CHAPTER 13 Supply Chain Management

TRUE/FALSE QUESTIONS
Answer whether the following statements are true or false

2 Discuss the concept of balancing logistics service and cost

1. The most important factor in physical distribution service is low cost.
true
false

3 Describe the integrated functions of the supply chain

2. The supply chain team is not responsible for transportation; this is the job of wholesalers.
true
false

3. U-Build-It Computer Company specializes in providing computers built-to-order to its customers. This is an example of mass customization.
true
false

4. Fiske's Disks, Inc., produces computer diskettes and has just changed its assembly method. The diskettes are produced on an assembly line, and suppliers deliver the needed parts in five small daily shipments directly to the line. Fiske's has noticed a dramatic decrease in carrying costs but a sharp increase in delivery costs because the company must pay more for the added delivery convenience. Fiske's Disks uses Just-in-Time (JIT) inventory management.
true
false

5. Nancy Gordan orders office supplies from a local retailer through her computer. The computer program is set up to transmit purchase orders and invoices between customers and the retailer. The retailer then delivers the products to her office. This is an example of electronic distribution.
true
false

4 Discuss new technology and emerging trends in logistics

6. The use of outsourcing has resulted in firms using fewer carriers, but demanding more from them.
true
false

MULTIPLE-CHOICE QUESTIONS
Select the response that best answers the question, and write the corresponding letter in the space provided.

2 Discuss the concept of balancing logistics service and cost

7. The sales representatives at Mechanix, Inc., are worried that they will lose more customer accounts if service is not faster. But the warehouse is trying to cut costs by holding less inventory and using slower transportation modes. This is an example of:

a. an inefficient warehousing system
b. the difficulties in an inventory control system
c. the need for third-party or contact warehousing
d. the complex balancing required of the physical distribution system
e. a situation in which a mechanized material handling system would work

3 Describe the integrated functions of the supply chain

8. Spiffy Spices, Inc., is trying to decide on a location for its new warehouse and should consider all of the following EXCEPT:
a. the cost and quality of industrial land
b. transportation costs and distances to customers
c. the stage of the product life cycle
d. the location of production facilities
e. the availability of transportation modes

9. The Megabit Company experiences much damage and loss when moving its computer products from the manufacturing plant to the storage facilities. The company should consider reducing the number of times an item is moved in the warehouse by installing a(n):
a. inventory control system
b. order-processing system
c. safety procedure
d. materials-handling system
e. transportation system

10. A large bank commissions a computer manufacturer to produce three hundred computers that would be tailored to the bank's specific needs. This is an example of:
a. JIT production
b. auto ID
c. EOQ
d. mass customization
e. procurement

11. The PorterCo company can no longer afford expensive storage facilities for its inventory. Furthermore, its computer products need to be built as soon as customers place orders. PorterCo should establish a(n) ____________ system.
a. UPC
b. auto ID
c. EOQ
d. JIT
e. TQM

12. The Limited clothing store can immediately transmit orders for new clothing to its suppliers in Asia. The Asian suppliers can electronically transmit back to the Limited information about in-stock items and shipping dates. This is an example of:
a. UPC
b. EDI
c. EOQ
d. JIT
e. ROP

13. Sudbury Mining harvests timber and mines metal ores and coals. This company is most likely to use ____________ for transportation to customers.
a. railroads
b. airplanes
c. trucklines
d. water transportation
e. pipelines

14. The Prime Cut Cattle Company has determined that its chief priority for choosing a transportation mode in Canada is transit time because meats must be fresh. However, this must be tempered by practical cost considerations. Prime Cut should use ____________ to ship their meats.
a. railroads
b. airplanes
c. motor carriers
d. water transportation
e. pipelines

15. Sunflower Greenhouses, Inc. promises its customers fresh-cut tropical flower arrangements with premium service (at a premium price). Sunflower Greenhouses most likely uses:
a. railroads
b. airways
c. motor carriers
d. water transportation
e. pipelines

16. Some Canadian car buyers save money by purchasing Mercedes-Benz cars in Germany and adding Canadian-required emission systems while the car is in transit. The most likely transportation mode is:
a. water carrier
b. motor carrier
c. railroad
d. air
e. ocean pipeline

4 Discuss new technology and emerging trends in logistics

17. Remex Diesel recognizes its main business strengths as efficient manufacturing procedures, an excellent dealer network, extensive market research, and an experienced marketing staff. The company has never developed a strong physical distribution system because it is not a focus of the business. It makes sense for Remex Diesel to use:
a. private warehousing
b. intermodal sourcing
c. distribution centre systems
d. freight forwarding
e. contract warehousing