Retail management 8th edition levy test bank

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Chapter 10 - Information Systems and Supply Chain Management

Chapter 10 Information Systems and Supply Chain Management True / False Questions

1. A pick ticket tells the DC what is being shipped.

True False

2. Since inventory at the store is based on consumer demand, in a pull supply chain, there is a lesser likelihood of being overstocked or out of stock.

True False

3. Freight forwarding is a flow back of merchandise through the channel from the customer back to the vendor.

True False

4. Cross-docking is when vendors ship merchandise prepackaged in the quantity required for each store and when the products arrive to the distribution center, the products move to the staging area to be shipped to the designated stores.

True False

5. The build up of inventory in an uncoordinated channel is called the bell-curve effect.

True False

6. Vendor-managed inventory is an approach for improving supply chain efficiency in which the vendor is responsible for maintaining the retailer's inventory levels in each of its stores.

True False

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Chapter 10 - Information Systems and Supply Chain Management

7. The technology that allows an object or person to be identified at a distance using radio waves uses RFID. True False

8. EDI is a set of activities and techniques that companies implement to efficiently and effectively manage the flow of merchandise from the vendors to the retailer.

True False

9. Vendors are in the best position to collect information about customer shopping behavior.

True False

10. A benefit of having an efficient supply chain is that there is better inventory management allowing retailers to be certain of having the right amount of inventory in the right place at the right time.

True False

Multiple Choice Questions

11. ______________ is a set of activities and techniques that companies implement to efficiently and effectively manage the flow of merchandise from the vendors to the retailer.

A. Logistics B. Supply chain management C. Total quality management D. Electronic data interchange (EDI) E. Materials handling

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Chapter 10 - Information Systems and Supply Chain Management

12. Which of the following best describes the goal of supply chain management?

A. to maximize retailers' profits by reducing costs while satisfying service levels that their customers require B. minimizing system wide costs while satisfying the service levels (product availability) that customers desire C. reducing costs by allocating merchandise D. maximizing retailers' profits by reducing system wide costs, while achieving the highest service level (product availability) E. minimizing system wide costs, while achieving the highest service level (product availability)

13. Which of the following is responsible for gauging the needs of the customer?

A. retailers B. distributors C. vendors D. transportation companies E. designers

14. Which of the following does NOT describe why retailers have been increasingly taking a leadership role in managing their respective supply chains?

A. consolidation of national retail chains B. emergence of larger retailers C. access to purchase information customer by customer D. flexibility of changing retail price

15. Which of the following is NOT a benefit of efficient supply chain management?

A. improved product availability B. fewer stockouts C. better fashions D. higher return on investments E. strategic advantage

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Chapter 10 - Information Systems and Supply Chain Management

16. Because of their position in the supply chain, retailers are in a unique position to: A. collect purchase information from customers based on each transaction B. communicate openly with a multiple of distribution centers without causing animosity C. dictate price despite recommendations by vendors D. negotiate prices with vendors E. sell more than a competing manufacturer

17. What is a benefit of having an efficient supply chain?

A. fewer associates are needed to replenish stock B. more time for customer services C. less negotiating with vendors D. fewer stockouts E. planning strategy becomes more predictable

18. Which of the following DOES NOT describe why an efficient supply chain is so important to retailers?

A. improved product availability B. higher return on investment C. a strategic advantage D. trendier merchandise E. improved in-stock position

19. To meet specific needs of a variety of customers, retailers must: A. manage its supply chain to avoid stockouts B. extending hours of operation C. include only national brands D. operating with more markdowns to make room for new merchandise E. working closer with vendors to keep prices lower

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Chapter 10 - Information Systems and Supply Chain Management

20. Macy's sells a variety of winter coats throughout the country focusing delivery in the northern tiers first and ending the season rollouts in the south much like the way the cold weather migrates. This management of the winter products can best be described as: A. reducing stockouts B. improved sale productivity C. tailoring assortments D. following seasonal lead E. tailoring assets

21. Which benefits does efficient supply chain management provide retailers concerning product availability?

A. reduced stockouts and employee productivity B. reduced stockouts and tailored assortments C. increased stock level and tailored assortments D. increased backup stock level and reduced stockouts E. tailored assortments and right pricing levels

22. Why are retailers considered the most important part of the supply chain?

A. They can set pricing strategies based on costs of goods sold.

B. They are more well known to the customers.

C. They can engage in both horizontal and vertical integration.

D. They receive discounts from suppliers.

E. They can best gather and evaluate data regarding customers' wants and needs.

23. Which of the following does NOT describe a retailer's strategic advantage gained through the efficient supply chain and information system?

A. All retailers can increase sales, and reduce costs, by using high performance information systems.

B. All retailers can develop a competitive advantage from their information and supply chain systems.

C. The competitive advantage from information and supply chain systems is easy to be duplicated by competitors.

D. Retailers can implement efficient supply chain management by buying best-in-class software package.

E. The effective use of supply chain and information systems requires the coordinated effort of employees and functional areas throughout the company.

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Chapter 10 - Information Systems and Supply Chain Management

24. A(n) ___________ is a document, which tells the retailer's distribution center what is specifically shipped by the vendor and when it will be delivered.

A. Universal Product Code (UPC) B. Radio Frequency Identification (RFID) C. Advanced Shipping Notice (ASN) D. Shipping document E. Bill of Lading (BOL)

25. The place where the point of sale data is stored, and that the organization uses to support its decisions is called __________.

A. a spreadsheet B. a computerized processing unit C. a data holding cell D. a database chain E. a data warehouse

26. Each time a customer makes a purchase at a Walmart store from the Health and Beauty area, data is transmitted to nearest distribution center so the merchandise can be replenished and sent on the next truck delivery. Which strategy does Walmart utilize?

A. cross check logistic strategy B. pull supply chain C. cost efficient logistic strategy D. push supply chain E. influential logistic strategy

27. When a regular customer calls a well-known pizza delivery restaurant, the order-taker types in the caller's name. The computer screen shows the customer's address, phone number, directions to his or her house, his or her usual order, and the date and frequency of orders. If the customer has not ordered during a two-month period, or the average number of orders has been down, then the pizza parlor mails them a coupon for their favorite pizza. The pizza parlor uses: A. a data warehouse B. retail information system C. customer data system D. direct marketing E. direct account management

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Chapter 10 - Information Systems and Supply Chain Management

28. Which of the following is a computer-to-computer exchange of business documents from retailer to vendor and back?

A. a data warehouse B. vendor marketing software C. customer data system D. electronic data interchange E. data exchange

29. Which of the following best describes logistics?

A. the management of merchandising products such as assortment planning and pricing adjustments B. the handling of retail materials C. part of the supply chain that does not impact profitability for most retailers D. part of the supply chain that is developed separately from the merchandising strategy E. the management of the flow of merchandise and information from the vendor to the customer

30. ____________ is the aspect of supply chain management which refers to the planning, implementation, and control of the efficient flow and storage of goods, services, and related information. It follows the process from the point of origin to the point of consumption to meet customers' requirements.

A. Logistics B. Total quality management C. Warehousing D. Distribution E. Material flow management

31. Which of the following is NOT a function of a distribution center?

A. receiving B. cross-docking C. storing merchandise D. getting merchandise "floor ready" E. negotiating with vendors

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Chapter 10 - Information Systems and Supply Chain Management

32. A _____ stores purchase data collected at the point of sale that is used to access data designed to support decision making in an organization.

A. spreadsheet B. computerized processing unit C. data holding cell D. data warehouse E. database chain

33. How do retailers and vendors ensure that information that passes back and forth between retailers and vendors is secure?

A. Paper hard copies are sent to one another for comparison to be certain that the information is accurate.

B. Suppliers, customers and new clients all have a form of access to information.

C. With a high level of planning, implementation and control of the flow of information, then the information will be secure.

D. There is an element of trust that is necessary in doing business with one another.

E. The system ensures that the information received has not been tampered with by ensuring that the communication is both authentic and authorized.

34. What are the rules that apply to activities in the computer and communication resources that belong to an organization?

A. security policy B. investigation policy C. corporate security D. policing E. corporate policy

35. Which of the following is NOT a benefit of EDI to retailers and their vendors?

A. EDI reduces cycle time.

B. Information flows quicker so inventory turnover is higher.

C. It improves overall quality of communications.

D. It is a computer readable format that can be easily analyzed.

E. EDI increases the desirability of the product for the end consumer.

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Chapter 10 - Information Systems and Supply Chain Management

36. A retailer whose orders are generated at the store level, on the basis of demand data captured by point-of-sale data, is said to employ a: A. cost efficient logistic strategy B. pull supply chain C. influential logistic strategy D. cross check logistic strategy E. push supply chain

37. In a(n) __________, merchandise is allocated to stores on the basis of forecasted demand.

Once a forecast is determined, specified quantities of merchandise are shipped to distribution centers and stores at predetermined time intervals.

A. push supply chain B. cross check logistic strategy C. influential logistic strategy D. pull supply chain E. cost efficient logistic strategy

38. Retailers with less sophisticated forecasting and information systems tend to use a(n): A. cost efficient logistic strategy B. cross check logistic strategy C. influential logistic strategy D. pull supply chain E. push supply chain

39. Which of the following does NOT describe the benefits of a pull strategy?

A. There exists less likelihood of being overstocked, or out of stock, because the store orders merchandise as needed on the basis of consumer demand.

B. It increases inventory turnover.

C. It is more responsive to changes in customer demand.

D. It becomes more efficient than a push approach when demand is uncertain and difficult to forecast.

E. All of the above are benefits of a pull strategy.

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Chapter 10 - Information Systems and Supply Chain Management

40. Which of the following describes the benefits of a pull strategy?

A. It does not require advanced systems to implement.

B. It decreases inventory turnover.

C. There is less likelihood of being overstocked or out of stock at each store.

D. It allows more efficient production and distribution scheduling to reduce costs.

E. It forecasts the competitor's demand.

41. ________ is a method where retailers receive orders from customers and have the product shipped directly to the customer from the vendor.

A. Consumer direct fulfillment B. Reverse logistics C. Pull supply chain D. Push supply chain E. Freight forwarding

42. ________ is a system when retailers receive an order from a customer they then have the product shipped directly to the customer from the vendor.

A. Drop-shipping B. Cross-docking C. Outsourcing D. Third party logistics E. Vendor managed inventory

43. From the retailers view, ___________ reduces the retailer's supply chain costs and investment because the vendor assumes the costs and risks of shipping the product to the customer.

A. Drop-shipping B. Cross-docking C. Outsourcing D. Third party logistics E. Vendor managed inventory

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Chapter 10 - Information Systems and Supply Chain Management

44. Which of the following is an advantage of using distribution centers over direct store delivery?

A. Individual stores that forecast and draw from a DC are more cost efficient.

B. The DCs have the advantage of keeping backup stock in the store.

C. Direct store delivery is always more expensive.

D. The DCs enable the retailer to carry less overall inventory.

E. The DC can always deliver faster than a vendor.

45. Which of the following does NOT describe the benefits of utilizing distribution centers over direct store delivery?

A. More accurate sales forecasts are possible when retailers combine forecast for many stores serviced by one distribution center, rather than doing a forecast for each store.

B. Distribution centers enable the retailer to carry less merchandise in the individual stores.

C. The use of distribution centers increases inventory investment systemwide.

D. It is easier to avoid running out of stock or having too much store in any particular store because merchandise is ordered from the distribution center as needed.

E. The effects of forecast error for the individual stores are minimized and less backup inventory is needed to prevent stockouts.

46. What type of retailer would most likely benefit from the use of direct store delivery?

A. A big box electronics retailer B. A supermarket C. A big box discount store D. A large department store E. A mall specialty store

47. What does a dispatcher do?

A. Dispatchers go through goods upon their receipt to make sure they arrived undamaged.

B. Dispatchers allocate warehouse space to merchants.

C. Dispatchers create pick tickets.

D. Dispatchers make pricing and identification labels and place them on merchandise.

E. Dispatchers coordinate deliveries to the distribution centers.

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Chapter 10 - Information Systems and Supply Chain Management

48. Alvin works in a distribution center. According to his job description, he is responsible for _____ or filling out paperwork to record the receipt of merchandise at the center.

A. receiving B. recording C. checking D. merchandise handling E. acquisition

49. Which of the following does NOT describe an activity managed by distribution centers?

A. receiving B. checking C. cross-docking D. ticketing E. markdowns

50. The process where vendors ship the merchandise prepackaged to the distribution center in the quantities required for each store and then that merchandise is shipped to stores as soon as it is received is called ________________.

A. cross conveyor B. cross-docking C. cycle time D. pull supply E. reverse logistics

51. Ali supervises the conveyor belts in a distribution center. Her job is to make sure the merchandise moves quickly from the receiving docks to the staging area in order for the trucks to load and deliver. No merchandise is stored as the vendors already prepared it specifically for the stores. Ali works in ______________________ at the distribution center.

A. cross examination B. cross-docking C. cataloging D. cross-checking E. reverse logistics

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Chapter 10 - Information Systems and Supply Chain Management

52. Which of the following statements about receiving, checking, marking, and ticketing is TRUE? A. Only receiving and checking involve UPC labels.

B. It is more efficient and less costly to ticket merchandise at the store level.

C. Vendors sometimes ticket and mark merchandise before shipping to the distribution centers.

D. To perform the checking process correctly, every carton must be opened and its merchandise examined.

E. The checking process is performed after the merchandise has been ticketed and marked.

53. Which of the following terms describe the process of moving returned goods to the retailer from the consumer to the DC and then to the vendor for the purpose of capturing value or proper disposal?

A. logistics B. reverse logistics C. expedited logistics D. reverse auctions E. exception management logistics

54. Ian's job at the Nordstrom distribution center is to place some of the incoming apparel on hangers in size order before rolling them down to be ticketed. Ian is preparing the merchandise to be: A. floor-ready B. ready for logistics C. cross-docked D. sorted and repacked for the conveyor E. put in storage

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Chapter 10 - Information Systems and Supply Chain Management

55. The retailer's order is transmitted to the distribution system via computers. Then the computer at the distribution center creates a(n) ____, a document or display on the screen in a forklift truck that tells the order filler how much of each item to get from the storage area and to take to the staging area.

A. order for selection B. pick ticket C. requisition order D. sorting order E. selection list

56. What is the process of moving merchandise through the channel from the customer to the store to the DC to the vendor?

A. return logistics B. reverse logistics C. outbound returns D. outbound flow E. reverse flow

57. When the law office of Dewey, Cheatham and Howe received the case of legal paper it had ordered from an internet office supply retailer, the office manager was dismayed to find the paper was pink even though it was marked white. The office manager packed the paper back up and sent it back to the retailer who in turn sent it back to the vendor. This is an example of: A. resourcing B. backwards distribution C. reverse logistics D. backwards handling E. demarketing

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Chapter 10 - Information Systems and Supply Chain Management

58. Matthew made a purchase online of a Fender speaker system from a retailer. When the shipment of his purchase arrived at his home, he noticed that the product was shipped to him directly from Fender. The retailer and vendor are utilizing a system of _________.

A. drop-shipping B. cross-docking C. outsourcing D. third party logistics E. vendor managed inventory

59. _______ are companies that purchase transport services. Then they consolidate small shipments from a number of shippers into large shipments which move at a lower freight rate.

A. Dispatchers B. Freight forwarders C. Integrated third-party logistics companies D. Reverse logistic companies E. Public warehouses

60. What happens when retailers and vendors do not coordinate their supply chain management activities?

A. prices drop at the negotiation level B. communication improves C. the DC shuts down D. inventory builds up in the supply chain E. lower inventory leads to sell-outs

61. Which of the following does NOT cause the bullwhip effect in an uncoordinated supply chain?

A. delays in transmitting orders B. overreacting to shortages C. ordering in batches D. delays in receiving orders E. information sharing

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Chapter 10 - Information Systems and Supply Chain Management

62. The building up of inventory in an uncoordinated channel is called a/an: A. adversary supply chain B. bullwhip effect C. buildup effect D. mishap effect E. CPFR

63. Which of the following does NOT describe the ways to reduce the level of inventory in the supply chain and the number of stockouts in the stores?

A. using EDI B. sharing information C. using reverse logistics D. using vendor-management inventory (VMI) E. employing collaborative planning, forecasting, and replenishment (CPRF)

64. _______________ is the sharing of forecasts and related business information between retailers and vendors to improve supply chain efficiency and product replenishment.

A. Automated replenishment system B. Universal Product Code (UPC) system C. Electronic data interchange (EDI) system D. Point of sale (POS) E. Collaborative planning, forecasting, and replenishment (CPFR)

65. ___________ is the computer-to-computer exchange of business documents from the retailer to the vendor, and vendor to retailer.

A. Automated replenishment system B. Universal Product Code (UPC) system C. Electronic data interchange (EDI) system D. Point of sale (POS) E. Collaborative planning, forecasting, and replenishment (CPFR)

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Chapter 10 - Information Systems and Supply Chain Management

66. Retailers transmit their purchase orders, transportation routings, and price tag information to their vendors through a(n) _____________.

A. automated replenishment system B. Universal Product Code (UPC) system C. Electronic data interchange (EDI) system D. Point of sale (POS) E. Collaborative planning, forecasting, and replenishment (CPFR)

67. ____________ is an approach for improving supply chain efficiency in which the vendor is responsible for maintaining the retailer's inventory levels in each of its stores.

A. Efficient consumer response (ECR) B. Reverse logistics C. Quick Response (QR) system D. Vendor-management inventory (VMI) E. Collaborative planning, forecasting, and replenishment (CPRF)

68. Because of the nature of vendor-managed inventory: A. the flow of consumer purchases determines replenishment B. DCs need to run as deliveries arrive after hours and on holidays C. there are many delays in replenishment as it's not a collaborative approach D. third party logistic companies have become necessary E. EDI is now obsolete

69. Which of the following describes the limitations of vendor-managed inventory that retailers may encounter?

A. Since the vendor owns the merchandise until it is sold by the retailer, at which time the retailer pays for the merchandise, a retailer bears a financial risk.

B. Retail buyers and planners need to monitor inventory levels.

C. When the vendor coordinates the supply chain for its specific products, it does not know what other actions the retailer is taking that might affect the sales of its products in the future.

D. It takes longer for a product to go from design to the ordering to have the product on the selling floor.

E. It is an added cost with little benefit for the retailer to share selling information with their vendors.

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Chapter 10 - Information Systems and Supply Chain Management

70. CPFR partnerships require: A. quick response interaction B. trust and commitment C. two or more vendors D. full responsibility of the vendor E. a controlled expense budget

71. What is an advantage of using RFID over traditional bar codes?

A. RFID eliminates the bull-whip effect B. RFID technology is inexpensive C. RFID holds more data stored on the device D. RFID makes tagging and pricing at DCs unnecessary

72. Which is NOT a benefit of using RFID over traditional bar codes?

A. reduced inventory turn B. reduced point of sale labor costs C. reduced warehouse and distribution labor costs D. reduced theft E. reduced out of stock product

73. Why have some vendors and retailers chosen not to adopt RFID tagging?

A. They are concerned about the data storage falling into the wrong hands B. They are concerned about the potential health risk of radio frequency C. They believe the additional costs do not benefit the return on investment D. They do not want to replace people with the devices

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Chapter 10 - Information Systems and Supply Chain Management

74. An inventory planner notes that the inventory she is responsible for would be best managed by relying on consumer demand. She recommends to her management to implement a _________ that would support being in a better stock position of her managed product by store location.

A. cross check logistic strategy B. pull supply chain strategy C. cost efficient logistic strategy D. push supply chain strategy E. influential logistic strategy

75. For fashion merchandise where there is only one shipment of the product or collection, the best supply chain method to use is the ___________.

A. cross check logistic strategy B. pull supply chain strategy C. cost efficient logistic strategy D. push supply chain strategy E. influential logistic strategy

76. A vendor that employs sales associates for retailers to visit stores, analyze their business and inventory and create displays of their products will most likely also utilize what method of product delivery?

A. direct store delivery B. consumer direct fulfillment C. drop-shipping D. cross-docking E. reverse logistics

77. _____________ is a retail business strategy that involves using supply chain management process to introduce fashionable merchandise rapidly and respond to customer demand for the merchandise quickly.

A. Fast fashion B. Consumer direct fulfillment C. Quick response D. Just in time delivery E. Lightening logistics

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Chapter 10 - Information Systems and Supply Chain Management Essay Questions

78. Explain how managing an efficient supply chain and information system can improve the company's return on investment (ROI).

79. What is the purpose of the data warehouse and how do retailers use it?

80. Identify and describe the three objectives that a supply chain security policy should meet.

81. Compare and contrast the push and pull supply chain methods.

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Chapter 10 - Information Systems and Supply Chain Management

82. Identify and describe the vendor-managed inventory approach.

83. Identify what cross-docking is and the advantages and disadvantages of this system.

84. What is the bullwhip effect and what causes it?

85. What activities take place at a distribution center?

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Chapter 10 - Information Systems and Supply Chain Management

86. Identify what is "floor-ready" merchandise and describe the tasks that are completed at the distribution center to prepare merchandise to be "floor ready".

87. What are the benefits of RFID technology and what are the drawbacks?

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Chapter 10 - Information Systems and Supply Chain Management

Chapter 10 Information Systems and Supply Chain Management Answer Key

True / False Questions

1. (p. 253) A pick ticket tells the DC what is being shipped.

TRUE An advanced shipping notice tells the DC what is being shipped and when it will be delivered.

The ASN helps the DC then make appointments to be unloaded and helps the planner or allocator at the corporate office know they need to have the merchandise allocated by store in the system by that date.

AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 10-03 What information technology (IT) developments are facilitating vendor-retailer communications?

Topic: The Flow of Information and Products in a Supply Chain

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Chapter 10 - Information Systems and Supply Chain Management

2. (p. 261) Since inventory at the store is based on consumer demand, in a pull supply chain, there is a lesser likelihood of being overstocked or out of stock.

TRUE The pull supply chain system is best to use for products that have an unpredictable demand so the stores can order what they need and when. There is less likelihood of stock outages or overstocks as each store controls their inventory flow.

AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Medium Learning Objective: 10-05 How do retailers and vendors collaborate to make sure the right merchandise is available when customers are ready to buy it?

Topic: System Design Issues

3. (p. 262) Freight forwarding is a flow back of merchandise through the channel from the customer back to the vendor.

FALSE This described reverse logistics rather than freight forwarding. Merchandise may be damaged, recalled, or be returned to vendor because of lack of selling and therefore the merchandise is needed to be consolidated and sent back to the vendor from the retailer.

AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 10-02 What activities are undertaken in a distribution center?

Topic: System Design Issues

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Chapter 10 - Information Systems and Supply Chain Management

4. (p. 257) Cross-docking is when vendors ship merchandise prepackaged in the quantity required for each store and when the products arrive to the distribution center, the products move to the staging area to be shipped to the designated stores.

TRUE The cross-docked merchandise usually already contains the price tags, theft tags and if applicable, on hangers. An advantage is that retailers can save on costs by assuming that the number and type of merchandise and the store designation are correctly encoded in the vendor's UPC labels and do not need to open and check the cartons.

AACSB: Communication AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Medium Learning Objective: 10-02 What activities are undertaken in a distribution center?

Topic: The Distribution Center

5. (p. 264) The build up of inventory in an uncoordinated channel is called the bell-curve effect.

FALSE This is the bullwhip effect not the bell-curve effect. When retailers and vendors do not coordinate their SCM, excess inventory builds up in the system causing a bullwhip effect.

AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Medium Learning Objective: 10-05 How do retailers and vendors collaborate to make sure the right merchandise is available when customers are ready to buy it?

Topic: Collaboration between Retailers and Vendors in Supply Chain Management

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Chapter 10 - Information Systems and Supply Chain Management

6. (p. 266) Vendor-managed inventory is an approach for improving supply chain efficiency in which the vendor is responsible for maintaining the retailer's inventory levels in each of its stores.

TRUE The vendor and the retailer partner together to create sales and inventory plan. The retailer shares sales and inventory data with the vendor who then analyzes the information to determine how much and what product needs to be ordered.

AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 10-05 How do retailers and vendors collaborate to make sure the right merchandise is available when customers are ready to buy it?

Topic: Collaboration between Retailers and Vendors in Supply Chain Management

7. (p. 267) The technology that allows an object or person to be identified at a distance using radio waves uses RFID. TRUE Radio Frequency Identification devices transmit data about the object in which they are embedded.

AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Medium Learning Objective: 10-06 What is RFID and how will it affect retailing?

Topic: Radio Frequency Identification

8. (p. 248) EDI is a set of activities and techniques that companies implement to efficiently and effectively manage the flow of merchandise from the vendors to the retailer.

FALSE This describes Supply Chain Management rather than EDI. These SCM activities ensure that the product is in the right place at the right time and in the right quantities.

AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 10-01 How do merchandise and information flow from the vendor to the retailer to consumers?

Topic: Creating Strategic Advantage through Supply Management and Information Systems

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Chapter 10 - Information Systems and Supply Chain Management

9. (p. 248) Vendors are in the best position to collect information about customer shopping behavior.

FALSE Retailers are in the best position to collect information about customer shopping behavior and purchases then analyze it and share with their vendors.

AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Easy Learning Objective: 10-04 What are the benefits to vendors and retailers for collaborating on supply chain management?

Topic: Creating Strategic Advantage through Supply Management and Information Systems

10. (p. 250) A benefit of having an efficient supply chain is that there is better inventory management allowing retailers to be certain of having the right amount of inventory in the right place at the right time.

TRUE Better inventory management allows retailers to have less stock outages.

AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Medium Learning Objective: 10-04 What are the benefits to vendors and retailers for collaborating on supply chain management?

Topic: Creating Strategic Advantage through Supply Management and Information Systems

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Chapter 10 - Information Systems and Supply Chain Management Multiple Choice Questions

11. (p. 248) ______________ is a set of activities and techniques that companies implement to efficiently and effectively manage the flow of merchandise from the vendors to the retailer.

A. Logistics B. Supply chain management C. Total quality management D. Electronic data interchange (EDI) E. Materials handling These SCM activities ensure that the product is in the right place at the right time and in the right quantities.

AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 10-01 How do merchandise and information flow from the vendor to the retailer to consumers?

Topic: Creating Strategic Advantage through Supply Management and Information Systems

12. (p. 248) Which of the following best describes the goal of supply chain management?

A. to maximize retailers' profits by reducing costs while satisfying service levels that their customers require B. minimizing system wide costs while satisfying the service levels (product availability) that customers desire C. reducing costs by allocating merchandise D. maximizing retailers' profits by reducing system wide costs, while achieving the highest service level (product availability) E. minimizing system wide costs, while achieving the highest service level (product availability) Supply chain management is geared to minimize systemwide costs, which might result in maximizing retailers' profit. However, maximizing retailer's profits does not necessary mean the minimization of systemwide costs. Achieving the highest service level is not desirable for all retailers because it is very costly. Allocating merchandise is a function of the planning merchandise team.

AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Hard Learning Objective: 10-01 How do merchandise and information flow from the vendor to the retailer to consumers?

Topic: Creating Strategic Advantage through Supply Management and Information Systems

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Chapter 10 - Information Systems and Supply Chain Management

13. (p. 248) Which of the following is responsible for gauging the needs of the customer?

A. retailers B. distributors C. vendors D. transportation companies E. designers Retailers are in the best position to collect information about customer shopping behavior and purchases then analyze it and share with their vendors.

AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Medium Learning Objective: 10-04 What are the benefits to vendors and retailers for collaborating on supply chain management?

Topic: Creating Strategic Advantage through Supply Management and Information Systems

14. (p. 248) Which of the following does NOT describe why retailers have been increasingly taking a leadership role in managing their respective supply chains?

A. consolidation of national retail chains B. emergence of larger retailers C. access to purchase information customer by customer D. flexibility of changing retail price Large retailers with robust systems are in the best position to collect information about customer shopping behavior and purchases then analyze it and share with their vendors.

AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Hard Learning Objective: 10-04 What are the benefits to vendors and retailers for collaborating on supply chain management?

Topic: Creating Strategic Advantage through Supply Management and Information Systems

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Chapter 10 - Information Systems and Supply Chain Management

15. (p. 248) Which of the following is NOT a benefit of efficient supply chain management?

A. improved product availability B. fewer stockouts C. better fashions D. higher return on investments E. strategic advantage All but "better fashions" are benefits of a supply chain management. Buyers choose the assortment of fashions without influence from SCM.

AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Easy Learning Objective: 10-04 What are the benefits to vendors and retailers for collaborating on supply chain management?

Topic: Creating Strategic Advantage through Supply Management and Information Systems

16. (p. 248) Because of their position in the supply chain, retailers are in a unique position to: A. collect purchase information from customers based on each transaction B. communicate openly with a multiple of distribution centers without causing animosity C. dictate price despite recommendations by vendors D. negotiate prices with vendors E. sell more than a competing manufacturer Large retailers with robust systems are in the best position to collect information about customer shopping behavior and purchases then analyze it and share with their vendors.

AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Medium Learning Objective: 10-04 What are the benefits to vendors and retailers for collaborating on supply chain management?

Topic: Creating Strategic Advantage through Supply Management and Information Systems

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Chapter 10 - Information Systems and Supply Chain Management

17. (p. 250) What is a benefit of having an efficient supply chain?

A. fewer associates are needed to replenish stock B. more time for customer services C. less negotiating with vendors D. fewer stockouts E. planning strategy becomes more predictable Better inventory management allows retailers to be certain of having the right amount of inventory in the right place at the right time.

AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Medium Learning Objective: 10-04 What are the benefits to vendors and retailers for collaborating on supply chain management?

Topic: Creating Strategic Advantage through Supply Management and Information Systems

18. (p. 250) Which of the following DOES NOT describe why an efficient supply chain is so important to retailers?

A. improved product availability B. higher return on investment C. a strategic advantage D. trendier merchandise E. improved in-stock position Better inventory management allows retailers to be certain of having the right amount of inventory in the right place at the right time.

AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Medium Learning Objective: 10-04 What are the benefits to vendors and retailers for collaborating on supply chain management?

Topic: Creating Strategic Advantage through Supply Management and Information Systems

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Chapter 10 - Information Systems and Supply Chain Management

19. (p. 250) To meet specific needs of a variety of customers, retailers must: A. manage its supply chain to avoid stockouts B. extending hours of operation C. include only national brands D. operating with more markdowns to make room for new merchandise E. working closer with vendors to keep prices lower Better inventory management allows retailers to be certain of having the right amount of inventory in the right place at the right time.

AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Hard Learning Objective: 10-04 What are the benefits to vendors and retailers for collaborating on supply chain management?

Topic: Creating Strategic Advantage through Supply Management and Information Systems

20. (p. 250) Macy's sells a variety of winter coats throughout the country focusing delivery in the northern tiers first and ending the season rollouts in the south much like the way the cold weather migrates. This management of the winter products can best be described as: A. reducing stockouts B. improved sale productivity C. tailoring assortments D. following seasonal lead E. tailoring assets Inventory management through tailoring assortments allows retailers to be certain of having the right amount of inventory in the right place at the right time.

AACSB: Reflective Thinking Bloom's: Application Difficulty: Medium Learning Objective: 10-04 What are the benefits to vendors and retailers for collaborating on supply chain management?

Topic: Creating Strategic Advantage through Supply Management and Information Systems

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Chapter 10 - Information Systems and Supply Chain Management

21. (p. 250) Which benefits does efficient supply chain management provide retailers concerning product availability?

A. reduced stockouts and employee productivity B. reduced stockouts and tailored assortments C. increased stock level and tailored assortments D. increased backup stock level and reduced stockouts E. tailored assortments and right pricing levels Better inventory management allows retailers to be certain of having the right amount of inventory in the right place at the right time which reduces stock outages and can help tailor assortments.

AACSB: Reflective Thinking Bloom's: Application Difficulty: Hard Learning Objective: 10-04 What are the benefits to vendors and retailers for collaborating on supply chain management?

Topic: Creating Strategic Advantage through Supply Management and Information Systems

22. (p. 248) Why are retailers considered the most important part of the supply chain?

A. They can set pricing strategies based on costs of goods sold.

B. They are more well known to the customers.

C. They can engage in both horizontal and vertical integration.

D. They receive discounts from suppliers.

E. They can best gather and evaluate data regarding customers' wants and needs.

Retailers are often larger sized businesses and are better able to control their supply chains because they are more knowledgeable about their customers from purchase information collected.

AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Medium Learning Objective: 10-01 How do merchandise and information flow from the vendor to the retailer to consumers?

Topic: Creating Strategic Advantage through Supply Management and Information Systems

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Chapter 10 - Information Systems and Supply Chain Management

23. (p. 249) Which of the following does NOT describe a retailer's strategic advantage gained through the efficient supply chain and information system?

A. All retailers can increase sales, and reduce costs, by using high performance information systems.

B. All retailers can develop a competitive advantage from their information and supply chain systems.

C. The competitive advantage from information and supply chain systems is easy to be duplicated by competitors.

D. Retailers can implement efficient supply chain management by buying best-in-class software package.

E. The effective use of supply chain and information systems requires the coordinated effort of employees and functional areas throughout the company.

Although all retailers strive to increase sales and reduce costs through the use of high performance information systems and efficient supply chain management, all retailers can not achieve without experience. The competitive advantage gained by the efficient supply chain and information systems is difficult to be duplicated by competitors.

AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Hard Learning Objective: 10-04 What are the benefits to vendors and retailers for collaborating on supply chain management?

Topic: Creating Strategic Advantage through Supply Management and Information Systems

24. (p. 253) A(n) ___________ is a document, which tells the retailer's distribution center what is specifically shipped by the vendor and when it will be delivered.

A. Universal Product Code (UPC) B. Radio Frequency Identification (RFID) C. Advanced Shipping Notice (ASN) D. Shipping document E. Bill of Lading (BOL) The ASN helps the DC then make appointments to be unloaded and helps the planner or allocator at the corporate office know they need to have the merchandise allocated by store in the system by that date.

AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 10-03 What information technology (IT) developments are facilitating vendor-retailer communications?

Topic: The Flow of Information and Products in a Supply Chain

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Chapter 10 - Information Systems and Supply Chain Management

25. (p. 254) The place where the point of sale data is stored, and that the organization uses to support its decisions is called __________.

A. a spreadsheet B. a computerized processing unit C. a data holding cell D. a database chain E. a data warehouse This data can be analyzed at different levels; by company, by division, by store, by vendor, by category, by SKU, by year, by season, by month, etc.

AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 10-03 What information technology (IT) developments are facilitating vendor-retailer communications?

Topic: The Flow of Information and Products in a Supply Chain

26. (p. 261) Each time a customer makes a purchase at a Walmart store from the Health and Beauty area, data is transmitted to nearest distribution center so the merchandise can be replenished and sent on the next truck delivery. Which strategy does Walmart utilize?

A. cross check logistic strategy B. pull supply chain C. cost efficient logistic strategy D. push supply chain E. influential logistic strategy It is called a pull supply chain because the demand of an item pulls it through the supply chain. This is more responsive to changes in customer demand, however it is more costly.

AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 10-05 How do retailers and vendors collaborate to make sure the right merchandise is available when customers are ready to buy it?

Topic: System Design Issues

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Chapter 10 - Information Systems and Supply Chain Management

27. (p. 254) When a regular customer calls a well-known pizza delivery restaurant, the ordertaker types in the caller's name. The computer screen shows the customer's address, phone number, directions to his or her house, his or her usual order, and the date and frequency of orders. If the customer has not ordered during a two-month period, or the average number of orders has been down, then the pizza parlor mails them a coupon for their favorite pizza. The pizza parlor uses: A. a data warehouse B. retail information system C. customer data system D. direct marketing E. direct account management Information stored in data warehouses can be used to target promotions to specific groups.

AACSB: Reflective Thinking Bloom's: Application Difficulty: Medium Learning Objective: 10-03 What information technology (IT) developments are facilitating vendor-retailer communications?

Topic: The Flow of Information and Products in a Supply Chain

28. (p. 255) Which of the following is a computer-to-computer exchange of business documents from retailer to vendor and back?

A. a data warehouse B. vendor marketing software C. customer data system D. electronic data interchange E. data exchange EDI technology has increased the communication speed and accuracy from vendor to retailer and vice versa.

AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 10-03 What information technology (IT) developments are facilitating vendor-retailer communications?

Topic: The Flow of Information and Products in a Supply Chain

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Chapter 10 - Information Systems and Supply Chain Management

29. (p. 255) Which of the following best describes logistics?

A. the management of merchandising products such as assortment planning and pricing adjustments B. the handling of retail materials C. part of the supply chain that does not impact profitability for most retailers D. part of the supply chain that is developed separately from the merchandising strategy E. the management of the flow of merchandise and information from the vendor to the customer Logistics includes the activities at the retailer's DC as well as the planning implementation and control of the flow and storage of goods.

AACSB: Reflective Thinking Bloom's: Application Difficulty: Medium Learning Objective: 10-04 What are the benefits to vendors and retailers for collaborating on supply chain management?

Topic: The Flow of Information and Products in a Supply Chain

30. (p. 255) ____________ is the aspect of supply chain management which refers to the planning, implementation, and control of the efficient flow and storage of goods, services, and related information. It follows the process from the point of origin to the point of consumption to meet customers' requirements.

A. Logistics B. Total quality management C. Warehousing D. Distribution E. Material flow management Logistics includes the activities at the retailer's DC as well as the planning implementation and control of the flow and storage of goods.

AACSB: Reflective Thinking Bloom's: Application Difficulty: Medium Learning Objective: 10-04 What are the benefits to vendors and retailers for collaborating on supply chain management?

Topic: The Flow of Information and Products in a Supply Chain

10-37

Chapter 10 - Information Systems and Supply Chain Management

31. (p. 256) Which of the following is NOT a function of a distribution center?

A. receiving B. cross-docking C. storing merchandise D. getting merchandise "floor ready" E. negotiating with vendors All of these (plus more) are functions of the DC except the DC does not negotiate with the vendors (the buyers do that).

AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Medium Learning Objective: 10-04 What are the benefits to vendors and retailers for collaborating on supply chain management?

Topic: The Distribution Center

32. (p. 254) A _____ stores purchase data collected at the point of sale that is used to access data designed to support decision making in an organization.

A. spreadsheet B. computerized processing unit C. data holding cell D. data warehouse E. database chain This data can be analyzed at different levels; by company, by division, by store, by vendor, by category, by SKU, by year, by season, by month, etc.

AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 10-03 What information technology (IT) developments are facilitating vendor-retailer communications?

Topic: The Flow of Information and Products in a Supply Chain

10-38

Chapter 10 - Information Systems and Supply Chain Management

33. (p. 255) How do retailers and vendors ensure that information that passes back and forth between retailers and vendors is secure?

A. Paper hard copies are sent to one another for comparison to be certain that the information is accurate.

B. Suppliers, customers and new clients all have a form of access to information.

C. With a high level of planning, implementation and control of the flow of information, then the information will be secure.

D. There is an element of trust that is necessary in doing business with one another.

E. The system ensures that the information received has not been tampered with by ensuring that the communication is both authentic and authorized.

The security policy is a set of rules that apply to be certain that there is authentication, authorization and integrity of the information.

AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Medium Learning Objective: 10-03 What information technology (IT) developments are facilitating vendor-retailer communications?

Topic: The Flow of Information and Products in a Supply Chain

34. (p. 255) What are the rules that apply to activities in the computer and communication resources that belong to an organization?

A. security policy B. investigation policy C. corporate security D. policing E. corporate policy The security policy is a set of rules that apply to be certain that there is authentication, authorization and integrity of the information.

AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 10-03 What information technology (IT) developments are facilitating vendor-retailer communications?

Topic: The Flow of Information and Products in a Supply Chain

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Chapter 10 - Information Systems and Supply Chain Management

35. (p. 255) Which of the following is NOT a benefit of EDI to retailers and their vendors?

A. EDI reduces cycle time.

B. Information flows quicker so inventory turnover is higher.

C. It improves overall quality of communications.

D. It is a computer readable format that can be easily analyzed.

E. EDI increases the desirability of the product for the end consumer.

EDI increases efficiency and accuracy, but does not influence the desirability of the products.

AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Medium Learning Objective: 10-03 What information technology (IT) developments are facilitating vendor-retailer communications?

Topic: The Flow of Information and Products in a Supply Chain

36. (p. 261) A retailer whose orders are generated at the store level, on the basis of demand data captured by point-of-sale data, is said to employ a: A. cost efficient logistic strategy B. pull supply chain C. influential logistic strategy D. cross check logistic strategy E. push supply chain It is called a pull supply chain because the demand of an item pulls it through the supply chain. This is more responsive to changes in customer demand, however it is more costly.

AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 10-05 How do retailers and vendors collaborate to make sure the right merchandise is available when customers are ready to buy it?

Topic: System Design Issues

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Chapter 10 - Information Systems and Supply Chain Management

37. (p. 261) In a(n) __________, merchandise is allocated to stores on the basis of forecasted demand. Once a forecast is determined, specified quantities of merchandise are shipped to distribution centers and stores at predetermined time intervals.

A. push supply chain B. cross check logistic strategy C. influential logistic strategy D. pull supply chain E. cost efficient logistic strategy The push supply chain system is most efficient for steady predictable demand products.

AACSB: Reflective Thinking Bloom's: Application Difficulty: Medium Learning Objective: 10-05 How do retailers and vendors collaborate to make sure the right merchandise is available when customers are ready to buy it?

Topic: System Design Issues

38. (p. 261) Retailers with less sophisticated forecasting and information systems tend to use a(n): A. cost efficient logistic strategy B. cross check logistic strategy C. influential logistic strategy D. pull supply chain E. push supply chain The push supply chain system is most efficient for steady predictable demand products and requires less sophistication as the pull supply chain.

AACSB: Reflective Thinking Bloom's: Application Difficulty: Medium Learning Objective: 10-05 How do retailers and vendors collaborate to make sure the right merchandise is available when customers are ready to buy it?

Topic: System Design Issues

10-41

Chapter 10 - Information Systems and Supply Chain Management

39. (p. 261) Which of the following does NOT describe the benefits of a pull strategy?

A. There exists less likelihood of being overstocked, or out of stock, because the store orders merchandise as needed on the basis of consumer demand.

B. It increases inventory turnover.

C. It is more responsive to changes in customer demand.

D. It becomes more efficient than a push approach when demand is uncertain and difficult to forecast.

E. All of the above are benefits of a pull strategy.

The push supply chain system is most efficient for steady predictable demand products. A pull approach is based on customer demand, which is difficult to forecast, does not allow efficient production and distribution scheduling.

AACSB: Reflective Thinking Bloom's: Application Difficulty: Hard Learning Objective: 10-05 How do retailers and vendors collaborate to make sure the right merchandise is available when customers are ready to buy it?

Topic: System Design Issues

40. (p. 261) Which of the following describes the benefits of a pull strategy?

A. It does not require advanced systems to implement.

B. It decreases inventory turnover.

C. There is less likelihood of being overstocked or out of stock at each store.

D. It allows more efficient production and distribution scheduling to reduce costs.

E. It forecasts the competitor's demand.

The pull supply chain system is best to use for products that have an unpredictable demand so the stores can order what they need and when. There is less likelihood of stock outages or overstocks as each store controls their inventory flow.

AACSB: Reflective Thinking Bloom's: Application Difficulty: Hard Learning Objective: 10-05 How do retailers and vendors collaborate to make sure the right merchandise is available when customers are ready to buy it?

Topic: System Design Issues

10-42

Chapter 10 - Information Systems and Supply Chain Management

41. (p. 263) ________ is a method where retailers receive orders from customers and have the product shipped directly to the customer from the vendor.

A. Consumer direct fulfillment B. Reverse logistics C. Pull supply chain D. Push supply chain E. Freight forwarding Consumer direct fulfillment also known as drop-shipping, is a system in which retailers receive orders from customers and relay these orders to vendors and then the vendors ship the merchandise ordered directly to the customer.

AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 10-05 How do retailers and vendors collaborate to make sure the right merchandise is available when customers are ready to buy it?

Topic: System Design Issues

42. (p. 263) ________ is a system when retailers receive an order from a customer they then have the product shipped directly to the customer from the vendor.

A. Drop-shipping B. Cross-docking C. Outsourcing D. Third party logistics E. Vendor managed inventory Drop-shipping also known as consumer direct fulfillment is a system in which retailers receive orders from customers and relay these orders to vendors and then the vendors ship the merchandise ordered directly to the customer.

AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 10-05 How do retailers and vendors collaborate to make sure the right merchandise is available when customers are ready to buy it?

Topic: System Design Issues

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Chapter 10 - Information Systems and Supply Chain Management

43. (p. 263) From the retailers view, ___________ reduces the retailer's supply chain costs and investment because the vendor assumes the costs and risks of shipping the product to the customer.

A. Drop-shipping B. Cross-docking C. Outsourcing D. Third party logistics E. Vendor managed inventory Drop-shipping also known as consumer direct fulfillment is a system in which retailers receive orders from customers and relay these orders to vendors and then the vendors ship the merchandise ordered directly to the customer.

AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 10-05 How do retailers and vendors collaborate to make sure the right merchandise is available when customers are ready to buy it?

Topic: System Design Issues

44. (p. 262) Which of the following is an advantage of using distribution centers over direct store delivery?

A. Individual stores that forecast and draw from a DC are more cost efficient.

B. The DCs have the advantage of keeping backup stock in the store.

C. Direct store delivery is always more expensive.

D. The DCs enable the retailer to carry less overall inventory.

E. The DC can always deliver faster than a vendor.

Backup inventory is expensive and difficult to house at the store level.

AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Medium Learning Objective: 10-05 How do retailers and vendors collaborate to make sure the right merchandise is available when customers are ready to buy it?

Topic: System Design Issues

10-44