Supply Chain Management Objective Set 3

Q1: Building some excess capacity in a supply chain network allows a firm within the supply chain to 

Answer

Answer: produce more in facilities that have a lower cost based on current exchange rates.

Q2: A firm focusing on responsiveness attempts to 

Answer

Answer: locate facilities nearer to the market.

Q3: What is a facility that offers a low cost supply of labour and/or materials for markets located outside the country known as 

Answer

Answer: An offshore facility

Q4: A facility that is established in a region in order to overcome tariff barriers and a high logistics cost as also to address local content requirement with a view to supplying its products/services to a specific market is known as 

Answer

Answer: a server facility.

Q5: A facility established in a region with a view to obtaining local knowledge or skills available in that region is known as 

Answer

Answer: an outpost facility.

Q6: A facility that is set up in a region with the main objective of obtaining low cost products subsequently becoming the primary source of a product for the global network is known as 

Answer

Answer: a source facility.

Q7: A facility that serves the market where it is located but also assumes responsibility for product customization, process improvements, product modifications, or supplier development is known as 

Answer

Answer: a contributor facility.

Q8: A facility that not only taps into local knowledge or skills but also creates new processes, products, or technologies for the entire network is known as 

Answer

Answer: a lead facility.

Q9: A global firm that has its production facilities in India and sells its products in the international markets will have higher profits 

Answer

Answer: if the rupee becomes weaker compared to the dollar.

Q10: Economies of scale in transportation is achieved 

Answer

Answer: when the mode of shipment is FTL

Q11: Economies of distance in transportation is achieved 

Answer

Answer: when the distance travelled is long and the utilization of the vehicle is high

Q12: Transportation cost in most cases is a function of the 

Answer

Answer: weight of the product

Q13: For products with high level of uncertainty in demand, the following strategy is suitable 

Answer

Answer: use of a faster mode of transportation and higher amount of safety stock

Q14: For products with a high volume and a stable demand, the following strategy is suitable 

Answer

Answer: Use of slower mode of transportation and a higher amount of cycle stock

Q15: Which mode of transportation is considered to be the least expensive 

Answer

Answer: Water

Q16: Which mode of transportation is considered to be the most expensive 

Answer

Answer: Air

Q17: Which mode of transportation has the capacity to carry the maximum lot size 

Answer

Answer: Water

Q18: Which mode of transportation has the highest delivery time variability 

Answer

Answer: Water

Q19: Which mode of transportation causes the maximum amount of loss and damage 

Answer

Answer: Rail

Q20: Retailing on the web is likely to be beneficial for items which have 

Answer

Answer: High product variety, high value density and high demand uncertainty

Q21: Inventory carried for the purpose of providing flexibility to each decision-making unit to manage its operations independently is known as 

Answer

Answer: Decoupling inventory

Q22: Cycle inventory helps in 

Answer

Answer: taking advantage of economies of scale and reducing cost within the supply chain

Q23: The inventory which is dependent on alternative modes of transportation is known as 

Answer

Answer: Pipeline inventory

Q24: In an automobile manufacturing facility, the management has brought down the cost of ordering of automotive components from Rs 500 to Rs 50 through the introduction of electronic ordering. The annual demand of cars is 15,000 units. Inventory carrying cost of automotive components is Rs 20 per unit per year. The inventory turnover ratio in both the cases would be 

Answer

Answer: 34.64 and 109.48

Q25: In an automobile manufacturing facility, the management has brought down the cost of ordering of automotive components from Rs 500 to Rs 50 through the introduction of electronic ordering. The annual demand of cars is 15,000 units. Inventory carrying cost of automotive components is Rs 20 per unit per year. Now assume the company runs its manufacturing operation for 300 days a year. Number of days inventory to be carried in both the cases would be 

Answer

Answer: 8.66 and 2.74

Q26: The best strategy of minimizing the amount of safety inventory to be kept in a store without hurting the level of customer service is 

Answer

Answer: minimizing the uncertainty inherent in supply

Q27: Higher demand uncertainty provides higher savings by pooling which of the following inventory 

Answer

Answer: Safety inventory

Q28: Higher number of stock points required for risk pooling results in higher savings in terms of 

Answer

Answer: cycle inventory

Q29: Decentralized system will provide benefits for the items which 

Answer

Answer: are fast moving and have low demand variability

Q30: Which of the following is not considered a primary activity in the value chain framework developed by Michael Porter 

Answer

Answer: Procurement

Q31: Which of the following is not considered a secondary activity in the value chain framework developed by Michael Porter 

Answer

Answer: Sales and service

Q32: In order to maintain leadership in its product offerings, which of the following make or buy decision(s) will a firm undertake 

Answer

Answer: It will carry out the brand management function itself and outsource the IT management function to a third party

Q33: The core processes of a firm are 

Answer

Answer: CRM, Product innovation and SCM

Q34: In order to maintain its core competence, high-end pharmaceutical firms should focus on 

Answer

Answer: Product innovations

Q35: In order to maintain its corporate image in the market, Wal-Mart should focus on 

Answer

Answer: Supply chain management

Q36: For the purpose of identifying a firm’s core processes through product architecture route, a sub-system is considered strategic if 

Answer

Answer: It involves fast changing technology, requires specialized skills and has significant impact on the performance of the product on important customer attributes

Q37: Costs incurred in connection with the control and co-ordination of external suppliers are known as 

Answer

Answer: Transaction costs

Q38: Costs incurred in connection with the control and co-ordination of internal supply chain are known as 

Answer

Answer: Agency costs

Q39: Which one of the following costs is tangible in nature 

Answer

Answer: Economies of scale

Q40: Which one of the following is not true regarding relationship-specific asset 

Answer

Answer: It can be redeployed for other customers without any significant cost.

Q41: The items with high strategic importance and high supply risk are termed as 

Answer

Answer: Strategic items

Q42: The items with low strategic importance and high supply risk are termed as 

Answer

Answer: Bottleneck items

Q43: The items with high strategic importance and low supply risk are termed as 

Answer

Answer: Leverage items

Q44: The items with low strategic importance and low supply risk are termed as 

Answer

Answer: Routine items

Q45: Transaction costs do not include 

Answer

Answer: Costs incurred in control and coordination of internal supply

Q46: Make or buy decisions are taken/reviewed very frequently 

Answer

Answer: Wrong – False

Q47: Once a firm identifies its core and non-core processes, it should carry out its core processes on its own and outsource its non-core processes to a third-party in most of the cases in order to maintain leadership in the market 

Answer

Answer: Correct – True

Q48: Each and every element of the core business process of a firm should be carried out by the firm itself in order to maintain leadership in the market 

Answer

Answer: Wrong – False

Q49: When a firm decides to outsource some core processes/sub-systems, it need not keep the necessary architecture knowledge in-house 

Answer

Answer: Wrong – False

Q50: Make versus buy decision is also known as market versus hierarchy decision 

Answer

Answer: Correct – True

Q51: In the hierarchical form of relationship, a firm has greater control over co-ordination and also takes advantage of economies of scale 

Answer

Answer: Wrong – False

Q52: Tapered integration allows a firm to do part of the manufacturing in-house and outsource the remaining part to a third party 

Answer

Answer: Correct – True

Q53: In a collaborative relationship, it is always advisable to maintain long-term relationship with the suppliers irrespective of the market conditions 

Answer

Answer: Wrong – False

Q54: Reverse auction works well for items in the low supply-risk category items 

Answer

Answer: Correct – True

Q55: Internet and e-commerce have brought about a fundamental change in the sourcing strategy of a firm 

Answer

Answer: Wrong – False

Q56: The push-pull boundary located at the beginning of a supply chain is known as 

Answer

Answer: make-to-order (MTO) supply chain.

Q57: The push-pull boundary located at the end of a supply chain is known as 

Answer

Answer: make-to-stock (MTS) supply chain.

Q58: The push-pull boundary located at the interface between component manufacturing and assembly of a supply chain is known as 

Answer

Answer: configure-to-order (CTO) supply chain.

Q59: Which one of the following does not constitute the dimensions of customer service from the perspective of a supply chain 

Answer

Answer: Product life span

Q60: Customer service dimension(s) used to characterize a supply chain is/are 

Answer

Answer: Order delivery lead time and responsiveness

Q61: Functional products are characterized by 

Answer

Answer: uncertain demand and low variety.

Q62: Innovative products are characterized by 

Answer

Answer: uncertain demand and short life cycle

Q63: Which of the following is not true 

Answer

Answer: FMCGs should have a responsive supply chain.

Q64: Which of the following is/are true 

Answer

Answer: During the growth stage of a product/service, companies need to develop a responsive supply chain while during the maturity stage, companies need to develop a responsive supply chain.

Q65: A firm that does not lie on the efficiency frontier can improve 

Answer

Answer: both responsiveness and cost performance.

Q66: A firm that lies on the efficiency frontier can improve 

Answer

Answer: only responsiveness or only cost performance or both responsiveness and cost performance simultaneously by improving processes and technology

Q67: Which of the following supply chain performance measure does not fall under the SCOR model 

Answer

Answer: Product variety

Q68: The parameter(s) for supply chain benchmarking is/are captured by the following measure 

Answer

Answer: total length of the chain, supply chain inefficiency ratio and supply chain working productivity

Q69: When a firm lies on the efficiency frontier, it is possible to improve the performance of the firm on both responsiveness and efficiency through 

Answer

Answer: Supply chain optimization, integration and restructuring

Q70: The supply chain lead time is the time taken by a supply chain to complete all the activities from the placement of customer order to the delivery of customer order 

Answer

Answer: Wrong – False

Q71: Activities along a supply chain which precede customer order penetration point do not face any uncertainty 

Answer

Answer: Wrong – False

Q72: The supply chain strategy of a firm should be formulated at the beginning of its product life cycle and thereafter should not be altered in the entire life cycle of the product 

Answer

Answer: Wrong – False

Q73: In the case of new technology products, firms generally face volume uncertainty instead of product-mix uncertainty 

Answer

Answer: Correct – True

Q74: In the case of innovative products, such as garments and jewellery, firms generally face volume uncertainty instead of product-mix uncertainty 

Answer

Answer: Wrong – False

Q75: Contribution margin is higher in case of functional products than that of innovative products 

Answer

Answer: Wrong – False

Q76: Likely forecast error is higher in case of innovative products than that of functional products 

Answer

Answer: Correct – True

Q77: Delivery reliability and product reliability are the same if a firm operates under the MTS model 

Answer

Answer: Correct – True

Q78: The SCOR model of SC performance measures does not capture customer order delivery time 

Answer

Answer: Correct – True

Q79: The supply chain inefficiency ratio measures the efficiency of both internal as well as external supply chain 

Answer

Answer: Wrong – False

Q80: Functional products require a smooth flow of materials in the system and do not need much inventory, and as such the focus should be on supply chain restructuring 

Answer

Answer: Wrong – False

Q81: Innovative products require flexibility in the supply chain which is possible by keeping higher inventory at appropriate locations, and as such the focus should be on supply chain integration 

Answer

Answer: Wrong – False

Q82: If a customer visiting a departmental store cannot find his desired soap manufactured by Hindustan Unilever Ltd (HUL) in the store, which of the following chain partner will he hold responsible for the non-availability of the soap 

Answer

Answer: The departmental store

Q83: Which of the following sequence is true 

Answer

Answer: Sourcing ? Inbound logistics ? Conversion into finished goods ? Outbound logistics ? Retailing

Q84: Supply chain is concerned with the 

Answer

Answer: flow of materials in the forward direction, cash in the reverse direction and information in both the directions

Q85: The objective of a supply chain is 

Answer

Answer: to improve the efficiency and responsiveness across the whole supply chain and also deliver improved value to the customers

Q86: Which of the following statements is true 

Answer

Answer: Dell supply chain believed in medium-term relationship with the suppliers with loosely held supplier network.

Q87: In today’s supply chain, there has been a shift in the power structure in a chain towards 

Answer

Answer: Retailers

Q88: If the focus of a retailer is to achieve leadership in cost, then which of the following phenomenon will hold good 

Answer

Answer: Customers will prefer a large variety of products but the retailer will not keep a large variety in the store in order to achieve economies of scale.

Q89: The companies will realize the benefits of implementing IT when which of the following is undertaken 

Answer

Answer: Companies need to re-engineer their supply chain structure and undertake revision in the supporting organizational processes.

Q90: Ford supply chain is characterized by 

Answer

Answer: Vertical integration

Q91: Toyota supply chain is characterized by 

Answer

Answer: Long-term relationship with the suppliers

Q92: Dell supply chain is characterized by 

Answer

Answer: Individual customization

Q93: A 3PL is a logistics service provider meeting only the logistics requirements of an organization while 4PL is a logistics service provider meeting the logistics requirements of an organization and can also integrate its resources, capability and technology to provide comprehensive solution to its customers 

Answer

Answer: Correct – True

Q94: Which one of the following is not the supply challenge being faced by the Indian organizations 

Answer

Answer: IT implementation

Q95: Toyota supply chain is highly flexible in terms of maintaining relationship with the suppliers 

Answer

Answer: Wrong – False

Q96: A supply chain could be more accurately described as a supply network or a supply web 

Answer

Answer: Correct – True

Q97: Dell computers have encouraged the suppliers to locate their plants close to the Dell Assembly plants 

Answer

Answer: Wrong – False

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