1) For any supply chain,

A) management rests solely in the hands of the manufacturer.

B) management rests solely in the hands of the distributor.

C) if each member focuses on profitability, the overall supply chain profit will be maximized.

D) there is only one source of revenue, the customer.

Answer: D

Diff: 2

Topic: 1.2: The Objective of a Supply Chain

AACSB: Application of knowledge

Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain

decisions on the success of a firm.

2) Webvan designed a supply chain with large warehouses in several major cities in the United

States, then they let groceries were delivered to customer homes. Sales are good but they failed partly because
of 0.8

A) low demand for their service.

B) slow inventory turnover compared to industry averages.

C) higher labor costs for proceeding orders

D) poor quality products.

Answer: C

Diff: 2

Topic: 1.3: Decision Phases in a Supply Chain

AACSB: Application of knowledge

Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain

decisions on the success of a firm.

3) A key issue facing Toyota is

A) developing an Internet marketing system.

B) whether to specialize in a particular market.

C) design of its global production and distribution network.

D) how to implement model changes.

Answer: C

Diff: 3

Topic: 1.5: Examples of Supply Chains

AACSB: Application of knowledge

Objective: LO 1.4: Identify important issues and decisions to be addresses in a supply chain.

4) Walmart's supply chain features clusters of stores around distribution centers, which

facilitates

A) high transportation costs.

B) frequent but inexpensive replenishment at the stores.

C) rapid design cycles from their R&D group.

D) sharing of information with suppliers.

Answer: B

Diff: 2

Topic: 1.3: Decision Phases in a Supply Chain

AACSB: Application of knowledge

Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain

decisions on the success of a firm.

5) Which of these statements about Dell's supply chain is best?

A) Dell's supply chain surplus was largely driven by their negative shipping model.

B) Dell's initial success was largely driven by the ability to accurately forecast what customers

wanted and supply those models to retail outlets that carried their computers.

C) Dell's initial success was largely driven by their Assembly → Customer supply chain linkage.

D) Dell's supply chain consists of only two members, Dell and the customer.

Answer: C

Diff: 2

Topic: 1.3: Decision Phases in a Supply Chain

AACSB: Analytical thinking

Objective: LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain

decisions on the success of a firm.

6) The functions and stages that devise an integrated strategy with a shared objective are

referred to as

A) competitive strategy.

B) supply chain strategy.

C) scope of strategic fit.

D) scope of marketing strategy.

E) scope of product development strategy.

Answer: C

Diff: 2

Topic: 2.3 Expanding Strategic Scope

7) The value chain consists of direct and indirect activities. Which of the following is an

indirect activity for an enterprise?

A) Marketing

B) Distribution

C) Human Resources

D) Service

Answer: C

Diff: 3

Topic: 2.1 Competitive and Supply Chain Strategies

8) A ________ strategy specifies the portfolio of new products that a company will try to

develop.

A) Product Development

B) Marketing and Sales

C) Supply Chain

D) Finance

Answer: A

Diff: 2

Topic: 2.1 Competitive and Supply Chain Strategies

9) A ________ strategy specifies how the market will be segmented and how the product will

be positioned, priced, and promoted.

A) Product Development

B) Marketing and Sales

C) Supply Chain

D) Finance

Answer: B

Diff: 2

Topic: 2.1 Competitive and Supply Chain Strategies

10) Between 1993 and 2006, Dell's competitive strategy was to provide a large variety of

customizable products at a reasonable price. Given the focus on customization, Dell's supply

chain was designed to

A) be responsive.

B) provide a different product.

C) operate on a low-cost basis.

D) provide sustainable products.

Answer: A

Diff: 3

Topic: 2.2 Achieving Strategic Fit

AACSB: Reflective Thinking Skills

11) Which of the following is not a major driver of supply chain performance?

A) Facilities

B) Inventory

C) Transportation

D) Information

E) All of the above are major drivers of supply chain performance.

Answer: E

Diff: 1

Topic: 3.2 Drivers of Supply Chain Performance

12) Which of the following is not a major driver of supply chain performance?

A) Customers

B) Facilities

C) Inventory

D) Transportation

E) Information

Answer: A

Diff: 2

Topic: 3.2 Drivers of Supply Chain Performance

13) The places in the supply chain network where product is stored, assembled, or fabricated are

known as
A) facilities.

B) inventory.

C) transportation.

D) information.

E) customers.

Answer: A

Diff: 1

Topic: 3.2 Drivers of Supply Chain Performance

14) All raw materials, work in process, and finished goods within a supply chain are known as

A) facilities.

B) inventory.

C) transportation.

D) information.

E) customers.

Answer: B

Diff: 1

Topic: 3.2 Drivers of Supply Chain Performance

15) Moving inventory from point to point in the supply is known as

A) facilities.

B) inventory.

C) transportation.

D) information.

E) customers.

Answer: C

Diff: 1

Topic: 3.2 Drivers of Supply Chain Performance

16) The steps taken to move and store a product from the supplier stage to a customer stage in the

supply chain are referred to as

A) transportation.

B) retailing.

C) wholesaling.
D) distribution.

Answer: D

Diff: 1

Topic: 4.1 The Role of Distribution in the Supply Chain

AACSB: Application of knowledge

Objective: LO 4.1: Identify the key factors to be considered when designing a distribution

network.

17) Where does distribution occur in the supply chain?

A) Between every pair of stages

B) Everywhere downstream from production

C) Between production and the retailer

D) Between suppliers and retailers

Answer: A

Diff: 2

Topic: 4.1 The Role of Distribution in the Supply Chain

AACSB: Application of knowledge

Objective: LO 4.1: Identify the key factors to be considered when designing a distribution

network.

18) Distribution is a key driver of the overall profitability of a firm because

A) the addition of distributors only adds cost to the supply chain.

B) it directly impacts both the supply chain cost and the customer experience.

C) it slows down the responsiveness of the supply chain.

D) it cannot be developed as a part of supply chain strategy.

Answer: B

Diff: 2

Topic: 4.1 The Role of Distribution in the Supply Chain

AACSB: Application of knowledge

Objective: LO 4.1: Identify the key factors to be considered when designing a distribution

network

19) Companies in the same industry often select very different distribution networks because
A) some companies are poorly run.

B) different companies try to avoid using the same approach.

C) different companies have different objectives for their supply chain.

D) all of the above

Answer: C

Diff: 2

Topic: 4.2 Factors Influencing Distribution Network Design

AACSB: Application of knowledge

Objective: LO 4.1: Identify the key factors to be considered when designing a distribution

network.

20) Case study: Overview

The year 2008 was the lowest point of diamond industry both for wholesalers and

retailers. World Federation of Diamond announces to reduce the supply of new gems

entering the market as an effect to reduce the supply. The situation worsened as

competition for the shrinking number of customers became fiercer. In such a difficult

environment, it was hard to judge which factors could best help different jewelry

retails succeed.

Zales

This company was found by Morris Zale, William Zale and Ben Lipshy in 1924. The

marketing strategy of this company is to offer a credit plan of “ a penny and a dollar a week.”
Within the success, it allows them to expand the company with 12 stores in Oklahoma and Texas by 1941.
Unfortunately, after a decade running the business, the company hit the problems from a delay of
new merchandise until the lost of their own customers. Within the problems, the company has to lay off some
of their workers with the hope to enhance the company profitability and improve its overall
effectiveness. However, with all the plans, the company lost more than $200 million.

Blue Nile

Blue Nile established in 1999, by Mark Vandon and Dough Williams. It is

headquartered in Seattle, WA and is one of the leading online retailers of diamond

and fine jewelry. When it comes to selling the product, the company has it own

philosophy as follows: “ Offer high- quality diamonds and fine jewelry at

outstanding prices”. When people visit their Web site, people can find

extraordinary jewelry, useful guidance, and easy-to-understand jewelry education

that perfect for occasions. This jewelry company also offers a low pressure

selling tactics that entirely focused on education. With explaining the four terms
of Cs- cut, color, clarity and carat- the company allowed their customer to build

their own ring along with the four Cs terms.

In 2008 turned out to be a challenging year for Blue Nile due to the sales drop by

just under 10%. However, in year 2009, the company can retrieve the company

sales and income.

Tiffany

This jewelry company opened it first flag on 1837 as a stationery and fancy

good emporium in NYC. Thanks to their silver designs, the company enjoys their

tremendous success all over the world. After more than a century enjoying their

success, the company went public in 1987. There are several high-end products

that this company offers included diamond rings, wedding bands, gemstone

jewelry and gemstone bands with diamonds as the primary gemstone.

Tiffany’s has its own manufacturing facilities in Rhode Island and New York

but also continued to source from the third parties. Until 2003, the company

never purchased a rough diamonds, because they want focus entirely on the

purchase of polished stones. Since than, the company established its own

diamond processing operation in Canada, China and many more. But, not all the

rough diamonds will be use by the Tiffany’s. Furthermore, they will do the

quality control and separate the diamond that not meets the company standard.

Because of that, the important parts of the success associate with quality, luxury

and exclusivity.

Which advice is TRUE for Zales for its strategy and structure?

A) Need to gain control in their inventory and limit their lower demand

B) Continue focusing on their brand image by offering outstanding products and

great service

C) Selling higher cost diamonds at retail stores

D) Continue focusing on their selling tactics and could re-structure their marketing strategy to
reach out to new customers

Right answer: A

21) If facilities have lower fixed costs,

A) a few high-capacity facilities are preferred because this helps lower transportation costs.

B) a few local facilities are preferred because this helps lower transportation costs.

C) many high-capacity facilities are preferred because this helps lower transportation costs.
D) many local facilities are preferred because this helps lower transportation costs.

E) one central facility is preferred because this helps lower transportation costs.

Answer: D

Diff: 2

Topic: 5.2 Factors Influencing Network Design Decisions

22) If the production technology is very inflexible and product requirements vary from one country to
another, a firm has to set up

A) local facilities to serve the market in each country.

B) a few high-capacity facilities to serve the market in each country.

C) many local facilities because this helps lower transportation costs.

D) a few high-capacity facilities because this helps lower transportation costs.

E) many high-capacity facilities because this helps lower transportation costs.

Answer: A

Diff: 3

Topic: 5.2 Factors Influencing Network Design Decisions

23) If the technology is flexible,

A) it becomes more difficult to consolidate manufacturing in a few large facilities.

B) it becomes more difficult to distribute manufacturing in many local facilities.

C) it becomes easier to consolidate manufacturing in a few large facilities.

D) it becomes easier to consolidate manufacturing in many local facilities.

E) the firm should have one central facility.

Answer: C

Diff: 3

Topic: 5.2 Factors Influencing Network Design Decisions

Learning Outcome: Compare common approaches to supply chain design

24) Duties that must be paid when products and/or equipment are moved across international,

state, or city boundaries are referred to as

A) taxes.

B) tax incentives.

C) tariffs.

D) incentives.
E) none of the above

Answer: C

Diff: 2

Topic: 5.2 Factors Influencing Network Design Decisions

Learning Outcome: Compare common approaches to supply chain design

25) If a country has very high tariffs,

A) companies either do not serve the local market or set up manufacturing plants within the country
to save on duties.

B) companies do not serve the local market.

C) companies set up manufacturing plants within the country to save on duties.

D) companies will not serve the local market or set up manufacturing plants within the country to

save on duties.

E) companies will serve the local market by setting up regional manufacturing plants.

Answer: A

Diff: 2

Topic: 5.2 Factors Influencing Network Design Decisions

26) The key players in any transportation that takes place within a supply chain are

A) the shipper and the receiver.

B) the shipper and the supplier.

C) the shipper and the manufacturer.

D) the shipper and the carrier.

Answer: D

Diff: 2

Topic: 14.1 The Role of Transportation in a Supply Chain

AACSB: Application of knowledge

Objective: LO 14.1: Understand the role of transportation in a supply chain.

27) ________ typically move commodities over large distances at lower costs per unit shipped.

A) Air

B) Truck

C) Rail

D) Package carriers
Answer: C

Diff: 1

Topic: 14.2 Modes of Transportation and Their Performance Characteristics

AACSB: Application of knowledge

Objective: LO 14.2: Evaluate the strengths and weaknesses of different modes of transportation

28) Which mode of transportation is used primarily for petroleum and natural gas?

A) Air

B) Truck

C) Water

D) Pipeline

Answer: D

Diff: 1

Topic: 14.2 Modes of Transportation and Their Performance Characteristics

AACSB: Application of knowledge

Objective: LO 14.2: Evaluate the strengths and weaknesses of different modes of transportation.

29) The cost of holding inventory incurred by the shipper's supply chain network is

A) transportation cost.

B) inventory cost.

C) facility cost.

D) processing cost.

Answer: B

Diff: 1

Topic: 14.6 Trade-Offs in Transportation Design

AACSB: Application of knowledge

Objective: LO 14.5: Identify trade-offs that shippers need to consider when designing a

transportation network.

30) The cost of loading/unloading orders, as well as other processing costs associated with

transportation, is considered

A) transportation cost.

B) inventory cost.

C) facility cost.

D) processing cost.
Answer: D

Diff: 1

Topic: 14.6 Trade-Offs in Transportation Design

AACSB: Application of knowledge

Objective: LO 14.5: Identify trade-offs that shippers need to consider when designing a

transportation network.