Questions and Answers
The transfer of some of what are traditional internal activities and resources of a firm to outside vendors is __________.
What term is used to describe the outsourcing of logistics?
The four stages of supplier selection, in order, are __________.
supplier evaluation, supplier development, negotiations, and contracting
Which one of the following is not a supply-chain strategy?
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With the growth of the JIT, which of the following distribution systems has been the biggest loser?
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Which of the following best describes vertical integration?
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__________________ is the technique where a manufacturer sends individual components (rather than assembled units) to a distributor.
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The trucking industry is establishing technologies, which let shippers and truckers find each other in order to ________.
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A disadvantage of the 'few suppliers' strategy is __________.
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Which of the following is not an advantage of the 'few suppliers' concept?
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The three classic types of negotiation strategies are __________.
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What type of negotiation strategy requires the supplier to open its books to the purchasers?
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Keeping a product generic as long as possible before customizing is known as __________.
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Which one of the following distribution systems offers quickness and reliability when emergency supplies are needed overseas?
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A restaurant runs a special promotion on lobster and plans to sell twice as many lobsters as usual. When this large order is sent to the distributer, the distributer assumes the large size is a trend, not a one-time event. The distributer, therefore, places an even larger order with the lobsterman. This is the result of __________.
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Last year, a vendor cost of goods sold was $8,000 and average inventory investment was $500. This vendor's ________ was 16.
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Maximizing local profit or minimizing cost in a supply chain is best described as __________.
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A furniture maker has delivered a dining set to the end consumer rather than to the furniture store. The furniture maker is practicing __________.
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Which of the following is an aspect of environmental risk in supply-chain management?
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Which one of the following performance measures is not true of a world class firm?
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The approach that holds the suppliers responsible for maintaining the necessary technology, expertise, and forecasting ability plus cost, quality, and delivery competencies is __________.
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Consider a firm with a 2018 net income of $20 million, revenue of $60 million, and cost of goods sold of $25 million. If the balance sheet amounts show $2 million of inventory and $500,000 of property, plant, and equipment, how many weeks of supply does the firm hold?
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Which of the following is not a concern of the supply chain?
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Which of the following supply-chain strategies creates value by allowing suppliers to have economies of scale?
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The three major variations of online catalogs are grouped by __________.
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Study Notes
Distribution Systems and JIT
- Railroads have struggled with the Just-In-Time (JIT) manufacturing system due to their inability to provide small, frequent deliveries.
- JIT increases the demand for airfreight and trucking, which can manage frequent deliveries more effectively.
Vertical Integration
- Vertical integration is defined as producing goods or services that were previously purchased.
- This strategy can reduce costs, enhance quality, and ensure timely delivery.
- Notably distinct from vertical integration are few suppliers, which focuses on maintaining long-term partnerships.
Channel Assembly
- Channel assembly involves manufacturers sending individual components to distributors, who are responsible for final assembly.
- This method helps streamline supply chain management by distributing assembly responsibilities.
Trucking Technologies
- The trucking industry is leveraging technologies to connect shippers and truckers to improve logistics efficiency by utilizing idle capacity.
Few Suppliers Strategy
- A major drawback of the "few suppliers" strategy is the high cost associated with changing partners due to established dependencies.
Sharing Trade Secrets
- Sharing trade secrets is not an advantage of the "few suppliers" concept, as trade secrets provide competitive advantages and are typically not disclosed to other firms.
Negotiation Strategies
- Classic negotiation strategies include cost-based price models, market-based price models, and competitive bidding.
- The cost-based price model requires suppliers to disclose financial records to establish appropriate costs.
Postponement
- Postponement refers to keeping a product generic until customization is necessary, allowing companies to better meet customer demands.
Airfreight
- Airfreight is the fastest and most reliable distribution method for shipping emergency supplies overseas.
Bullwhip Effect
- The bullwhip effect describes the distortion and fluctuation in order sizes and demand perception as information moves through the supply chain.
Inventory Turnover
- Inventory turnover measures how often inventory is sold and replaced, calculated as the cost of goods sold divided by average inventory investment.
Local Optimization
- Local optimization refers to focusing on maximizing local profits or minimizing costs without considering the overall needs of the supply chain.
Drop Shipping
- Drop shipping is a fulfillment method where goods are shipped directly to the end consumer from the manufacturer instead of going through a retailer.
Environmental Risk
- Political issues and tariffs are considered environmental risks that supply chain managers must assess due to their global operations.
World Class Firm Attributes
- World class firms are characterized by short lead times and high on-time delivery rates, contrasting with companies that exhibit long lead times.
Supplier Responsibility
- The many suppliers strategy holds suppliers accountable for maintaining necessary competencies in technology, quality, and forecasting.
Weeks of Supply
- Weeks of supply helps determine how long current inventory will last based on average weekly sales.
Supply Chain Concerns
- Maintenance scheduling falls outside the primary concerns of supply chain management, which focuses on procurement, storage, and delivery processes.
Economies of Scale
- Long-term partnerships with fewer suppliers create economies of scale, allowing for cost-efficient production and resource allocation.
Online Catalogs
- Online catalogs can be categorized into three groups: vendors, intermediaries, and buyer exchange systems, facilitating various purchasing strategies.
Outsourcing
- Outsourcing involves transferring traditional internal activities and resources to external vendors, often for efficiency.
Third-Party Logistics
- Third-party logistics (3PL) refers to outsourcing logistics functions to specialized service providers to optimize inventory costs and improve delivery reliability.
Supplier Selection Process
- The supplier selection process involves four stages: supplier evaluation, supplier development, negotiations, and contracting, each critical for ensuring reliable partnerships.### Product Development Stage
- Outlining product specifications is essential for setting clear expectations and requirements.
- Developing quality control systems ensures consistency and reliability in products.
- Creation of a payment system facilitates transactions and financial management.
- Development of procurement policies guides the sourcing and acquisition of products and services.
Negotiation Stage
- Focuses on key elements such as quality, delivery timelines, payment terms, and overall costs.
- Effective negotiation seeks to balance the interests of all supply chain members.
Contracting Stage
- Clearly outlines the terms of the relationship among supply chain members.
- Designed to share risks and benefits, promoting collaboration.
- Incentive structures are created to encourage optimal policies throughout the entire supply chain.
Supply-Chain Strategies
- Vertical integration is a common strategy that involves controlling multiple stages of production or distribution within a supply chain.
- Continued negotiation with many suppliers enables competitive pricing and access to diverse resources.
- Short-term relationships with few suppliers are not considered a viable supply chain strategy due to lack of trust and stability in partnerships.
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Description
Test your knowledge with these flashcards from Chapter 11, focused on logistics and distribution systems. Learn about the impacts of Just-in-Time (JIT) manufacturing on different transportation methods. Perfect for students looking to reinforce their understanding of logistics concepts.
