Industrial Engineering Supply Chain Management Questions

1. A company's supply chain involves the flow of materials and information from suppliers, through production, to the end users. True False 2. In supply chain organizations, functions must operate independently of each other. True False 3. In purchasing, one's only ethical obligation is to one's suppliers. True False 4. Using third-party logistics involves using your organization's logistics function to ship to customers that aren't officially part of the supply chain. True False 5. Every business organization is part of at least one supply chain. True False 6. Frequent deliveries of small shipments can reduce inventory but also result in an increase in the transportation cost per unit. True False 7. The materials in the supply chain flow toward the end of the chain, while the information and the dollars move toward the beginning of the chain. True False 8. Managing supply chain visibility involves making sure that potential supply chain partners are aware of your organization's needs. True False 9. The goal of supply chain management is to synchronize supply and demand of all of the organizations that are part of the chain. True False 10. The need for supply chain management increases as globalization increases. True False 11. The design of the supply chain and establishing partnerships with vendors and distributors are examples of operating issues in a supply chain. True False 12. Traffic management refers to truck movement within our parking areas. True False 13. One of the major reasons for a company to adopt third-party logistics is to concentrate on one's core business. True False 14. E-commerce refers to the use of electronic technology to facilitate business transactions. True False 15. E-commerce involves business-to-business (B2B) interaction only. True False 16. Disintermediation refers to the phenomenon that the traditional retailer or service provider is reduced or eliminated in a supply chain. True False 17. Most people working for a business organization are somehow involved with the supply chain of that business. True False 18. Strategic partnering is encouraged when two or more business organizations have complementary products or services that would benefit the others. True False 19. Forming strategic partnerships is beneficial for two or more business organizations that have the same products or services. True False 20. Inventory velocity refers to the average speed (in miles/hour) of material handling equipment in a warehouse. True False 21. Global supply chains make purchasing easier because of more options. True False 22. Centralized or decentralized purchasing is directly related to the size of an organization. True False 23. The optimization of the supply chain uses a mathematical model to determine the optimal number of business organizations to be included in the chain. True False 24. Information technology is the key to success of global supply chains. True False 25. Bullwhip effect refers to a phenomenon that demand variations that exist at the customer end of the supply chain are magnified as orders are generated back through the supply chain. True False 26. Starting with the final customer and moving backward through the supply chain, batch sizes and the level of safety stock tend to decrease. True False 27. Scheduling and maintaining equipment are operational decisions. True False 28. To prevent temporary storage in a warehouse, cross docking can be used. True False 29. Delayed differentiation is a means of increasing product variety without building the customized product from scratch or keeping large inventories of custom products. True False 30. Returned goods are part of reverse logistics. True False 31. A 30% reduction in product and service variety won't really affect the efficiency of a supply chain. True False 32. The service function of purchasing interfaces with many area including legal, accounting, and engineering functions. True False 33. Gate keeping manages the cost of shipping returned goods. True False 34. Outsourcing logistics gives a company less flexibility because it forces them to focus more on core businesses. True False 35. Vendor analysis examines the function of purchased parts and materials with a view towards improvement or cost reduction. True False 36. Using third-party fulfillment means losing control of fulfillment. True False 37. Price is the primary determining factor in choosing a vendor since most products are essentially the same. True False 38. RFID eliminates the need for counting and bar-code scanning. True False 39. The importance of purchasing relates only to the cost of parts and materials purchased, which is often 60% or more of the cost of finished goods. True False 40. The importance of purchasing is the cost of goods purchased, the quality of goods and services, and the timing of deliveries of goods or services. True False 41. Vendor analysis is the process that evaluates the source of supply in terms of price, quality, reputation, and service. True False 42. In e-commerce, the front-end design is significantly more important than the backend design. True False 43. One disadvantage to RFID is that they require a ‘line of sight' for reading. True False 44. Decentralized purchasing can usually offer quicker response than centralized purchasing. True False 45. Some firms have structured their procurement function to include both centralized and decentralized purchasing. True False 46. Creating an effective supply chain requires linking the marketing, distribution, and supplier channels. True False 47. An advantage of decentralized purchasing is the attention given to local needs. True False 48. Event management is the advanced planning required for major performances such as concerts or conferences. True False 49. Supplier certification is the first step required in a supplier audit program. True False 50. Design and purchasing people should work closely because changes in design, specifications, or materials can impact future purchase requirements. True False 51. The purchasing cycle ends when the purchasing department is notified that the supplier has shipped the items. True False 52. Producing and shipping in large lots may reduce costs but increase lead times. True False 53. Variations create uncertainty, thereby causing inefficiencies in a supply chain. True False 54. Disintermediation is the refusal of one party to use mediators for price negotiation. True False 55. Which of the following is not a goal of supply chain management? A. fewer suppliers and long-term relationship B. small lot sizes C. on time deliveries D. lowest possible transportation costs E. delivery often to the place of use 56. Logistics includes all of these except: A. the movement of materials within a production facility B. incoming shipments of goods or materials C. outgoing shipments of goods or materials D. customer selection E. returned goods processing 57. Small changes in consumer demand can result in large variations in orders placed because of the A. Supply chain B. Safety stock requirement C. Lead time effect D. Bullwhip effect E. FCFS scheduling 58. RFID chips: (I) are used to track goods in distribution (II) are used to track job progress in production (III) are used to provide special instructions to operators (IV) can be used in inventory record keeping A. II and III only B. I and II only C. II, III, and IV D. I, II, and IV E. IV only 59. Which of the following is not a benefit of RFID? A. increased productivity B. elimination of paper work C. frequent deliveries of smaller shipments D. reduction in clerical labor E. increased accuracy 60. A factor that makes it desirable for business organizations to actively manage their supply chains is: A. more potential vendors B. increasing globalization C. downsizing D. the internet E. RFID's 61. Which of the following is not a benefit of effective supply chain management? A. lower inventory costs B. higher productivity C. shorter lead times D. greater customer loyalty E. larger number of suppliers 62. Which of the following is not a measure of the reliability of the supply chain? A. supply chain response time B. on-time delivery C. fill rate D. lead time variability E. improving e-fulfillment statistics 63. The automatic identification of material is part of/facilitated by: A. holding costs B. RFID C. working capital reduction D. net present value calculations E. vendor analysis 64. Which of the following is not an application of E-business? A. internet buying and selling B. e-mail C. order and shipment tracking D. electronic data interchange (EDI) E. universal product codes 65. Which of the following is an advantage of E-business? (I) reduction of transaction costs (II) shortened supply chain response time (III) greater customer loyalty A. I B. II C. I and II D. II and III E. I, II, and III 66. Which of the following is a barrier to integration of separate organizations in the supply chain? (I) conflicting objectives of the companies in the chain. (II) different level of capacity of the companies in the chain. (III) reluctance of the organizations in the chain to allow other organizations access to their data. A. I only B. I and II C. II and III D. I and III E. I, II and III 67. _________ has helped business concentrate on their core business. A. Supply Chains B. Scheduling C. Outsourcing D. ERP E. Lean Production 68. Outsourcing followed by __________ is not simple. A. Integration B. Unionization C. Backsourcing D. Computerization E. Just-in-time 69. The interface between the firm and its suppliers is: A. purchasing B. production C. distribution D. engineering E. accounting 70. The two types of decisions that are relevant to supply chain management are: A. Short, long term B. Domestic, international C. Location, layout D. In-source, out-source E. Tactical, operational 71. One important objective of purchasing is to: A. set quality standards for purchased items B. be knowledgeable about new products C. maintain numerous sources of supply D. obtain the lowest prices on all purchased items E. determine the processes that should be used 72. The purchasing cycle begins with: A. selecting a supplier B. placing an order C. evaluating potential vendors D. conducting a value analysis E. receiving a requisition 73. Examination of the sources of supply for purchased parts or materials in order to improve performance is called: A. vendor analysis B. value analysis C. negotiated purchasing D. reverse engineering E. disintegration 74. Vendor analysis has the greatest potential for savings for items which have: A. low cost per unit B. low annual cost-volume C. high cost per unit D. high annual usage E. high annual cost-volume 75. Which of the following is not true of vendor analysis? A. It involves an examination of the function of purchased parts or raw materials. B. Its purpose is to reduce costs and/or improve performance of purchased goods or services. C. It is usually performed only periodically. D. Representatives from design and operations may work with purchasing. E. If improvements are identified, purchasing implements those that purchasing agrees are justified. 76. Which of the following is not a performance driver? A. Quality B. Cost C. Stability D. Velocity E. Flexibility 77. Which of the following would not usually be a main factor in selecting a vendor? A. location B. price C. quality D. inventory turnover E. vendor services 78. Which of the following is part of the purchasing cycle? (I) Purchasing selects a supplier. (II) Orders from vendors are received. (III) Purchasing receives a requisition. A. II and III B. I, II, and III C. I only D. I and II E. I and III 79. Which of the following is least likely to be a key consideration when a company chooses a supplier? A. lead time and on-time delivery B. reputation and financial stability C. value analysis D. quality and Quality assurance E. flexibility of design change 80. Which of the following is not a benefit of centralized purchasing? A. potential for quantity discounts B. better service from suppliers C. quick response to local needs D. potential for use of purchasing specialists E. supplier research 81. The purchasing perspective of the supplier as a partner is characterized by: A. an emphasis on low prices B. one or a few suppliers C. low flexibility D. 100% inspection for quality E. low volume 82. Vendor Analysis is the examination of the _________ of purchased materials. A. Function B. Source C. Quality D. Cycle E. Quantity 83. Last quarter, a retailer sold 8,000 t-shirts, 7,000 of which were sold directly from onhand inventory. This retailer's ________ was 88%. A. fill rate B. inventory yield C. profit margin D. inventory turnover E. none of the above 84. Which of the following is a principle required for ethical behavior in purchasing? A. loyalty to employer. B. justice to those you deal with. C. faith in your profession. D. all of the above. E. none of the above. 85. The activity which begins with a request from within the organization is: A. Outsourcing search B. Purchasing cycle C. Supplier selection D. Order receipt E. Supply chain management 86. Our organization can obtain visibility to potential trading partners on the internet by using: A. C2C B. B2C C. B2B D. C2B E. None of the above 87. Real time information about product movement on store shelves could benefit from the use of: A. batch processing B. economic order quantities C. statistical process control D. radio frequency identification tags E. infrared remote scanners 88. The website and order fulfillment are essential features of: A. delayed differentiation B. e-commerce C. internet service providers D. inventory balancing E. market segmentation 89. A given inventory item has a per-year holding cost of $500. One method of shipping this item is three days faster than the other, but it is $2.50 more per unit. Using the slower method would be __________ more expensive overall than using the faster method. A. $1.08 B. $1.16 C. $2.37 D. $2.73 E. $1.61