1.

Best-in-class companies manage quality and achieve a very low defective parts per
million.
A. True
B. False
Ans. True

2. Which of the following appropriately characterizes supply chain management (SCM)?

A. SCM involves cross investments among the different members of the value-added network.
B. SCM is essentially the economic theory of comparative advantage applied at the company
level.
C. SCM is the design and management of value-added processes across organizational
boundaries.
D. SCM is the ownership of the valued-added activities up and down the distribution channel.
E. A and C
F. B and C
Ans: (F) B and C

3. In order to identify a core competency, two questions should be asked: "What are we
known for that makes us uniquely good" and "What do we do just as good as anyone
else?"
A. True
B. False
Ans: False

4. Before supply chain processes can be managed effectively up and down the supply chain,
they must be...

A. documented as a value chain process

B. supported adequately with supply chain expert staffing
C. managed well within the focal firm
D. evaluated for efficiency and effectiveness by internal accounting staff
E. identified as ideal levers to provide cost-cutting opportunities
Ans: C. managed well within the focal firm

5. If other firms can easily understand and copy a capability, it is not a competitive advantage.
To serve as a basis for sustainable competitive advantage, resources must be:

A. Valuable (Ans: A. Valuable)

B. Rare
C. Inimitable
D. Non-substitutable
E. All of the above
F. Only A and C

6. Managers need to recognize and understand all of the following elements for managing a
supply chain except:
a. a holistic view of company organization
b. information availability and accuracy
c. trade offs between cost and efficiency
d. performance measurement
e. none of the above - they all need to be considered
Ans: C. trade offs between cost and efficiency

7. Decisions made in one functional area of a company often affect performance in other areas of
a company. This situation requires business teams to perform a ______________ in order to
decide what decision is best for a company.
a. strategic plan
b. gap analysis
c. trade-off analysis
d. value stream map analysis
e. both b & c
Ans: C. trade-off analysis

8. A ______________ is a capability the company is good at that it provides the company a

competitive advantage.
a. strategic value
b. core competency
c. economies of scale
d. target task
e. all of the above
Ans: B. core competency

9. The "total cost of logistics" of a purchased material is explained as ____________.

a. purchasing the lowest price component
b. the sum of the costs of purchasing, transportation, using, warranting and disposing
c. the global sourced cost
d. purchase price plus the direct labor expense
e. none of the above
Ans: B. the sum of the costs of purchasing, transportation, using, warranting and disposing
10. One marketing department responsibility is to identify current and emerging
_____________.
a. products
b. competitors
c. core competencies
d. employees
e. none of the above
Ans: B. competitors

11. Satisfying customer needs is not the job of marketing department alone. It is the task of the
entire supply chain, sometimes called a ___________ by customer focused marketers
a. contingency
b. business
c. organization
d. demand chain
e. none of the above
Ans: D. demand chain

12. A step in the cycle of satisfaction is to take the product from idea to _____________.
a. customer
b. production
c. end
d. market
e. the world
Ans: B. production

13. While the team is working on cost management activities, it must keep in mind that the new
product it is creating must ______________.
a. be expensive
b. meet the customer's needs
c. have the highest quality
d. be technically excellent
e. both b & c
Ans: B. meet the customer's needs
14. The ________________is a measure of how much a company makes after paying all its
expenses.
a. sales revenue
b. profit
c. assets
d. cash flow
e. liability
Ans: B. profit

15. A long production time or high inventory levels tie up large amounts of cash.
A. True
B. False
Ans: A. True

16. The top management is the driver of SCM

A. True
B. False
Ans: B. False

17. The most important step in the purchasing process is___________.

a. transaction management
b. supplier selection
c. relationship management
d. communication
e. both a & b
Ans: B. supplier selection

18. All of the following are major steps in the supplier selection process except ____________.
a. identification
b. development
c. approval
d. monitoring
e. none of the above, they are all steps in the process
Ans: B. development