Chapter 10
Extending the Organization-Supply Chain Management
Multiple Choice Questions
1. What does the average company spend on production needs?
A) Almost 10 percent of every dollar that it earns
B) Almost 20 percent of every dollar that it earns
C) Almost 40 percent of every dollar that it earns
D) Almost 50 percent of every dollar that it earns
Answer: D Level: Easy Page: 106
Response: The average company spends nearly half of every dollar that it earns on production needs.
2. What year was SCM developed?
A) 1980s
B) 1990s
C) 2000
D) None of the above
Answer: A Level: Medium Page: 106
Response: SCMs inception occurred in the early 1990s.
3. Today, SCM systems focus on extending beyond an organization's four walls to influence:
A) Suppliers
B) Suppliers' supplier
C) Customers' customer
D) All of the above
Answer: D Level: Easy Page: 106
Response: SCM efforts extend beyond an organization's four walls to influence the entire supply chain
including customers, customers' customer, suppliers, and suppliers' supplier.
4. Which of the following is not one of the three main links in the supply chain?
A) Materials flow from suppliers and their "downstream" suppliers at all levels
B) Transformation of materials into semifinished and finished products – the organization's own
production processes
C) Distribution of products to customers and their "downstream" customers at all levels
D) None of the above
Answer: A Level: Medium Page: 106
Response: Materials flow from suppliers and their "upstream" suppliers at all levels.
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Test Bank, Chapter 10
5. Which of the following is the top reason why executives are using SCM to manage extended
enterprises?
A) Inventory reductions/improvements
B) Productivity improvements
C) Cost control/savings
D) Improved visibility into demand/supply
Answer: C Level: Easy Page: 107
Response: According to Figure 3.8, cost control/savings is the number one reason why executives are
using SCM to manage extended enterprises.
6. All of the following are factors driving supply chain management, except:
A) Visibility
B) Speed
C) Customers
D) Competition
Answer: C Level: Easy Page: 108
Response: Customers is not a factor driving supply chain management.
7. Which of the following statements is accurate?
A) DSSs assist decision makers in the design and operation of integrated supply chains
B) DSSs identify opportunities for improvements across the supply chain
C) DSSs identify opportunities for improvement beyond the intuition and insights of even the most
experience managers
D) All of the above
Answer: D Level: Medium Page: 108
Response: Each of the above statements is accurate in regards to SCM and DSSs.
8. DSSs allow managers to examine performance and relationships over the supply chain and among:
A) Suppliers
B) Transportation options
C) Other factors that optimize supply chain performance
D) All of the above
Answer: D Level: Medium Page: 108
Response: Each of the above are used by DSSs to allow managers to examine performance and
relationships over the supply chain.
9. Which of the following is the first principle of supply chain management?
A) Customize the logistics network and focus intensively on the service requirements
B) Listen to signals of market demand and plan accordingly
C) Segment customers by service needs and then tailor services to those particular segments
D) None of the above
Answer: C Level: Hard Page: 109
Response: Segment customers by service needs and then tailor services to those particular segments is the
first principle of supply chain management.
Haag et al., Business Driven Technology
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10. All of the following are principles of supply chain management, except:
A) Customize the logistics network and focus intensively on the service requirements
B) Listen to signals of market demand and plan accordingly
C) Segment customers by service needs and then tailor services to those particular segments
D) Make the sale to suppliers
Answer: D Level: Hard Page: 109
Response: Make the sale to the suppliers is part of the SCM industry best practices.
11. Which of the following is the first SCM industry best practice?
A) Be future oriented
B) Listen to signals of market demand and plan accordingly
C) Wean employees off traditional business practices
D) None of the above
Answer: D Level: Hard Page: 110
Response: Make the sale to suppliers is the first SCM industry best practice.
12. All of the following are SCM industry best practices, except:
A) Listen to signals of market demand and plan accordingly
B) Wean employees off traditional business practices
C) Be future oriented
D) Make the sale to suppliers
Answer: A Level: Hard Page: 110
Response: Listen to signals of market demand and plan accordingly is one of the seven principles of
supply chain management.
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Test Bank, Chapter 10