Chapter B3
Supply Chain Management
Multiple Choice Questions
1. What uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain?
A) Supply chain planning
B) Supply chain execution
C) Supply chain
D) Selling chain management
Answer: A Level: Easy Page: 251
Response: This is the definition of SCP.
2. What automates the different steps and stages of the supply chain?
A) Supply chain planning
B) Supply chain execution
C) Supply chain
D) Selling chain management
Answer: B Level: Easy Page: 251
Response: This is the definition of SCE.
3. What are the four primary drivers of supply chain management?
A) Facilities, inventory, transportation, e-business
B) Facilities, investment, transportation, e-business
C) Facilities, inventory, transportation, information
D) Inventory, investment, transportation, e-business
Answer: C Level: Easy Page: 252
Response: Facilities, inventory, transportation, and information are the four drivers of SCM.
4. What can an organization's supply chain focus on?
A) Efficiency
B) Effectiveness
C) Efficiency or effectiveness
D) None of the above
Answer: C Level: Easy Page: 252
Response: An organization's supply chain can focus on either efficiency or effectiveness.
5. What strategy does Toyota stress in its facilities?
A) Efficiency
B) Effectiveness
C) Inventory
D) None of the above
Answer: B Level: Medium Page: 252
Response: Toyota uses an effectiveness facilities strategy.
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6. What are the three primary components an organization should consider when determining its
facilities strategy?
A) Location, inventory, transportation
B) Location, capacity, operational design
C) Capacity, operational design, information
D) Capacity, operational design, transportation
Answer: B Level: Easy Page: 252
Response: Location, capacity, and operational design determine an organization facilities strategy.
7. Which of the following would an organization choose if it wants to pursue an efficiency strategy for
its location driver?
A) Centralize the location to gain economies of scale
B) Decentralize the locations to be closer to the customers
C) All of the above
D) None of the above
Answer: A Level: Medium Page: 253
Response: An efficiency location is centralized.
8. Which of the following would an organization choose if it wants to pursue an effectiveness strategy
for its location driver?
A) Centralize the location to gain economies of scale
B) Decentralize the locations to be closer to the customers
C) All of the above
D) None of the above
Answer: B Level: Medium Page: 253
Response: An effective location is decentralized.
9. Which of the following increases effectiveness for the facilities driver?
A) Few facilities
B) Centralized facilities
C) Minimal amounts of excess capacity
D) Functional focus operational design
Answer: D Level: Medium Page: 253
Response: A facility that has a functional focus is effective.
10. Which of the following increases efficiency for the facilities driver?
A) Decentralized facilities
B) Large amounts of excess capacity
C) Functional focus operational design
D) Product focus operational design
Answer: D Level: Medium Page: 253
Response: A product focus operational design is efficient.
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Test Bank, Chapter B3
11. Which strategy is Dillard's department store following for its inventory driver?
A) Efficiency
B) Effectiveness
C) Cycle inventory
D) None of the above
Answer: B Level: Medium Page: 253
Response: Dillard's follows a highly-effective SCM strategy.
12. What is the average amount of inventory held to satisfy customer demands between inventory
deliveries?
A) Safety inventory
B) Cycle inventory
C) Performance inventory
D) Capacity inventory
Answer: B Level: Easy Page: 253
Response: This is the definition of cycle inventory.
13. What is extra inventory held in the event demand exceeds supply?
A) Safety inventory
B) Cycle inventory
C) Performance inventory
D) Capacity inventory
Answer: A Level: Easy Page: 254
Response: This is the definition of safety inventory.
14. What is it called if a toy store holds extra inventory for the Christmas season?
A) Safety inventory
B) Cycle inventory
C) Performance inventory
D) Capacity inventory
Answer: A Level: Easy Page: 254
Response: Holding extra inventory for high fluctuations in demand is safety inventory.
15. How will an organization use its transportation driver if it focuses on a highly effective supply
chain?
A) Increase the price of its products by using slower, less expensive transportation methods
B) Decrease the price of its products by using slower, less expensive transportation methods
C) Increase the price of its products by using faster, more costly transportation methods
D) Decrease the price of its products by using faster, more costly transportation methods
Answer: C Level: Medium Page: 254
Response: Effective methods of transportation are expensive and speedy.
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16. How will an organization use its transportation driver if it focuses on a highly efficient supply
chain?
A) Increase the price of its products by using slower, less expensive transportation methods
B) Decrease the price of its products by using slower, less expensive transportation methods
C) Increase the price of its products by using faster, more costly transportation methods
D) Decrease the price of its products by using faster, more costly transportation methods
Answer: B Level: Medium Page: 254
Response: Efficient methods of transportation are inexpensive and slow.
17. What are the transportation components that an organization should consider when determining its
transportation strategy?
A) Method of transportation, transportation effectiveness
B) Transportation route, method of transportation
C) Transportation route by air, truck, or ship
D) Method of transportation by air, truck, or ship
Answer: B Level: Easy Page: 254
Response: Method of transportation and transportation route are the two components of the transportation
driver.
18. What would an organization choose that focuses on transportation efficiency?
A) Ship its products directly to its customers
B) Ship its products to a distributor that ships the products to customers
C) Ship its products to a distributor by air only
D) Ship its products to its customers by boat
Answer: B Level: Medium Page: 254
Response: An efficient transportation route ships goods to a distributor who ships the goods to the
customers.
19. What would an organization choose that focuses on transportation effectiveness?
A) Ship its products directly to its customers
B) Ship its products to a distributor that ships the products to customers
C) Ship its products to a distributor by air only
D) Ship its products to a distributor by boat only
Answer: A Level: Medium Page: 254
Response: An effective transportation route ships goods directly to its customers.
20. What would an organization choose that focuses on information efficiency?
A) Freely share lots of information
B) Share only selected information
C) Charge others for access to its information
D) All of the above
Answer: A Level: Medium Page: 255
Response: An efficient information strategy freely shares lots of information.
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Test Bank, Chapter B3
21. What would an organization choose that focuses on information effectiveness?
A) Freely share lots of information
B) Share only selected information
C) Charge others for access to its information
D) All of the above
Answer: B Level: Medium Page: 255
Response: An effective information sharing strategy shares only selected information.
22. What happens to information in a push technology environment?
A) Receive information
B) Get information
C) Send information
D) Request information
Answer: C Level: Easy Page: 255
Response: A push environment sends information.
23. What does Wal-Mart's supply chain facilities driver focuses on?
A) Efficiency
B) Effectiveness
C) All of the above
D) None of the above
Answer: A Level: Easy Page: 256
Response: Wal-Mart's facilities driver focus on efficiency.
24. What does Wal-Mart's inventory driver focus on?
A) Efficiency
B) Effectiveness
C) All of the above
D) None of the above
Answer: A Level: Easy Page: 256
Response: Wal-Mart's inventory driver focuses on efficiency.
25. What does Wal-Mart's transportation driver focus on?
A) Efficiency
B) Effectiveness
C) All of the above
D) None of the above
Answer: B Level: Easy Page: 256
Response: Wal-Mart's transportation driver focuses on effectiveness.
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26. What does Wal-Mart's information driver focus on?
A) Efficiency
B) Effectiveness
C) All of the above
D) None of the above
Answer: A Level: Easy Page: 256
Response: Wal-Mart's information driver focuses on efficiency.
27. What enables an organization to react more quickly to resolve supply chain issues?
A) Supply chain event management
B) Selling chain management
C) Collaborative engineering
D) Collaborative demand planning
Answer: A Level: Easy Page: 257
Response: This is the definition of SCEM.
28. What applies technology to the activities in the order life cycle from inquiry to sale?
A) Supply chain event management
B) Selling chain management
C) Collaborative engineering
D) Collaborative demand planning
Answer: B Level: Easy Page: 257
Response: This is the definition of selling chain management.
29. What helps organizations reduce their investment in inventory, while improving customer
satisfaction through product availability?
A) Supply chain event management
B) Selling chain management
C) Collaborative engineering
D) Collaborative demand planning
Answer: D Level: Easy Page: 257
Response: This is the definition of collaborative demand planning.
30. What allows an organization to reduce the cost and time required during the design process of a
product?
A) Supply chain event management
B) Selling chain management
C) Collaborative engineering
D) Collaborative demand planning
Answer: C Level: Easy Page: 257
Response: This is the definition of collaborative engineering.
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Test Bank, Chapter B3