Mastering the Art of Cost Advantage
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Questions and Answers

Which one of the following statements best describes the relationship between supply chain management and logistics?

  • Supply chain management is a subset of logistics.
  • Supply chain management and logistics are the same thing.
  • Supply chain management and logistics are unrelated concepts.
  • Logistics is a subset of supply chain management. (correct)

    • What is the mission of logistics management?

  • To create demand for products and services.
  • To achieve competitive advantage.
  • To manage the physical supply of goods. (correct)
  • To ensure efficient distribution of goods.

    • Why is the coordination between demand creation and physical supply important in logistics management?

  • It ensures efficient distribution of goods.
  • It leads to the creation of demand.
  • It upsets the equilibrium of forces. (correct)
  • It helps achieve competitive advantage.

    • Which industry typically has a low-cost producer with the greatest sales volume in the sector?

    <p>Clothing industry</p> Signup and view all the answers

    According to the text, what is the relationship described by the experience curve?

    <p>The relationship between real unit costs and cumulative volume</p> Signup and view all the answers

    What are the two primary types of value chain activities?

    <p>Inbound logistics and outbound marketing</p> Signup and view all the answers

    What is the scope of logistics management according to the text?

    <p>Management of raw materials through to the delivery of the final product</p> Signup and view all the answers

    What are the four principles that guide the supply chain manager?

    <p>Responsiveness, reliability, resilience, and relationships</p> Signup and view all the answers

    What does responsiveness in the supply chain refer to?

    <p>The ability to respond to customers' requirements in ever-shorter time-frames</p> Signup and view all the answers

    How can significant improvements in reliability be achieved in the supply chain?

    <p>By re-engineering the processes that impact performance</p> Signup and view all the answers

    What is the emphasis in supply chain design today?

    <p>Resilience</p> Signup and view all the answers

    According to the text, what is the fundamental difference between the previous model of competition and the current era of 'supply chain competition'?

    <p>Organizations need to focus on creating value delivery systems</p> Signup and view all the answers

    What is one of the key challenges logistics management faces due to the trend towards globalisation?

    <p>Lengthening of supply chains</p> Signup and view all the answers

    What is the role of national companies in the global business environment according to the text?

    <p>To cater for specific and unique local demands</p> Signup and view all the answers

    What is the critical management issue related to time compression mentioned in the text?

    <p>Increased demand for just-in-time deliveries</p> Signup and view all the answers

    Which of the following best defines logistics?

    <p>The process of strategically managing the procurement, movement, and storage of materials and inventory through an organization and its marketing channels.</p> Signup and view all the answers

    Which of the following best differentiates supply chain management from logistics?

    <p>Supply chain management is a wider concept that includes logistics as a planning orientation and framework.</p> Signup and view all the answers

    Which of the following best describes supply chain management?

    <p>The management of relationships in order to achieve a more profitable outcome for all parties in the chain.</p> Signup and view all the answers

    Which of the following best reflects the idea that the supply chain should be driven by the market and includes multiple suppliers and customers in a network?

    <p>Supply chain management is a network of connected and interdependent organizations working together to control the flow of materials and information.</p> Signup and view all the answers

    Which of the following best describes logistics management in the context of the text?

    <p>The physical distribution of goods</p> Signup and view all the answers

    What is the relationship between supply chain management and logistics?

    <p>Logistics management is a subset of supply chain management</p> Signup and view all the answers

    What is the mission of logistics management according to the text?

    <p>To ensure efficient distribution of goods</p> Signup and view all the answers

    Which of the following best describes the concept of cost advantage in the text?

    <p>The ability of a competitor to have the lowest production costs</p> Signup and view all the answers

    What is the relationship between real unit costs and cumulative volume described by the experience curve?

    <p>They are inversely proportional</p> Signup and view all the answers

    What is the main focus of logistics and supply chain management in reducing unit costs?

    <p>Increasing efficiency and productivity</p> Signup and view all the answers

    What is the key factor that determines competitive advantage in the value chain?

    <p>Performing activities more efficiently than competitors</p> Signup and view all the answers

    Which of the following is a key characteristic of a resilient supply chain?

    <p>Business-wide recognition of vulnerabilities</p> Signup and view all the answers

    What is the main reason why companies carry safety stock in their inventory?

    <p>To meet future demand</p> Signup and view all the answers

    What does the concept of responsiveness in the supply chain refer to?

    <p>Ability to meet customer needs</p> Signup and view all the answers

    What is one of the principles that guide the supply chain manager?

    <p>Responsiveness</p> Signup and view all the answers

    Which of the following best describes the concept of 'supply chain competition' mentioned in the text?

    <p>Organizations focus on creating value delivery systems</p> Signup and view all the answers

    Which one of the following best describes logistics?

    <p>The process of strategically managing the procurement, movement, and storage of materials, parts, and finished inventory</p> Signup and view all the answers

    What is the trend towards globalisation in the business environment described in the text?

    <p>Companies dominate most markets</p> Signup and view all the answers

    Which of the following best describes supply chain management?

    <p>The management of relationships in order to achieve a more profitable outcome for all parties in the chain</p> Signup and view all the answers

    What is the strategic issue that presents a challenge for logistics management due to globalisation?

    <p>Increased complexity of managing global logistics</p> Signup and view all the answers

    What is one of the key challenges logistics management faces due to the trend towards globalization?

    <p>Reducing or eliminating the buffers of inventory between organizations in a chain</p> Signup and view all the answers

    What is the emphasis in supply chain design today?

    <p>Driving the chain based on market demand and including multiple suppliers and customers in a network</p> Signup and view all the answers

    What is the critical management issue related to 'time-based competition' mentioned in the text?

    <p>Shorter product life cycles</p> Signup and view all the answers

    True or false: Logistics management is a narrower concept than supply chain management.

    <p>False</p> Signup and view all the answers

    True or false: The supply chain and the value chain are two separate concepts.

    <p>False</p> Signup and view all the answers

    True or false: The mission of logistics management is to efficiently distribute goods.

    <p>True</p> Signup and view all the answers

    True or false: The changing competitive environment has no impact on the supply chain.

    <p>False</p> Signup and view all the answers

    True or false: The principles of interdependence and balance are crucial in logistics management.

    <p>True</p> Signup and view all the answers

    True or false: The coordination between demand creation and physical supply is not important in logistics management.

    <p>False</p> Signup and view all the answers

    True or false: Logistics is the process of managing the procurement, movement, and storage of materials and information through a business.

    <p>True</p> Signup and view all the answers

    True or false: Supply chain management is a narrower concept than logistics.

    <p>False</p> Signup and view all the answers

    True or false: Supply chain management focuses on achieving linkage and coordination between suppliers, customers, and the organization itself.

    <p>True</p> Signup and view all the answers

    True or false: The goal of supply chain management is to reduce or eliminate the barriers of inventory between organizations in a chain.

    <p>True</p> Signup and view all the answers

    True or false: Supply chain management is primarily concerned with managing relationships to achieve a more profitable outcome for all parties.

    <p>True</p> Signup and view all the answers

    True or false: The term 'supply chain management' should be replaced with 'demand chain management' to reflect the market-driven nature of the chain.

    <p>True</p> Signup and view all the answers

    True or false: There is evidence to suggest that 'big is beautiful' when it comes to cost advantage.

    <p>True</p> Signup and view all the answers

    True or false: Logistics and supply chain management can contribute to reduced unit costs.

    <p>True</p> Signup and view all the answers

    True or false: Competitive advantage is derived from performing value chain activities more efficiently than competitors.

    <p>True</p> Signup and view all the answers

    True or false: The scope of logistics management spans from the management of raw materials to the delivery of the final product.

    <p>True</p> Signup and view all the answers

    True or false: Supply chain management is the same as 'vertical integration'.

    <p>False</p> Signup and view all the answers

    True or false: Virtual organizations are focused on their 'core business' and outsource everything else.

    <p>True</p> Signup and view all the answers

    True or false: Supply chain competition means that organizations can still act as isolated entities in competition with other stand-alone organizations.

    <p>False</p> Signup and view all the answers

    True or false: The ground rules for marketing success in the past were strong brands backed up by large advertising budgets and aggressive selling.

    <p>True</p> Signup and view all the answers

    True or false: Organisations gain an advantage in the marketplace by performing fundamental activities in a more cost-effective way than their competitors.

    <p>True</p> Signup and view all the answers

    True or false: The globalisation of industry has led to shorter product life cycles and an increased demand for just-in-time deliveries.

    <p>True</p> Signup and view all the answers

    True or false: Global companies like Hewlett Packard and Caterpillar use global logistics channels to supply parts to offshore assembly plants and after-markets.

    <p>True</p> Signup and view all the answers

    True or false: The trend towards globalisation has led to shorter supply chains as companies move production offshore or source from more distant locations.

    <p>False</p> Signup and view all the answers

    True or false: The ability to respond to customers' requirements in ever-shorter time-frames has become critical in today's just-in-time world.

    <p>True</p> Signup and view all the answers

    True or false: Agility refers to the ability to move quickly and meet customer demands.

    <p>True</p> Signup and view all the answers

    True or false: Reliability can only be improved through re-engineering the processes that impact performance.

    <p>True</p> Signup and view all the answers

    True or false: Resilient supply chains are more vulnerable to disruption and the risk to business continuity is increased.

    <p>False</p> Signup and view all the answers

    True or false: Partnership sourcing involves seeking mutually beneficial, long-term relationships with suppliers.

    <p>True</p> Signup and view all the answers

    True or false: Supply chain management is about the management of relationships across complex networks of companies that are legally independent.

    <p>True</p> Signup and view all the answers

    True or false: Supply chain management is a wider concept than logistics.

    <p>True</p> Signup and view all the answers

    True or false: The supply chain becomes the value chain.

    <p>True</p> Signup and view all the answers

    True or false: The mission of logistics management is to efficiently distribute goods.

    <p>True</p> Signup and view all the answers

    True or false: The changing competitive environment has no impact on the supply chain.

    <p>False</p> Signup and view all the answers

    True or false: Supply chain management is a narrower concept than logistics.

    <p>False</p> Signup and view all the answers

    True or false: Agility refers to the ability to move quickly and meet customer demands.

    <p>True</p> Signup and view all the answers

    True or false: 'Big is beautiful' refers to the impact of economies of scale and the experience curve in achieving cost advantage?

    <p>True</p> Signup and view all the answers

    True or false: Logistics and supply chain management can contribute significantly to reducing unit costs?

    <p>True</p> Signup and view all the answers

    True or false: Competitive advantage is derived from performing value chain activities more efficiently than competitors?

    <p>True</p> Signup and view all the answers

    True or false: Supply chain management is the same as 'vertical integration'?

    <p>False</p> Signup and view all the answers

    True or false: The changing competitive environment can have a considerable impact on logistics and supply chain management?

    <p>True</p> Signup and view all the answers

    True or false: GANT is an example of a virtual organization that creates value across a network?

    <p>True</p> Signup and view all the answers

    True or false: The ability to respond to customers' requirements in ever-shorter time-frames has become critical in today's just-in-time world.

    <p>True</p> Signup and view all the answers

    True or false: Significant improvements in reliability can only be achieved through re-engineering the processes that impact performance.

    <p>True</p> Signup and view all the answers

    True or false: Resilient supply chains may not be the lowest-cost supply chains but they are more capable of coping with the uncertain business environment.

    <p>True</p> Signup and view all the answers

    True or false: The trend towards customers seeking to reduce their supplier base has already been commented upon.

    <p>True</p> Signup and view all the answers

    True or false: Supply chain management is primarily concerned with managing relationships to achieve a more profitable outcome for all parties.

    <p>True</p> Signup and view all the answers

    True or false: Partnership sourcing involves seeking mutually beneficial, long-term relationships with suppliers.

    <p>True</p> Signup and view all the answers

    True or false: Supply chain competition means that organizations can no longer act as isolated and independent entities in competition with other similarly 'stand-alone' organizations.

    <p>True</p> Signup and view all the answers

    True or false: The trend towards globalisation has led to shorter supply chains as companies move production offshore or source from more distant locations.

    <p>False</p> Signup and view all the answers

    True or false: The ability to respond to customers' requirements in ever-shorter time-frames has become critical in today's just-in-time world.

    <p>True</p> Signup and view all the answers

    True or false: The globalisation of industry has led to shorter product life cycles and an increased demand for just-in-time deliveries.

    <p>True</p> Signup and view all the answers

    True or false: Supply chain management focuses on achieving linkage and coordination between suppliers, customers, and the organization itself.

    <p>True</p> Signup and view all the answers

    True or false: Organizations gain an advantage in the marketplace by performing fundamental activities in a more cost-effective way than their competitors.

    <p>True</p> Signup and view all the answers

    True or false: Logistics is essentially a planning orientation and framework that seeks to create a single plan for the flow of products and information through a business.

    <p>True</p> Signup and view all the answers

    True or false: Supply chain management builds upon the framework of logistics and seeks to achieve linkage and coordination between the processes of other entities in the pipeline.

    <p>True</p> Signup and view all the answers

    True or false: Supply chain management focuses on the management of relationships in order to achieve a more profitable outcome for all parties in the chain.

    <p>True</p> Signup and view all the answers

    True or false: The phrase 'supply chain management' should be replaced with 'demand chain management' to reflect the market-driven nature of the chain.

    <p>True</p> Signup and view all the answers

    True or false: Successful companies either have a cost advantage or a value advantage, or a combination of the two.

    <p>True</p> Signup and view all the answers

    True or false: The most profitable competitor in any industry sector tends to be the lowest-cost producer or the supplier providing a product with the greatest perceived differentiated values.

    <p>True</p> Signup and view all the answers

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