CHAPTER SEVEN
STRATEGIC SOURCING
KEY REVIEW
True-False Questions
____
1.
Few companies are achieving competitive advantage through supply
chain management.
_____ 2.
Inventory turnover is the average aggregate inventory value divided by cost of
goods sold.
_____ 3.
Supply chain efficiency is measured based on the size of the chain’s
inventory investment.
_____ 4.
Companies can unload noncore activities, shed balance sheet assets, and boost
their return on capital by using third-party service providers.
_____ 5.
Outsourcing moves a firm’s internal activities to outside providers.
_____ 6.
There has been dramatic growth in outsourcing in the logistics area.
_____ 7.
Unions view outsourcing favorably.
_____ 8.
Inventory ties up funds that could be used for other purposes and a firm may
have to borrow money to finance the inventory investment.
_____ 9.
Process postponement refers to the delay of the process step that
differentiates the product as late as possible within the supply chain.
_____ 10.
The bullwhip effect refers to the costs for a company to produce the
goods or services provided to consumers.
Multiple-Choice Questions
_____ 11.
Innovative products:
A.
Include fashionable clothes and computers
B.
Enable a company to achieve a higher profit margin
C.
Typically have a life cycle of just a few months
D.
All of the above
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_____
_____ 13.
_____ 14.
_____ 15.
E.
None of the above
12.
The inventory turnover is mathematically the inverse of the
A.
Gross margin
B.
Weeks-of-supply
C.
Cost of goods sold
D.
Profit
All of the following are true about inventory, except:
A.
Inventory is an investment.
B.
Inventories tie up funds that could be used for other purposes.
C.
Firms may have to borrow money to finance inventory.
D.
All of the above are true.
Functional products are:
A.
Products with short life cycles
B.
Staples people buy in a range of retail locations
C.
Do not include products in gas stations and grocery stores
D
Products that change over time
Reasons to outsource include:
A.
To increase costs
B.
To reduce investments in assets
C.
To focus on new and different areas or activities
D.
To increase investments in assets
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E.
_____ 16.
_____ 17.
_____ 18.
_____ 19.
All of the above
Supply chains that utilize strategies aimed at creating the highest cost efficiency
are:
A.
Efficient supply chains.
B.
Risk-hedging supply chains.
C.
Responsive supply chains.
D.
Agile supply chains.
Supply chains that utilize strategies aimed at being responsive and flexible to
customer needs, while the risks of supply shortages or disruptions are hedged
by pooling inventory and other capacity resources are:
A.
Efficient supply chains.
B.
Risk-hedging supply chains.
C.
Responsive supply chains.
D.
Agile supply chains.
Supply chains that utilize strategies aimed at being flexible to the changing and
diverse needs of customers are:
A.
Efficient supply chains.
B.
Risk-hedging supply chains.
C.
Responsive supply chains.
D.
Agile supply chains.
Supply chains that utilize strategies aimed at pooling and sharing resources in a
supply chain so the risks in supply disruption can be shared are:
A.
Efficient supply chains.
B.
Risk-hedging supply chains.
C.
Responsive supply chains.
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D.
_____ 20.
_____ 21.
Agile supply chains.
Net Revenue
$49,205
Cost of Revenue
40,190
Production Materials on Hand
228
WIP and Finished Goods on Hand
231
Days of Supply in Inventory
4 days
Using the above data, what is the inventory turnover?
A.
59 turns per year
B.
87.56 turns per year
C.
459 turns per year
D.
none of the above
Again using the financial data above, how many weeks of supply does the
company have?
A.
52
B,
59
C.
57
D.
87
E.
87.56
F.
none of the above
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