Test Bank for Supply Chain Logistics Management 5th Edition by Donald Bowersox, David Closs, M. Bixb

TEST BANK FOR ALL CHAPTERS Supply Chain Logistics Management, 5e (Bowersox) Chapter 1 21st-Century Supply Chains

1) A unique feature of integrated logistics is: A) The newness of the concept B) Its fundamental similar to military operations C) Complexity and scope of operations D) The fact that it employs many people Answer: C Difficulty: 1 Easy Topic: The Supply Chain Revolution Learning Objective: 01-01 The Supply Chain Revolution Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 2) What is the primary reason that responsiveness has decreased over the past two decades: A) Improvement in Federal Highways B) Better Sea Ports C) Development of Double Stack Containers D) Information Technology Answer: D Difficulty: 1 Easy Topic: The Supply Chain Revolution Learning Objective: 01-01 The Supply Chain Revolution Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 3) A Supply Chain is best described by which of the following: A) A group of cooperative carriers B) A group of collaborative companies C) A formal association of competitive companies D) Two firms who create a strategic alliance Answer: B Difficulty: 1 Easy Topic: The Supply Chain Revolution Learning Objective: 01-01 The Supply Chain Revolution Bloom's: Remember AACSB: Knowledge Application 1 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Accessibility: Keyboard Navigation 4) Which of the following best describes an integrative supply chain process:

A) Something that links together independent parts B) A concept that identifies independent parts C) A conglomeration of functions D) The link of critical parts of a supply chain Answer: D Difficulty: 2 Medium Topic: Why Integration Creates Value Learning Objective: 01-02 Why Integration Creates Value Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 5) The concept of postponement: A) Involves two organizations working together to delay delivery B) Involves strategic delay of the delivery C) Seeks to reduce the risk of delivery D) Seeks to reduce the risk of anticipation Answer: D Difficulty: 2 Medium Topic: Integrative Management and Supply Chain Processes Learning Objective: 01-06 Integrative Management and Supply Chain Processes Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 6) Collaboration is the act of: A) Sharing secret information B) Working with competitors C) Integrating components of a supply chain D) Legal in selected supply chain arrangements Answer: C Difficulty: 2 Medium Topic: Integrative Management and Supply Chain Processes Learning Objective: 01-06 Integrative Management and Supply Chain Processes Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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7) An integrated service supplier (ISP) seeks to: A) Provide critical operational functionality in a supply chain B) Specializes in providing a specialized service C) Bring together two otherwise separate functions D) None of the above Answer: A Difficulty: 1 Easy Topic: Integrative Management and Supply Chain Processes Learning Objective: 01-06 Integrative Management and Supply Chain Processes Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 8) The lowest total process cost: A) Is always the sum of the lowest cost for each involved function B) May be the lowest cost of each involved function C) Is the lowest cost of each involved function D) Is a product of careful cost integration Answer: B Difficulty: 2 Medium Topic: Integrative Management and Supply Chain Processes Learning Objective: 01-06 Integrative Management and Supply Chain Processes Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 9) The Anticipatory Business Model is best described by which statement: A) Driven by forecast B) Driven by information technology C) Builds on the principles of time-based competition D) Is a low risk strategy Answer: A Difficulty: 2 Medium Topic: Responsiveness Learning Objective: 01-01 The Supply Chain Revolution Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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10) The internet has increased business-to-business connectivity.

Answer: FALSE Difficulty: 1 Easy Topic: Responsiveness Learning Objective: 01-08 Responsiveness Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 11) Supply Chain Management promotes a network of highly efficient interdependent businesses.

Answer: TRUE Difficulty: 1 Easy Topic: Generalized Supply Chain Model and Supply Chain Applications Learning Objective: 01-03 Generalized Supply Chain Model and Supply Chain Applications Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 12) There are eight critical supply chain processes.

Answer: TRUE Difficulty: 1 Easy Topic: Integrative Management and Supply Chain Processes Learning Objective: 01-06 Integrative Management and Supply Chain Processes Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 13) Collaboration is a fundamental part of Supply Chain Management.

Answer: TRUE Difficulty: 1 Easy Topic: Integrative Management and Supply Chain Processes Learning Objective: 01-06 Integrative Management and Supply Chain Processes Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 14) A third party service supplier is also a public warehouse.

Answer: FALSE Difficulty: 1 Easy Topic: Integrative Management and Supply Chain Processes Learning Objective: 01-06 Integrative Management and Supply Chain Processes 4 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 15) Process specialization involves the same concepts as vertical integration.

Answer: FALSE Difficulty: 2 Medium Topic: Integrative Management and Supply Chain Processes Learning Objective: 01-06 Integrative Management and Supply Chain Processes Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 16) The principle of postponement is new to the discipline of logistics.

Answer: FALSE Difficulty: 2 Medium Topic: Integrative Management and Supply Chain Processes Learning Objective: 01-06 Integrative Management and Supply Chain Processes Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 17) Increased operational responsiveness is directly related to information technology.

Answer: TRUE Difficulty: 2 Medium Topic: Responsiveness Learning Objective: 01-08 Responsiveness Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 18) Enterprise extension is a diversification strategy.

Answer: FALSE Difficulty: 2 Medium Topic: Integrative Management and Supply Chain Processes Learning Objective: 01-06 Integrative Management and Supply Chain Processes Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 19) Vertical integration and supply chain extension are essentially the same concepts.

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Answer: FALSE Difficulty: 2 Medium Topic: Integrative Management and Supply Chain Processes Learning Objective: 01-06 Integrative Management and Supply Chain Processes Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

Supply Chain Logistics Management, 5e (Bowersox) Chapter 2 Supply Chain Information Technology 1) Transaction systems are characterized by all of the following EXCEPT A) Formalized rules, procedures, and standardized communications B) A low volume of transactions C) A large volume of transactions D) An operational, day-to-day focus Answer: B Difficulty: 1 Easy Topic: Information System Functionality Learning Objective: Information System Functionality Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 2) The foundation of the Supply Chain Information Functionality pyramid is A) Formalized rules, procedures, and standardized communications B) Complex strategic planning C) A strong transaction system D) Informed decision analyses Answer: C Difficulty: 1 Easy Topic: Information System Functionality Learning Objective: Information System Functionality Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 3) Most SCIS development and implementation is now focused on A) Formalized rules, procedures, and standardized communications 6 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

B) A low volume of transactions C) A large volume of transactions D) Enhanced supply chain system integration and improved decision-making Answer: D Difficulty: 1 Easy Topic: Information System Functionality Learning Objective: Information System Functionality Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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4) ________ is sometimes also referred to as a "data warehouse".

A) ERP B) An integrated corporatewide database C) A legacy system D) The general ledger Answer: B Difficulty: 1 Easy Topic: Supply Chain Information System Modules Learning Objective: Supply Chain Information System Modules Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 5) The human resources module of the ERP systems tracks A) Personnel profiles and their activity levels B) The functions for invoice collection C) The supply chain's ability to measure, monitor and report cost D) The timing and location of supply chain value-added processes Answer: A Difficulty: 1 Easy Topic: Supply Chain Information System Modules Learning Objective: Supply Chain Information System Modules Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 6) ________ systems are applications designed to facilitate information sharing between customers, sales force, and operations management.

A) ERP (Enterprise resource planning) B) TMS (Transportation management system) C) Samp;OP (Sales and operations planning) D) CRM (Customer relationship management) Answer: D Difficulty: 1 Easy Topic: Supply Chain Information System Modules Learning Objective: Supply Chain Information System Modules Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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7) ________ is the hardware and technical software that facilitates information exchange between the systems and physical infrastructures within the firm and between supply chain partners.

A) Communication technology B) Blockchain C) Consumer connectivity D) Reverse logistics Answer: A Difficulty: 1 Easy Topic: Supply Chain Information System Modules Learning Objective: Supply Chain Information System Modules Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 8) The pharmaceutical industry is highly affected by counterfeiting because of the ________ value of products and ________ of falsifying raw material.

A) High; ease B) High; difficulty C) Low; ease D) Low; difficulty Answer: A Difficulty: 1 Easy Topic: Supply Chain Information System Modules Learning Objective: Supply Chain Information System Modules Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 9) All of the following are benefits of blockchain EXCEPT A) Better security B) Increased innovation C) Decreased scalability D) Enhanced transparency Answer: C Difficulty: 1 Easy Topic: Supply Chain Information System Modules Learning Objective: Supply Chain Information System Modules Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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10) The ________ manages, and in many cases initiates the transactions that receive, store, retrieve and ship product from the warehouse.

A) CMS B) TMS C) YMS D) WMS Answer: D Difficulty: 1 Easy Topic: Logistics Operations Modules Learning Objective: Logistics Operations Modules Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation Supply Chain Logistics Management, 5e (Bowersox) Chapter 3 Logistics 1) Dwell time is: A) A key component of system design B) The ratio of asset idle time to total time required to complete a mission C) The total time inventory is waiting to be processed.

D) A key concept in manufacturing efficiency Answer: B Difficulty: 1 Easy Topic: Supply Chain Synchronization Learning Objective: 03-08 Supply Chain Synchronization Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 2) A unique feature of integrated logistics is: A) The newness of the concept B) Its fundamental similarity to military operations C) Its complexity and scope of operations D) The fact that it employees many people.

Answer: C Difficulty: 2 Medium Topic: Logistical Operations Learning Objective: 03-04 Logistical Operations Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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3) Basic logistics service is a concept that: A) Describes the level of service provided all established customers B) Is involved in designing a network C) Only involves availability D) None of the above Answer: A Difficulty: 1 Easy Topic: The Logistical Value Proposition Learning Objective: 03-02 The Logistical Value Proposition Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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4) A logistics performance cycle is: A) A format for improved measurement of cost and service.

B) The basic unit of supply chain design and operational control C) An important form of transportation measurement D) Typically echeloned Answer: B Difficulty: 1 Easy Topic: Supply Chain Synchronization Learning Objective: 03-08 Supply Chain Synchronization Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 5) A flow through facility is: A) Typically found in the beverage industry B) Also often called a cross-dock facility C) A specialized warehouse that performs value-added services D) Dedicated to the support of an integrated service provider.

Answer: B Difficulty: 1 Easy Topic: Logistical Operating Arrangements Learning Objective: 03-06 Logistical Operating Arrangements Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 6) The "Pareto Principle" is: A) Unique to logistical performance measurement B) A concept developed in manufacturing to integrate logistics and procurement C) Used in logistics to develop fine line inventory classification D) Seldom the result of logistics system design Answer: C Difficulty: 1 Easy Topic: The Work of Logistics Learning Objective: 03-03 The Work of Logistics Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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7) Service reliability is best described as: A) The measure of availability that is most critical in system design B) Dealing with speed and consistency of order cycle performance.

C) The quality dimension of logistics performance D) The key attribute of transportation integration Answer: C Difficulty: 1 Easy Topic: The Logistical Value Proposition Learning Objective: 03-02 The Logistical Value Proposition Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 8) The primary reason that total logistics cost has reduced as a percentage of GDP is: A) Inventory has increased as a percent of total cost B) Inventory has decreased as a percent of total cost C) Transportation has decreased as a percent of total cost D) Nominal GDP has increased Answer: B Difficulty: 3 Hard Topic: The Logistics of Business is Big and Important Learning Objective: 03-01 The Logistics of Business is Big and Important Bloom's: Analyze AACSB: Knowledge Application Accessibility: Keyboard Navigation 9) The work of logistics involves: A) Order processing, inventory, and manufacturing B) Inventory, transportation, manufacturing and procurement C) Manufacturing, customer accommodation, and purchasing D) Transportation, inventory, order processing, warehousing, and facility network design Answer: D Difficulty: 1 Easy Topic: The Work of Logistics Learning Objective: 03-03 The Work of Logistics Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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10) Logistics cost has declined as a percent of GDP over the past 25 years.

Answer: TRUE Difficulty: 2 Medium Topic: The Logistics of Business is Big and Important Learning Objective: 03-01 The Logistics of Business is Big and Important Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 11) Service reliability involves logistical quality.

Answer: TRUE Difficulty: 1 Easy Topic: The Logistical Value Proposition Learning Objective: 03-02 The Logistical Value Proposition Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 12) Total cost was not typically the way managers viewed logistics prior to the 1960's.

Answer: TRUE Difficulty: 2 Medium Topic: The Logistical Value Proposition Learning Objective: 03-02 The Logistical Value Proposition Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 13) The logistics value proposition is based solely on cost minimization.

Answer: FALSE Difficulty: 2 Medium Topic: The Logistical Value Proposition Learning Objective: 03-02 The Logistical Value Proposition Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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14) The work of logistics is all about transportation planning and execution.

Answer: FALSE Difficulty: 2 Medium Topic: The Work of Logistics Learning Objective: 03-03 The Work of Logistics Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 15) Logistical system design is driven by careful integration of all operational components to minimize total cost.

Answer: FALSE Difficulty: 2 Medium Topic: Logistical Operating Arrangements Learning Objective: 03-06 Logistical Operating Arrangements Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 16) Transportation cost drives a firm's focus on speed and consistency.

Answer: FALSE Difficulty: 2 Medium Topic: The Work of Logistics Learning Objective: 03-03 The Work of Logistics Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 17) Facility network design is the function of total cost minimization.

Answer: FALSE Difficulty: 2 Medium Topic: The Work of Logistics Learning Objective: 03-03 The Work of Logistics Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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18) Procurement and manufacturing are an integral part of integrated logistics.

Answer: FALSE Difficulty: 2 Medium Topic: Logistical Integration Objectives Learning Objective: 03-05 Logistical Integration Objectives Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 19) Echeloned distribution structure facilitates direct delivery.

Answer: FALSE Difficulty: 1 Easy Topic: Logistical Operating Arrangements Learning Objective: 03-06 Logistical Operating Arrangements Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 20) Efficiency as contrasted to effectiveness is the primary goal of logistics.

Answer: FALSE Difficulty: 1 Easy Topic: Chapter Outline Learning Objective: 03-06 Chapter Outline Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 21) Performance cycle uncertainty is a key concern in logistical operations.

Answer: TRUE Difficulty: 1 Easy Topic: Supply Chain Synchronization Learning Objective: 03-08 Supply Chain Synchronization Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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22) The goal of cycle synchronization is achievement of planned time performance.

Answer: TRUE Difficulty: 1 Easy Topic: Supply Chain Synchronization Learning Objective: 03-08 Supply Chain Synchronization Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 23) Performance Cycle variance is a prime determinant of safety stock.

Answer: TRUE Difficulty: 2 Medium Topic: Supply Chain Synchronization Learning Objective: 03-08 Supply Chain Synchronization Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation Supply Chain Logistics Management, 5e (Bowersox) Chapter 4 Customer Accommodation 1) In providing service outputs to consumers, a disadvantage of Internet retailers compared to store-based retailers arises in: A) product variety and assortment B) lot size C) price D) waiting time Answer: D Difficulty: 1 Easy Topic: Customer-Focused Marketing Learning Objective: 04-01 Customer-Focused Marketing Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 2) In general, offering consumers higher levels of service output in terms of greater spatial convenience or product variety: A) has little impact on logistics and distribution cost B) results in lower logistics and distribution cost C) results in higher logistics and distribution cost D) does not impact configuration of a supply chain Answer: C 17 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Difficulty: 1 Easy Topic: Customer-Focused Marketing Learning Objective: 04-01 Customer-Focused Marketing Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 3) The most exacting measure of logistics performance regarding availability is: A) Stockout frequency B) orders shipped complete C) fill rate D) average number of items on hand Answer: B Difficulty: 1 Easy Topic: Customer Service Learning Objective: 04-02 Customer Service Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 4) Which of the following is not one of the "service outputs" of a supply chain: A) lot size B) waiting time C) price D) spatial convenience Answer: C Difficulty: 1 Easy Topic: Customer Service Learning Objective: 04-02 Customer Service Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 5) Numerous studies have been performed concerning retail stockouts. While results vary, generally the studies find that stockouts: A) are extremely rare B) average about 8% C) are less frequent for items that are being specifically promoted by a retailer D) average about 20% Answer: B Difficulty: 1 Easy Topic: Customer Service Learning Objective: 04-02 Customer Service Bloom's: Remember 18 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

AACSB: Knowledge Application Accessibility: Keyboard Navigation 6) Jones Company promised a customer that the customer would receive at least 98% of all items ordered. In fact, the customer received 95% of the items. This is an example of which "gap" in the customer satisfaction model?

A) performance gap B) knowledge gap C) standards gap D) communication gap Answer: D Difficulty: 2 Medium Topic: Customer Satisfaction Learning Objective: 04-03 Customer Satisfaction Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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7) The difference between a "customer success" focus" and a "customer satisfaction" focus is that: A) customer satisfaction is more difficult to achieve B) customer success deals with expectations of customers, satisfaction deals with their requirements C) customer satisfaction deals with expectations, customer success deals with requirements.

D) there really isn't any difference Answer: C Difficulty: 2 Medium Topic: Customer Success Learning Objective: 04-04 Customer Success Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 8) Providing perfect orders to a customer would be a key aspect of which customer accommodation focus?

A) customer service B) customer satisfaction C) customer success D) customer happiness Answer: A Difficulty: 1 Easy Topic: Customer Service Learning Objective: 04-02 Customer Service Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 9) Jones Company makes every effort to consistently meet the expectations of all of its customers.

It is clear that Jones company is focused on: A) customer service B) customer satisfaction C) customer happiness D) customer success Answer: B Difficulty: 2 Medium Topic: Customer Satisfaction Learning Objective: 04-03 Customer Satisfaction Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 10) Providing value-added services is a critical aspect of: 20 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

A) customer service B) customer satisfaction C) customer happiness D) customer success Answer: D Difficulty: 1 Easy Topic: Customer Success Learning Objective: 04-04 Customer Success Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 11) From a strategic perspective, companies should strive to: A) provide customer success to all customers B) realize different customer accommodation approaches may be appropriate for different customers C) decern/be aware that all customers desire close customer success types of relationships D) never refuse to do business with a customer Answer: B Difficulty: 1 Easy Topic: Developing Customer Accommodation Strategy Learning Objective: 04-05 Developing Customer Accommodation Strategy Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 12) Alpha Company has a performance standard of 97% fill rate. Last month it achieved a 94% fill rate. This is an example of: A) a knowledge gap B) a standards gap C) a performance gap D) a perception gap Answer: C Difficulty: 2 Medium Topic: Customer Satisfaction Learning Objective: 04-03 Customer Satisfaction Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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13) On-time delivery is an aspect of a company's performance in: A) availability B) operational performance C) malfunction recovery D) speed Answer: B Difficulty: 1 Easy Topic: Customer Service Learning Objective: 04-02 Customer Service Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 14) Since Walmart* and Target are both mass merchandisers it is likely that they both have the same logistical service requirements from suppliers.

Answer: FALSE Difficulty: 2 Medium Topic: Customer-Focused Marketing Learning Objective: 04-01 Customer-Focused Marketing Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 15) Providing greater spatial convenience to customers typically requires greater logistics expense.

Answer: TRUE Difficulty: 1 Easy Topic: Customer-Focused Marketing Learning Objective: 04-01 Customer-Focused Marketing Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 16) Companies should strive to offer the same fill rate performance on all items they stock.

Answer: FALSE Difficulty: 1 Easy Topic: Customer Service Learning Objective: 04-02 Customer Service Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 17) Good logistics practice involves developing operations in which malfunctions never occur.

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Answer: FALSE Difficulty: 1 Easy Topic: Customer Service Learning Objective: 04-02 Customer Service Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 18) A company has identified that there are 5 critical components of a "perfect order" It establishes a 97% standard on each of these components. Assuming it achieves this standard, it can expect that its overall perfect order performance is 97%.

Answer: FALSE Difficulty: 2 Medium Topic: Customer Service Learning Objective: 04-02 Customer Service Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 19) Achieving customer satisfaction with logistical performance does not mean that customers will be loyal.

Answer: TRUE Difficulty: 1 Easy Topic: Customer Satisfaction Learning Objective: 04-03 Customer Satisfaction Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 20) Customers may be dissatisfied with a company even if that company consistently provides perfect order performance.

Answer: TRUE Difficulty: 1 Easy Topic: Customer Satisfaction Learning Objective: 04-03 Customer Satisfaction Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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21) A customer success program in a company should focus on every customer the company serves.

Answer: FALSE Difficulty: 2 Medium Topic: Customer Success Learning Objective: 04-04 Customer Success Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 22) In developing strategy for customer accommodation, low-profitability customers should never be candidates for a customer success relationship.

Answer: FALSE Difficulty: 1 Easy Topic: Customer Success Learning Objective: 04-04 Customer Success Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 23) A firm which provides logistics service that is superior to its competitors can be sure that customers are satisfied.

Answer: FALSE Difficulty: 2 Medium Topic: Customer Satisfaction Learning Objective: 04-03 Customer Satisfaction Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation Supply Chain Logistics Management, 5e (Bowersox) Chapter 5 Integrated Operations Planning 1) Knowing the location and status of inventory and resources is referred to as: A) intelligence B) visibility C) knowledge D) integration Answer: B Difficulty: 1 Easy Topic: Supply Chain Planning Learning Objective: 05-01 Supply Chain Planning 24 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 2) Which of the following illustrates a typical conflict in objectives between sales and operations?

A) operations prefers many product variation, sales prefers few product variations B) operations prefers long lead times, sales prefers short lead times.

C) operations prefers maximized revenue, sales prefers maximized production D) operations prefers responsive schedules, sales prefers stable schedules Answer: B Difficulty: 2 Medium Topic: Sales and Operation Planning Learning Objective: 05-03 Sales and Operation Planning Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 3) When a company implements its monthly S&OP process, the process should begin with: A) Developing and specifying the constraints related to manufacturing capabilities B) Determining the business planning vs financial objectives C) Looking at existing orders from major customers D) Gathering information from sales and marketing Answer: B Difficulty: 1 Easy Topic: Sales and Operation Planning Learning Objective: 05-03 Sales and Operation Planning Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 4) Which of the following is NOT a benefit of S&OP? A) the S&OP process eliminates the need to have finished goods inventory B) the S&OP process results in better customer service C) the S&OP process provides better visibility into future capacity problems D) the S&OP process provides a single set of numbers to run the business.

Answer: A Difficulty: 2 Medium Topic: Sales and Operation Planning Learning Objective: 05-03 Sales and Operation Planning Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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5) Which of the following is NOT a key to making S&OP work in an organization.

A) S&OP should be executed monthly B) S&OP should have a clear leader C) S&OP should focus 12-18 months into the future D) None of the above Answer: C Difficulty: 2 Medium Topic: Sales and Operation Planning Learning Objective: 05-03 Sales and Operation Planning Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 6) In recent years some companies have begun to work closely with their customers and/or suppliers by sharing information to develop forecasts of demand. The procedure they are following is known as: A) Coordinated Forecasting of requirements B) Joint planning of Demand Forecasts C) Collaborative Planning, Forecasting, and Replenishment D) Conjoint Analysis and Forecasting Answer: C Difficulty: 1 Easy Topic: Collaborative Planning, Forecasting and Replenishment Learning Objective: 05-05 Collaborative Planning, Forecasting and Replenishment Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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7) If Dell computer is making a forecast for the next year, which of the following forecasts would most likely have the largest forecast error (as measure by the percentage error)?

A) Total number of computers (laptops and desktops) to be sold next year in US B) Total number of laptops to be sold next year in US C) Total number of desktop to be sold next year in US D) Total number of laptops with 2 Gigabyte RAM, 80 Gigabyte hard drive and 16x DVD drive to be sold next year in US Answer: D Difficulty: 2 Medium Topic: Forecasting Learning Objective: 05-06 Forecasting Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation [The following information applies to the questions displayed below.]

Period 1 2 3

Actual Demand Forecast Demand 800 1100 1200 1000 1400 1500

Error (300) 200 (100)

Absolute Value 300 200 100

8) What is the Mean Absolute Deviation (MAD)?

A) 200 B) 225 C) -66.67 D) 1200 Answer: A Explanation: MAD is the average of the absolute value of the error. MAD=300+200+100/3=200 Difficulty: 3 Hard Topic: Forecasting Learning Objective: 05-06 Forecasting Bloom's: Analyze AACSB: Knowledge Application Accessibility: Keyboard Navigation

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9) The Mean Absolute Percentage Error (MAPE) is approximately: A) 200% B) -27.98% C) 20.44% D) 53.93% Answer: C Explanation: Actual Forecast Absolute Absolute Percentage Period Demand Demand Error Value Error 1 800 1100 (300 ) 300 300/800 = 37.5 % 2 1200 1000 200 200 200/1200 = 16.67 % 3 1400 1500 (100 ) 100 100/1400 = 7.14 % MAPE = 37.5%+16.67%+7.14% / 3=20.44% Difficulty: 3 Hard Topic: Forecasting Learning Objective: 05-06 Forecasting Bloom's: Analyze AACSB: Knowledge Application Accessibility: Keyboard Navigation 10) Which function typically needs the most detailed forecasts and therefore typically deals with the highest forecast error?

A) logistics B) production C) finance D) marketing Answer: A Difficulty: 2 Medium Topic: Forecasting Learning Objective: 05-06 Forecasting Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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11) Accurate forecasting is most critical; A) when lead times are long B) when there are high economies of scale in manufacturing C) when there are high economies of scale in transportation D) all of the above Answer: D Difficulty: 2 Medium Topic: Forecasting Learning Objective: 05-06 Forecasting Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 12) The component of a forecast that is impossible to predict is: A) base demand B) trend C) promotional D) irregular Answer: D Difficulty: 1 Easy Topic: Forecasting Learning Objective: 05-06 Forecasting Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 13) Which of the following is not a time series technique of forecasting?

A) simulation B) exponential smoothing C) moving average D) adaptive smoothing Answer: A Difficulty: 1 Easy Topic: Forecasting Learning Objective: 05-06 Forecasting Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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14) As a forecasting technique, moving average: A) is useful when only base and irregular demand components exist B) is never useful C) is useful when demand patterns repeat with cyclic, trend, or seasonal components D) is useful when there is a strong relationship between demand and certain independent variables Answer: A Difficulty: 2 Medium Topic: Forecasting Learning Objective: 05-06 Forecasting Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 15) It has been clearly demonstrated that quantitative techniques of forecasting always result in less forecast error than qualitative techniques.

Answer: FALSE Difficulty: 1 Easy Topic: Forecasting Learning Objective: 05-06 Forecasting Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 16) To effectively implement Sales and Operations Planning, sales and marketing people should develop marketing plans based on their forecast of demand while operations should develop the production plan based on their own forecast of demand.

Answer: FALSE Difficulty: 1 Easy Topic: Sales and Operation Planning Learning Objective: 05-03 Sales and Operation Planning Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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17) S&OP is a process that applies only to manufacturing organizations.

Answer: FALSE Difficulty: 1 Easy Topic: Sales and Operation Planning Learning Objective: 05-03 Sales and Operation Planning Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 18) Good supply chain visibility is achieved when a firm is able to identify its shipments and its inventory.

Answer: FALSE Difficulty: 2 Medium Topic: Supply Chain Planning Learning Objective: 05-01 Supply Chain Planning Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 19) S&OP is primarily concerned with implementation of advanced planning information technology.

Answer: FALSE Difficulty: 1 Easy Topic: Sales and Operation Planning Learning Objective: 05-03 Sales and Operation Planning Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 20) To insure that S&OP is most effectively implemented, a company should establish a specific department charged with S&OP responsibility.

Answer: FALSE Difficulty: 2 Medium Topic: Sales and Operation Planning Learning Objective: 05-03 Sales and Operation Planning Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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21) CPFR involves joint planning of forecasts between customers and suppliers.

Answer: TRUE Difficulty: 1 Easy Topic: Collaborative Planning, Forecasting and Replenishment Learning Objective: 05-05 Collaborative Planning, Forecasting and Replenishment Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 22) A company that has a responsive supply chain capability is less reliant on forecasting than a company that has an anticipatory supply chain.

Answer: TRUE Difficulty: 2 Medium Topic: Forecasting Learning Objective: 05-06 Forecasting Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 23) Of the various components of a forecast, the most controllable is the promotional component.

Answer: TRUE Difficulty: 1 Easy Topic: Forecasting Learning Objective: 05-06 Forecasting Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 24) Use of statistical forecasting techniques removes the need for managerial judgment in forecasting.

Answer: FALSE Difficulty: 1 Easy Topic: Forecasting Learning Objective: 05-06 Forecasting Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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25) It is generally easier to provide an accurate forecast of SKU level demand than it is to provide an accurate forecast of total demand.

Answer: FALSE Difficulty: 2 Medium Topic: Forecasting Learning Objective: 05-06 Forecasting Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation Supply Chain Logistics Management, 5e (Bowersox) Chapter 6 Procurement and Manufacturing 1) A company has decided that it no longer needs to extensively count and inspect the products it receives from a particular supplier. This suggests that the company has begun: A) volume consolidation B) supplier operational integration C) value management D) analysis of total cost of ownership Answer: B Difficulty: 1 Easy Topic: Procurement Strategy Learning Objective: 06-04 Procurement Strategy Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 2) Generally speaking, procurement can have a greater impact on the net income of a company than most other departments. This is due to the fact that: A) manufacturing relies on purchasing to identify high quality suppliers B) suppliers want to reduce their prices to their customers C) marketers don't care about net income D) purchased materials and supplies frequently represent the largest costs in a company Answer: D Difficulty: 1 Easy Topic: Procurement Importance Learning Objective: 06-02 Procurement Importance Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 3) Which of the following reflects does not reflect a strategic focus on procurement?

A) focus on total cost of ownership.

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B) supply base reduction.

C) focus on purchase price.

D) win-win negotiation.

Answer: C Difficulty: 2 Medium Topic: Procurement Strategy Learning Objective: 06-04 Procurement Strategy Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 4) Supply base reduction (volume consolidation) A) has potential benefits for suppliers as well as for buyers.

B) involves early supplier involvement in product design.

C) puts the buyer at a negotiating disadvantage.

D) has little potential for savings for buyers.

Answer: A Difficulty: 2 Medium Topic: Procurement Strategy Learning Objective: 06-04 Procurement Strategy Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 5) In procurement, Total Cost of Ownership includes all of the following except: A) field failures of purchased items B) consideration of the impact of supplier quantity discounts C) cost of order placement D) In fact, total cost of ownership includes all of the above.

Answer: D Difficulty: 1 Easy Topic: Procurement Objectives Learning Objective: 06-03 Procurement Objectives Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 6) In the promotional material for its GG2330 portable bar code scanner, the Yanda Company states that the mean time between failures for the scanner is 400 operating hours. Which of the following dimensions of quality does this indicate?

A) functionality.

B) durability.

C) performance D) reliability.

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Answer: D Difficulty: 2 Medium Topic: The Quality Imperative Learning Objective: 06-01 The Quality Imperative Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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7) John Jones has a VCR which a friend described as being of poor quality since it doesn't have a remote control. The friend is focusing on what aspect of quality?

A) conformance B) aesthetics C) features D) durability

Answer: C Difficulty: 2 Medium Topic: The Quality Imperative Learning Objective: 06-01 The Quality Imperative Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

8) John Jones told his friend that his VCR is over 20 years old while most VCRs only last about 10 years. He is focusing on which aspect of quality?

A) features B) reliability C) performance D) durability

Answer: D Difficulty: 2 Medium Topic: The Quality Imperative Learning Objective: 06-01 The Quality Imperative Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

9) Which of the following manufacturing approaches would describe most consumer products, 36 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

such as food, razor blades, over the counter drug, etc?

A) PTO (Procure to order) B) MTO (Make to order) C) ATO (Assemble to order) D) MTS (Make to stock)

Answer: D Difficulty: 2 Medium Topic: Manufacturing Strategies Learning Objective: 06-09 Manufacturing Strategies Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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10) Which of the following approaches would typically have the longest customer experienced lead time?

A) MTO (Make to order) B) PTO (Procure to order) C) MTS (Make to stock) D) ATO (Assemble to order)

Answer: A Difficulty: 2 Medium Topic: Manufacturing Strategies Learning Objective: 06-09 Manufacturing Strategies Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

11) Which of the following process structures can produce highest volume?

A) Job shop B) Line flow C) Continuous flow D) Batch operation

Answer: C Difficulty: 2 Medium Topic: Manufacturing Processes Learning Objective: 06-07 Manufacturing Processes Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

12) Which manufacturing process can produce many different product varieties but has a long customer experienced lead time?

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A) Line flow B) Repetitive flow C) Continuous flow D) Batch operation

Answer: D Difficulty: 2 Medium Topic: Manufacturing Processes Learning Objective: 06-07 Manufacturing Processes Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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13) In this manufacturing approach, typically many different end items are made by combining standard components in inventory into many different products.

A) MTS (Make to Stock) B) ATO (Assemble to Order) C) ETO (Engineer to Order) D) JIT (Just in Time)

Answer: B Difficulty: 1 Easy Topic: Manufacturing Strategies Learning Objective: 06-09 Manufacturing Strategies Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

14) In MTS (Make-to-Stock), customer orders are satisfied from?

A) Raw material inventory B) Work in process inventory C) Finished goods inventory D) Supplier inventory

Answer: C Difficulty: 2 Medium Topic: Manufacturing Strategies Learning Objective: 06-09 Manufacturing Strategies Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

15) Which of the following statements would be true regarding the customer experienced lead time in a make-to-order company?

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A) It would be shorter than make-to-stock company B) It would be the same as a make-to-stock company C) It would be longer than assemble-to-order company D) It would be shorter than an assemble-to-order company

Answer: C Difficulty: 3 Hard Topic: Manufacturing Strategies Learning Objective: 06-09 Manufacturing Strategies Bloom's: Evaluate AACSB: Knowledge Application Accessibility: Keyboard Navigation

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16) Early Supplier Involvement (ESI) is an important part of the "Volume Consolidation" stage of procurement strategy evolution.

Answer: FALSE Difficulty: 1 Easy Topic: Procurement Strategy Learning Objective: 06-04 Procurement Strategy Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

17) Good purchasing strategy is based on standardized set of procedures for dealing with every supplier in a firm's supply base.

Answer: FALSE Difficulty: 1 Easy Topic: Procurement Strategy Learning Objective: 06-04 Procurement Strategy Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

18) The most important objective in procurement strategy is to insure that the lowest purchase price is obtained from suppliers.

Answer: FALSE Difficulty: 1 Easy Topic: Procurement Strategy Learning Objective: 06-04 Procurement Strategy Bloom's: Remember AACSB: Knowledge Application 42 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Accessibility: Keyboard Navigation

19) It is very possible that the supplier which offers the lowest purchase price does not have the lowest total cost of ownership for the buying firm.

Answer: TRUE Difficulty: 1 Easy Topic: Procurement Objectives Learning Objective: 06-03 Procurement Objectives Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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20) A job shop manufacturing process allows products to be customized for specific customers.

Answer: TRUE Difficulty: 2 Medium Topic: Manufacturing Processes Learning Objective: 06-07 Manufacturing Processes Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

21) The customer accommodation cycle for make-to-plan items is typically longer than the cycle for assemble-to-order items.

Answer: FALSE Difficulty: 2 Medium Topic: Manufacturing Strategies Learning Objective: 06-09 Manufacturing Strategies Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

22) Make-to-order strategies typically have lower inventory and warehousing cost than make-to plan strategies.

Answer: TRUE Difficulty: 1 Easy Topic: Manufacturing Strategies Learning Objective: 06-09 Manufacturing Strategies Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 44 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

23) A six-sigma quality program suggests that the acceptable level of defects or failures is one-half that of a traditional three sigma approach.

Answer: FALSE Difficulty: 2 Medium Topic: Six Sigma Learning Objective: 06-12 Six Sigma Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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24) Performance based logistics has been found to both improve quality as well as reduce cost for the buying organization.

Answer: TRUE Difficulty: 2 Medium Topic: Logistical Interfaces with Procurement Learning Objective: 06-05 Logistical Interfaces with Procurement Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation Supply Chain Logistics Management, 5e (Bowersox) Chapter 7

Inventory

1) Alpha Company places 10 orders per year with its supplier. Each order is for an amount exactly equal to the EOQ. Alpha's order cost has been determined to be $50 per order. Alpha carries no safety stock at all. What is Alpha's annual inventory carrying cost?

A) cannot be determined without further information B) $50 C) $250 D) $500

Answer: D Explanation: At the EOQ, ordering and carrying costs are equal. Since ordering costs are $500 per year ($50 per order times 10 orders per year) the carrying costs must be the same - $500.

Difficulty: 3 Hard Topic: Planning Inventory Learning Objective: 07-03 Planning Inventory Bloom's: Analyze AACSB: Knowledge Application Accessibility: Keyboard Navigation 46 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

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2) Jones Company has calculated that the EOQ for a particular item is 1,000 units. However, Jones does not have enough capital to order that many units each time, so it only orders 250 units at a time. This will result in: A) Higher annual inventory carrying cost than ordering the EOQ quantity B) Lower annual inventory carrying cost than ordering the EOQ quantity C) Lower annual ordering cost than ordering the EOQ quantity D) Cannot be determined

Answer: B Explanation: Ordering less than the EOQ results in a lower carrying cost but higher annual ordering costs, as shown in Figure 7.4.

Difficulty: 2 Medium Topic: Planning Inventory Learning Objective: 07-03 Planning Inventory Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 48 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

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3) Safety stock exists for which of the following reasons?

A) To allow less expensive purchases by buying more B) To allow for transportation time C) To provide protection against the uncertainties of supply and demand D) None of the above

Answer: C Difficulty: 1 Easy Topic: Managing Uncertainty Learning Objective: 07-04 Managing Uncertainty Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

4) Which of the following IS NOT an example of CC? A) Cost of obsolescence and loss B) Taxes C) Insurance D) All of the above

Answer: D Difficulty: 1 Easy Topic: Inventory Carrying Cost Learning Objective: 07-02 Inventory Carrying Cost Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

5) Suppose demand is 25 units a month and average inventory is 30 units and unit cost is $10. What is the annual inventory turnover?

A) 100 50 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

B) 10 C) .83333 D) 83.333

Answer: B Explanation: Inventory Turnover =

=

= 10 turns

Difficulty: 3 Hard Topic: Inventory Functionality and Definitions Learning Objective: 07-01 Inventory Functionality and Definitions Bloom's: Analyze AACSB: Knowledge Application Accessibility: Keyboard Navigation

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6) What happens to the EOQ when the unit cost increases (assuming all other variables remain the same)?

A) EOQ increases B) EOQ decreases C) EOQ remains the same D) None of the above (need more information)

Answer: B Explanation: EOQ =

When unit cost (U) increases, the EOQ will decrease.

Difficulty: 2 Medium Topic: Planning Inventory Learning Objective: 07-03 Planning Inventory Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

Rajesh Indian Market (RIM) is open 12 months out of the year. At RIM, the demand for rice is very consistent 200 pounds per month. RIM orders the rice from a distributor in India at an ordering cost of $50 per order. Rice costs $5 per pound, and annual carrying charge is 15%.

Answer question 7-11 based on this information.

7) The EOQ is? (Round up to the nearest whole number.)

A) 566 pounds B) 164 pounds C) 163 pounds D) 26667 pounds

Answer: A 52 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Explanation: EOQ =

=

= 565.7 ~ 566

Difficulty: 3 Hard Topic: Planning Inventory Learning Objective: 07-03 Planning Inventory Bloom's: Evaluate AACSB: Knowledge Application Accessibility: Keyboard Navigation

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8) How many orders will RIM place in a year? (Round up to the nearest whole number.)

A) 2 orders B) 3 orders C) 4 orders D) 5 orders

Answer: D Explanation: EOQ =

=

Orders per Year =

= 565.7

=

= 4.24

which rounds up to 5 orders per year.

Difficulty: 3 Hard Topic: Planning Inventory Learning Objective: 07-03 Planning Inventory Bloom's: Evaluate AACSB: Knowledge Application Accessibility: Keyboard Navigation

9) What is the average inventory? (Round up to the nearest whole number.)

A) 1200 units B) 283 units C) 250 units D) 275 units

Answer: B Explanation: EOQ =

=

= 565.7

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Average Inventory =

=

= 282.85 ~ 283 units.

Difficulty: 3 Hard Topic: Planning Inventory Learning Objective: 07-03 Planning Inventory Bloom's: Analyze AACSB: Knowledge Application Accessibility: Keyboard Navigation

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10) What is the inventory turnover?

A) 8.48 times B) 0.7 times C) 10.49 times D) 10.5 times

Answer: A Explanation: EOQ =

Average Inventory =

=

=

= 565.7

= 282.85 units.

Inventory Turnover =

=

= 8.48 turns

Difficulty: 1 Easy Topic: Planning Inventory Learning Objective: 07-03 Planning Inventory Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

11) What is the annual ordering cost (based on the rounded up number of orders)?

A) $150 B) $175 C) $200 D) $250

Answer: D Explanation: EOQ =

=

= 565.7

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Over one year, the firm will place 5 orders

Annual orders =

=

= 4.24

which rounds up to 5. Each order has a cost of $50 so the annual cost of orders is 5×$50=$250.

Difficulty: 3 Hard Topic: Planning Inventory Learning Objective: 07-03 Planning Inventory Bloom's: Analyze AACSB: Knowledge Application Accessibility: Keyboard Navigation Cooper Company has average demand of 50 units per day. Lead time from the supplier averages 20 days. The combined standard deviation of demand during lead time is 20 units. The item costs $75 and inventory carrying cost is 24%. Answers to the next two questions are based on this information.

1 standard deviation covers 84.13%

1.04 standard deviations covers 85%

1.28 standard deviations covers 90%

1.65 standard deviations covers 95%

1.96 standard deviations covers 97.5%

2 standard deviations covers 97.72%

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2.33 standard deviations covers 99%

3 standard deviations covers 99.86%

6 standard deviations covers 99.99966%

12) Suppose management decides it wants to offer a 95% service level. That is, Cooper Company is willing to experience a stock-out probability of 5% during the order cycle. How much safety stock should be carried?

A) 33 units B) 35 units C) 46 units D) 25 units

Answer: A Explanation: A 95% service level requires carrying 1.65 standard deviations of safety stock. The standard deviation during the lead time is 20 units, so Cooper Company should carry 33 units (1.65x20) of safety stock.

Difficulty: 3 Hard Topic: Managing Uncertainty Learning Objective: 07-04 Managing Uncertainty Bloom's: Analyze AACSB: Knowledge Application Accessibility: Keyboard Navigation

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13) How much is the annual inventory carrying cost of the safety stock because of this decision?

A) $755 B) $610 C) $594 D) $351

Answer: C Explanation: A 95% service level requires carrying 1.65 standard deviations of safety stock. The standard deviation during the lead time is 20 units, so Cooper Company should carry 33 units (1.65x20) of safety stock. The carrying cost of this safety stock is

Carrying Cost = Stock × Value × Inventory Carr𝒚ing Cost % = 33 × $75 × 0.24 = $594.

Difficulty: 3 Hard Topic: Managing Uncertainty Learning Objective: 07-04 Managing Uncertainty Bloom's: Analyze AACSB: Knowledge Application Accessibility: Keyboard Navigation

14) Suppose you tell management at Cooper Company (in the above two questions) it should raise safety stock to the six sigma level. If Cooper decides to do this, it will incur an additional inventory carrying cost of approximately how much?

A) $2,160 B) $234 C) cannot be determined D) $1,566

Answer: D Explanation: The six sigma level requires six standard deviations of safety stock (20 × 6=120 units). The carrying cost of this safety stock is

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Carrying Cost = Stock × Value × Inventory Carrying Cost % = 120 × $75 × 0. 24 = $2,160.

Compared to the 95% level of safety stock (33 units), this is a difference of $1,566.00.

Difficulty: 3 Hard Topic: Managing Uncertainty Learning Objective: 07-04 Managing Uncertainty Bloom's: Evaluate AACSB: Knowledge Application Accessibility: Keyboard Navigation

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15) When calculating a Reorder Point (ROP), which of the following factors WOULD NOT affect the calculation?

A) Item's EOQ B) Delivery lead time.

C) Demand during the delivery lead time.

D) Standard deviation of demand during delivery lead time.

Answer: A Explanation: The reorder point is a function of daily demand, performance cycle length (lead time) and safety stock (which is a function of standard deviation of demand).

Difficulty: 1 Easy Topic: Inventory Management Policies Learning Objective: 07-05 Inventory Management Policies Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

16) A batch of Raisin Bran that has been made at Kellogg's, but not yet packaged in its final cereal box would be an example of ________ inventory.

A) Raw Material B) Work-in-process C) Finished Goods D) Maintenance, repair and operating supplies (MRO)

Answer: B Difficulty: 1 Easy Topic: Inventory Management Policies Learning Objective: 07-05 Inventory Management Policies Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 61 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

RAJ Company and LEE Company each annually order the exact same amount of an item from the same supplier (They each have the exact same annual demand from their customers for this item and the lead time from the supplier is the same for both companies). There is no variation at all for either company in either daily demand or lead time from the supplier. They pay the exact same price to the supplier for the item. They both figure that their ordering cost is $50 per order.

However, RAJ has determined its annual inventory carrying cost is 20%, whereas LEE figures it is only 10%.

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17) Which of the following is true?

A) RAJs EOQ is higher than Lee's EOQ B) LEE's EOQ is higher than RAJ's EOQ C) both have the same EOQ

Answer: B Explanation: EOQ =

Since the inventory carrying cost (Ci) is higher for RAJ than for LEE, RAJ will have a lower EOQ. Difficulty: 2 Medium Topic: Planning Inventory Learning Objective: 07-03 Planning Inventory Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

18) Given the information above about RAJ and LEE, which of the following is true?

A) both will have the same annual ordering cost B) both will have the same reorder point C) both will have the same inventory turnover D) all of the above are true

Answer: B Explanation: ROP = D × T × SS.

These factors are the same for both firms, so the ROP will be the same.

Difficulty: 1 Easy Topic: Inventory Management Policies Learning Objective: 07-05 Inventory Management Policies Bloom's: Remember 63 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

AACSB: Knowledge Application Accessibility: Keyboard Navigation

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19) A company recently lowered its service performance from 99% product availability to 97% product availability. The change saved the company exactly $1 million per year in inventory carrying cost. Senior management now wants to lower the service level to 95% from 97%. Such a further change is likely to save: A) less than $1 million B) about another $1 million C) more than $1 million

Answer: A Explanation: Because of the nature of the normal distribution, a change from 99% to 97% decreases inventory by a greater amount than a change from 97% to 95%.

Difficulty: 2 Medium Topic: Managing Uncertainty Learning Objective: 07-04 Managing Uncertainty Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

RajDee Furniture Company (RFC) buys and sells office furniture. The company buys chairs from a manufacturer for $40 per unit. Order costs are $200 per order and there is a lead time of 10 days for each order to arrive from the manufacturer to RFC warehouse. Inventory carrying cost for RFC is 10%. Average yearly demand for the chairs is 40,000 units. Answer the following questions, assuming there is no uncertainty at all about the demand or the lead time.

20) How many units should RFC order each time?

A) 2000 B) 200 C) 100 D) 400

Answer: A 65 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Explanation: EOQ =

=

= 2,000 units.

Difficulty: 3 Hard Topic: Planning Inventory Learning Objective: 07-03 Planning Inventory Bloom's: Analyze AACSB: Knowledge Application Accessibility: Keyboard Navigation

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21) What would average inventory be if RFC orders this quantity every time?

A) 100 B) 200 C) 1000 D) 50

Answer: C Explanation: Average Inventory =

=

= 1,000 units.

Difficulty: 3 Hard Topic: Planning Inventory Learning Objective: 07-03 Planning Inventory Bloom's: Analyze AACSB: Knowledge Application Accessibility: Keyboard Navigation

22) If average lead time went up from 10 to 15 days, what will happen to EOQ? A) Increase of 200 units B) Decrease of 200 units.

C) No change in EOQ D) Increase of 100 units

Answer: C Explanation: EOQ =

Since this does not depend upon lead time, the change in lead time will not effect the EOQ. Difficulty: 2 Medium Topic: Planning Inventory Learning Objective: 07-03 Planning Inventory Bloom's: Understand 67 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

AACSB: Knowledge Application Accessibility: Keyboard Navigation

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23) Which of the following is included in the cost of carrying inventory?

A) Heating and lighting a warehouse B) inventory obsolescence C) material handling D) all of the above

Answer: D Difficulty: 1 Easy Topic: Inventory Carrying Cost Learning Objective: 07-02 Inventory Carrying Cost Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation Supply Chain Logistics Management, 5e (Bowersox) Chapter 8

Transportation

1) Which combination of transportation operating service characteristics is not correct?

A) Speed: air is best; pipeline is worst B) Availability: motor is best; pipeline is worst C) Capability: air is best; truck is worst D) Dependability: pipeline is best; air is worst

Answer: C Difficulty: 2 Medium Topic: Transportation Modal Structure Learning Objective: 08-03 Transportation Modal Structure Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

69 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

2) Generally the least costly method of moving product that is not gaseous, liquid, or slurry is: A) Air B) Water C) Truck D) Rail

Answer: B Difficulty: 1 Easy Topic: Transportation Modal Structure Learning Objective: 08-03 Transportation Modal Structure Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

3) If a transportation vehicle has completed a delivery and is returned empty, the situation is called a: A) Backhaul B) Piggy-back C) Freight absorption D) Deadhead

Answer: D Difficulty: 1 Easy Topic: Transportation Economics and Pricing Learning Objective: 08-05 Transportation Economics and Pricing Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

4) Among the following choices which is typically the most expensive transportation mode: A) Air 70 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

B) Water C) Truck D) Rail

Answer: A Difficulty: 1 Easy Topic: Transportation Modal Structure Learning Objective: 08-03 Transportation Modal Structure Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

5) The transportation economic principle that deals with economy of distance is: A) Consolidation B) Load–off C) Tapering D) Spanning

Answer: C Difficulty: 2 Medium Topic: Transportation Economics and Pricing Learning Objective: 08-05 Transportation Economics and Pricing Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

6) Since 1995 the use of intermodal transportation has: A) Remained about the same B) Increase significantly C) Decreased D) Increased slightly 71 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Answer: B Difficulty: 1 Easy Topic: Specialized Transportation Services Learning Objective: 08-04 Specialized Transportation Services Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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7) The mode of transportation hauling the most tonnage is: A) Truck B) Rail C) Air D) Water

Answer: A Difficulty: 1 Easy Topic: Transportation Modal Structure Learning Objective: 08-03 Transportation Modal Structure Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

8) Which of the following is a non-operating transportation intermediary: A) Bonded Warehouse B) UPS C) Freight Forwarder D) None of the above

Answer: C Difficulty: 1 Easy Topic: Transportation Operations Management Learning Objective: 08-06 Transportation Operations Management Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

9) The document that lists and details the contents and conditions of a shipment is called: A) The Tariff B) Proof of Delivery 73 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

C) The Invoice D) The Bill of Lading

Answer: D Difficulty: 1 Easy Topic: Documentation Learning Objective: 08-07 Documentation Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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10) Jones Company decided it would only deliver to each geographic market it serves once each week. This strategy is called: A) Market area consolidation B) Scheduled delivery consolidation C) Pooled Delivery D) Phantom freight

Answer: A Difficulty: 2 Medium Topic: Transportation Operations Management Learning Objective: 08-06 Transportation Operations Management Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

11) If you need to find the cost to ship 10,000 pounds from Lansing to Orlando you should look at the: A) Tariff B) Uniform Freight Classification C) Bill of Lading D) FOB content description

Answer: A Difficulty: 2 Medium Topic: Documentation Learning Objective: 08-07 Documentation Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

12) Which of the following is a product's characteristic that directly influences transport cost: 75 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

A) The product's market share.

B) The product's density C) The product's technical complexity D) All of the above

Answer: B Difficulty: 2 Medium Topic: Transportation Economics and Pricing Learning Objective: 08-05 Transportation Economics and Pricing Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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13) If you want the consignee to be responsible for goods while they are intransit you should ship products: A) FOB Destination B) FOB Origin C) Using Delivered Pricing D) Using Single Zone Pricing

Answer: B Difficulty: 2 Medium Topic: Product Pricing and Transportation Learning Objective: 08-08 Product Pricing and Transportation Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

14) Declining transport rates as the quantity shipped increases represents: A) The Tapering Principle B) Economy of Distance C) Economy of Energy D) Economy of Scale

Answer: D Difficulty: 1 Easy Topic: Transportation Economics and Pricing Learning Objective: 08-05 Transportation Economics and Pricing Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

15) When a carrier's transportation vehicle is used for temporary product storage a firm typically has to pay: 77 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

A) Freight Absorption B) Demurrage C) Phantom Storage D) Vehicular Stoppage

Answer: B Difficulty: 2 Medium Topic: Transport Functionality and Participants Learning Objective: 08-01 Transport Functionality and Participants Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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16) The Jones Company learned that several other shippers located in its hometown had customers located in the same markets it serves. With this information Jones could find it advantage to investigate the potential of:

A) Market Area Consolidation B) Scheduled Delivery Consolidation C) Pooled Delivery Consolidation D) A Phantom Freight Program

Answer: C Difficulty: 2 Medium Topic: Transportation Operations Management Learning Objective: 08-06 Transportation Operations Management Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

17) To facilitate classification of a large variety of different items being shipped on a single invoice a Traffic Manager may want to consider: A) Commodity Rates B) Class Rates C) Volume Rates D) FAK Rates

Answer: D Difficulty: 2 Medium Topic: Documentation Learning Objective: 08-07 Documentation Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 79 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

18) Motor carriers are the most used mode of transportation.

Answer: TRUE Difficulty: 1 Easy Topic: Transportation Modal Structure Learning Objective: 08-03 Transportation Modal Structure Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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19) The transportation mode having the fastest point to point transit time is truck.

Answer: FALSE Difficulty: 1 Easy Topic: Transportation Modal Structure Learning Objective: 08-03 Transportation Modal Structure Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

20) The transportation mode having the best overall operating characteristics is truck.

Answer: TRUE Difficulty: 2 Medium Topic: Transportation Modal Structure Learning Objective: 08-03 Transportation Modal Structure Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

21) Pipeline has the highest dependability and frequency among alternative modes.

Answer: TRUE Difficulty: 1 Easy Topic: Transportation Modal Structure Learning Objective: 08-03 Transportation Modal Structure Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

22) The fact that most traditional carriers require a minimum charge helped create the market for 81 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

package services.

Answer: TRUE Difficulty: 2 Medium Topic: Transportation Economics and Pricing Learning Objective: 08-05 Transportation Economics and Pricing Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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23) Intermodal transportation typically consists of using three modes to complete a shipment.

Answer: FALSE Difficulty: 2 Medium Topic: Specialized Transportation Services Learning Objective: 08-04 Specialized Transportation Services Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

24) A freight forwarder is an example of a nonoperating intermediary.

Answer: TRUE Difficulty: 2 Medium Topic: Transportation Operations Management Learning Objective: 08-06 Transportation Operations Management Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

25) The land bridge combines sea and rail transport.

Answer: TRUE Difficulty: 1 Easy Topic: Specialized Transportation Services Learning Objective: 08-04 Specialized Transportation Services Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

26) The main advantage of air transport is safety.

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Answer: FALSE Difficulty: 1 Easy Topic: Transportation Modal Structure Learning Objective: 08-03 Transportation Modal Structure Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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27) Under transportation regulation the government established rates.

Answer: FALSE Difficulty: 2 Medium Topic: From Regulation to a Free Market System Learning Objective: 08-02 From Regulation to a Free Market System Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

28) Water transport has the highest fixed cost.

Answer: FALSE Difficulty: 2 Medium Topic: Transportation Modal Structure Learning Objective: 08-03 Transportation Modal Structure Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

29) The main disadvantage of pipelines is that they can only transport liquids.

Answer: FALSE Difficulty: 1 Easy Topic: Transportation Modal Structure Learning Objective: 08-03 Transportation Modal Structure Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

30) Trucking has superior operating characteristics in all categories except availability.

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Answer: FALSE Difficulty: 1 Easy Topic: Transportation Modal Structure Learning Objective: 08-03 Transportation Modal Structure Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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31) Air transport is characterized by low fixed and high variable cost.

Answer: TRUE Difficulty: 1 Easy Topic: Transportation Modal Structure Learning Objective: 08-03 Transportation Modal Structure Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

32) Railroad mileage has declined over the past several decades.

Answer: TRUE Difficulty: 1 Easy Topic: Transportation Modal Structure Learning Objective: 08-03 Transportation Modal Structure Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

33) If your company does not want responsibility for freight damage on the products they ship they should negotiate FOB Destination rates.

Answer: TRUE Difficulty: 2 Medium Topic: Product Pricing and Transportation Learning Objective: 08-08 Product Pricing and Transportation Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

87 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

34) If you want to find freight rates charged by a transportation company to deliver different size shipments between two cities you should check the bill of lading.

Answer: FALSE Difficulty: 2 Medium Topic: Documentation Learning Objective: 08-07 Documentation Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

88 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

35) As a general rule the greater the density the lower the freight rate.

Answer: TRUE Difficulty: 2 Medium Topic: Transportation Economics and Pricing Learning Objective: 08-05 Transportation Economics and Pricing Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

36) The rating reflects the cost of shipment from one location to another.

Answer: FALSE Difficulty: 1 Easy Topic: Transportation Economics and Pricing Learning Objective: 08-05 Transportation Economics and Pricing Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

37) The significant difference between a class rate and a commodity rate is the type of freight being shipped.

Answer: FALSE Difficulty: 2 Medium Topic: Transportation Economics and Pricing Learning Objective: 08-05 Transportation Economics and Pricing Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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38) Freight classification is a method to simplify the locations being serviced by a carrier.

Answer: FALSE Difficulty: 2 Medium Topic: Transportation Economics and Pricing Learning Objective: 08-05 Transportation Economics and Pricing Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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39) A minimum charge represents the lowest cost per hundred weight a carrier offers.

Answer: FALSE Difficulty: 1 Easy Topic: Transportation Economics and Pricing Learning Objective: 08-05 Transportation Economics and Pricing Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

40) A joint rate is applicable when two or more carriers participate in a specific transportation movement.

Answer: TRUE Difficulty: 2 Medium Topic: Transportation Economics and Pricing Learning Objective: 08-05 Transportation Economics and Pricing Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

41) When the release of railroad equipment is detained by a shipper a detention charge may apply.

Answer: FALSE Difficulty: 1 Easy Topic: Transport Functionality and Participants Learning Objective: 08-01 Transport Functionality and Participants Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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42) When shippers provide Advanced Shipment Notification (ASN) their objective is to collect freight bills faster.

Answer: FALSE Difficulty: 2 Medium Topic: Transportation Operations Management Learning Objective: 08-06 Transportation Operations Management Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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43) The legislation that determines how many hours a locative operator can work is called Hours of Service (HOS).

Answer: FALSE Difficulty: 1 Easy Topic: From Regulation to a Free Market System Learning Objective: 08-02 From Regulation to a Free Market System Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

44) A pickup allowance reflects a discount given to a customer when they provide transportation on a shipment that otherwise would involve delivery.

Answer: TRUE Difficulty: 1 Easy Topic: Product Pricing and Transportation Learning Objective: 08-08 Product Pricing and Transportation Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

45) The primary purpose of a pickup allowance is to reduce the miles a shipment must be transported.

Answer: FALSE Difficulty: 2 Medium Topic: Product Pricing and Transportation Learning Objective: 08-08 Product Pricing and Transportation Bloom's: Understand AACSB: Knowledge Application 93 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Accessibility: Keyboard Navigation Supply Chain Logistics Management, 5e (Bowersox) Chapter 9

Warehousing, Materials Handling and Packaging

1) One function of a distribution warehouse is consolidation, which means the facility is being used to A) Group small inbound shipments into one large outbound shipment B) Collect products/packaging materials or disposal C) Hold safety stock inventory D) None of the above

Answer: A Difficulty: 2 Medium Topic: Strategic Warehousing Learning Objective: 09-01 Strategic Warehousing Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

2) A company which has limited experience in warehousing who has a need to establish temporary warehouse facilities in multiple cities would most likely use: A) Private warehouses B) Public warehouses C) Contract Warehouses D) Common Warehouses

Answer: B Difficulty: 2 Medium Topic: Warehouse Ownership Arrangements Learning Objective: 09-02 Warehouse Ownership Arrangements 94 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

3) When a firm uses cross-docking, inventory: A) Must be staged for shipping B) Moves directly from receiving to shipping C) Always is tagged for shipping D) Is considered short movement freight

Answer: B Difficulty: 1 Easy Topic: Primary Warehouse Operations Learning Objective: 09-05 Primary Warehouse Operations Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 4) The four economic benefits of warehousing are: A) Receiving, shipping, handling, and storage B) Shipping, receiving, assortment, and value added C) Consolidation, sorting, seasonal storage, and reverse logistics D) None of the above benefit combinations

Answer: C Difficulty: 1 Easy Topic: Strategic Warehousing Learning Objective: 09-01 Strategic Warehousing Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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5) A firm that supports an automotive assembly plant by providing just-in time inventory is engaged in: A) Cross Docking B) Order Assembly C) Mixing D) Sequencing

Answer: D Difficulty: 2 Medium Topic: Strategic Warehousing Learning Objective: 09-01 Strategic Warehousing Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

6) When a firm "spot stocks" inventory they are engaged in: A) Placing inventory in an exact location in the warehouse B) Placing inventory in consignment C) Marking inventory for ease of identification D) Placing inventory in a local warehouse in anticipation of future need

Answer: D Difficulty: 1 Easy Topic: Strategic Warehousing Learning Objective: 09-01 Strategic Warehousing Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

96 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

7) The Jones firm decides to assemble specific products in their distribution warehouse to meet customer requests. They are: A) Performing custom distribution B) Performing selective marketing C) Performing value added services D) All of the above.

Answer: C Difficulty: 2 Medium Topic: Strategic Warehousing Learning Objective: 09-01 Strategic Warehousing Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

8) When a firm engages in extended storage they normally are: A) Holding inventory in excess of typical replenishment requirements B) Speculating that inventory cost will decrease C) Engaged in customization D) Performing value added services.

Answer: A Difficulty: 1 Easy Topic: Primary Warehouse Operations Learning Objective: 09-05 Primary Warehouse Operations Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

9) "Slotting" a warehouse means: A) Products are positioned for value added services 97 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

B) Products are assigned a specific warehouse location C) Products are placed in a pick line location D) None of the above.

Answer: B Difficulty: 1 Easy Topic: Primary Warehouse Operations Learning Objective: 09-05 Primary Warehouse Operations Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

98 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

10) When engaged in warehouse picking and a combination of customer order requirements are selected simultaneously the method being employed is called: A) Combination discrete selection B) Combined selection C) Discrete selection D) Wave selection

Answer: D Difficulty: 1 Easy Topic: Systems Learning Objective: 09-07 Systems Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

11) The use of a Warehouse Management System(WMS) to route fork trucks on-demand is called: A) Simultaneous routing B) Variable routing C) Directed routing D) Task Interleaving

Answer: D Difficulty: 1 Easy Topic: Systems Learning Objective: 09-07 Systems Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

12) When a company cross-docks products, the products are generally in storage for several days.

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Answer: FALSE Difficulty: 2 Medium Topic: Strategic Warehousing Learning Objective: 09-01 Strategic Warehousing Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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13) A disadvantage of RFID tags versus UPC codes is that RFID is more expensive.

Answer: TRUE Difficulty: 1 Easy Topic: Strategic Warehousing Learning Objective: 09-01 Strategic Warehousing Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

14) The modern concept of a distribution center means that products are never placed in storage.

Answer: FALSE Difficulty: 1 Easy Topic: Primary Warehouse Operations Learning Objective: 09-05 Primary Warehouse Operations Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

15) The warehouse functionality of sorting means that products are being assembled in custom assortments to meet the needs of specific orders.

Answer: TRUE Difficulty: 1 Easy Topic: Strategic Warehousing Learning Objective: 09-01 Strategic Warehousing Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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16) Cross docking is a form of sorting.

Answer: TRUE Difficulty: 2 Medium Topic: Strategic Warehousing Learning Objective: 09-01 Strategic Warehousing Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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17) Assembly is a primary service expected to be performed by lead suppliers.

Answer: TRUE Difficulty: 1 Easy Topic: Strategic Warehousing Learning Objective: 09-01 Strategic Warehousing Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

18) Recycling is a major part of reverse logistics.

Answer: TRUE Difficulty: 1 Easy Topic: Strategic Warehousing Learning Objective: 09-01 Strategic Warehousing Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

19) Value Added Services (VAS) are seldom performed by Integrated Service Providers (ISP).

Answer: FALSE Difficulty: 1 Easy Topic: Strategic Warehousing Learning Objective: 09-01 Strategic Warehousing Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

20) Order assembly is important to both manufacturers and retailers.

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Answer: TRUE Difficulty: 1 Easy Topic: Strategic Warehousing Learning Objective: 09-01 Strategic Warehousing Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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21) When a firm locates a temporary inventory in a specific location it is called Spot Stocking.

Answer: TRUE Difficulty: 1 Easy Topic: Strategic Warehousing Learning Objective: 09-01 Strategic Warehousing Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

22) A slot is the location where an over-the-road truck is parked.

Answer: FALSE Difficulty: 1 Easy Topic: Warehouse Decisions Learning Objective: 09-04 Warehouse Decisions Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

23) Distribution warehouses that are dedicated to a specific firm are called public warehouses.

Answer: FALSE Difficulty: 1 Easy Topic: Warehouse Decisions Learning Objective: 09-04 Warehouse Decisions Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

24) The best approach to developing a distribution warehouse is to locate a vacant building and 105 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

then design a material handling system that will work in that structure.

Answer: FALSE Difficulty: 2 Medium Topic: Warehouse Decisions Learning Objective: 09-04 Warehouse Decisions Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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25) Wave selection means that multiple orders are being picked simultaneously.

Answer: TRUE Difficulty: 1 Easy Topic: Systems Learning Objective: 09-07 Systems Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

26) Pallets and slip-sheets basically perform the same functionality in a material handling system.

Answer: TRUE Difficulty: 1 Easy Topic: Packaging for Handling Efficiency Learning Objective: 09-08 Packaging for Handling Efficiency Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation Supply Chain Logistics Management, 5e (Bowersox) Chapter 10

Global Supply Chain

1) Firms are globalizing their operations today for all of the following reasons except A) Take advantage of lower labor rates B) Obtain reductions in value-added taxes C) Source product from locations that involve less transportation uncertainty D) Simplify product variations

Answer: D Difficulty: 2 Medium 107 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Topic: Global Economics Learning Objective: 10-01 Global Economics Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

2) The characteristics of an export/import perspective are all of the following except A) Sourcing and resource choices may be influenced by artificial constraints B) Operations are strongly driven by local presence C) Increased planning complexity D) Extended domestic logistics systems and operating practices to global origins and destinations

Answer: B Difficulty: 2 Medium Topic: Global Sourcing Learning Objective: 10-03 Global Sourcing Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

3) Which of the following describes the supply chain strategy for the "International Operations: local presence" stage of global development?

A) Agents and third party logistics service providers B) Subsidiaries and local distributors with specific business charters and visible local presence C) Worldwide flow of key resources to leverage global sourcing and marketing advantages D) None of the above

Answer: B Difficulty: 2 Medium Topic: Global Sourcing Learning Objective: 10-03 Global Sourcing 108 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

4) Which of the following describes the product focus for the "Export/Import" stage of global development?

A) Unique production and distribution for each country served B) Local market customization supported by postponement or local production C) Global brands D) None of the above

Answer: D Difficulty: 2 Medium Topic: Global Sourcing Learning Objective: 10-03 Global Sourcing Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

5) Which of the following is not a reason for extended performance cycle times for globalized supply chains?

A) Longer production run times B) Longer transit times C) Customs delays D) Finance requirements

Answer: A Difficulty: 1 Easy Topic: Global Supply Chain Integration Learning Objective: 10-02 Global Supply Chain Integration Bloom's: Remember 109 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

AACSB: Knowledge Application Accessibility: Keyboard Navigation

6) The major justification for Cabotage laws was A) Reduce transportation uncertainty B) Reduce transportation cost C) Protect domestic shipping capacity D) Protect domestic infrastructure

Answer: C Difficulty: 1 Easy Topic: Global Supply Chain Integration Learning Objective: 10-02 Global Supply Chain Integration Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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7) All of the following are examples of international logistics documentation except A) Export irrevocable commercial letter of credit B) Certificate of origin C) Commercial invoice D) Shipping invoice

Answer: D Difficulty: 1 Easy Topic: Global Supply Chain Integration Learning Objective: 10-02 Global Supply Chain Integration Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

8) Which of the following does not represent challenges for low-cost country sourcing?

A) Identification of sources capable of producing the materials in the quality and quantity required B) Protection of the firm's intellectual property C) Identifying low cost production sources D) Inventory and obsolescence risk associated with longer lead times

Answer: C Difficulty: 1 Easy Topic: Global Sourcing Learning Objective: 10-03 Global Sourcing Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

9) All other things being equal, domestic sourcing would be suggested for A) Products with high value B) Products with high labor content 111 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

C) Products with long life cycles D) Products with low transportation uncertainty

Answer: A Difficulty: 2 Medium Topic: Global Sourcing Learning Objective: 10-03 Global Sourcing Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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10) All other things being equal, low cost country sourcing would be suggested for A) Products with many varieties B) Products with high security or import constraints C) Products with low intellectual property content D) Products with low labor content

Answer: C Difficulty: 2 Medium Topic: Global Sourcing Learning Objective: 10-03 Global Sourcing Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation Supply Chain Logistics Management, 5e (Bowersox) Chapter 11

Network Design

1) The threshold service level is: A) The level of service associated with the least cost system design B) The level of service only associated with an optimum system design C) The level of service existing in a system prior to redesign D) None of the above

Answer: A Difficulty: 1 Easy Topic: Formulating Logistical Strategy Learning Objective: 11-05 Formulating Logistical Strategy Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

113 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

2) A trade-off is best described by which of the following: A) The relationship between two variables B) The sum of two variables C) One variable minus the other variable D) One variable plus the other variable

Answer: A Difficulty: 1 Easy Topic: Systems Concept and Analysis Learning Objective: 11-03 Systems Concept and Analysis Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

3) Local Presence is considered an obsolete paradigm because: A) Local presence was replaced by regional warehousing B) Having inventory immediately available is no longer required C) Customers are willing to wait for delivery D) The advent of timely and consistent transportation

Answer: D Difficulty: 1 Easy Topic: Enterprise Facility Network Learning Objective: 11-01 Enterprise Facility Network Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

114 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

4) In terms of warehouse justification which of the following statements is true?

A) A warehouse is justified if it offers a way to achieve competitively superior service.

B) A warehouse is justified if it offers a way to provide service at lowest cost C) A warehouse is justified if it offers lowest total cost assembly support.

D) All of the above

Answer: D Difficulty: 2 Medium Topic: Warehouse Requirements Learning Objective: 11-02 Warehouse Requirements Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

5) Market based Assembly To Order (ATO) is a form of: A) Manufacturing justified warehousing B) Procurement justified warehousing C) Customer justified warehousing D) None of the above.

Answer: C Difficulty: 2 Medium Topic: Warehouse Requirements Learning Objective: 11-02 Warehouse Requirements Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

6) When designing a warehouse network, if the overall safety stock increases as the number of warehouses increase then: A) Network uncertainty is decreasing 115 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

B) Network uncertainty is increasing C) Network uncertainty in constant D) Safety stock is appropriately linked to average stock

Answer: B Difficulty: 1 Easy Topic: Total Cost Integration Learning Objective: 11-04 Total Cost Integration Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

116 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

7) In system design the lowest total cost configuration is typically; A) Not the lowest cost of either transportation or inventory B) the lowest cost of either transportation or inventory C) Not related to transportation or inventory D) Difficult to generalize

Answer: B Difficulty: 2 Medium Topic: Total Cost Integration Learning Objective: 11-04 Total Cost Integration Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

8) Threshold service level is: A) Limited to measures of availability B) Limited to measures of capability C) Unique to each location situation D) The result of service sensitivity analysis

Answer: C Difficulty: 2 Medium Topic: Formulating Logistical Strategy Learning Objective: 11-05 Formulating Logistical Strategy Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

9) Which of the following is not a component of the feasibility assessment of the Planning Methodology?

A) Situation analysis 117 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

B) Statement of objectives C) Cost/benefit estimate D) Supporting logic

Answer: B Difficulty: 1 Easy Topic: Planning Methodology Learning Objective: 11-07 Planning Methodology Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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10) The internal review topics should focus on all of the following except: A) Customer service B) Suppliers C) Warehousing D) Inventory

Answer: B Difficulty: 1 Easy Topic: Phase I: Problem Definition and Planning Learning Objective: 11-08 Phase I: Problem Definition and Planning Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

11) Cost prevention benefits: A) Represent a one-time reduction in financial or managerial resources required to operate the logistics system B) Represent reduced out-of-pocket or variable expenses C) Represent initiatives to reduce sales volumes D) Represent initiatives to reduce activities in areas where cost drivers are increasing

Answer: D Difficulty: 2 Medium Topic: Phase I: Problem Definition and Planning Learning Objective: 11-08 Phase I: Problem Definition and Planning Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

12) Business assumptions focus on all of the following except A) Resource availability 119 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

B) Competitive actions C) Mode utilization D) Consumer trends

Answer: C Difficulty: 1 Easy Topic: Phase II: Data Collection and Analysis Learning Objective: 11-09 Phase II: Data Collection and Analysis Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

120 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

13) Supply chain design decisions focus on?

A) How much inventory is necessary to meet service requirements?

B) How many warehouses should the firm use and where should they be located?

C) How should the firm route trucks for deliveries?

D) Which channels of distribution should the firm use?

E) B and D above

Answer: E Difficulty: 2 Medium Topic: Other Considerations in Logistics Network Design Learning Objective: 11-06 Other Considerations in Logistics Network Design Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

14) Which of the following is the best method to determine inventory parameters such as safety stock and order quantity?

A) Inventory simulation B) Supply chain design optimization C) Analytic inventory formulation D) Transportation analysis tool

Answer: C Difficulty: 2 Medium Topic: Phase II: Data Collection and Analysis Learning Objective: 11-09 Phase II: Data Collection and Analysis Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

15) Which of the following problems is not appropriate for a transportation analysis tool?

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A) Which routes should be assigned to which vehicle types?

B) How should deliveries be grouped together to form routes?

C) What delivery sequence should be used to accommodate customer time restrictions?

D) How many distribution centers should there be to best serve customers?

Answer: D Difficulty: 1 Easy Topic: Phase II: Data Collection and Analysis Learning Objective: 11-09 Phase II: Data Collection and Analysis Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

122 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

16) Each unique location analysis has a unique threshold service level.

Answer: TRUE Difficulty: 2 Medium Topic: Formulating Logistical Strategy Learning Objective: 11-05 Formulating Logistical Strategy Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

17) The threshold service level is the starting point for cost revenue sensitivity analysis.

Answer: TRUE Difficulty: 1 Easy Topic: Formulating Logistical Strategy Learning Objective: 11-05 Formulating Logistical Strategy Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

18) The relationship between uncertainty and inventory is called the square root rule.

Answer: FALSE Difficulty: 1 Easy Topic: Formulating Logistical Strategy Learning Objective: 11-05 Formulating Logistical Strategy Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

19) In a typical static location analysis customer service fill rate and delivery time is calculated 123 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

based on distance.

Answer: FALSE Difficulty: 1 Easy Topic: Enterprise Facility Network Learning Objective: 11-01 Enterprise Facility Network Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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20) Transit stock inventory can be available to promise.

Answer: TRUE Difficulty: 1 Easy Topic: Total Cost Integration Learning Objective: 11-04 Total Cost Integration Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

21) The local presence paradigm is increasingly obsolete because of improved inventory control.

Answer: FALSE Difficulty: 1 Easy Topic: Enterprise Facility Network Learning Objective: 11-01 Enterprise Facility Network Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

22) Warehouses can be justified on the basis of cost, specific service objective or generalized local presence.

Answer: TRUE Difficulty: 1 Easy Topic: Warehouse Requirements Learning Objective: 11-02 Warehouse Requirements Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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23) A supply facing warehouse is one that is focused on supplying key customers.

Answer: FALSE Difficulty: 2 Medium Topic: Warehouse Requirements Learning Objective: 11-02 Warehouse Requirements Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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24) The manufacturing strategy of a firm will determine to a large degree the appropriate supporting warehouse structure.

Answer: TRUE Difficulty: 1 Easy Topic: Warehouse Requirements Learning Objective: 11-02 Warehouse Requirements Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

25) Mathematical modeling supported by computer analysis has rendered the optimization of warehouse networks a relatively easy analysis.

Answer: FALSE Difficulty: 1 Easy Topic: Phase II: Data Collection and Analysis Learning Objective: 11-09 Phase II: Data Collection and Analysis Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

26) Service sensitivity analysis is a form of cost-revenue analysis.

Answer: TRUE Difficulty: 1 Easy Topic: Formulating Logistical Strategy Learning Objective: 11-05 Formulating Logistical Strategy Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 127 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

27) Transit time to customer is typically estimated on the basis of highway route miles when performing a static warehouse analysis.

Answer: FALSE Difficulty: 1 Easy Topic: Warehouse Requirements Learning Objective: 11-02 Warehouse Requirements Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation Supply Chain Logistics Management, 5e (Bowersox) Chapter 12

Relationship Management

1) The idea of structuring logistics as an integrated organization: A) has been a concern since the beginning of the industrial revolution B) first appeared in the 1950s C) became necessary because of advanced information systems D) is more important for manufacturers than it is for retailers

Answer: B Difficulty: 1 Easy Topic: Development and Management of Internal Logistics Relationships Learning Objective: 12-01 Development and Management of Internal Logistics Relationships Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

2) Which of the following is not considered a barrier to achieving process integration?

A) measurement and reward systems 128 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

B) organization structure C) knowledge hoarding D) financial resources

Answer: D Difficulty: 2 Medium Topic: Development and Management of Internal Logistics Relationships Learning Objective: 12-01 Development and Management of Internal Logistics Relationships Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

3) The text makes reference to a situation it calls "The Great Divide". While this divide has many different possible forms, it is most frequently observed in: A) a divide between procurement and manufacturing B) a divide between distribution and marketing C) a divide between finance and accounting D) none of the above

Answer: D Difficulty: 2 Medium Topic: Development and Management of Internal Logistics Relationships Learning Objective: 12-01 Development and Management of Internal Logistics Relationships Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

4) Over the last several decades, power in supply chains has increasingly been shifting to: A) manufacturers B) third party logistics providers C) retailers 129 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

D) wholesalers

Answer: C Difficulty: 2 Medium Topic: Development and Management of Internal Logistics Relationships Learning Objective: 12-01 Development and Management of Internal Logistics Relationships Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

5) The most elementary form of collaboration in supply chains is seen in the form of: A) contracting and outsourcing B) targeted systems C) alliances D) administered systems

Answer: A Difficulty: 1 Easy Topic: Development and Management of Supply Chain Relationships Learning Objective: 12-02 Development and Management of Supply Chain Relationships Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

6) The majority of information shared among supply chain members is operational vs. strategic.

Answer: TRUE Difficulty: 2 Medium Topic: Development and Management of Supply Chain Relationships Learning Objective: 12-02 Development and Management of Supply Chain Relationships Bloom's: Understand 130 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

AACSB: Knowledge Application Accessibility: Keyboard Navigation

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7) Initial implementation of successful supply chain collaborative relationships seems to require: A) compatible information systems B) identical organizational cultures C) common organizational vision D) all of the above

Answer: C Difficulty: 2 Medium Topic: Development and Management of Supply Chain Relationships Learning Objective: 12-02 Development and Management of Supply Chain Relationships Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

8) Jones Company consistently delivers on-time as promised to customers. This type of performance is critical to: A) developing character based trust B) developing reliability based trust C) developing power in a supply chain D) none of the above

Answer: B Difficulty: 2 Medium Topic: Development and Management of Supply Chain Relationships Learning Objective: 12-02 Development and Management of Supply Chain Relationships Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

9) Until the 1950s, logistics functions were generally viewed in companies as facilitating or support work.

132 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Answer: TRUE Difficulty: 1 Easy Topic: Development and Management of Internal Logistics Relationships Learning Objective: 12-01 Development and Management of Internal Logistics Relationships Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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10) Grouping transportation, warehousing and other activities related to logistics into a single logistical function was motivated by the belief that this would help optimize the performance of each of these individual activities.

Answer: FALSE Difficulty: 2 Medium Topic: Development and Management of Internal Logistics Relationships Learning Objective: 12-01 Development and Management of Internal Logistics Relationships Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

11) An organization structure in which all logistical functions and operations report to a single senior manager or executive is very common today.

Answer: FALSE Difficulty: 1 Easy Topic: Development and Management of Internal Logistics Relationships Learning Objective: 12-01 Development and Management of Internal Logistics Relationships Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

12) The shift from functional to process integration decreases the pressure to aggregate functions into specific organizational units.

Answer: TRUE Difficulty: 2 Medium Topic: Development and Management of Internal Logistics Relationships Learning Objective: 12-01 Development and Management of Internal Logistics Relationships Bloom's: Understand 134 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

AACSB: Knowledge Application Accessibility: Keyboard Navigation

13) Most firms today have successfully overcome the situation that the text describes as "The Great Divide".

Answer: FALSE Difficulty: 1 Easy Topic: Development and Management of Internal Logistics Relationships Learning Objective: 12-01 Development and Management of Internal Logistics Relationships Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

135 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

14) Centralization of logistics organization is critical to achieving lowest total cost logistics performance.

Answer: FALSE Difficulty: 2 Medium Topic: Development and Management of Internal Logistics Relationships Learning Objective: 12-01 Development and Management of Internal Logistics Relationships Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

15) Decentralization of logistics organization is critical to achieving customer service, satisfaction, and success.

Answer: FALSE Difficulty: 2 Medium Topic: Development and Management of Internal Logistics Relationships Learning Objective: 12-01 Development and Management of Internal Logistics Relationships Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

16) In many firms, collaboration with customers or suppliers has been found to be easier to accomplish than has collaboration within internal functions.

Answer: TRUE Difficulty: 1 Easy Topic: Development and Management of Supply Chain Relationships Learning Objective: 12-02 Development and Management of Supply Chain Relationships Bloom's: Remember AACSB: Knowledge Application 136 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Accessibility: Keyboard Navigation

17) Most successful initiatives to improve supply chain competitiveness include third- party or integrated service providers in the collaboration.

Answer: TRUE Difficulty: 1 Easy Topic: Development and Management of Supply Chain Relationships Learning Objective: 12-02 Development and Management of Supply Chain Relationships Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

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18) As a general rule powerful firms prefer to link with less powerful firms in supply chain collaboration so that it can use power to obtain advantage over those less powerful firms.

Answer: FALSE Difficulty: 1 Easy Topic: Development and Management of Supply Chain Relationships Learning Objective: 12-02 Development and Management of Supply Chain Relationships Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

19) Contracting as a form of supply chain collaborative relationship generally involves greater information sharing and dependency than administered relationships.

Answer: FALSE Difficulty: 1 Easy Topic: Development and Management of Supply Chain Relationships Learning Objective: 12-02 Development and Management of Supply Chain Relationships Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

20) Most supply chain relationships that are characterized as alliances have been initiated by the customer rather than the supplier.

Answer: TRUE Difficulty: 2 Medium Topic: Development and Management of Supply Chain Relationships Learning Objective: 12-02 Development and Management of Supply Chain Relationships Bloom's: Understand AACSB: Knowledge Application 138 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Accessibility: Keyboard Navigation

21) The text use of the term "Great Divide" describes the difficulties firms have had in establishing relationships with customers and suppliers.

Answer: FALSE Difficulty: 2 Medium Topic: Development and Management of Supply Chain Relationships Learning Objective: 12-02 Development and Management of Supply Chain Relationships Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

139 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

22) Jones Company has done an excellent job in meeting its promises concerning logistical performance to customers. This level of performance is distinguishing factor in reliability-based trust.

Answer: TRUE Difficulty: 2 Medium Topic: Development and Management of Supply Chain Relationships Learning Objective: 12-02 Development and Management of Supply Chain Relationships Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

23) Before implementing a supply chain alliance, investments in compatible information technology are essential.

Answer: FALSE Difficulty: 1 Easy Topic: Managing Supply Chain Relationships over Time Learning Objective: 12-03 Managing Supply Chain Relationships over Time Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation Supply Chain Logistics Management, 5e (Bowersox) Chapter 13

Performance Management

1) Joe Jones has put in place a new set of performance metrics for the Logistics Department at his firm. He is convinced that these will give him better information about the department's performance, but is concerned that he doesn't know what type of behavior the new measurement system will encourage in his employees. Joe seems to be concerned about which objective of performance measurement?

140 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

A) monitoring B) directing C) controlling D) measuring

Answer: B Difficulty: 1 Easy Topic: Measurement System Objectives Learning Objective: 13-01 Measurement System Objectives Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

2) Jingle Corporation received an order from a customer for 100 units of bells, 200 units of whistles, and 200 units of dingers. The customer received from Jingle Corporation 90 units of bells, 190 units of whistles, and 200 units of dingers. Jingle's item fill rate was: A) 90% B) 95% C) 33.33% D) 96%

Answer: D Explanation: Item fill rate =

=

= 0.96

Difficulty: 3 Hard Topic: Operational Assessment Learning Objective: 13-02 Operational Assessment Bloom's: Analyze AACSB: Knowledge Application Accessibility: Keyboard Navigation 141 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

142 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

3) In the above question, Jingle's line fill rate was: A) 90% B) 95% C) 33.33% D) 96%

Answer: C Explanation: Line fill rate =

=

= 0.3333

Difficulty: 3 Hard Topic: Operational Assessment Learning Objective: 13-02 Operational Assessment Bloom's: Analyze AACSB: Knowledge Application Accessibility: Keyboard Navigation

4) Which of the following metrics would be part of the "internal operations perspective" in the Balanced Scorecard?

A) return on investment B) fill rate C) number of credit claims D) units shipped per employee

Answer: D Difficulty: 2 Medium Topic: Measurement System Objectives Learning Objective: 13-01 Measurement System Objectives Bloom's: Understand AACSB: Knowledge Application 143 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Accessibility: Keyboard Navigation

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5) Suppose your company receives trade credit from your suppliers which allows you 10 days to pay for the goods you buy. You flow your inventory through your company every 30 days. You allow your customers 30 days to pay you. Your cash-to-cash cycle time is: A) 10 days B) 50 days C) 70 days D) none of the above

Answer: B Explanation: CTC = Inventory Days + AR days - AP days = 30 + 30 - 10 = 50 days Difficulty: 3 Hard Topic: Financial Assessment Learning Objective: 13-03 Financial Assessment Bloom's: Evaluate AACSB: Knowledge Application Accessibility: Keyboard Navigation

6) Last year, Able Company had Sales of $10 million, Cost of Goods Sold of $6 million, Gross Profit of $4 million and Net Profit of $1 million. Average inventory at cost was $2 million. Able's inventory turn rate was: A) 5 times B) 3 times C) 2 times D) 0.5 times

Answer: B Explanation: Inventory turnover =

=

= 3 turns

Difficulty: 3 Hard Topic: Operational Assessment 145 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Learning Objective: 13-02 Operational Assessment Bloom's: Analyze AACSB: Knowledge Application Accessibility: Keyboard Navigation

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7) Which of the following supply chain comprehensive metrics is likely the most difficult to actually quantify?

A) supply chain response time B) inventory days of supply C) dwell time D) cash-to-cash conversion

Answer: A Difficulty: 2 Medium Topic: Operational Assessment Learning Objective: 13-02 Operational Assessment Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

8) People who support the use of the contribution approach to segmental profitability feel that the net profit approach is wrong because it allocates costs: A) arbitrarily B) on a predetermined basis C) equally among the products or customers D) all of the above

Answer: A Difficulty: 2 Medium Topic: Financial Assessment Learning Objective: 13-03 Financial Assessment Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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[The following information applies to the questions displayed below.]

9) In the above "Strategic Profit Model" what is the hypothetical firm's net profit margin?

A) 8% B) 16% C) 40% D) none of the above

Answer: B Explanation: Net profit margin =

=

=

= 0.16

Difficulty: 3 Hard Topic: Financial Assessment Learning Objective: 13-03 Financial Assessment 148 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Bloom's: Analyze AACSB: Knowledge Application Accessibility: Keyboard Navigation

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10) In the above Strategic Profit Model what is the hypothetical firm's ROA? A) 8% B) 0.8 C) 32% D) 2

Answer: C Explanation: Return on assets = Net profit margin × Asset turnover =

=

=

×

×

×

= 0.16 × 2 = 0.32

Difficulty: 3 Hard Topic: Financial Assessment Learning Objective: 13-03 Financial Assessment Bloom's: Analyze AACSB: Knowledge Application Accessibility: Keyboard Navigation

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[The following information applies to the questions displayed below.]

Suppose the firm in the above Strategic Profit Model undertakes a supply chain improvement project. It improves its service level to customers by opening more warehouses which means it will be able to delivery more quickly to customers. The result is a 10% increase in sales. Assume cost of goods sold increases by 6%.. The new warehouse requires additional new asset investment of $40,000. Fixed expenses increase by $1,000 because of the expense of operating the warehouses.

Assume other variables do not change. Answer the following three questions based on this information.

11) What is the firm's new net profit margin?

A) 22% B) 16% C) 20% D) 5%

Answer: C Explanation: COGS = 150,000 × 1.06 = 159,000

Gross margin = Sales - COGS = 275,000 - 159,000 = 116,000.

Total expenses = Variable expenses + Fixed expenses = 25,000 + (35,000 + 1,000) = 61,000.

Net profit margin =

=

=

= 0.20

Difficulty: 3 Hard Topic: Financial Assessment Learning Objective: 13-03 Financial Assessment Bloom's: Analyze AACSB: Knowledge Application Accessibility: Keyboard Navigation 151 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

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12) The firm's new asset turnover is closest to?

A) 1.67 times B) 2.5 times C) 1.52 times D) 0.6 times

Answer: A Explanation: Asset turnover =

=

=

1.67 turns Difficulty: 2 Medium Topic: Financial Assessment Learning Objective: 13-03 Financial Assessment Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

13) What is the firm's new return on assets (choose the closest answer)?

A) 33.33% B) 28% C) 33.44% D) 12%

Answer: A Explanation: Sales = 250,000 × 1.1 = 275,000

COGS = 150,000 × 1.06 = 159,000

Gross margin = Sales - COGS = 275,000 - 159,000 = 116,000.

Total expenses = Variable expenses + Fixed expenses = 25,000 + (35,000 + 1,000) = 61,000.

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Net profit margin =

=

Asset turnover =

=

=

= 0.20

= 1.67 turns

Return on assets = Net profit margin × Asset turnover = 0.20 × 1.67 = 0.3333 Difficulty: 3 Hard Topic: Financial Assessment Learning Objective: 13-03 Financial Assessment Bloom's: Analyze AACSB: Knowledge Application Accessibility: Keyboard Navigation 14) Suppose two companies have identical profit margins. However, Company A has a higher gross margin than company B. Which one of the following would best explain how company B ends up with the same profit margin?

A) Company A has a more efficient supply chain.

B) Company A has a higher asset turnover rate.

C) Company B has a more efficient supply chain.

D) Company B has a higher asset turnover.

Answer: C Difficulty: 2 Medium Topic: Financial Assessment Learning Objective: 13-03 Financial Assessment Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

15) A firm has an asset turnover of 3 times and a net profit margin of 4%. In the next year its 154 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

margin decreases to 2%. This is not necessarily bad if A) asset turnover increases to at least 6 times B) asset turnover decreases to 1.5 times C) asset turnover doesn't change D) gross margin increases enough to offset the decrease in net profit margin

Answer: A Explanation: Return on assets = Net profit margin × Asset turnover,

in the first year the firm's ROA was 3×4%=12%. In the second year, margins decreased to 2%, which would require an asset turnover of 6 to result in an equal ROA (6×2%=12%).

Difficulty: 3 Hard Topic: Financial Assessment Learning Objective: 13-03 Financial Assessment Bloom's: Evaluate AACSB: Knowledge Application Accessibility: Keyboard Navigation

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16) What is dwell time: A) A key component of system design B) The ratio of asset idle time to total time required to complete a mission C) The total time inventory is waiting to be processed.

D) A key concept in manufacturing efficiency

Answer: B Difficulty: 2 Medium Topic: Operational Assessment Learning Objective: 13-02 Operational Assessment Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

17) Measuring transportation cost per order would be appropriate for the Operations Perspective of the Balanced Scorecard.

Answer: TRUE Difficulty: 2 Medium Topic: Measurement System Objectives Learning Objective: 13-01 Measurement System Objectives Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

18) A firm performs at a level of 90% on each individual dimension of its logistics service performance. This suggests that the firm is providing 90% perfect order performance.

Answer: FALSE Explanation: Because a failure is possible for any of the individual dimensions, the perfect order score can be as low as the product of the individual dimension scores. For example, with two 156 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

individual dimensions, each performing at the 90% level, the perfect order score could be as low as 81% (0.9×0.9=0.81).

Difficulty: 2 Medium Topic: Operational Assessment Learning Objective: 13-02 Operational Assessment Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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19) Recent research suggests that most firms currently are unable to actually measure the profitability of serving specific customers.

Answer: TRUE Difficulty: 1 Easy Topic: Financial Assessment Learning Objective: 13-03 Financial Assessment Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

20) It is more difficult to achieve a high percentage order fill rate than a high percentage item fill rate.

Answer: TRUE Difficulty: 2 Medium Topic: Operational Assessment Learning Objective: 13-02 Operational Assessment Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

21) Customer satisfaction with logistics performance can be determined by measuring perfect order performance.

Answer: FALSE Difficulty: 2 Medium Topic: Operational Assessment Learning Objective: 13-02 Operational Assessment Bloom's: Understand AACSB: Knowledge Application 158 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Accessibility: Keyboard Navigation

22) On-shelf in-stock percentage is the retailer's sole responsibility.

Answer: FALSE Difficulty: 2 Medium Topic: Operational Assessment Learning Objective: 13-02 Operational Assessment Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

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23) Benchmarking processes is less common than benchmarking performance metrics.

Answer: TRUE Difficulty: 1 Easy Topic: Operational Assessment Learning Objective: 13-02 Operational Assessment Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

24) Activity-based costing is a methodology for avoiding allocation of expenses to customer or product segments.

Answer: FALSE Difficulty: 2 Medium Topic: Financial Assessment Learning Objective: 13-03 Financial Assessment Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

25) A product's direct costs should not be considered when determining the profitability of that product.

Answer: FALSE Difficulty: 2 Medium Topic: Financial Assessment Learning Objective: 13-03 Financial Assessment Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 160 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

26) A product with low gross margin can provide a higher return on its direct investment than a product with a high gross margin.

Answer: TRUE Difficulty: 2 Medium Topic: Financial Assessment Learning Objective: 13-03 Financial Assessment Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation Supply Chain Logistics Management, 5e (Bowersox) Chapter 14

Supply Chain Trends

1) The primary benefits of low product complexity include all of the following except: A) Increased revenue B) Improved product quality and reliability C) Improved product development D) Decreased sales support cost

Answer: A Difficulty: 2 Medium Topic: Managing Risk and Complexity Learning Objective: 14-03 Managing Risk and Complexity Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

2) Which of the following are not environmental initiatives being used by firms in their supply chains 161 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

A) Reduced packaging B) Product recycling after useful life C) Waste electrical and electronic equipment D) Supply chain redesign to minimize carbon

Answer: C Difficulty: 1 Easy Topic: Managing Threats and Environmental Changes Learning Objective: 14-04 Managing Threats and Environmental Changes Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

3) When searching for a supply chain management professional, hiring executives should expect that candidates meet all the desired criteria.

Answer: FALSE Difficulty: 2 Medium Topic: Developing Supply Chain Management Talent Learning Objective: 14-02 Developing Supply Chain Management Talent Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

162 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

4) Employees who are being groomed for supply chain managerial positions should not be in rotation programs that are developed and controlled by a single leader.

Answer: TRUE Difficulty: 2 Medium Topic: Developing Supply Chain Management Talent Learning Objective: 14-02 Developing Supply Chain Management Talent Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

163 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.