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Q:
A favorable labor climate might include all of the following except:
A) a good work ethic.
B) no union presence.
C) high average wages.
D) an educated work force.
Q:
An important factor for locating new manufacturing plants is:
A) proximity to customers.
B) location of competitors.
C) proximity to markets.
D) favorable labor climate.
Q:
On average, it is less expensive to relocate a service-oriented business than a manufacturing business.
Q:
When comparing several sites, typically a company will pick specific available site locations, then broaden their choices to communities, and finally to alternate regions.
Q:
Repeated onsite expansion ultimately leads to diseconomies of scale.
Q:
More than 80 percent of all relocations are within 10 miles of the first location, so usually the existing workforce is displaced.
Q:
Critical mass is a situation whereby several competing firms cluster near one location, and thus attract more customers than the total number who would shop at the same stores in scattered locations.
Q:
Many firms are concluding that large, centralized manufacturing facilities in low-cost countries with poorly trained workers are not sustainable.
Q:
Service location decisions are driven primarily by the operating costs at the locations under consideration.
Q:
Traffic flows are one dominant factor in locating manufacturing location.
Q:
One dominant factor in locating manufacturing facilities is a favorable labor climate.
Q:
When outbound transportation costs are a dominant factor, manufacturing facilities should be located close to suppliers and resources needed for production.
Q:
Two conditions must be met by factors selected to evaluate location decisions: the factors must have a high impact on the company's ability to meet its goals and the factors themselves must be affected by the location decision.
Q:
If the customer must be physically present at the process, location is an important issue.
Q:
13.1 Factors Affecting Location Decisions
Q:
The Dhaba Restaurant wishes to locate a new facility. Based on the following subjective criteria, where should the new facility be located? (Very good = 5, Good = 4, Fair = 3, Poor = 2, and Very poor = 1)
Q:
Sweet Sweet Candy, Inc. wishes to open two new stores. Based on the following subjective criteria, where should the new stores be located? The higher the score, the better.
Q:
The Hunan Restaurant wishes to locate a new facility. Based on the following subjective criteria, where should the new facility be located? (Very good = 5, Good = 4, Fair = 3, Poor = 2, and Very poor = 1) A) A
B) B
C) C
D) D
Q:
Sweet Candy, Inc. wishes to open two new stores. Based on the following subjective criteria, where should the new stores be located? The higher the score, the better. A) A and B
B) B and C
C) B and D
D) B and E
Q:
Acme Fasteners desires to locate a new facility. Based on preliminary analysis, the choice has been reduced to four locations: A, B, C, and D. These four locations were rated on a scale from 1 (worst) to 10 (best) on each of four criteria. Each criterion was also weighted to indicate its importance (i.e., the higher the weight, the more important). The list of ratings and weights follows. Based on weighted scores, where should Acme locate its new facility?
A) A
B) B
C) C
D) D
Q:
Scenario 12.2 SAGE Inc. receives too many applications each year for the Global MBA program so they turn to their network of partners for assistance. Nothing in this world is free, of course, so their partners provide quotes that include a per student cost as well as a facilities cost that SAGE would pay regardless of the number of students they sent there. The costs in Rupees () are elegantly summarized in the table below. Per student Cost Facilities Cost Oklahoma 17 15,000 Wisconsin 13 22,000 England 10 35,000 Use Scenario 12.2 to answer the question. Determine the ranges for which each alternative is preferable from a total cost standpoint.
Q:
There was no reason to build a new call center and hire hundreds of customer service representatives when there were perfectly viable options thousands of miles away. Hence, the company decided to ________ this process.
Q:
When a company uses ________, it is moving upstream in the supply chain toward the source of raw materials.
Q:
One way to gain control over suppliers in a chain is to buy a controlling interest in them, known as ________.
Q:
A U.S. company faced with spiraling costs in their customer care center recreated that service in Luxembourg at a fraction of the cost. This is an example of:
A) offshoring.
B) forward integration.
C) backward integration.
D) postponement.
Q:
Which of the following is not a benefit of outsourcing?
A) comparative labor costs
B) increased logistics costs
C) reduction of transaction costs through use of the Internet
D) technology transfer to another country or company
Q:
Scenario 12.1 You currently make a part on old equipment at a cost of $50,000 per year and a variable cost of $20 / unit. You have found an outside supplier who will make the part for $15 / unit if you will pay their annual fixed costs of $200,000 / year. The following table summarizes the details of this make versus buy decision. ALTERNATIVE FIXED COST VARIABLE COST Buy $200,000 per year $15 per unit Make $50,000 per year $20 per unit Use Scenario 12.1 to answer the question. What does the company save for the year by selecting the low-cost option at an annual requirement of 40,000 units? A) $150,000 B) $300,000 C) $50,000 D) $40,000
Q:
The supply chain management department of a major manufacturer pondered a particularly weighty make or buy decision for weeks, ultimately deciding to make, rather than buy. This decision resulted in increased: A) outsourcing. B) offshoring. C) postponement. D) backward integration.
Q:
What's the difference between postponement and channel assembly? Provide examples of both.
Q:
What is mass customization and what advantages does a producer benefit from if they can realize it?
Q:
________ is the process of using members of the distribution channel as if they were assembly stations in the factory.
Q:
________ is a concept whereby some of the final activities in the provision of a service or product are delayed until the orders are received.
Q:
________ is essentially standardization in chunks.
Q:
A producer of medical devices makes a single model that can be customized to talk in and display any of 47 different languages. This customization is performed in one of their five regional distribution centers as firm orders are received, providing an elegant example of:
A) backward integration.
B) forward integration
C) channel assembly.
D) offshoring.
Q:
A somewhat successful computer manufacturer makes a generic computer in five exciting colors. Once orders are received, the computer guts are encased in the customer's choice of colored case at the factory. This approach to production is known as:
A) channel assembly.
B) postponement.
C) strategic sourcing.
D) strategic production.
Q:
________ uses a firm's flexible processes to generate a wide variety of personalized services or products at reasonably low costs.
A) Mass customization
B) Channel assembly
C) Outsourcing
D) Forward integration
Q:
Which of the following is not identified in the text as a competitive advantage of a mass customization strategy?
A) improvement of the quality of parts produced
B) management of customer relationships
C) elimination of finished goods inventory
D) an increase in perceived value of services or products
Q:
A firm may choose to use members of the distribution channel as if they were assembly stations in the factory. Such an approach is known as:
A) backward integration.
B) postponement.
C) channel assembly.
D) deferred delay.
Q:
Channel assembly is the process of using members of the distribution channel as if they were assembly stations in the factory.
Q:
Customer clothing and the Boeing 787 Dreamliner aircraft are based on standard designs but component production and manufacture of the final product is ________.
Q:
In ________, the product is built to customer specifications from a stock of existing components.
Q:
When a customer orders an item that is a completely new and different product, the company's supply chain must be able to deliver an item that is ________-to-order.
Q:
The objective of a firm in a responsive supply chain is likely to be realized if it has a:
A) standardized product.
B) short lead time.
C) low-capacity cushion.
D) line-flow process.
Q:
It is desirable for a firm in a responsive supply chain to have:
A) low-capacity cushions.
B) delivery by railroad.
C) high-capacity utilization consistent with high-volume delivery.
D) inventory investments as needed to enable fast delivery times.
Q:
The type of goods for which a responsive supply chain is appropriate are:
A) fashion goods.
B) products with a long shelf life.
C) inexpensive products.
D) those with infrequent design changes.
Q:
Responsive supply chains should be preferred when:
A) product variety is low.
B) demand is predictable.
C) contribution margins are low.
D) product variety is high.
Q:
A responsive supply chain typically has:
A) a low capacity cushion.
B) high inventory turns.
C) supply chain partners that emphasize low prices.
D) supply chain partners that emphasize volume flexibility.
Q:
An efficient supply chain typically has:
A) a high capacity cushion.
B) high inventory turns.
C) supply chain partners that emphasize fast high quality.
D) supply chain partners that emphasize volume flexibility.
Q:
An efficient supply chain should be preferred when:
A) product variety is high.
B) competitive priority is customization.
C) demand is highly predictable.
D) demand is unpredictable.
Q:
Responsive supply chains work best when firms offer a low variety of services or products and demand predictability is high.
Q:
Efficient supply chains use low capacity cushions.
Q:
Efficient supply chains work best when contribution margins are high.
Q:
Responsive supply chains work best when frequent product introduction exists.
Q:
A television manufacturer would like to reduce its inventory. To this end, you are asked by the operations manager to assess its inventory level. You have the following information on average inventories from last year's financial statement:
Raw materials $1,500,000
Work-in-process $1,200,000
Finished goods $800,000
In addition, the cost of goods sold last year (50 weeks) was $20 million.
a. What is its total inventory (measured as weeks of supply)?
b. What is its inventory turnover?
Q:
Rome Corporation is a supplier of ball bearings. Because of the specialized manufacturing process employed, considerable work-in-process and raw material inventories are created. The current inventory levels are $1,500,000 and $3,775,000, respectively. In addition, finished goods inventory is $3,500,000, and sales (at cost) for the current year are expected to be about $28 million. Assume they operate 50 weeks per year.
a. What is their total inventory (measured as weeks of supply)?
b. What is their inventory turnover?
Q:
Last year, RJT Enterprises had average inventories (raw materials, work-in-process, and finished goods) of $7.5 million. During this same year the cost of goods sold was $30 million. The company operates 50 weeks per year.
a. What is their total inventory (measured as weeks of supply)?
b. What is their inventory turnover?
Q:
What are some financial measures of supply chain performance? Which one is the most important and why?
Q:
The clever wine shop owner held a tasting, accepted customer orders and payments, and then placed an order with the vineyard. Since he paid the vineyard after he received the shipment (and well after he charged his customers), his ________ time was negative.
Q:
________, the annual sales at cost divided by the average aggregate inventory value, is the number of times a year that a firm completely replenishes its inventory.
Q:
________ is an inventory measure obtained by dividing the average aggregate inventory value by sales per week at cost.
Q:
Shipments of Product Q from a plant to a wholesaler are made in lots of 400. The wholesaler's average demand for Q is 150 units per week. Lead time from plant to wholesaler is 5 weeks. The wholesaler pays for the shipments when they leave the plant. The plant has proposed several new lead time and lot size options to the wholesaler (see table below). If the wholesaler's goal is to minimize total cycle plus pipeline inventories, which option should the wholesaler select? OPTION
SHIPMENT LOT SIZE
PLANT-TO- WHOLESALER LEAD TIME CURRENT
400
5 1
500
4 2
800
3 3
1,000
2 A) option #1
B) option #2
C) option #3
D) remain with the current option
Q:
Some discount stores are able to sell items before they have to pay their suppliers, resulting in a negative:
A) net profit.
B) return on assets.
C) number of inventory turns.
D) cash-to-cash measure.
Q:
Weeks of inventory and inventory turns are reflected in:
A) working capital.
B) operating expenses.
C) cost of goods sold.
D) cash flow.
Q:
Padco averages $15 million worth of inventory in all of its worldwide locations. They operate 51 weeks a year and each week average $3 million in sales (at cost). Their inventory turnover is:
A) 1.13 turns.
B) 5 turns.
C) 10.2 turns.
D) 17 turns.
Q:
The average inventory at Hamilton Industries, comprising raw materials, work-in-process, and finished goods, was found to be $17.2 million last year. If the cost of goods sold per week averaged $1.32 million, what was the inventory turnover experienced by Hamilton Industries? Assume the company had 50 working weeks per year.
A) less than or equal to 3.50
B) greater than 3.50 but less than 3.75
C) greater than 3.75 but less than 4.00
D) greater than 4.00
Q:
Henderson Corporation is a supplier of alloy ball bearings to auto manufacturers in Detroit. Because of the specialized manufacturing process employed, considerable work-in-process and raw material inventories are created. The average inventory levels are $1,152,000 and $2,725,000, respectively. In addition, finished goods inventory is $3,225,000, and sales (at cost) for the current year are expected to be about $24 million. The inventory turnover that Henderson Corporation is currently expecting is:
A) less than 2.0.
B) greater than 2.0 but less than 2.5.
C) greater than 2.5 but less than 3.0.
D) greater than 3.0.
Q:
Increasing the percentage of on-time deliveries to customers actually reduces the total revenue of a firm.
Q:
Selling expenses, fixed expenses and depreciation are all considered operating expenses.
Q:
The weeks of supply measure will improve if the weekly sales decrease.
Q:
Discuss the major differences between supply chains for services and manufacturing. Which supply chain is easier to coordinate effectively?
Q:
A typical manufacturer spends:
A) about 25% of its total income from sales on purchased services and materials.
B) about 45% of its total income from sales on purchased services and materials.
C) more than 60% of its total income from sales on purchased services and materials.
D) almost 80% of its total income from sales on purchased services and materials.
Q:
The finished goods of one firm may actually be the raw materials for another firm.
Q:
While it is important to manufacturing firms, little can be done to improve supply chain strategy in most service organizations.
Q:
The fundamental purpose of supply chain design for a manufacturer is to control inventories by managing the flow of materials.
Q:
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.
Q:
Compare and contrast efficient versus responsive supply chains.
Q:
________ seeks to develop a firm's supply chain to meet the competitive priorities of the firm's operations strategy.
Q:
________ is the synchronization of a firm's process with those of its suppliers and customers to match flow of materials, services and information with demand.
Q:
Figure 12.1 This figure represents the impact of supply chain performance on total costs. Refer to Figure 12.1. Which is the best statement if a company simultaneously moves from point A to point B and from point D to point C? A) The new supply chain efficiency curve is superior to the old one. B) The new costs are higher, but the performance is better. C) The new supply chain is still inferior to the supply chain efficiency curve. D) The new performance is worse, but the costs are lower.
Q:
Which one of the following is true for supply chain management? A) Supply chain applies to both manufacturing and service organizations. B) Supply chain applies only to manufacturing because it deals with flow of materials. C) Supply chain is about suppliers and does not include distributors or customers. D) Supply chain includes any operation that deals with materials.