chap04.doc

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Department
Supply Chain Management
Course
33:799:301
Professor
spiegel
Semester
Fall

Description
Chapter 4—Strategic Sourcing for Successful Supply Chain Management TRUE/FALSE 1. Retail items, which would likely be found at a store like Target or Wal-Mart, like lamps, blankets, microwave ovens, and candy bars would be classified as innovative products. ANS: F PTS: 1 2. Retail items, which would likely be found at a store like Target or Wal-Mart, like lamps, blankets, microwave ovens, and candy bars would be classified as functional products. ANS: T PTS: 1 3. According to the text, driving your suppliers to offer the lowest possible prices, which in turn will lower your cost of goods sold, could prove to be harmful to buyer-supplier relationships and may also decrease the quality levels of the items produced using your suppliers' low cost components. ANS: T PTS: 1 4. According to the text, driving your suppliers to offer the lowest possible prices, which in turn will lower your cost of goods sold, could prove to be beneficial to buyer-supplier relationships since it intensifies competition between suppliers and will likely increase the quality levels of the items produced. ANS: F PTS: 1 5. "Rationalizing the supplier base" would mean that the purchasing firm is attempting to reduce the number of suppliers in its supplier network by eliminating poor performing suppliers in its present supplier base. ANS: T PTS: 1 6. "Rationalizing the supplier base" would mean that the purchasing firm is attempting to strengthen its present supplier base through certification programs in an effort to improve their output quality. ANS: F PTS: 1 7. Because internationally recognized certifications like ISO 9000 are becoming so common among suppliers, it is becoming more important that purchasing firms develop internal certification programs that are geared toward the specific needs of the purchasing organization. ANS: T PTS: 1 8. Product parts, processes, and product assembly should all be designed by the manufacturing firm to assure a single-minded approach that the suppliers can follow. Supplier involvement in these design phases is considered counterproductive. ANS: F PTS: 1 9. While most companies pursuing a sustainable purchasing program are focusing on paper, retailers like Corporate Express and Staples say they are seeing an increased demand for sustainable products across the board. ANS: T PTS: 1 10. While most companies pursuing a sustainable supply chain program are focusing on efficient and clean transportation of cargo, few see any benefits in utilizing sustainable purchasing initiatives. ANS: F PTS: 1 11. While paperless transactions are now possible through e-procurement and Web-based services, these would NOT be considered sustainable business practices. ANS: F PTS: 1 12. Paperless transactions are now possible through e-procurement and Web-based services, these would all be considered sustainable business practices. ANS: T PTS: 1 13. While a manufacturer may have substantial influence over its first tier suppliers, their influence over second and third tier suppliers is typically much higher. ANS: F PTS: 1 14. Manufacturers typically have very little influence over second and third tier suppliers when compared to the influence they hold over first tier suppliers. ANS: T PTS: 1 15. Reverse auctions are often run via third party providers known as application service providers (ASP's). These ASPs often charge both buyers and sellers a fee for participating in these reverse auctions. ANS: T PTS: 1 16. Some strategic supplier agreements reward the highest performing suppliers with a share of the cost reductions resulting from supplier improvements, additional purchasing contracts, or contract extensions on existing contracts. ANS: T PTS: 1 17. According to the textbook, Wal-Mart is perhaps the company that is most averse to implementing sustainable business practices. ANS: F PTS: 1 18. Companies that experience late deliveries or low product quality from their supplier may resort to insourcing. ANS: T PTS: 1 19. Companies that lack internal expertise in a specific functional area would likely consider insourcing. ANS: F PTS: 1 MULTIPLE CHOICE 1. Which of the following would most likely be considered a functional product? a. PDA − Personal Digital Assistant b. HDTV − High Definition Televisions c. DVD recorders d. Disposable Camera ANS: D PTS: 1 2. Which of the following is NOT a step suggested in the Supply Chain Sourcing Strategy Framework? a. Classify supplier items as either innovative or functional b. Define the goals of the supply chain and check for consistency with products and firm strategy c. Distribute free samples of all purchased products to the end-user for detailed evaluation and feedback on supply chain development d. Identify and evaluate the capabilities of suppliers and then identify areas which could be improved ANS: C PTS: 1 3. Which of the following are considered outcomes of implementing a supplier evaluation and selection criteria? a. Allows firm to screen out poor performing suppliers in its present supplier base. b. Allows firm to screen out undesirable suppliers that they may be considering for future purchases. c. Allows firm and its suppliers to develop a better corporate relationship d. All of these ANS: D PTS: 1 4. An outsourcing program can result in all of the following positive outcomes, except: a. Reducing staffing levels b. Decreased need for supplier management c. Cost reduction d. Gains in manufacturing flexibility ANS: B PTS: 1 5. According to the textbook, collaborative relationships place a relatively lower importance rating on which of the following competitive priorities: a. Speed of Delivery b. Cost c. Product Quality d. Frequency of deliveries ANS: B PTS: 1 6. Benchmarking is: a. A system of performance metrics that seeks to motivate suppliers to perform better. b. A practice where companies attempt to learn and apply the best practices of other companies. c. A system of marking defective inbound inventory so it can quickly be identified for return to the supplier. d. A program where suppliers compete for contracts, but those companies who are outbid are provided advice for winning future contracts ANS: B PTS: 1 7. Which of the following is FALSE? a. The use of 3PL's has been increasing as companies seek more effective supply chain strategies. b. VMI provides retail facilities the opportunity to communicate to manufacturers that the customers are requesting customized items c. The use of 3PL providers allows companies to gain competitive advantages without having to gain the required knowledge through firsthand experience. d. VMI allows suppliers to manage their customers' inventory provided they have the capability to see inventory levels in real time ANS: B PTS: 1 8. Which of the following is TRUE? a. VMI stands for Vertically Managed Inventory b. 3PL stands for Third Party Leverage c. VMI stands for Vendor-Managed Inventory d. 3PL stands for Three Point Logistics ANS: C PTS: 1 9. Which of the following is TRUE? a. VMI stands for Vertically Managed Inventory b. 3PL stands for Third Party Logistics c. VMI stands for Vendor Manufactured Items d. 3PL stands for Three Point Logistics ANS: B PTS: 1 10. The inventory level where suppliers replenish their customer's inventory with a predetermined order quantity is called the: a. Channel Equity Level b. Reorder point c. Bill Back d. MRO point ANS: B PTS: 1 11. The management of the firm's external resources through identification and selection of suppliers, management of supplier relationships, and monitoring and rewarding supplier performance in an effort to support the long-term goals of the organization is called: a. Buyer-supplier integration b. Acceptance sampling c. Procurement rationalization d. Strategic sourcing ANS: D PTS: 1 12. Hard-bargaining sourcing departments focused on decreasing purchasing spend may experience which of the following from their suppliers? a. Lower levels of quality from their suppliers b. Lower levels of service from their suppliers c. Deteriorating buyer-supplier relationships d. All of these ANS: D PTS: 1 13. According to the EcoMarkets survey, which surveys over 6000 private and public buyers, the most popular aspect of green sourcing is: a. Recycling b. Material reuse c. Energy conservation d. Packaging reuse ANS: C PTS: 1 14. According to the textbook, which is typically utilized when companies are deciding whether or not to outsource? a. Acceptance sampling b. Make-or-buy analysis c. Selective sourcing analysis d. Benchmarking ANS: B PTS: 1 15. Which of the following is the most accurate definition of a reverse auction? a. An auction where buyers attempt to outbid each other for the services of a supplier b. An auction where suppliers continuously attempt to guess the amount a buyer has established as the "buy price" c. An auction where a number of suppliers try to underbid their competition in hopes of gaining a buyer's contract d. An auction where competing buyers continuously bid lower and competing suppliers bid higher until 1 buyer and 1 supplier agree upon an acce
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