Contemporary logistics 12th edition murphy test bank

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TEST BANK CHAPTER 7: DEMAND MANAGEMENT, ORDER MANAGEMENT AND CUSTOMER SERVICE Multiple Choice Questions (correct answers are bolded) 1. The creation across the supply chain and its markets of a coordinated flow of demand is the definition of ___________. a. order cycle b. order management c. demand management d. supply chain management [LO 7.1: To explain demand management and demand forecasting models; Easy; Concept; AACSB Category 3: Analytical thinking] 2. ___________ refers to finished goods that are produced prior to receiving a customer order. a. Make-to-stock b. Supply management c. Make-to-order d. Speculation [LO 7.1: To explain demand management and demand forecasting models; Easy; Concept; AACSB Category 3: Analytical thinking] 3. ___________ refers to finished goods that are produced after receiving a customer order. a. Make-to-stock b. Supply management c. Make-to-order d. Postponement [LO 7.1: To explain demand management and demand forecasting models; Easy; Concept; AACSB Category 3: Analytical thinking] 4. Which of the following is not a basic type of demand forecasting model? a. exponential smoothing b. cause and effect c. judgmental d. time series

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[LO 7.1: To explain demand management and demand forecasting models; Moderate; Synthesis; AACSB Category 3: Analytical thinking] 5. Surveys and analog techniques are examples of ___________ forecasting. a. cause and effect b. time series c. exponential smoothing d. judgmental [LO 7.1: To explain demand management and demand forecasting models; Moderate; Application; AACSB Category 3: Analytical thinking] 6. An underlying assumption of ___________ forecasting is that future demand is dependent on past demand. a. trial and error b. time series c. judgmental d. cause and effect [LO 7.1: To explain demand management and demand forecasting models; Moderate; Concept; AACSB Category 3: Analytical thinking] 7. Which forecasting technique assumes that one or more factors are related to demand and that this relationship can be used to estimate future demand? a. exponential smoothing b. judgmental c. cause and effect d. time series [LO 7.1: To explain demand management and demand forecasting models; Moderate; Concept; AACSB Category 3: Analytical thinking] 8. Which forecasting technique tends to be appropriate when there is little or no historical data? a. exponential smoothing b. judgmental c. time series d. cause and effect [LO 7.1: To explain demand management and demand forecasting models; Moderate; Application; AACSB Category 3: Analytical thinking]

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9. ___________ suggests that supply chain partners will be working from a collectively agreedto single demand forecast number as opposed to each member working off its own demand forecast projection. a. Supply chain orientation b. Collaborative planning, forecasting, and replenishment (CPFR) concept c. Order management d. Supply chain analytics [LO 7.1: To explain demand management and demand forecasting models; Easy; Concept; AACSB Category 3: Analytical thinking] 10. ___________ refers to the management of various activities associated with the order cycle. a. Logistics b. Order processing c. Demand management d. Order management [LO 7.2: To examine the order cycle and its four components; Easy; Concept; AACSB Category3: Analytical thinking] 11. The order cycle is ___________. a. the time that it takes for a check to clear b. the time that it takes from when a customer places an order until the selling firm receives the order c. also called the replenishment cycle d. also called the vendor cycle [LO 7.2: To examine the order cycle and its four components; Moderate; Concept; AACSB Category3: Analytical thinking] 12. The order cycle is composed of each of the following except: a. order retrieval. b. order delivery. c. order picking and assembly. d. order transmittal.

[LO 7.2: To examine the order cycle and its four components; Difficult; Synthesis; AACSB Category 3: Analytical thinking] 13. Which of the following statements is false?

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a. Some organizations have expanded the order management concept to include the length of time it takes for an organization to receive payment for an order. b. The order cycle should be analyzed in terms of total cycle time and cycle time variability. c. Order management has been profoundly impacted by advances in information systems. d. Order management is synonymous with order cycle.

[LO 7.2: To examine the order cycle and its four components; Difficult; Synthesis; AACSB Category 3: Analytical thinking] 14. Order transmittal is ___________. a. the series of events that occurs from the time a customer places an order and the time the customer receives the order b. the series of events that occurs between the time a customer places an order and the time the seller receives the order c. the series of events that occurs between the time a customer perceives the need for a product and the time the seller receives the order d. the series of events that occurs between the time a customer places an order and the time the order cycle begins [LO 7.2: To examine the order cycle and its four components; Moderate; Concept; AACSB Category 3: Analytical thinking] 15. In general, there are ___________ possible ways to transmit orders. a. three b. four c. five d. six [LO 7.2: To examine the order cycle and its four components; Moderate; Application; AACSB Category 3: Analytical thinking] 16. ___________ and electronic ordering are order transmittal techniques that have emerged over the last 30 years. a. In-person b. Mail c. Fax d. Telephone [LO 7.2: To examine the order cycle and its four components; Easy; Application; AACSB Category 3: Analytical thinking] 17. What is the second phase of the order cycle?

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a. order transmittal b. order processing c. order picking and assembly d. order delivery [LO 7.2: To examine the order cycle and its four components; Moderate; Synthesis; AACSB Category 3: Analytical thinking] 18. ___________ refers to the time from when the seller receives an order until an appropriate location is authorized to fill the order. a. Order processing b. Order cycle c. Order management d. Order transmittal [LO 7.2: To examine the order cycle and its four components; Moderate; Concept; AACSB Category 3: Analytical thinking] 19. Classifying orders according to pre-established guidelines so that a company can prioritize how orders are to be filled refers to ___________. a. order fill rate b. order management c. order processing d. order triage [LO 7.2: To examine the order cycle and its four components; Moderate; Concept; AACSB Category 3: Analytical thinking] 20. Order picking and assembly is ___________. a. the final stage of the order cycle b. the most important component of the order cycle c. the order cycle component that follows order processing d. the order cycle component that follows order transmittal [LO 7.2: To examine the order cycle and its four components; Moderate; Synthesis; AACSB Category 3: Analytical thinking] 21. The text suggests that ___________ often represents the best opportunity to improve the effectiveness and efficiency of an order cycle. a. order transmittal b. order picking and assembly 5 Copyright © 2018 Pearson Education, Inc.

c. order delivery d. order processing [LO 7.2: To examine the order cycle and its four components; Difficult; Synthesis; AACSB Category 3: Analytical thinking] 22. Which of the following is not a characteristic of contemporary voice-based order picking systems? a. easily disrupted by other noises b. better voice quality c. more powerful d. less costly [LO 7.2: Order Management; Difficult; Synthesis; AACSB Category 3: Analytical thinking] 23. Which of the following is not a benefit of voice-based order picking? a. fewer picking errors b. improved productivity c. minimal training time to learn the technology d. fewer employee accidents [LO 7.2: To examine the order cycle and its four components; Difficult; Synthesis; AACSB Category 3: Analytical thinking] 24. The final phase of the order cycle is called order ___________. a. picking and assembly b. delivery c. receiving d. replenishment [LO 7.2: To examine the order cycle and its four components; Moderate; Synthesis; AACSB Category 3: Analytical thinking] 25. The time span within which an order must arrive refers to ___________. a. transit time reliability b. order delivery c. delivery window d. transit time [LO 7.2: To examine the order cycle and its four components; Moderate; Concept; AACSB Category 3: Analytical thinking]

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26. A commonly used rule of thumb is that it costs approximately ___________ times as much to get a new customer as it does to keep an existing customer. a. three b. four c. five d. six [LO 7.3: To understand the four dimensions of customer service as they pertain to logistics; Moderate; Application; AACSB Category 3: Analytical thinking] 27. An unhappy customer will tell ___________ other people about her/his unhappiness. a. seven b. nine c. twelve d. fifteen [LO 7.3: To understand the four dimensions of customer service as they pertain to logistics; Moderate; Application; AACSB Category 3: Analytical thinking] 28. The ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience is the definition of ___________. a. customer service b. the order cycle c. a perfect order d. customer satisfaction [LO 7.3: To understand the four dimensions of customer service as they pertain to logistics; Moderate; Concept; AACSB Category 3: Analytical thinking] 29. The order cycle is an excellent example of the ___________ dimension of customer service. a. time b. convenience c. dependability d. communication [LO 7.3: To understand the four dimensions of customer service as they pertain to logistics; Moderate; Application; AACSB Category 3: Analytical thinking] 30. The percentage of orders that can be completely and immediately filled from existing stock is the ___________ rate. a. optimal inventory 7 Copyright © 2018 Pearson Education, Inc.

b. order cycle c. perfect order d. order fill [LO 7.3: To understand the four dimensions of customer service as they pertain to logistics; Easy; Concept; AACSB Category 3: Analytical thinking] 31. What component of customer service focuses on the ease of doing business with a seller? a. convenience b. dependability c. time d. communication [LO 7.3: To understand the four dimensions of customer service as they pertain to logistics; Easy; Concept; AACSB Category 3: Analytical thinking] 32. What are multichannel marketing systems? a. channels that have multiple intermediaries between the producer and the consumer b. separate marketing channels that serve an individual customer c. the same thing as horizontal marketing systems d. channels that combine horizontal and vertical marketing systems [LO 7.3: To understand the four dimensions of customer service as they pertain to logistics; Moderate; Concept; AACSB Category 3: Analytical thinking] 33. Objectives should be SMART—that is, ___________, measurable, achievable, realistic, and timely. a. specific b. strategic c. static d. striving [LO 7.4: To familiarize you with select managerial issues associated with customer service; Moderate; Application; AACSB Category 3: Analytical thinking] 34. Which of the following statements is false? a. Goals tend to be broad, generalized statements regarding the overall results that the firm is trying to achieve. a. Objectives are more specific than goals. c. A central element to the establishment of customer service goals and objectives is determining the customer’s viewpoint. d. Objectives should be specific, measurable, achievable, and responsive.

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[LO 7.4: To familiarize you with select managerial issues associated with customer service; Difficult; Synthesis; AACSB Category 3: Analytical thinking] 35. ___________ refers to a process that continuously identifies, understands, and adapts outstanding processes inside and outside an organization. a. Environmental scanning b. Quality management c. Benchmarking d. Continuous improvement [LO 7.4: To familiarize you with select managerial issues associated with customer service; Moderate; Concept; AACSB Category 3: Analytical thinking] 36. ___________ is the process of taking corrective action when measurements indicate that the goals and objectives of customer service are not being achieved. a. Benchmarking b. Leadership c. Control d. Managing [LO 7.4: To familiarize you with select managerial issues associated with customer service; Moderate; Concept; AACSB Category 3: Analytical thinking] 37. Which statement about measuring customer service is true? a. Firms should choose those aspects of customer service that are easiest to measure. b. Order cycle time is the most commonly used customer service measure. c. Firms should use as many customer service measures as they can. d. It is possible for organizations to use only one customer service metric.

[LO 7.4: To familiarize you with select managerial issues associated with customer service; Difficult; Synthesis; AACSB Category 3: Analytical thinking] 38. ___________ refers to the allocation of revenues and costs to customer segments or individual customers to calculate the profitability of the segments or customers. a. Customer profitability analysis b. Net present value c. Customer lifetime value d. Activity-based costing (ABC) [LO 7.4: To familiarize you with select managerial issues associated with customer service; Easy; Concept; AACSB Category 3: Analytical thinking] 9 Copyright © 2018 Pearson Education, Inc.

39. Which of the following statements is false? a. The service recovery paradox is where a customer holds the responsible company in higher regard after the service recovery than if a service failure had not occurred in the first place. b. A set formula that companies should follow for service recovery exists. c. One service recovery guideline involves fair treatment for customers. d. Service recovery refers to a process for returning a customer to a state of satisfaction after a service or product has failed to live up to expectations.

[LO 7.4: To familiarize you with select managerial issues associated with customer service; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

True-False Questions 1. Demand management is important because efficient and effective supply chains have learned to match both supply and demand. (True) [LO: Beginning of the chapter material; Moderate; Application; AACSB Category 3: Analytical thinking] 2. In make-to-order situations, finished goods are produced after receiving a customer order.

(True) [LO 7.1: To explain demand management and demand forecasting models; Easy; Concept; AACSB Category 3: Analytical thinking] 3. Simple moving averages and weighted moving averages are examples of judgmental forecasting. (False) [LO 7.1: To explain demand management and demand forecasting models; Moderate; Application; AACSB Category 3: Analytical thinking] 4. Judgmental forecasting is appropriate when there is little or no historical data. (True) [LO 7.1: To explain demand management and demand forecasting models; Moderate; Application; AACSB Category 3: Analytical thinking] 5. Forecasting accuracy refers to the relationship between the actual and forecasted demand.

(True) [LO 7.1: To explain demand management and demand forecasting models; Easy; Concept; AACSB Category 3: Analytical thinking]

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6. Demand chain management is where supply chain partners share planning and forecasting data to better match up supply and demand. (False) [LO 7.1: To explain demand management and demand forecasting models; Moderate; Concept; AACSB Category 3: Analytical thinking] 7. In general terms, order management refers to management of the various activities associated with the order cycle. (True) [LO 7.2: To examine the order cycle and its four components; Easy; Concept; AACSB Category 3: Analytical thinking] 8. The order cycle is usually the time from when a customer places an order to when the firm receives the order. (False) [LO 7.2: To examine the order cycle and its four components; Moderate; Concept; AACSB Category 3: Analytical thinking] 9. There are four possible ways to transmit orders. (False) [LO 7.2: To examine the order cycle and its four components; Moderate; Application; AACSB Category 3: Analytical thinking] 10. Order information is checked for completeness and accuracy in the order processing component of the order cycle. (True) [LO 7.2: To examine the order cycle and its four components; Moderate; Synthesis; AACSB Category 3: Analytical thinking] 11. The order triage function refers to correcting mistakes that may occur with order picking.

(False) [LO 7.2: To examine the order cycle and its four components; Moderate; Concept; AACSB Category 3: Analytical thinking] 12. A commonsense approach is to fill an order from the facility location that is closest to the customer, with the idea that this should generate lower transportation costs as well as a shorter order cycle time. (True) [LO 7.2: To examine the order cycle and its four components; Easy; Application; AACSB Category 3: Analytical thinking] 13. Order processing often represents the best opportunity to improve the effectiveness and efficiency of the order cycle. (False)

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[LO 7.2: To examine the order cycle and its four components; Moderate; Application; AACSB Category 3: Analytical thinking] 14. Travel time accounts for a majority of an order picker’s total pick time. (True) [LO 7.2: To examine the order cycle and its four components; Moderate; Synthesis; AACSB Category 3: Analytical thinking] 15. Pick-to-light technology is an order picking technique that has grown in popularity in recent years. (True) [LO 7.2: To examine the order cycle and its four components; Moderate; Application; AACSB Category 3: Analytical thinking] 16. Order retrieval is the final phase of the order cycle. (False) [LO 7.2: To examine the order cycle and its four components; Moderate; Synthesis; AACSB Category 3: Analytical thinking] 17. A key change in the order delivery component of the order cycle is that more and more shippers are emphasizing both the elapsed transit time and transit time variability. (True) [LO 7.2: To examine the order cycle and its four components; Moderate; Application; AACSB Category 3: Analytical thinking] 18. It costs about five times as much to get a new customer as it does to keep an existing customer. (True) [LO 7.3: To understand the four dimensions of customer service as they pertain to logistics; Easy; Application; AACSB Category 3: Analytical thinking] 19. Consumers are demanding about the same levels of service today as in years past. (False) [LO 7.3: To understand the four dimensions of customer service as they pertain to logistics; Moderate; Synthesis; AACSB Category 3: Analytical thinking] 20. The increased use of vendor quality-control programs necessitates higher levels of customer service. (True) [LO 7.3: To understand the four dimensions of customer service as they pertain to logistics; Moderate; Synthesis; AACSB Category 3: Analytical thinking] 21. Customer service can be defined as the ability of logistics management to satisfy users in terms of quality, dependability, communication, and convenience. (False)

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[LO 7.3: To understand the four dimensions of customer service as they pertain to logistics; Moderate; Concept; AACSB Category 3: Analytical thinking] 22. Dependability consists of consistent order cycles, safe delivery, and complete delivery.

(True) [LO 7.3: To understand the four dimensions of customer service as they pertain to logistics; Moderate; Synthesis; AACSB Category 3: Analytical thinking] 23. Companies today will not accept slower order cycles in exchange for higher order cycle consistency. (False) [LO 7.3: To understand the four dimensions of customer service as they pertain to logistics; Moderate; Synthesis; AACSB Category 3: Analytical thinking] 24. Order fill rate is the percentage of orders that can be completely and immediately filled from existing stock. (True) [LO 7.3: To understand the four dimensions of customer service as they pertain to logistics; Easy; Concept; AACSB Category 3: Analytical thinking] 25. Text messaging and the Internet have lessened the need for telephone interaction and face-toface contact between seller and customer. (False) [LO 7.3: To understand the four dimensions of customer service as they pertain to logistics; Moderate; Synthesis; AACSB Category 3: Analytical thinking] 26. The convenience component of customer service focuses on the ease of doing business with a seller. (True) [LO 7.3: To understand the four dimensions of customer service as they pertain to logistics; Easy; Concept; AACSB Category 3: Analytical thinking] 27. Today’s customer likes to have multiple purchasing options at her/his disposal, and organizations have responded by developing hybrid marketing channels—that is, separate marketing channels to serve an individual customer. (False) [LO 7.3: To understand the four dimensions of customer service as they pertain to logistics; Moderate; Concept; AACSB Category 3: Analytical thinking] 28. Goals are the means by which objectives are achieved. (False) [LO 7.4: To familiarize you with select managerial issues associated with customer service; Moderate; Concept; AACSB Category 3: Analytical thinking] 29. Objectives should be specific, measurable, achievable, realistic, and timely. (True) 13 Copyright © 2018 Pearson Education, Inc.

[LO 7.4: To familiarize you with select managerial issues associated with customer service; Moderate; Synthesis; AACSB Category 3: Analytical thinking] 30. Continuous improvement refers to a process that continuously identifies, understands, and adapts outstanding processes found inside and outside an organization. (False) [LO 7.4: To familiarize you with select managerial issues associated with customer service; Moderate; Concept; AACSB Category 3: Analytical thinking] 31. Benchmarking should only involve numerical comparisons of relevant metrics. (False) [LO 7.4: To familiarize you with select managerial issues associated with customer service; Moderate; Synthesis; AACSB Category 3: Analytical thinking] 32. The nature of the product can affect the level of customer service that should be offered.

(True) [LO 7.4: To familiarize you with select managerial issues associated with customer service; Moderate; Synthesis; AACSB Category 3: Analytical thinking] 33. A product just being introduced needs a different level of service support than one that is in a mature or declining market stage. (True) [LO 7.4: To familiarize you with select managerial issues associated with customer service; Moderate; Synthesis; AACSB Category 3: Analytical thinking] 34. Leadership is the process of taking corrective action when measurements indicate that the goals and objectives of customer service are not being achieved. (False) [LO 7.4: To familiarize you with select managerial issues associated with customer service; Moderate; Concept; AACSB Category 3: Analytical thinking] 35. The customer service metrics that are chosen should be relevant and important from the customer’s perspective. (True) [LO 7.4: To familiarize you with select managerial issues associated with customer service; Moderate; Synthesis; AACSB Category 3: Analytical thinking] 36. It is possible for organizations to use only one customer service metric to measure customer service. (True) [LO 7.4: To familiarize you with select managerial issues associated with customer service; Easy; Application; AACSB Category 3: Analytical thinking

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37. Customer profitability analysis explicitly recognizes that all customers are not the same and that some customers are more valuable than others to an organization. (True) [LO 7.4: To familiarize you with select managerial issues associated with customer service; Moderate; Concept; AACSB Category 3: Analytical thinking] 38. Customer profitability analysis is grounded in traditional accounting cost allocation methods.

(False) [LO 7.4: To familiarize you with select managerial issues associated with customer service; Moderate; Application; AACSB Category 3: Analytical thinking] 39. Poor customer experiences cost U.S. business in excess of $75 billion per year. (False) [LO 7.4: To familiarize you with select managerial issues associated with customer service; Moderate; Synthesis; AACSB Category 3: Analytical thinking] 40. In the service recovery paradox, a customer holds the responsible company in higher regard after the service than if a service failure had not occurred in the first place. (True) [LO 7.4: To familiarize you with select managerial issues associated with customer service; Moderate; Application; AACSB Category 3: Analytical thinking]

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