Chapter 10 Supply Chain Design True False

Operations Management: Processes and Supply Chains Chapter 10 Supply Chain Design 1) The purpose of supply chain management is to synchronize a firm's processes with those of its suppliers and customers. Answer: TRUE Reference: Introduction Difficulty: Easy Keywords: supply chain management 2) Supply chain management tries to match the flow of materials, services and information with demand. Answer: TRUE Reference: Introduction Difficulty: Easy Keywords: supply chain management 3) The purpose of supply chain design is to shape a firm's supply chain to meet the competitive priorities of its operations strategies. Answer: TRUE Reference: Introduction Difficulty: Moderate Keywords: supply chain design 4) Supply chain design for a service provider is driven primarily by the need to control the materials it consumes as it delivers its various services. Answer: FALSE Reference: Supply Chains for Services and Manufacturing Difficulty: Moderate Keywords: supply chain design 5) The fundamental purpose of supply chain design for a manufacturer is to control inventories by managing the flow of materials. Answer: TRUE Reference: Supply Chains for Services and Manufacturing Difficulty: Moderate Keywords: supply chain design 6) While it is important to manufacturing firms, little can be done to improve supply chain strategy in most service organizations. Answer: FALSE Reference: Supply Chains for Services and Manufacturing Difficulty: Moderate Keywords: supply chain strategy 1 7) The finished goods of one firm may actually be the raw materials for another firm. Answer: TRUE Reference: Supply Chains for Services and Manufacturing Difficulty: Moderate Keywords: finished good, raw material 8) The weeks of supply measure will improve if the weekly sales decrease. Answer: FALSE Reference: Measures of Supply Chain Performance Difficulty: Easy Keywords: weeks of supply 9) The best inventory level, when expressed as a turnover, is 52 per year. Answer: FALSE Reference: Measures of Supply Chain Performance Difficulty: Easy Keywords: inventory, turnover 10) Selling expenses, fixed expenses and depreciation are all considered operating expenses. Answer: TRUE Reference: Measures of Supply Chain Performance Difficulty: Moderate Keywords: operating expenses 11) One disadvantage of centralized placement is increased shipping costs from the distribution center to the customer. Answer: TRUE Reference: Measures of Supply Chain Performance Difficulty: Moderate Keywords: centralized placement 12) Inventory turnover is obtained by dividing the average aggregate inventory value by sales per week at cost. Answer: FALSE Reference: Measures of Supply Chain Performance Difficulty: Moderate Keywords: inventory, turnover 13) Increasing the percentage of on-time deliveries to customers actually reduces the total revenue of a firm. Answer: FALSE Reference: Measures of Supply Chain Performance Difficulty: Moderate Keywords: on-time delivery, revenue 2 14) Forward placement is a reduction in inventory and safety stock because of the merging of variable demands from customers. Answer: FALSE Reference: Inventory Placement Difficulty: Moderate Keywords: forward placement, inventory 15) Channel assembly is the process of using members of the distribution channel as if they were assembly stations in the factory. Answer: TRUE Reference: Mass Customization Difficulty: Moderate Keywords: channel assembly, distribution, mass customization 16) Responsive supply chains work best when frequent product introduction exists. Answer: TRUE Reference: Strategic Implications Difficulty: Moderate Keywords: responsive supply chains, product introduction 17) Efficient supply chains work best when contribution margins are high. Answer: FALSE Reference: Strategic Implications Difficulty: Moderate Keywords: efficient supply chains, contribution margin 18) Efficient supply chains use low capacity cushions. Answer: TRUE Reference: Strategic Implications Difficulty: Moderate Keywords: efficient supply chains, capacity cushion 19) Responsive supply chains work best when firms offer a low variety of services or products and demand predictability is high. Answer: FALSE Reference: Strategic Implications Difficulty: Moderate Keywords: responsive supply chains, variety, predictability 3