Chapter 1 Test Bank PDF

lOMoARcPSD|28144440 chapter 1 test bank Supply Chain Management (McMaster University) Scan to open on Studocu Studocu is not sponsored or endorsed by any college or university Downloaded by lit trench (randomst...

lOMoARcPSD|28144440 chapter 1 test bank Supply Chain Management (McMaster University) Scan to open on Studocu Studocu is not sponsored or endorsed by any college or university Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 Supply Chain Management, 6e (Chopra/Meindl) Chapter 1 Understanding the Supply Chain 1.1 True/False Questions 1) A supply chain could be more accurately described as a supply network or supply web. Answer: TRUE Diff: 2 Topic: 1.1 What Is a Supply Chain? AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 2) All stages of an enterprise are involved, either directly or indirectly, in fulfilling a customer request. Answer: TRUE Diff: 2 Topic: 1.1 What Is a Supply Chain? AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 3) A supply chain includes only the organizations directly involved in supplying components needed for manufacturing. Answer: FALSE Diff: 2 Topic: 1.2 The Objective of a Supply Chain AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 4) The objective of every supply chain is to maximize the overall value generated. Answer: TRUE Diff: 1 Topic: 1.2 The Objective of a Supply Chain AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 5) The objective of the customer arrival process is to ensure that orders are quickly and accurately entered and communicated to other affected supply chain processes. Answer: FALSE Diff: 2 Topic: 1.2 The Objective of a Supply Chain AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 1 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 6) The objective of customer order entry is to maintain a record of product receipt and complete payment. Answer: FALSE Diff: 3 Topic: 1.2 The Objective of a Supply Chain AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 7) The difference between the value of the product and its price remains with the customer as consumer surplus. Answer: TRUE Diff: 1 Topic: 1.2 The Objective of a Supply Chain AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 8) The supply chain planning phase exceeds the supply chain design phase in duration. Answer: FALSE Diff: 2 Topic: 1.4 Decision Phases in a Supply Chain AACSB: Application of knowledge Objective: LO 1.2: Identify the three key supply chain decision phases and explain the significance of each one. 9) The goal during the supply chain operation phase is to exploit the reduction of uncertainty and optimize performance. Answer: TRUE Diff: 2 Topic: 1.4 Decision Phases in a Supply Chain AACSB: Application of knowledge Objective: LO 1.2: Identify the three key supply chain decision phases and explain the significance of each one. 10) The replenishment cycle occurs at the retailer/distributor interface. Answer: TRUE Diff: 3 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 2 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 11) The manufacturing cycle occurs at the distributor/manufacturer interface. Answer: TRUE Diff: 2 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 12) The push/pull view of a supply chain holds that the processes in a supply chain are divided into 2 categories depending on whether they are initiated in response to or in anticipation of customer orders. Answer: TRUE Diff: 1 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 13) The production scheduling process in the manufacturing cycle is similar to the order entry process in the replenishment cycle. Answer: TRUE Diff: 3 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 14) The cycle view of a supply chain holds that the processes in a supply chain are divided into 2 categories depending on whether they are initiated in response to or in anticipation of customer orders. Answer: FALSE Diff: 2 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 15) The procurement cycle occurs at the manufacturer/supplier interface. Answer: TRUE Diff: 1 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 16) The cycle view of the supply chain is useful when considering operational decisions, because it specifies the roles and responsibilities of each member of the supply chain. Answer: TRUE Diff: 2 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 3 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 17) Push processes may also be referred to as speculative processes. Answer: TRUE Diff: 1 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 18) All supply chain activities within a firm belong to one of three macro processes — CRM, ISCM and SRM. Answer: TRUE Diff: 1 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.4: Classify the supply chain macro processes in a firm. 19) There is a close connection between the design and management of supply chain flows and the success of a supply chain. Answer: TRUE Diff: 1 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 20) The drawback of Zara's responsive supply chain is that it tends to sell more products at markdown than most of its competitors. Answer: FALSE Diff: 2 Topic: 1.6 Examples of Supply Chains AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 4 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 1.2 Multiple Choice Questions 1) Each stage in a supply chain is connected through the flow of products, information, and funds. These flows often occur in both directions and are usually managed by A) pricing department. B) one of the stages. C) upper management. D) engineering department. Answer: B Diff: 2 Topic: 1.1 What Is a Supply Chain? AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 2) A supply chain features a constant flow of A) information, product and funds. B) personnel, information, and policies. C) processes, funds, and product. D) product, processes, and support. Answer: A Diff: 2 Topic: 1.1 What Is a Supply Chain? AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 3) Which set of supply chain flows is correctly described? A) Funds flow only upstream but information flows both upstream and downstream in a supply chain. B) Product flows only downstream and information flows only upstream in a supply chain. C) Information and product both flow upstream and downstream in a supply chain. D) Funds flow both upstream and downstream but product flows only downstream in a supply chain. Answer: C Diff: 2 Topic: 1.1 What Is a Supply Chain? AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 5 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 4) Which statement about supply chains is best? A) New product development is not a supply chain function. B) If a supplier uses a shipping company to send product to a customer, the shipping company is technically not a supply chain member. C) Funds in a supply chain flow upstream only. D) Flows in a supply chain may be managed by an intermediary. Answer: D Diff: 3 Topic: 1.1 What Is a Supply Chain? AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 5) Which sequence of stages is typical for product flow in a supply chain? A) Supplier → Manufacturer → Distributor B) Retailer → Distributor → Customer C) Manufacturer → Retailer → Distributor D) Supplier → Customer → Retailer Answer: A Diff: 1 Topic: 1.1 What Is a Supply Chain? AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 6) Supply chain surplus involves what two parts? A) Manufacturing cost and selling price B) Customer value and supply chain cost C) Customer value and high quality products D) Reliable transportation and supply chain cost Answer: B Diff: 3 Topic: 1.2 The Objective of a Supply Chain AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 6 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 7) For any supply chain, the source of revenue is generated by A) efficient operations. B) information flows. C) the customer. D) product flows. Answer: C Diff: 3 Topic: 1.2 The Objective of a Supply Chain AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 8) Customer value is A) the sum of the supply chain surplus and supply chain cost. B) the remainder after supply chain cost is subtracted from supply chain surplus. C) the remainder after supply chain surplus is subtracted from supply chain cost. D) supply chain profitability minus the supply chain cost. Answer: A Diff: 3 Topic: 1.2 The Objective of a Supply Chain AACSB: Analytical thinking Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 9) The objective of every supply chain is to A) minimize the overall cost generated. B) maximize the overall value generated. C) minimize the cost to the manufacturer. D) maximize the profit of the manufacturer. Answer: B Diff: 2 Topic: 1.2 The Objective of a Supply Chain AACSB: Analytical thinking Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 10) Retailing in the United States is largely A) push/pull. B) profitable. C) consolidated. D) centralized. Answer: C Diff: 3 Topic: 1.2 The Objective of a Supply Chain AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 7 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 11) For any supply chain, A) management rests solely in the hands of the manufacturer. B) management rests solely in the hands of the distributor. C) if each member focuses on profitability, the overall supply chain profit will be maximized. D) there is only one source of revenue, the customer. Answer: D Diff: 2 Topic: 1.2 The Objective of a Supply Chain AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 12) Webvan designed a supply chain with large warehouses in several major cities in the United States, from which groceries were delivered to customer homes. They failed partly because of A) low demand for their service. B) slow inventory turnover compared to industry averages. C) higher labor costs for picking orders. D) poor quality products. Answer: C Diff: 2 Topic: 1.3 The Importance of Supply Chain Decisions AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 13) A key issue facing Toyota is A) developing an Internet marketing system. B) whether to specialize in a particular market. C) design of its global production and distribution network. D) how to implement model changes. Answer: C Diff: 3 Topic: 1.3 The Importance of Supply Chain Decisions AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 8 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 14) Walmart's supply chain features clusters of stores around distribution centers, which facilitates A) high transportation costs. B) frequent but inexpensive replenishment at the stores. C) rapid design cycles from their R&D group. D) sharing of information with suppliers. Answer: B Diff: 1 Topic: 1.3 The Importance of Supply Chain Decisions AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 15) Which of these statements about Dell's supply chain is best? A) Dell's supply chain surplus was largely driven by their negative shipping model. B) Dell's initial success was largely driven by the ability to accurately forecast what customers wanted and supply those models to retail outlets that carried their computers. C) Dell's initial success was largely driven by their Assembly→Customer supply chain linkage. D) Dell's supply chain consists of only two members, Dell and the customer. Answer: C Diff: 1 Topic: 1.3 The Importance of Supply Chain Decisions AACSB: Analytical thinking Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 16) The decision phases in a supply chain include A) production scheduling. B) customer relationship management. C) supply chain operation. D) supply chain orientation. Answer: C Diff: 2 Topic: 1.4 Decision Phases in a Supply Chain AACSB: Application of knowledge Objective: LO 1.2: Identify the three key supply chain decision phases and explain the significance of each one. 9 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 17) A company would decide whether to outsource or perform a supply chain function in-house during the A) planning phase. B) design phase. C) tactical phase. D) operation phase. Answer: B Diff: 2 Topic: 1.4 Decision Phases in a Supply Chain AACSB: Application of knowledge Objective: LO 1.2: Identify the three key supply chain decision phases and explain the significance of each one. 18) The supply chain strategy category would include a decision about A) which items in the warehouse will be shipped to Malibu. B) which warehouse will supply the Surf City location. C) when the order should be shipped to the little old lady from Pasadena. D) how large the warehouse in Kokomo should be. Answer: D Diff: 2 Topic: 1.4 Decision Phases in a Supply Chain AACSB: Application of knowledge Objective: LO 1.2: Identify the three key supply chain decision phases and explain the significance of each one. 19) The profitability of a supply chain is impacted primarily by the A) design, planning and operation categories of decisions. B) operation category of decisions. C) design and planning categories of decisions. D) planning and operation categories of decisions. Answer: A Diff: 1 Topic: 1.4 Decision Phases in a Supply Chain AACSB: Application of knowledge Objective: LO 1.2: Identify the three key supply chain decision phases and explain the significance of each one. 10 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 20) The time horizon of the operation phase is typically A) quarterly or yearly. B) weekly or daily. C) monthly or quarterly. D) over the next several years. Answer: B Diff: 2 Topic: 1.4 Decision Phases in a Supply Chain AACSB: Application of knowledge Objective: LO 1.2: Identify the three key supply chain decision phases and explain the significance of each one. 21) The cycle view of a supply chain holds that A) the processes in a supply chain are divided into 2 categories. B) the processes in a supply chain are divided into a series of activities performed at the interface between successive stages. C) all processes in a supply chain are initiated in response to a customer order. D) all processes in a supply chain are performed in anticipation of customer orders. Answer: B Diff: 2 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 22) The push/pull view of a supply chain holds that A) the processes in a supply chain are divided into a series of activities performed at the interface between successive stages. B) all processes in a supply chain are initiated in response to a customer order. C) all responses in a supply chain are performed in anticipation of customer orders. D) the processes in a supply chain are divided into 2 categories depending on whether they are initiated in response to or in anticipation of customer orders. Answer: D Diff: 2 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 23) The customer order cycle occurs at the A) customer/retailer interface. B) retailer/distributor interface. C) distributor/manufacturer interface. D) manufacturer/supplier interface. Answer: A Diff: 1 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 11 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 24) Customer arrival refers to A) the point in time when the customer has access to choices and makes a decision regarding a purchase. B) the customer informing the retailer of what they want to purchase and the retailer allocating product to the customer. C) the process where product is prepared and sent to the customer. D) the process where the customer receives the product and takes ownership. Answer: A Diff: 2 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 25) The objective of the customer arrival process is to A) get the correct orders to customers by the promised due date at the lowest possible cost. B) maintain a record of product receipt and complete payment. C) maximize the conversion of customer arrivals to customer orders. D) ensure that orders are quickly and accurately entered and communicated to other affected supply chain processes. Answer: C Diff: 1 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 26) Customer order entry is A) the point in time when the customer has access to choices and makes a decision regarding a purchase. B) the customer informing the retailer of what they want to purchase and the retailer allocating product to the customer. C) the process where product is prepared and sent to the customer. D) the process where the customer receives the product and takes ownership. Answer: B Diff: 2 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 12 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 27) The objective of customer order entry is to A) get the correct orders to customers by the promised due date at the lowest possible cost. B) maintain a record of product receipt and complete payment. C) maximize the conversion of customer arrivals to customer orders. D) ensure that orders are quickly and accurately entered and communicated to other affected supply chain processes. Answer: D Diff: 1 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 28) Customer order fulfillment refers to A) the point in time when the customer has access to choices and makes a decision regarding a purchase. B) the customer informing the retailer of what they want to purchase and the retailer allocating product to the customer. C) the process where product is prepared and sent to the customer. D) the process where the customer receives the product and takes ownership. Answer: C Diff: 2 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 29) The objective of customer order fulfillment is to A) get the correct orders to customers by the promised due date at the lowest possible cost. B) maintain a record of product receipt and complete payment. C) maximize the conversion of customer arrivals to customer orders. D) ensure that orders are quickly and accurately entered and communicated to other affected supply chain processes. Answer: A Diff: 1 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 13 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 30) Customer order receiving is A) the point in time when the customer has access to choices and makes a decision regarding a purchase. B) the customer informing the retailer of what they want to purchase and the retailer allocates product to the customer. C) the process where product is prepared and sent to the customer. D) the process where the customer receives the product and takes ownership. Answer: D Diff: 2 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 31) The replenishment cycle occurs at the A) customer/retailer interface. B) retailer/distributor interface. C) distributor/manufacturer interface. D) manufacturer/supplier interface. Answer: B Diff: 1 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 32) The processes included in the replenishment cycle include A) order arrival. B) production scheduling. C) retail trigger. D) manufacturing. Answer: C Diff: 2 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 33) The manufacturing cycle occurs at the A) customer/retailer interface. B) retailer/distributor interface. C) distributor/manufacturer interface. D) manufacturer/supplier interface. Answer: C Diff: 1 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 14 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 34) The processes involved in the manufacturing cycle include A) order trigger. B) production scheduling. C) order fulfillment. D) order entry. Answer: B Diff: 2 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 35) The production scheduling process in the manufacturing cycle is similar to the A) order receiving process in the replenishment cycle. B) order fulfillment process in the replenishment cycle. C) order entry process in the replenishment cycle. D) order trigger process in the replenishment cycle. Answer: C Diff: 3 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 36) The manufacturing and shipping process in the manufacturing cycle is equivalent to the A) order receiving process in the replenishment cycle. B) order fulfillment process in the replenishment cycle. C) order entry process in the replenishment cycle. D) order trigger process in the replenishment cycle. Answer: B Diff: 3 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 37) The procurement cycle occurs at the A) customer/retailer interface. B) retailer/distributor interface. C) distributor/manufacturer interface. D) manufacturer/supplier interface. Answer: D Diff: 1 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 15 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 38) The relationship between the manufacturer and supplier during the procurement cycle is very similar to the relationship between A) customer and retailer. B) retailer and distributor. C) distributor and manufacturer. Answer: C Diff: 2 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 39) The cycle view of the supply chain is useful when considering operational decisions, because A) it categorizes processes based on whether they are initiated in response to or in anticipation of customer orders. B) it specifies the roles and responsibilities of each member of the supply chain. C) processes are identified as either reactive or speculative. D) it focuses on processes that are external to the firm. Answer: B Diff: 3 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 40) The push/pull view of the supply chain is useful when considering strategic decisions relating to supply chain design, because A) it categorizes processes based on whether they are initiated in response to or in anticipation of customer orders. B) it specifies the roles and responsibilities of each member of the supply chain. C) it clearly defines the processes involved and the owners of each process. D) it focuses on processes that are external to the firm. Answer: A Diff: 3 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 41) Which of the following statements about pull processes is accurate? A) They may also be referred to as speculative processes. B) Execution is initiated in anticipation of customer orders. C) At the time of execution, demand must be forecast. D) They may also be referred to as reactive processes. Answer: D Diff: 1 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 16 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 42) Which of the following statements about push processes is accurate? A) They may also be referred to as speculative processes. B) Execution is initiated in response to customer orders. C) At the time of execution, demand is known with certainty. D) They may also be referred to as reactive processes. Answer: A Diff: 1 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 43) Supply chain macro processes include which of the following? A) Internal Relationship Management (IRM) B) Customer Relationship Management (CRM) C) External Relationship Management (ERM) D) Supply Chain Relationship Management (SCRM) Answer: B Diff: 2 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.4: Classify the supply chain macro processes in a firm. 44) Supply chain macro processes include which of the following? A) Internal Relationship Management (IRM) B) External Relationship Management (ERM) C) Supplier Relationship Management (SRM) D) Supply Chain Relationship Management (SCRM) Answer: C Diff: 2 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.4: Classify the supply chain macro processes in a firm. 45) Activities involved in the Customer Relationship Management (CRM) macro process include A) planning of internal production and storage. B) order fulfillment. C) marketing. D) supply planning. Answer: C Diff: 3 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.4: Classify the supply chain macro processes in a firm. 17 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 46) Activities involved in the Internal Supply Chain Management (ISCM) macro process include A) marketing. B) order fulfillment. C) sales. D) order management. Answer: B Diff: 3 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.4: Classify the supply chain macro processes in a firm. 47) Activities involved in the Supplier Relationship Management (SRM) macro process include A) planning of internal production and storage. B) order fulfillment. C) supplier evaluation and selection. D) order management. Answer: C Diff: 2 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.4: Classify the supply chain macro processes in a firm. 48) A key supply chain difference between Gateway and Apple is that A) Gateway's stores currently carry a large variety of products made by other manufacturers, while Apple carries only Apple products. B) Apple has always carried product in their stores while at one time Gateway stores carried no inventory. C) Gateway has always used a push system while Apple has always used a pull system. D) Gateway has no suppliers, preferring to make everything in-house, while Apple buys many of their components from suppliers. Answer: B Diff: 2 Topic: 1.6 Examples of Supply Chains AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 18 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 49) Zara's supply chain strategy A) results in supply more closely matching customer demand. B) results in longer lead times for store order fulfillment, primarily due to shipping time. C) of purely online sales reduces the costs that they would incur with a brick and mortar store system. D) of high volume but low cost apparel requires production well in advance of the actual selling season for each garment type. Answer: A Diff: 3 Topic: 1.6 Examples of Supply Chains AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 50) Toyota's global complementation strategy A) calls for plants to be devoted to the production of vehicles for only the local market. B) dictates that parts plants be built to supply all of the needs for each vehicle production plant worldwide. C) requires that a single parts plant, for example, for brakes, export brake components to all of its vehicle assembly plants worldwide. D) mandates that plants can produce vehicles for export to markets that remain strong when the local market weakens. Answer: D Diff: 3 Topic: 1.6 Examples of Supply Chains AACSB: Application of knowledge Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm. 19 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 1.3 Essay Questions 1) Explain why supply chain flows are important. Answer: Supply chain flows are important, because there is a close connection between the design and management of supply chain flows (product, information, and cash) and the success of a supply chain. The success of many companies can be directly traced to the design and management of an appropriate supply chain. The failure of many businesses can be linked directly to their inability to effectively design and manage supply chain flows. Diff: 2 Topic: 1.3 The Importance of Supply Chain Decisions AACSB: Application of knowledge Objective: LO 1.2: Identify the three key supply chain decision phases and explain the significance of each one. 2) Explain the 3 decision phases (categories) that must be made in a successful supply chain. Answer: The 3 decision phases that occur within a supply chain are supply chain strategy (or design), supply chain planning and supply chain operation. Decisions relate to the flow of information, product and funds. The difference between categories depends upon the frequency of each decision and the time frame over which it has an impact. During the supply chain strategy phase, a company determines what the chain's configurations will be, how resources will be allocated, and what processes each stage will perform. This will establish the structure of the supply chain for several years. Supply chain planning deals with decisions with a time frame from 3 months up to a year. The planning phase must work within the constraints established in the strategy phase. Planning decisions include which markets to supply from which locations, subcontracting of manufacturing, inventory policies and timing and size of marketing promotions. The supply chain operation phase operates on a weekly or daily time horizon and deals with decisions concerning individual customer orders. Diff: 3 Topic: 1.4 Decision Phases in a Supply Chain AACSB: Application of knowledge Objective: LO 1.2: Identify the three key supply chain decision phases and explain the significance of each one. 20 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 3) Describe the cycle view of the processes within a supply chain. Answer: The cycle view divides the supply chain into a series of 4 cycles between the 5 different stages of a supply chain. The cycles are the customer order cycle, replenishment cycle, manufacturing cycle and procurement cycle. The customer order cycle occurs at the customer/retailer interface and includes all processes directly involved in receiving and filling the customer. The replenishment cycle occurs at the retailer/distributor interface and includes all processes involved in replenishing retailer inventory. The manufacturing cycle typically occurs at the distributor/manufacturer (or retailer/manufacturer) interface and includes all processes involved in replenishing distributor (or retailer) inventory. The procurement cycle occurs at the manufacturer/supplier interface and includes all processes necessary to ensure that the materials are available for manufacturing according to schedule. Diff: 2 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 4) Explain the push/pull view of the processes within a supply chain. Answer: The push/pull view of the supply chain divides supply chain processes into two categories based on whether they are executed in response to a customer order or in anticipation of customer orders. Pull processes are initiated in response to a customer order. Push processes are initiated and performed in anticipation of customer orders. The push/pull boundary separates push processes from pull processes. This view is very useful when considering strategic decisions relating to supply chain design, because it forces a more global consideration of supply chain processes as they relate to the customer. Diff: 2 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 5) Explain the three macro processes within a supply chain. Answer: All processes within a supply chain can be classified into three macro processes which are Customer Relationship Management (CRM), Internal Supply Chain Management (ISCM), and Supplier Relationship Management (SRM). Customer Relationship Management (CRM) includes all processes that focus on the interface between the firm and its customers such as marketing, sales, call center management and order management. Internal Supply Chain Management (ISCM) includes all processes that are internal to the firm such as finalization of demand and supply plans, preparation of inventory management policies, order fulfillment and planning of capacity. Supplier Relationship Management (SRM) includes all processes that focus on the interface between a firm and its suppliers such as evaluation and selection of suppliers, negotiation of supply terms and communication regarding new products and orders. Diff: 2 Topic: 1.5 Process Views of a Supply Chain AACSB: Application of knowledge Objective: LO 1.4: Classify the supply chain macro processes in a firm. 21 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])  lOMoARcPSD|28144440 6) Discuss the differences of push and pull supply chain processes. Answer: Processes in a supply chain fall into one of two categories depending on the timing of their execution relative to end customer demand. With pull processes, execution is initiated in response to a customer order. With push processes, execution is initiated in anticipation of customer orders based on a forecast. Pull processes may also be referred to as reactive processes because they react to customer demand. Push processes may also be referred to as speculative processes because they respond to speculated (or forecasted) rather than actual demand. The push/pull boundary in a supply chain separates push processes from pull processes. Push processes operate in an uncertain environment because customer demand is not yet known. Pull processes operate in an environment in which customer demand is known. They are, however, often constrained by inventory and capacity decisions that were made in the push phase. Diff: 3 Topic: 1.5 Process Views of a Supply Chain AACSB: Analytical thinking Objective: LO 1.3: Describe the cycle and push/pull views of a supply chain. 22 Copyright © 2016 Pearson Education, Inc. Downloaded by lit trench ([email protected])