chips
|
e.
|
distribution resources strategy
|
ANS: A
A logistical information system provides the technological link connecting all of the logistics components of the supply chain
PTS: 1 REF: 223 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Application
38. The supply chain team does all of the following EXCEPT:
a.
|
communicating, coordinating, and cooperating extensively
|
b.
|
embracing all parties who participate in moving the product to market
|
c.
|
typically cutting across organizational boundaries
|
d.
|
providing financing for distributors
|
e.
|
orchestrating the movement of goods, services, and information from the source to the consumer
|
ANS: D
The supply chain team does all of these, but it does not provide financing for distributors.
PTS: 1 REF: 223 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Analysis
39. Which of the following is a member of a supply chain team that moves just-picked cotton to finished clothing and then to the consumer of that clothing?
a.
|
The warehouse in which the cotton was temporarily stored
|
b.
|
The ad agency that develops the promotion for the clothing
|
c.
|
The farmer who picks the cotton
|
d.
|
The trucking company that hauls the cotton to the clothing manufacturer
|
e.
|
All of the choices
|
ANS: E
The supply chain team is composed of everyone who participates in the movement from raw material to consumer, including all external participants like ad agencies and transportation companies.
PTS: 1 REF: 223 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Application
40. In which logistical component of the supply chain will you find electronic data interchange a common feature?
a.
|
Production scheduling
|
b.
|
Transportation
|
c.
|
Order processing
|
d.
|
Materials handling
|
e.
|
All of these
|
ANS: C
Order processing is becoming more automated through the use of computer technology known as electronic data interchange (EDI).
PTS: 1 REF: 225 OBJ: 14-4 TOP: AACSB Technology
KEY: CB&E Model Distribution | CB&E Model Online/Computer
MSC: BLOOMS Comprehension
41. _____ is the direct electronic transmission, from computer to computer, of standard business forms between two organizations. When this technique is used, orders can become virtually paperless, and information about the order is available to both firms.
a.
|
Business prioritizing
|
b.
|
Electronic data interchange
|
c.
|
Just-in-time inventory
|
d.
|
Real-time inventory
|
e.
|
Direct sourcing
|
ANS: B
Electronic data interchange (EDI) is information technology that replaces the paper documents that usually accompany business transactions.
PTS: 1 REF: 225 OBJ: 14-4 TOP: AACSB Technology
KEY: CB&E Model Distribution | CB&E Model Online/Computer
MSC: BLOOMS Knowledge
42. _____ is a method of developing and maintaining an adequate assortment of materials or products to meet a manufacturer’s or a customer’s demand.
a.
|
The materials-handling system
|
b.
|
An inventory control system
|
c.
|
Direct sourcing
|
d.
|
Contract logistics
|
e.
|
Warehousing
|
ANS: B
This is the definition of an inventory control system.
PTS: 1 REF: 225 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
43. Which of the following is the inventory control system that manages the replenishment of raw materials, supplies, and components from the supplier to the manufacturer?
a.
|
Electronic data interchange (EDI)
|
b.
|
Distribution resource planning (DRP)
|
c.
|
Third-party logistics firm (3PL)
|
d.
|
Materials requirement planning (MRP)
|
e.
|
Activity-based costing (ABC)
|
ANS: D
This is the definition of materials requirement planning (MRP), which is also referred to as materials management.
PTS: 1 REF: 225 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
44. The goal of inventory control is to:
a.
|
minimize inventory levels while maintaining an adequate supply of goods to meet customer demands
|
b.
|
maximize inventory levels to prevent any possibility of stockouts
|
c.
|
determine order timing and order quantity
|
d.
|
estimate proper usage rates
|
e.
|
integrate JIT to reduce risks of obsolescence, theft, and damage
|
ANS: A
Inventory decisions affect physical distribution costs and service levels. The goal is to balance minimum inventory levels while meeting customer needs for stock.
PTS: 1 REF: 225 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Comprehension
45. In which logistical component of the supply chain will you find distribution resource planning (DRP) a common feature?
a.
|
Production scheduling
|
b.
|
Transportation
|
c.
|
Order processing
|
d.
|
Materials handling
|
e.
|
Inventory control
|
ANS: E
Distribution resource planning (DRP) is an inventory control system that manages the replenishment of goods from the manufacturer to the final consumer.
PTS: 1 REF: 225-226 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Comprehension
46. ZuTech makes sensitive monitors for measuring exposure to hazardous materials. ZuTech has suffered substantial losses when moving products from the assembly line to the warehouse and shipping docks. ZuTech should consider reducing the number of times an item is moved in the warehouse by installing a(n):
a.
|
inventory control system
|
b.
|
materials-handling system
|
c.
|
safety procedure to manage SKUs
|
d.
|
order-processing system
|
e.
|
outsourcing system
|
ANS: B
The goal of the materials-handling system is to move items quickly with minimal handling.
PTS: 1 REF: 226 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Application
47. All of the following are types of inputs used in both materials requirement planning and distribution resource planning EXCEPT:
a.
|
the source of funding
|
b.
|
lead times
|
c.
|
the mode of transportation to be used
|
d.
|
outstanding orders
|
e.
|
sales forecasts
|
ANS: A
Both inventory systems use various inputs, such as sales forecasts, available inventory, outstanding orders, lead times, and mode of transportation to be used, to determine what actions must be taken to replenish goods at all points in the supply chain.
PTS: 1 REF: 226 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Analysis
48. _____ provides time utility to buyers and sellers and aids manufacturers in managing supply and demand.
a.
|
Containerization
|
b.
|
Distribution
|
c.
|
Storage
|
d.
|
Direct sourcing
|
e.
|
Channelization
|
ANS: C
Storage is necessary to match supply with demand and to provide a level of safety stock.
PTS: 1 REF: 226 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
49. Which of the following moves inventory into, within, and out of a warehouse?
a.
|
An inventory control system
|
b.
|
A multichannel system
|
c.
|
An ERP control system
|
d.
|
A freight forwarder
|
e.
|
A materials-handling system
|
ANS: E
A materials handling system is a method of moving inventory into, within, and out of the warehouse.
PTS: 1 REF: 226 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
50. The goal of any effective materials-handling system is to:
a.
|
reduce the time of the order-processing system
|
b.
|
optimize the inventory control system
|
c.
|
increase safety procedures
|
d.
|
move items quickly with minimal handling
|
e.
|
reduce the length of time a product is in the transportation subsystem
|
ANS: D
Each time a product is handled, the cost and risk of damage increase.
PTS: 1 REF: 226 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
51. All of the following are criteria used to choose a mode of transportation EXCEPT:
a.
|
diversity
|
b.
|
cost
|
c.
|
transit time
|
d.
|
reliability
|
e.
|
traceability
|
ANS: A
Criteria used include cost, transit time, reliability, capability, accessibility, and traceability.
PTS: 1 REF: 227 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Analysis
52. The mode of transportation that provides the most accessibility is:
a.
|
pipelines
|
b.
|
air freight
|
c.
|
truck freight
|
d.
|
water transport
|
e.
|
railroad
|
ANS: C
Motor carriers (trucks) can go to more locations than any of the other modes of transportation. See Exhibit 14.1.
PTS: 1 REF: 227 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Comprehension
53. The growers of Vidalia onions have determined that their chief priority for choosing a transportation mode within the United States is transit time. However, this must be tempered by practical cost considerations. In light of these considerations, Vidalia onion growers should use _____ to ship their onions.
a.
|
railroads
|
b.
|
motor carriers (trucks)
|
c.
|
airplanes
|
d.
|
water transportation
|
e.
|
pipelines
|
ANS: B
Motor carriers are not as fast as airplanes, but they are less expensive, particularly when dealing with a bulky product like onions. See Exhibit 14.1.
PTS: 1 REF: 227 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Application
54. One major advantage of pipelines over other modes of transportation is:
a.
|
availability
|
b.
|
points served
|
c.
|
flexibility
|
d.
|
speed
|
e.
|
reliability
|
ANS: E
Pipelines are rarely interrupted by weather, traffic, or labor disputes. See Exhibit 14.1.
PTS: 1 REF: 227 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Comprehension
55. Which of the following describes a disadvantage associated with water transportation?
a.
|
Cannot be used for international trade
|
b.
|
High cost
|
c.
|
Capability
|
d.
|
Lack of speed
|
e.
|
Product weight restrictions
|
ANS: D
Shipping via water is the slowest mode of transportation. See Exhibit 14.1.
PTS: 1 REF: 227 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Comprehension
56. Which of the following transportation modes can most easily determine the location of a package en route between shipper and receiver?
a.
|
Air
|
b.
|
Truck
|
c.
|
Rail
|
d.
|
Pipe
|
e.
|
Water
|
ANS: A
In addition to speed, air transport offers an important additional benefit to shippers, that being the ease of tracing shipments. See Exhibit 14.1.
PTS: 1 REF: 227 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Comprehension
57. The Canadian lobster harvest requires special handling coupled with rapid transportation to ensure the cargo reaches destinations alive. The favored transportation mode would be:
a.
|
air
|
b.
|
water
|
c.
|
truck
|
d.
|
pipeline
|
e.
|
rail
|
ANS: A
Air transportation ensures the speed necessary for lobster delivery. (Air Canada has developed special handling and shipping techniques for the lobsters.) See Exhibit 14.1.
PTS: 1 REF: 227 OBJ: 14-4 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Application
58. All of the following are business trends currently having a strong influence on the job of the supply chain manager EXCEPT:
a.
|
bar coding and radio frequency technology
|
b.
|
the advancement of computer technology
|
c.
|
the outsourcing of logistical functions
|
d.
|
replenishment benchmarking
|
e.
|
electronic distribution
|
ANS: D
An additional trend is green supply chain management.
PTS: 1 REF: 227-228 OBJ: 14-5 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Analysis
59. A manufacturer’s or supplier’s use of an independent third party to manage an entire function of the logistics system, such as transportation, warehousing, or order processing, is called:
a.
|
outsourcing
|
b.
|
mediation
|
c.
|
intermediary distribution
|
d.
|
benchmarking
|
e.
|
disintermediaton
|
ANS: A
This is the definition of outsourcing, also called contract logistics.
PTS: 1 REF: 228 OBJ: 14-5 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Knowledge
60. Papa John’s pizza chain uses UPS trucks to carry supplies to its franchises. Papa John’s does not own the trucks but has contracted with UPS to have all of the trucks it uses in its deliveries to Papa John’s establishments painted with the Papa John’s logo and company colors. Papa John’s is using:
a.
|
a horizontal distribution channel
|
b.
|
a selective distribution channel
|
c.
|
outsourcing
|
d.
|
multisourcing
|
e.
|
a portable inventory control system
|
ANS: C
Papa John’s supplier is an independent third party.
PTS: 1 REF: 228 OBJ: 14-5 TOP: AACSB Reflective Thinking
KEY: CB&E Model Distribution MSC: BLOOMS Application
61. Volvo, working with FedEx, set up a warehouse in Memphis with a complete stock of truck parts. A dealer needing a part for an emergency phones a toll-free number, and the part is delivered by FedEx within 24 hours. This is an example of how manufacturers are using:
a.
|
outsourcing
|
b.
|
cross-docking
|
c.
|
disintermediation
|
d.
|
piggybacking
|
e.
|
an integrated demand channel
|
ANS: A
With outsourcing, a company would use an independent third party to operate some or all of its logistics system.
PTS: 1 REF: 228 OBJ: 14-5 TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy MSC: BLOOMS Application
62. A manufacturer of automobile component parts that has turned over all transportation functions to an independent third party in its supply chain has engaged in:
a.
|
creating a dependent materials-handling system
|
b.
|
outsourcing
|
c.
|
removing entry barriers
|
d.
|
task deployment
|
e.
|
channel rotation
|
ANS: B
Outsourcing (or contract logistics) is a manufacturer’s or supplier’s use of an independent third party to manage an entire function of the logistics system, such as transportation, warehousing, or order processing.
PTS: 1 REF: 228 OBJ: 14-5 TOP: AACSB Reflective Thinking
KEY: CB&E Model Strategy MSC: BLOOMS Application
63. When Rick purchased tickets to a concert on the Internet, it was an example of:
a.
|
single-sourcing distribution
|
b.
|
one-way channelization
|
c.
|
electronic distribution
|
d.
|
mass customization
|
e.
|
aggregated marketing
|
ANS: C
Electronic distribution includes any kind of product or service that can be distributed electronically. Tickets are just one of many types of products and services that can be distributed electronically.
PTS: 1 REF: 228 OBJ: 14-5 TOP: AACSB Technology
KEY: CB&E Model Distribution | CB&E Model Online/Computer
MSC: BLOOMS Application
Retailing (Ch. 15 MKTG 300 Text)
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