Chapter 11

Student: ___________________________________________________________________________

1. A company's supply chain involves the flow of materials and information from suppliers, through
production, to the final customer.

True False

2. Supply chain management is collaboration among, and coordination of all the facilities and
activities of companies so that market demand is met as effectively as possible.

True False

3. Supply chains are sometimes called value chains.

True False

4. A company's supply chain comprises the internal flow of materials and information from the point of
receiving inputs from suppliers, through production, to the point of shipping to final customers.

True False

5. Determining the number, location, and capacity of facilities would be considered one of the
tactical/operational activities of supply chain management.

True False

6. As the level of outsourcing increases, the need for supply chain management decreases.

True False

7. EDI is the direct transmission of inter-organizational transactions from computer to computer,

including purchase orders, shipping notices, and more.
Discuss three techniques used in supply chain management.

True False

8. "Quick response" (QR) involves making sales information available to vendors to allow for JIT
replenishment.

True False

9. Efficient consumer response (ECR) is an extension of quick response, initially developed in the
retail clothing industry.

True False

10. Delayed differentiation or postponement adds differentiated features to products early in a

process to achieve a closer match between supply and demand.

True False

11. In retail, cross-docking minimizes handling and warehousing of products in the supply chain by
11. In retail, cross-docking minimizes handling and warehousing of products in the supply chain by
shipping directly from manufacturers to retail outlets.

True False

12. Quick response (QR) results in frequent small-lot shipments and has the benefit of reduced
reliance on forecasts.

True False

13. The extent of vertical integration and outsourcing decisions are strategic (design) supply chain
management activities.

True False

14. One of the major reasons for a company to adopt third party logistics (3PL) is to concentrate on
one's core business.

True False

15. The primary use of radio frequency identification (RFID) in supply chain management is to track
the location of delivery trucks.

True False

16. Distribution requirements planning (DRP) is a pull system based on the same logic of time-
phased planning as material requirements planning (MRP).

True False

17. The role of ERP systems in supply chain management is limited to inventory planning.

True False

18. Relative to bar-codes, RFID tags have the advantage of providing more detailed information, and
being able to be read automatically.

True False

19. Electronic data interchange (EDI) is rapidly becoming obsolete with increased usage of the
internet.

True False

20. Examples of metrics for supply chain performance are logistics costs, percentage of on-time
delivery, and item fill rate.

True False

21. Inventory turnover refers to the speed at which inventory (material) goes through the supply
chain.

True False

22. The faster the material passes through the supply chain, the higher the inventory costs will be,
and the faster the products and services will be delivered to the customer.

True False
23. Supply chain visibility refers to the physical flow of material in supply chain management including
the design of warehouses to make it easier to locate products.

True False

24. Item fill rate refers to the time it takes to have inventory replenished from a supplier.

True False

25. Bullwhip effect refers to a phenomenon in which the demand variations that exist at the customer
end of the supply chain are magnified as orders are generated back through the supply chain.

True False

26. Establishing partnerships with suppliers typically leads to depending on more suppliers and
shorter term relationships.

True False

27. An advantage of the use of e-commerce for supply chain management is that companies can
collect more detailed information about clients' choices.

True False

28. Cross docking is a technique to reduce the need to store inventory at warehouses and distribution
centres.

True False

29. Delayed differentiation/postponement is a technique to minimize the cost of providing product

variety by adding differentiating features late in the supply chain.

True False

30. Holding safety stock inventory at multiple retail outlets rather than at a centralized distribution
centre is an example of risk pooling.

True False

31. Typically, Japanese companies rely on short-term contracts with many suppliers in order to be
consistent with the frequent deliveries and large lot sizes of JIT systems.

True False

32. The purchasing department interfaces with the accounting, engineering design, and operations
functions, along with several other functional areas.

True False

33. The primary goal of purchasing is to negotiate low prices from an organization's suppliers.

True False

34. The primary factors of importance to purchasing are the cost of goods purchased, the quality of
goods and services, and the timing of deliveries of goods or services.

True False

35. The risks of outsourcing include having less control over supplies and lower expertise internally.
35. The risks of outsourcing include having less control over supplies and lower expertise internally.

True False

36. The purchasing cycle ends when the receiving staff are notified that the supplier has shipped the
items.

True False

37. Value analysis examines the function of purchased parts and materials in an effort to reduce
costs.

True False

38. Buyers are more likely to require quotes or use competitive bidding when ordering large quantities
of standard items.

True False

39. Outsourcing refers to buying goods or services from outside sources instead of making the goods
or providing the services in-house.

True False

40. Outsourcing carries the risk of less control over outside suppliers than producing internally.

True False

41. Disintermediation involves terminating the relationship with a supplier as a result of repeated
failures to meet performance expectations.

True False

42. Long-term contracts imply stronger relationships with fewer suppliers.

True False

43. For small orders of standard products or services, competitive bidding is typically used.

True False

44. Decentralized purchasing means buying the same item from multiple suppliers.

True False

45. For large orders of standard products or services, price negotiation is more common than
competitive bidding.

True False

46. An important advantage of decentralized purchasing is the opportunity to obtain lower prices than
with centralized purchasing.

True False

47. Decentralized purchasing can usually offer quicker response than centralized purchasing.

True False
48. Some firms use both centralized and decentralized purchasing.

True False

49. An advantage of decentralized purchasing is the attention given to local needs.

True False

50. Price is the primary determining factor in choosing a supplier.

True False

51. Supplier analysis is the process that evaluates the source of supply in terms of price, quality,
delivery, and service.

True False

52. Spend analysis involves collecting, cleansing, and analyzing data regarding expenditures with the
purpose of reducing costs, improving efficiency, and monitoring compliance with purchasing
policies.

True False

53. The purchasing cycle involves collecting, cleansing, and analyzing data regarding expenditures
with the purpose of reducing costs, improving efficiency, and monitoring compliance with
purchasing policies.

True False

54. Japanese firms tend to use fewer vendors than many of their American counterparts.

True False

55. The closer an organization is to the final customer, the __________ is the demand side of the
supply chain and the __________ is the supply side.

A. shorter; longer

B. shorter; shorter

C. longer; shorter

D. longer; longer

E. slower; faster

56. Which of the following is not a factor that has increased the need for business organizations to
actively manage their supply chains?

A. Increasing reliance on e-commerce for purchasing and logistics services

B. Increasing globalization

C. Increased competition driving efforts to lower costs

D. The complexity of management information systems

 D. The complexity of management information systems

E. The need to manage orders and inventories throughout supply chains

57. Logistics refers to:

I) the movement of materials within a production facility.

II) incoming and outgoing deliveries.
III) the use of information to control the movement of goods.

A. I only

B. II only

C. III only

D. I and II only

E. I, II, and III

58. Overseeing the shipment of incoming and outgoing goods is the function of:

A. traffic management.

B. distribution management.

C. production management.

D. inventory management.

E. purchasing.

59. An item with a holding cost of $500 per year can be shipped by air in 1 day, costing $100, or by
ground in 4 days, costing $25. Assuming the holding costs of $500 per year are based on an
operational year of 365 days, which is cheaper and by how much?

A. Ground is cheaper by $75.00

B. Ground is cheaper by $70.89

C. Ground is cheaper by $72.26

D. Ground and air have the same total cost

E. None of the choices are correct

60. Which of the following is not a motivation for using electronic data interchange (EDI)?

A. Reduction of paper work

B. Frequent deliveries of smaller shipments

 B. Frequent deliveries of smaller shipments

C. Reduction in clerical labour

D. Increased accuracy

E. Increased speed in processing transactions

61. Which of the following is not a benefit of "quick response" for retailers?

A. Reduced dependency on forecasts

B. Reduced transportation costs

C. Reduced inventory holding costs

D. Better match between supply and demand

E. All of the choices are benefits

62. Which of the following is not true about JIT deliveries?

A. Also referred to as "quick response" (QR) in wholesale sectors

B. Small lot sizes

C. Frequent deliveries

D. Decreased transportation cost per unit

E. All of the choices are true

63. Which of the following is an advantage of e-commerce?

I. Reduction of transaction costs

II. Shortened supply chain response times
III. Greater customer loyalty

A. I only

B. II only

C. I and II only

D. II and III only

E. I, II, and III

64. Holding safety stock inventory in one central location rather than in multiple locations is called:

A. postponement.
 A. postponement.

B. outsourcing.

C. risk pooling.

D. cross-docking.

E. vendor-managed inventory.

65. Which of the following is not typically used as a performance attribute/metric commonly used to
measure supply chain performance?

A. Inventory turnover

B. Cost

C. Variety/flexibility (e.g. speed of product changes)

D. Item fill rate

E. Product quality

66. Which of the following is not associated with quick response (QR) replenishment methods?

A. Sales information made available to vendors

B. Regular, periodic orders by retailers

C. Frequent small-lot shipments

D. Reduced dependence on forecasts

E. Closer match between supply and demand

67. Which of the following is considered an advantage of e-commerce for supply chain
management?

A. Substantial reduction of transaction costs

B. Data concerning customers' choices can be collected and analyzed more readily

C. Supply chain response time is reduced

D. Opportunities to reach customers more directly based on disintermediation

E. All of the choices are advantages

68. Which technology allows companies to automatically identify, track, monitor, or locate objects
within the supply chain?

A. Hand-held barcode readers

 A. Hand-held barcode readers

B. Radio frequency identification (RFID) tags

C. Electronic data interchange (EDI) systems

D. E-commerce websites

E. The internet

69. Which statement is not a correct match between technologies and their use in supply chain
management?

A. EDI; direct computer-to-computer transactions

B. RFID tags; automatically reading tags for multiple items

C. ERP software; coordinating resources and functions from a shared database

D. Bar codes; battery activated for reading with wireless device

E. All of the choices are correctly matched

70. Which one of the following is the interface between the firm and the suppliers?

A. Purchasing

B. Production

C. Distribution

D. All of the choices are interfaces

E. None of the choices are interfaces

71. Purchasing may interface with:

A. operations.

B. accounting.

C. receiving staff.

D. design engineering.

E. all of the choices.

72. Which of the following is not a duty of purchasing?

A. Set quality standards for purchased products

 B. Maintaining databases of suppliers

C. Identify sources of supply

D. Establish partnerships with suppliers

E. Negotiating supply contracts

73. The purchasing cycle begins with:

A. selecting a supplier.

B. placing an order.

C. evaluating potential vendors.

D. conducting a value analysis.

E. receiving a requisition.

74. The purchasing cycle ends when the purchasing department is notified that:

A. an order has been placed.

B. potential suppliers have been identified.

C. the supplier has been paid.

D. the supplier has been selected.

E. the order has been received.

75. Examination of the function of purchased parts or materials in an effort to reduce costs and/or
improve performance is called:

A. vendor analysis.

B. value analysis.

C. negotiated purchasing.

D. vendor relations.

E. vendor assessment.

76. Value analysis has the greatest potential for savings for items which have:

A. low cost per unit.

B. low annual cost-volume.

 B. low annual cost-volume.

C. high cost per unit.

D. high annual usage.

E. high annual dollar-volume.

77. Which of the following is not true about value analysis?

A. It involves an examination of the function of purchased parts or products.

B. Its purpose is to reduce costs and/or improve performance of purchased goods or services.

C. It is usually performed only periodically.

D. Representatives from design and operations may work with purchasing.

E. If improvements are identified, purchasing usually has the authority to implement them.

78. Which of the following would not be considered a requirement for creating an effective supply
chain?

A. Close relationships among organizations involved

B. Electronic data interchange (EDI) adopted by all members

C. Effective communication among members

D. Having event management capabilities

E. Supply chain visibility

79. The ability for members to connect in real time to any part of the supply chain to access data such
as forecasts, shipments, inventory levels, and shortages that could impact the timely flow of
products is called:

A. electronic data interchange (EDI).

B. e-commerce.

C. quick response (QR).

D. supply chain visibility.

E. event management.

80. Which of the following is not one of the steps in the purchasing cycle?

A. Receive a requisition

B. Execute a spend analysis

 B. Execute a spend analysis

C. Select a supplier

D. Monitor orders

E. Payment to supplier

81. Which of the following is not a benefit of centralized purchasing?

A. Potential for quantity discounts

B. Better service from suppliers

C. Quick response to local needs

D. Potential for use of purchasing specialists

E. All are potential benefits of centralized purchasing

82. The item fill rate is categorized as which type of supply chain performance metric?

A. Flexibility

B. Cost

C. Variety

D. Delivery

E. Customer service

83. Which of the following is a key consideration when a company chooses a supplier?

A. Lead time and on-time delivery

B. Reputation and financial stability

C. Flexibility in handling changes

D. Quality control procedures of suppliers

E. All of the choices are considered

84. Which of the following is not a decision involved in transport planning?

A. Selecting a mode of transportation

B. Negotiating a transport rate

C. Selecting a carrier
 C. Selecting a carrier

D. Choosing a supplier for the item to be purchased

E. Deciding whether or not to outsource transportation

85. The perspective of business organizations in viewing suppliers as partners is characterized by:

I. price based competitive bidding.

II. reliance on fewer suppliers.
III. long-term contracts.

A. I and II only

B. II only

C. II and III only

D. I and III only

E. I, II, and III

86. The benefits of establishing partnerships with suppliers include:

I higher quality.
II increased delivery speed.
III lower inventories.

A. I and II only

B. II only

C. II and III only

D. I and III only

E. I, II, and III

Chapter 11 Key

1. A company's supply chain involves the flow of materials and information from suppliers, through
production, to the final customer.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #1
Topic: 11-01 Introduction to Supply Chain Management

2. Supply chain management is collaboration among, and coordination of all the facilities and
activities of companies so that market demand is met as effectively as possible.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #2
Topic: 11-01 Introduction to Supply Chain Management

3. Supply chains are sometimes called value chains.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #3
Topic: 11-01 Introduction to Supply Chain Management

4. A company's supply chain comprises the internal flow of materials and information from the point of
receiving inputs from suppliers, through production, to the point of shipping to final customers.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #4
Topic: 11-01 Introduction to Supply Chain Management

5. Determining the number, location, and capacity of facilities would be considered one of the
tactical/operational activities of supply chain management.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #5
Topic: 11-03 Supply Chain Management Activities

6. As the level of outsourcing increases, the need for supply chain management decreases.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #6
Topic: 11-02 The Need for Supply Chain Management

7. EDI is the direct transmission of inter-organizational transactions from computer to computer,

including purchase orders, shipping notices, and more.
Discuss three techniques used in supply chain management.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #7
Topic: 11-07 Supply Chain Management Information Systems

8. "Quick response" (QR) involves making sales information available to vendors to allow for JIT
replenishment.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #8
Topic: 11-04 Efficient Replenishment Methods

9. Efficient consumer response (ECR) is an extension of quick response, initially developed in the
retail clothing industry.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #9
Topic: 11-04 Efficient Replenishment Methods

10. Delayed differentiation or postponement adds differentiated features to products early in a

process to achieve a closer match between supply and demand.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #10
Topic: 11-03 Supply Chain Management Activities

11. In retail, cross-docking minimizes handling and warehousing of products in the supply chain by
shipping directly from manufacturers to retail outlets.
 FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #11
Topic: 11-03 Supply Chain Management Activities

12. Quick response (QR) results in frequent small-lot shipments and has the benefit of reduced
reliance on forecasts.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #12
Topic: 11-04 Efficient Replenishment Methods

13. The extent of vertical integration and outsourcing decisions are strategic (design) supply chain
management activities.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #13
Topic: 11-03 Supply Chain Management Activities

14. One of the major reasons for a company to adopt third party logistics (3PL) is to concentrate on
one's core business.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-03 Describe what logistics is; and know how to select a transportation mode and solve problems; and discuss third-party
logistics and reverse logistics.
Stevenson - Chapter 11 #14
Topic: 11-16 Transport Planning

15. The primary use of radio frequency identification (RFID) in supply chain management is to track
the location of delivery trucks.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #15
Topic: 11-07 Supply Chain Management Information Systems

16. Distribution requirements planning (DRP) is a pull system based on the same logic of time-
phased planning as material requirements planning (MRP).
 phased planning as material requirements planning (MRP).

FALSE
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #16
Topic: 11-05 Distribution Requirements Planning

17. The role of ERP systems in supply chain management is limited to inventory planning.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #17
Topic: 11-07 Supply Chain Management Information Systems

18. Relative to bar-codes, RFID tags have the advantage of providing more detailed information, and
being able to be read automatically.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #18
Topic: 11-07 Supply Chain Management Information Systems

19. Electronic data interchange (EDI) is rapidly becoming obsolete with increased usage of the
internet.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #19
Topic: 11-07 Supply Chain Management Information Systems

20. Examples of metrics for supply chain performance are logistics costs, percentage of on-time
delivery, and item fill rate.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #20
Topic: 11-11 Performance Metrics

21. Inventory turnover refers to the speed at which inventory (material) goes through the supply
21. Inventory turnover refers to the speed at which inventory (material) goes through the supply
chain.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #21
Topic: 11-11 Performance Metrics

22. The faster the material passes through the supply chain, the higher the inventory costs will be,
and the faster the products and services will be delivered to the customer.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #22
Topic: 11-11 Performance Metrics

23. Supply chain visibility refers to the physical flow of material in supply chain management including
the design of warehouses to make it easier to locate products.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #23
Topic: 11-08 Creating an Effective Supply Chain

24. Item fill rate refers to the time it takes to have inventory replenished from a supplier.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #24
Topic: 11-11 Performance Metrics

25. Bullwhip effect refers to a phenomenon in which the demand variations that exist at the customer
end of the supply chain are magnified as orders are generated back through the supply chain.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #25
Topic: 11-02 The Need for Supply Chain Management
26. Establishing partnerships with suppliers typically leads to depending on more suppliers and
shorter term relationships.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #26
Topic: 11-14 Supplier Management and Partnership

27. An advantage of the use of e-commerce for supply chain management is that companies can
collect more detailed information about clients' choices.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #27
Topic: 11-13 E-Commerce

28. Cross docking is a technique to reduce the need to store inventory at warehouses and distribution
centres.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-03 Describe what logistics is; and know how to select a transportation mode and solve problems; and discuss third-party
logistics and reverse logistics.
Stevenson - Chapter 11 #28
Topic: 11-03 Supply Chain Management Activities

29. Delayed differentiation/postponement is a technique to minimize the cost of providing product

variety by adding differentiating features late in the supply chain.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #29
Topic: 11-03 Supply Chain Management Activities

30. Holding safety stock inventory at multiple retail outlets rather than at a centralized distribution
centre is an example of risk pooling.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #30
Topic: 11-03 Supply Chain Management Activities

31. Typically, Japanese companies rely on short-term contracts with many suppliers in order to be
consistent with the frequent deliveries and large lot sizes of JIT systems.
 consistent with the frequent deliveries and large lot sizes of JIT systems.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #31
Topic: 11-14 Supplier Management and Partnership

32. The purchasing department interfaces with the accounting, engineering design, and operations
functions, along with several other functional areas.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #32
Topic: 11-12 Purchasing

33. The primary goal of purchasing is to negotiate low prices from an organization's suppliers.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #33
Topic: 11-12 Purchasing

34. The primary factors of importance to purchasing are the cost of goods purchased, the quality of
goods and services, and the timing of deliveries of goods or services.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #34
Topic: 11-12 Purchasing

35. The risks of outsourcing include having less control over supplies and lower expertise internally.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #35
Topic: 11-12 Purchasing

36. The purchasing cycle ends when the receiving staff are notified that the supplier has shipped the
items.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #36
Topic: 11-12 Purchasing

37. Value analysis examines the function of purchased parts and materials in an effort to reduce
costs.
 costs.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #37
Topic: 11-12 Purchasing

38. Buyers are more likely to require quotes or use competitive bidding when ordering large quantities
of standard items.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #38
Topic: 11-12 Purchasing

39. Outsourcing refers to buying goods or services from outside sources instead of making the goods
or providing the services in-house.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #39
Topic: 11-02 The Need for Supply Chain Management

40. Outsourcing carries the risk of less control over outside suppliers than producing internally.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #40
Topic: 11-02 The Need for Supply Chain Management

41. Disintermediation involves terminating the relationship with a supplier as a result of repeated
failures to meet performance expectations.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #41
Topic: 11-13 E-Commerce

42. Long-term contracts imply stronger relationships with fewer suppliers.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #42
Topic: 11-14 Supplier Management and Partnership

43. For small orders of standard products or services, competitive bidding is typically used.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #43
Topic: 11-12 Purchasing

44. Decentralized purchasing means buying the same item from multiple suppliers.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #44
Topic: 11-12 Purchasing

45. For large orders of standard products or services, price negotiation is more common than
competitive bidding.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #45
Topic: 11-12 Purchasing

46. An important advantage of decentralized purchasing is the opportunity to obtain lower prices than
with centralized purchasing.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #46
Topic: 11-12 Purchasing

47. Decentralized purchasing can usually offer quicker response than centralized purchasing.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #47
Topic: 11-12 Purchasing

48. Some firms use both centralized and decentralized purchasing.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #48
Topic: 11-12 Purchasing
49. An advantage of decentralized purchasing is the attention given to local needs.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #49
Topic: 11-12 Purchasing

50. Price is the primary determining factor in choosing a supplier.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #50
Topic: 11-14 Supplier Management and Partnership

51. Supplier analysis is the process that evaluates the source of supply in terms of price, quality,
delivery, and service.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #51
Topic: 11-14 Supplier Management and Partnership

52. Spend analysis involves collecting, cleansing, and analyzing data regarding expenditures with the
purpose of reducing costs, improving efficiency, and monitoring compliance with purchasing
policies.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #52
Topic: 11-12 Purchasing

53. The purchasing cycle involves collecting, cleansing, and analyzing data regarding expenditures
with the purpose of reducing costs, improving efficiency, and monitoring compliance with
purchasing policies.

FALSE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #53
Topic: 11-12 Purchasing

54. Japanese firms tend to use fewer vendors than many of their American counterparts.

TRUE
Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #54
Topic: 11-14 Supplier Management and Partnership

55. The closer an organization is to the final customer, the __________ is the demand side of the
supply chain and the __________ is the supply side.

A. shorter; longer

B. shorter; shorter

C. longer; shorter

D. longer; longer

E. slower; faster

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #55
Topic: 11-02 The Need for Supply Chain Management

56. Which of the following is not a factor that has increased the need for business organizations to
actively manage their supply chains?

A. Increasing reliance on e-commerce for purchasing and logistics services

B. Increasing globalization

C. Increased competition driving efforts to lower costs

D. The complexity of management information systems

E. The need to manage orders and inventories throughout supply chains

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #56
Topic: 11-02 The Need for Supply Chain Management

57. Logistics refers to:

I) the movement of materials within a production facility.

II) incoming and outgoing deliveries.
III) the use of information to control the movement of goods.

A. I only

B. II only
 C. III only

D. I and II only

E. I, II, and III

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-03 Describe what logistics is; and know how to select a transportation mode and solve problems; and discuss third-party
logistics and reverse logistics.
Stevenson - Chapter 11 #57
Topic: 11-15 Logistics

58. Overseeing the shipment of incoming and outgoing goods is the function of:

A. traffic management.

B. distribution management.

C. production management.

D. inventory management.

E. purchasing.

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-03 Describe what logistics is; and know how to select a transportation mode and solve problems; and discuss third-party
logistics and reverse logistics.
Stevenson - Chapter 11 #58
Topic: 11-15 Logistics

59. An item with a holding cost of $500 per year can be shipped by air in 1 day, costing $100, or by
ground in 4 days, costing $25. Assuming the holding costs of $500 per year are based on an
operational year of 365 days, which is cheaper and by how much?

A. Ground is cheaper by $75.00

B. Ground is cheaper by $70.89

C. Ground is cheaper by $72.26

D. Ground and air have the same total cost

E. None of the choices are correct

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-03 Describe what logistics is; and know how to select a transportation mode and solve problems; and discuss third-party
logistics and reverse logistics.
Stevenson - Chapter 11 #59
Topic: 11-16 Transport Planning

60. Which of the following is not a motivation for using electronic data interchange (EDI)?

A. Reduction of paper work

 B. Frequent deliveries of smaller shipments

C. Reduction in clerical labour

D. Increased accuracy

E. Increased speed in processing transactions

Accessibility: Keyboard Navigation

Difficulty: Hard
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #60
Topic: 11-07 Supply Chain Management Information Systems

61. Which of the following is not a benefit of "quick response" for retailers?

A. Reduced dependency on forecasts

B. Reduced transportation costs

C. Reduced inventory holding costs

D. Better match between supply and demand

E. All of the choices are benefits

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #61
Topic: 11-04 Efficient Replenishment Methods

62. Which of the following is not true about JIT deliveries?

A. Also referred to as "quick response" (QR) in wholesale sectors

B. Small lot sizes

C. Frequent deliveries

D. Decreased transportation cost per unit

E. All of the choices are true

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #62
Topic: 11-04 Efficient Replenishment Methods
63. Which of the following is an advantage of e-commerce?

I. Reduction of transaction costs

II. Shortened supply chain response times
III. Greater customer loyalty

A. I only

B. II only

C. I and II only

D. II and III only

E. I, II, and III

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #63
Topic: 11-13 E-Commerce

64. Holding safety stock inventory in one central location rather than in multiple locations is called:

A. postponement.

B. outsourcing.

C. risk pooling.

D. cross-docking.

E. vendor-managed inventory.

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #64
Topic: 11-03 Supply Chain Management Activities

65. Which of the following is not typically used as a performance attribute/metric commonly used to
measure supply chain performance?

A. Inventory turnover

B. Cost

C. Variety/flexibility (e.g. speed of product changes)

D. Item fill rate

E. Product quality
 E. Product quality

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #65
Topic: 11-11 Performance Metrics

66. Which of the following is not associated with quick response (QR) replenishment methods?

A. Sales information made available to vendors

B. Regular, periodic orders by retailers

C. Frequent small-lot shipments

D. Reduced dependence on forecasts

E. Closer match between supply and demand

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #66
Topic: 11-04 Efficient Replenishment Methods

67. Which of the following is considered an advantage of e-commerce for supply chain
management?

A. Substantial reduction of transaction costs

B. Data concerning customers' choices can be collected and analyzed more readily

C. Supply chain response time is reduced

D. Opportunities to reach customers more directly based on disintermediation

E. All of the choices are advantages

Accessibility: Keyboard Navigation

Difficulty: Easy
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #67
Topic: 11-13 E-Commerce

68. Which technology allows companies to automatically identify, track, monitor, or locate objects
within the supply chain?

A. Hand-held barcode readers

B. Radio frequency identification (RFID) tags

 C. Electronic data interchange (EDI) systems

D. E-commerce websites

E. The internet

Accessibility: Keyboard Navigation

Difficulty: Easy
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #68
Topic: 11-07 Supply Chain Management Information Systems

69. Which statement is not a correct match between technologies and their use in supply chain
management?

A. EDI; direct computer-to-computer transactions

B. RFID tags; automatically reading tags for multiple items

C. ERP software; coordinating resources and functions from a shared database

D. Bar codes; battery activated for reading with wireless device

E. All of the choices are correctly matched

Accessibility: Keyboard Navigation

Difficulty: Hard
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #69
Topic: 11-07 Supply Chain Management Information Systems

70. Which one of the following is the interface between the firm and the suppliers?

A. Purchasing

B. Production

C. Distribution

D. All of the choices are interfaces

E. None of the choices are interfaces

Accessibility: Keyboard Navigation

Difficulty: Easy
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #70
Topic: 11-12 Purchasing

71. Purchasing may interface with:

 A. operations.

B. accounting.

C. receiving staff.

D. design engineering.

E. all of the choices.

Accessibility: Keyboard Navigation

Difficulty: Easy
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #71
Topic: 11-12 Purchasing

72. Which of the following is not a duty of purchasing?

A. Set quality standards for purchased products

B. Maintaining databases of suppliers

C. Identify sources of supply

D. Establish partnerships with suppliers

E. Negotiating supply contracts

Accessibility: Keyboard Navigation

Difficulty: Hard
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #72
Topic: 11-12 Purchasing

73. The purchasing cycle begins with:

A. selecting a supplier.

B. placing an order.

C. evaluating potential vendors.

D. conducting a value analysis.

E. receiving a requisition.

Accessibility: Keyboard Navigation

Difficulty: Easy
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #73
Topic: 11-12 Purchasing

74. The purchasing cycle ends when the purchasing department is notified that:

A. an order has been placed.

 A. an order has been placed.

B. potential suppliers have been identified.

C. the supplier has been paid.

D. the supplier has been selected.

E. the order has been received.

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #74
Topic: 11-12 Purchasing

75. Examination of the function of purchased parts or materials in an effort to reduce costs and/or
improve performance is called:

A. vendor analysis.

B. value analysis.

C. negotiated purchasing.

D. vendor relations.

E. vendor assessment.

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #75
Topic: 11-12 Purchasing

76. Value analysis has the greatest potential for savings for items which have:

A. low cost per unit.

B. low annual cost-volume.

C. high cost per unit.

D. high annual usage.

E. high annual dollar-volume.

Accessibility: Keyboard Navigation

Difficulty: Hard
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #76
Topic: 11-12 Purchasing

77. Which of the following is not true about value analysis?

A. It involves an examination of the function of purchased parts or products.

 A. It involves an examination of the function of purchased parts or products.

B. Its purpose is to reduce costs and/or improve performance of purchased goods or services.

C. It is usually performed only periodically.

D. Representatives from design and operations may work with purchasing.

E. If improvements are identified, purchasing usually has the authority to implement them.

Accessibility: Keyboard Navigation

Difficulty: Hard
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #77
Topic: 11-12 Purchasing

78. Which of the following would not be considered a requirement for creating an effective supply
chain?

A. Close relationships among organizations involved

B. Electronic data interchange (EDI) adopted by all members

C. Effective communication among members

D. Having event management capabilities

E. Supply chain visibility

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #78
Topic: 11-08 Creating an Effective Supply Chain

79. The ability for members to connect in real time to any part of the supply chain to access data such
as forecasts, shipments, inventory levels, and shortages that could impact the timely flow of
products is called:

A. electronic data interchange (EDI).

B. e-commerce.

C. quick response (QR).

D. supply chain visibility.

E. event management.

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
 Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #79
Topic: 11-08 Creating an Effective Supply Chain

80. Which of the following is not one of the steps in the purchasing cycle?

A. Receive a requisition

B. Execute a spend analysis

C. Select a supplier

D. Monitor orders

E. Payment to supplier

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #80
Topic: 11-12 Purchasing

81. Which of the following is not a benefit of centralized purchasing?

A. Potential for quantity discounts

B. Better service from suppliers

C. Quick response to local needs

D. Potential for use of purchasing specialists

E. All are potential benefits of centralized purchasing

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #81
Topic: 11-12 Purchasing

82. The item fill rate is categorized as which type of supply chain performance metric?

A. Flexibility

B. Cost

C. Variety

D. Delivery

E. Customer service

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply
chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
 chain activities; describe quick response and other similar initiatives; distribution requirement planning; global supply chains; and technologies used in
supply chain management; and outline the key steps in creating an effective supply chain; including Collaborative Planning; Forecasting; and
Replenishment (CPFR) and performance metrics.
Stevenson - Chapter 11 #82
Topic: 11-11 Performance Metrics

83. Which of the following is a key consideration when a company chooses a supplier?

A. Lead time and on-time delivery

B. Reputation and financial stability

C. Flexibility in handling changes

D. Quality control procedures of suppliers

E. All of the choices are considered

Accessibility: Keyboard Navigation

Difficulty: Easy
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #83
Topic: 11-14 Supplier Management and Partnership

84. Which of the following is not a decision involved in transport planning?

A. Selecting a mode of transportation

B. Negotiating a transport rate

C. Selecting a carrier

D. Choosing a supplier for the item to be purchased

E. Deciding whether or not to outsource transportation

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-03 Describe what logistics is; and know how to select a transportation mode and solve problems; and discuss third-party
logistics and reverse logistics.
Stevenson - Chapter 11 #84
Topic: 11-16 Transport Planning

85. The perspective of business organizations in viewing suppliers as partners is characterized by:

I. price based competitive bidding.

II. reliance on fewer suppliers.
III. long-term contracts.

A. I and II only

B. II only

C. II and III only

D. I and III only

 E. I, II, and III

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #85
Topic: 11-14 Supplier Management and Partnership

86. The benefits of establishing partnerships with suppliers include:

I higher quality.
II increased delivery speed.
III lower inventories.

A. I and II only

B. II only

C. II and III only

D. I and III only

E. I, II, and III

Accessibility: Keyboard Navigation

Difficulty: Medium
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Stevenson - Chapter 11 #86
Topic: 11-14 Supplier Management and Partnership

Chapter 11 Summary

Accessibility: Keyboard Navigation

Difficulty: Easy
Difficulty: Hard
Difficulty: Medium
Learning Objective: 11-
01 Explain what a supply chain is; discuss the need for managing supply chains; identify strategic and tactical operational supply chain activities; describ
Learning Objective: 11-02 Explain the purchasing function in organizations; E-commerce; and supplier management and partnership.
Learning Objective: 11-03 Describe what logistics is; and know how to select a transportation mode and solve problems; and discuss third-party logistics
Stevenson - Chapter 11
Topic: 11-01 Introduction to Supply Chain Management
Topic: 11-02 The Need for Supply Chain Management
Topic: 11-03 Supply Chain Management Activities
Topic: 11-04 Efficient Replenishment Methods
Topic: 11-05 Distribution Requirements Planning
Topic: 11-07 Supply Chain Management Information Systems
Topic: 11-08 Creating an Effective Supply Chain
Topic: 11-11 Performance Metrics
Topic: 11-12 Purchasing
Topic: 11-13 E-Commerce
Topic: 11-14 Supplier Management and Partnership
Topic: 11-15 Logistics
Topic: 11-16 Transport Planning
Topic: 11-16 Transport Planning