Chapter 5 Network Design in the Supply Chain Multiple Choice 1

5.2 Multiple Choice Questions 1) Supply chain network design decisions include A) only the location of manufacturing, storage, or transportation-related facilities. B) only the allocation of capacity and roles to each facility. C) both the location of manufacturing, storage, or transportation-related facilities and the allocation of capacity and roles to each facility. D) neither the location of manufacturing, storage, or transportation-related facilities nor the allocation of capacity and roles to each facility. Answer: C Diff: 1 Topic: 5.1 The Role of Network Design in the Supply Chain AACSB: Application of knowledge Objective: LO 5.1: Understand the role of network design in a supply chain. 2) Supply chain network design decisions classified as facility role are concerned with A) what processes are performed at each facility. B) where facilities should be located. C) how much capacity should be allocated to each facility. D) what markets each facility should serve and which supply sources should feed each facility. Answer: A Diff: 2 Topic: 5.1 The Role of Network Design in the Supply Chain AACSB: Application of knowledge Objective: LO 5.1: Understand the role of network design in a supply chain. 3) Supply chain network design decisions classified as facility location are concerned with A) what processes are performed at each facility. B) where facilities should be located. C) how much capacity should be allocated to each facility. D) what markets each facility should serve and which supply sources should feed each facility. Answer: B Diff: 1 Topic: 5.1 The Role of Network Design in the Supply Chain AACSB: Application of knowledge Objective: LO 5.1: Understand the role of network design in a supply chain. 4) Supply chain network design decisions classified as capacity allocation are concerned with A) what processes are performed at each facility. B) where facilities should be located. C) how much capacity should be allocated to each facility. D) what markets each facility should serve and which supply sources should feed each facility. Answer: C Diff: 1 Topic: 5.1 The Role of Network Design in the Supply Chain AACSB: Application of knowledge Objective: LO 5.1: Understand the role of network design in a supply chain. 5 5) Supply chain network design decisions classified as market and supply allocation are concerned with A) what processes are performed at each facility. B) where facilities should be located. C) how much capacity should be allocated to each facility. D) what markets each facility should serve and which supply sources should feed each facility. Answer: D Diff: 1 Topic: 5.1 The Role of Network Design in the Supply Chain AACSB: Application of knowledge Objective: LO 5.1: Understand the role of network design in a supply chain. Diff: 2 Topic: 5.1 The Role of Network Design in the Supply Chain AACSB: Application of knowledge Objective: LO 5.1: Understand the role of network design in a supply chain. 7) Facility location decisions have a long-term impact on a supply chain's performance because A) it is very expensive to shut down a facility or move it to a different location. B) it is not expensive to shut down a facility or move it to a different location. C) it is advisable to shut down a facility or move it to a different location. D) it is cost effective to shut down a facility or move it to a different location. Answer: A Diff: 2 Topic: 5.1 The Role of Network Design in the Supply Chain AACSB: Application of knowledge Objective: LO 5.1: Understand the role of network design in a supply chain. 8) Capacity allocation decisions have a significant impact on supply chain performance because A) capacity decisions tend to be permanent. B) capacity decisions tend to be changed frequently. C) capacity decisions do not tend to stay in place for several years. D) capacity decisions tend to stay in place for several years. Answer: D Diff: 2 Topic: 5.1 The Role of Network Design in the Supply Chain AACSB: Application of knowledge Objective: LO 5.1: Understand the role of network design in a supply chain. Answer: A Diff: 2 Topic: 5.1 The Role of Network Design in the Supply Chain AACSB: Application of knowledge Objective: LO 5.1: Understand the role of network design in a supply chain. 6 10) Allocating too little capacity results in A) good responsiveness if demand is not satisfied or low cost if demand is filled from a distant facility. B) good responsiveness if demand is not satisfied or high cost if demand is filled from a distant facility. C) poor responsiveness if demand is not satisfied or low cost if demand is filled from a distant facility. D) poor responsiveness if demand is not satisfied or high cost if demand is filled from a distant facility. Answer: D Diff: 2 Topic: 5.1 The Role of Network Design in the Supply Chain AACSB: Application of knowledge Objective: LO 5.1: Understand the role of network design in a supply chain. 11) The allocation of supply sources and markets to facilities has a significant impact on performance because A) it cannot affect total production, inventory, and transportation costs incurred by the supply chain to satisfy customer demand. B) it cannot affect customer demand. C) it affects total production, inventory, and transportation costs incurred by the supply chain to satisfy customer demand. D) it cannot satisfy customer demand. Answer: C Diff: 2 Topic: 5.1 The Role of Network Design in the Supply Chain AACSB: Application of knowledge Objective: LO 5.1: Understand the role of network design in a supply chain. 12) The allocation of supply sources and markets to facilities should be reconsidered on a regular basis so that A) the allocation can be held constant as market conditions or plant capacities expand. B) the allocation can be changed as market conditions or plant capacities stagnate. C) the allocation can be held constant as market conditions or plant capacities change. D) the allocation can be changed as market conditions or plant capacities change. Answer: D Diff: 2 Topic: 5.1 The Role of Network Design in the Supply Chain AACSB: Application of knowledge Objective: LO 5.1: Understand the role of network design in a supply chain. 7 13) Network design decisions have a significant impact on performance because they A) determine the customer demand. B) determine the supply chain conflagration. C) set constraints within which inventory, transportation, and information can be used to either decrease supply chain cost or increase responsiveness. D) set constraints within which inventory, transportation, and information can be used to either increase supply chain cost or decrease responsiveness. Answer: C Diff: 3 Topic: 5.1 The Role of Network Design in the Supply Chain AACSB: Application of knowledge Objective: LO 5.1: Understand the role of network design in a supply chain. Diff: 2 Topic: 5.1 The Role of Network Design in the Supply Chain AACSB: Application of knowledge Objective: LO 5.1: Understand the role of network design in a supply chain. 15) Firms focusing on cost leadership tend to A) locate facilities close to the market they serve. B) locate facilities very far from the market they serve. C) find the lowest cost location for their manufacturing facilities. D) select a high-cost location to be able to react quickly. Answer: C Diff: 2 Topic: 5.2 Factors Influencing Network Design Decisions AACSB: Application of knowledge Objective: LO 5.2: Identify factors influencing supply chain network design decisions. 16) Firms focusing on responsiveness tend to A) locate facilities close to the market they serve. B) locate facilities very far from the market they serve. C) find the lowest cost location for their manufacturing facilities. D) select a high-cost location to be able to react slowly. Answer: A Diff: 2 Topic: 5.2 Factors Influencing Network Design Decisions AACSB: Application of knowledge Objective: LO 5.2: Identify factors influencing supply chain network design decisions. 8 Answer: A Diff: 2 Topic: 5.2 Factors Influencing Network Design Decisions AACSB: Application of knowledge Objective: LO 5.2: Identify factors influencing supply chain network design decisions. Answer: B Diff: 2 Topic: 5.2 Factors Influencing Network Design Decisions AACSB: Application of knowledge Objective: LO 5.2: Identify factors influencing supply chain network design decisions. Answer: C Diff: 2 Topic: 5.2 Factors Influencing Network Design Decisions AACSB: Application of knowledge Objective: LO 5.2: Identify factors influencing supply chain network design decisions. 9 Answer: D Diff: 2 Topic: 5.2 Factors Influencing Network Design Decisions AACSB: Application of knowledge Objective: LO 5.2: Identify factors influencing supply chain network design decisions. Answer: D Diff: 2 Topic: 5.2 Factors Influencing Network Design Decisions AACSB: Application of knowledge Objective: LO 5.2: Identify factors influencing supply chain network design decisions. Answer: A Diff: 2 Topic: 5.2 Factors Influencing Network Design Decisions AACSB: Application of knowledge Objective: LO 5.2: Identify factors influencing supply chain network design decisions. 23) If facilities have lower fixed costs A) a few high-capacity facilities are preferred because this helps lower transportation costs. B) a few local facilities are preferred because this helps lower transportation costs. C) many high-capacity facilities are preferred because this helps lower transportation costs. D) many local facilities are preferred because this helps lower transportation costs. Answer: D Diff: 2 Topic: 5.2 Factors Influencing Network Design Decisions AACSB: Analytical thinking Objective: LO 5.2: Identify factors influencing supply chain network design decisions. 10 Answer: A Diff: 3 Topic: 5.2 Factors Influencing Network Design Decisions AACSB: Application of knowledge Objective: LO 5.2: Identify factors influencing supply chain network design decisions. Answer: C Diff: 3 Topic: 5.2 Factors Influencing Network Design Decisions AACSB: Application of knowledge Objective: LO 5.2: Identify factors influencing supply chain network design decisions. Diff: 2 Topic: 5.2 Factors Influencing Network Design Decisions AACSB: Application of knowledge Objective: LO 5.2: Identify factors influencing supply chain network design decisions. Diff: 2 Topic: 5.2 Factors Influencing Network Design Decisions AACSB: Application of knowledge Objective: LO 5.2: Identify factors influencing supply chain network design decisions. 11 . Answer: C 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. Diff: 2 Topic: 5.2 Factors Influencing Network Design Decisions AACSB: Application of knowledge Objective: LO 5.2: Identify factors influencing supply chain network design decisions. 30) Total logistics costs are a sum of the A) inventory and facility costs. B) transportation and facility costs. C) inventory and transportation costs. D) inventory, transportation, and facility costs. Answer: D Diff: 2 Topic: 5.2 Factors Influencing Network Design Decisions AACSB: Analytical thinking Objective: LO 5.2: Identify factors influencing supply chain network design decisions. Answer: C Diff: 1 Topic: 5.2 Factors Influencing Network Design Decisions AACSB: Analytical thinking Objective: LO 5.2: Identify factors influencing supply chain network design decisions. 12