Chapter 5 Network Design in the Supply Chain Multiple Choice 2

32) Firms that focus on cost leadership tend to find the lowest-cost location might A) locate far from their customers. B) locate in a higher cost area to provide faster response. C) have many facilities to take advantage of economies of scale. D) increase inventory levels to reduce stockouts. Answer: A Diff: 1 Topic: 5.2 Factors Influencing Network Design Decisions AACSB: Application of knowledge Objective: LO 5.2: Identify factors influencing supply chain network design decisions. 33) ________ costs increase as the number of facilities in a supply chain increases. A) Inventory B) Transportation C) Retail operation D) Information Answer: A Diff: 3 Topic: 5.3 Framework for Network Design Decisions AACSB: Analytical thinking Objective: LO 5.3: Develop a framework for making network design decisions. Answer: A Diff: 2 Topic: 5.3 Framework for Network Design Decisions AACSB: Application of knowledge Objective: LO 5.3: Develop a framework for making network design decisions. Answer: C Diff: 3 Topic: 5.3 Framework for Network Design Decisions AACSB: Application of knowledge Objective: LO 5.3: Develop a framework for making network design decisions. 13 36) which of the four Global Network Design Decisions? A) Phase I - Supply Chain Strategy B) Phase II - Regional Facility Configuration C) Phase III - Desirable Sites D) Phase IV - Location Choices Answer: B Diff: 3 Topic: 5.3 Framework for Network Design Decisions AACSB: Application of knowledge Objective: LO 5.3: Develop a framework for making network design decisions. 37) Available infrastructure, skill needs and response time mostly affect which of the four Global Network Design Decisions? A) Phase I - Supply Chain Strategy B) Phase II - Regional Facility Configuration C) Phase III - Desirable Sites D) Phase IV - Location Choices Answer: C Diff: 3 Topic: 5.3 Framework for Network Design Decisions AACSB: Application of knowledge Objective: LO 5.3: Develop a framework for making network design decisions. 38) When faced with a network design decision, the goal of a manager is to design a network that A) maximizes the firm's profits. B) minimizes the firm's costs. C) satisfies customer needs in terms of demand and responsiveness. D) maximizes the firm's profits while satisfying customer needs in terms of demand and responsiveness. Answer: D Diff: 2 Topic: 5.3 Framework for Network Design Decisions AACSB: Analytical thinking Objective: LO 5.3: Develop a framework for making network design decisions. 39) Which of the following is the first phase in the design of a global supply chain network? A) Define a supply chain strategy B) Define the regional facility configuration C) Select desirable sites D) Location choices Answer: A Diff: 2 Topic: 5.3 Framework for Network Design Decisions AACSB: Application of knowledge Objective: LO 5.3: Develop a framework for making network design decisions. 14 40) The objective of the first phase of network design is to A) maximize total profits, taking into account the expected margin and demand in each market. B) select a set of desirable sites within each region where facilities are to be located. C) identify regions where facilities will be located, their potential roles, and their approximate capacity. D) specify what capabilities the supply chain network must have to support a firm's competitive strategy. Answer: D Diff: 3 Topic: 5.3 Framework for Network Design Decisions AACSB: Application of knowledge Objective: LO 5.3: Develop a framework for making network design decisions. 41) The objective of the second phase of network design is to A) select a precise location and capacity allocation for each facility. B) select a set of desirable sites within each region where facilities are to be located. C) identify regions where facilities will be located, their potential roles, and their approximate capacity. D) specify what capabilities the supply chain network must have to support a firm's competitive strategy. Answer: C Diff: 3 Topic: 5.3 Framework for Network Design Decisions AACSB: Application of knowledge Objective: LO 5.3: Develop a framework for making network design decisions. 42) The objective of the third phase of network design is to A) maximize total profits, taking into account the expected margin and demand in each market. B) select a precise location and capacity allocation for each facility. C) select a set of desirable sites within each region where facilities are to be located. D) identify regions where facilities will be located, their potential roles, and their approximate capacity. Answer: C Diff: 3 Topic: 5.3 Framework for Network Design Decisions AACSB: Application of knowledge Objective: LO 5.3: Develop a framework for making network design decisions. 15 43) It is very important that long-term consequences be thought through when making facility decisions, because A) network designers can use this fact to influence the role of the new facility and the focus of people working there. B) facilities last a long time and have an enduring impact on a firm's performance. C) it is astounding how often tax incentives drive the choice of location. D) the location of a facility has a significant impact on the extent and form of communication that develops in the supply chain network. Answer: B Diff: 3 Topic: 5.3 Framework for Network Design Decisions AACSB: Application of knowledge Objective: LO 5.3: Develop a framework for making network design decisions. 44) A manufacturer of cat towers wishes to locate a super assembly facility to meet their cat tower assembly needs for the next millennium. Currently, carpet, cylinders, yarn and fasteners are purchased in bulk from suppliers in North Haverbrook, Ogden, and Springfield in the quantities shown in the table. The super assembly facility would ship to distribution centers located in Seattle, Lubbock, Nashville, and Philadelphia. The locations of all of these cities on an x-y grid, transportation costs on a ton per mile basis, and total tonnage are all contained in the table. Transportation Sources/Markets Cost $/ton mile (Fn) Supply North Haverbrook 1.1 Ogden 1.2 Springfield 1.4 Market Seattle 2.25 Lubbock 2.25 Nashville 2.25 Philadelphia 2.25 Quantity in Tons (Dn) 650 450 400 300 200 500 500 Xn Yn 700 1200 225 825 450 800 950 300 250 1100 What is the distance between the Ogden and Seattle locations? A) 450 miles B) 350 miles C) 630 miles D) 1050 miles Answer: C Diff: 3 Topic: 5.4 Models for Facility Location and Capacity Allocation AACSB: Analytical thinking Objective: LO 5.4: Use optimization for facility location and capacity allocation decisions. 16 45) A manufacturer of cat towers wishes to locate a super assembly facility to meet their cat tower assembly needs for the next millennium. Currently, carpet, cylinders, yarn and fasteners are purchased in bulk from suppliers in North Haverbrook, Ogden, and Springfield in the quantities shown in the table. The super assembly facility would ship to distribution centers located in Seattle, Lubbock, Nashville, and Philadelphia. The locations of all of these cities on an x-y grid, outbound transportation costs on a ton per mile basis, and total tonnage are all contained in the table. Transportation Sources/Markets Cost $/ton mile (Fn) Supply North Haverbrook 1.1 Ogden 1.2 Springfield Market Lubbock Nashville Philadelphia 2.25 2.25 2.25 Quantity in Tons (Dn) Xn Yn 650 450 700 250 1200 600 200 500 500 450 800 950 300 250 1100 Diff: 3 Topic: 5.4 Models for Facility Location and Capacity Allocation AACSB: Analytical thinking Objective: LO 5.4: Use optimization for facility location and capacity allocation decisions. 17 46) A manufacturer of cat towers wishes to locate a super assembly facility to meet their cat tower assembly needs for the next millennium. Currently, carpet, cylinders, yarn and fasteners are purchased in bulk from suppliers in North Haverbrook, Ogden, and Springfield in the quantities shown in the table. The super assembly facility would ship to distribution centers located in Seattle, Lubbock, Nashville, and Philadelphia. The locations of all of these cities on an x-y grid, outbound transportation costs on a ton per mile basis, and total tonnage are all contained in the table. Transportation Sources/Markets Cost $/ton mile (Fn) Supply North Haverbrook 1.1 Ogden 1.2 Springfield 1.4 Market Seattle 2.25 Lubbock 2.25 Nashville 2.25 Philadelphia 2.25 Quantity in Tons (Dn) Xn Yn 650 450 400 700 250 225 1200 600 825 300 200 500 500 50 450 800 950 1200 300 250 1100 Objective: LO 5.4: Use optimization for facility location and capacity allocation decisions. 18 47) A manufacturer of cat towers wishes to locate a super assembly facility to meet their cat tower assembly needs for the next millennium. Currently, carpet, cylinders, yarn and fasteners are purchased in bulk from suppliers in North Haverbrook, Ogden, and Springfield in the quantities shown in the table. The super assembly facility would ship to distribution centers located in Seattle, Lubbock, Nashville, and Philadelphia. The locations of all of these cities on an x-y grid, outbound transportation costs on a ton per mile basis, and total tonnage are all contained in the table. Transportation Sources/Markets Cost $/ton mile (Fn) Supply North Haverbrook 1.1 Ogden 1.2 Springfield 1.4 Market Seattle 2.25 Lubbock 2.25 Nashville 2.25 Philadelphia 2.25 Quantity in Tons (Dn) Xn Yn 650 450 400 700 250 225 1200 600 825 300 200 500 500 50 450 800 950 1200 300 250 1100 What is the minimal shipping cost that satisfies all market demand? A) $2,546,632 B) $2,586,342 C) $2,451,668 D) $2,522,982 Answer: B Diff: 3 Topic: 5.4 Models for Facility Location and Capacity Allocation AACSB: Analytical thinking Objective: LO 5.4: Use optimization for facility location and capacity allocation decisions. Answer: A Diff: 3 Topic: 5.5 Making Network Design Decisions in Practice AACSB: Application of knowledge Objective: LO 5.2: Identify factors influencing supply chain network design decisions. 19 A) network designers can use this fact to influence the role of the new facility and the focus of people working there. B) facilities last a long time and have an enduring impact on a firm's performance. C) the location of a facility has a significant impact on the extent and form of communication that develops in the supply chain network. D) it influences the work force available and their morale. Answer: D Diff: 3 Topic: 5.5 Making Network Design Decisions in Practice AACSB: Application of knowledge Objective: LO 5.2: Identify factors influencing supply chain network design decisions. Diff: 2 Topic: 5.5 Making Network Design Decisions in Practice AACSB: Application of knowledge Objective: LO 5.2: Identify factors influencing supply chain network design decisions. the 20