Chapter 6 Supply Chain Design PDF

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Operations Management and TQM Solutions manual...

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Chapter 6 - Supply Chain Design 1. Zara's value chain model focuses on two basic rules: "Give customers what they want, and get it to them faster than anyone else." a. True b. Fals e ANSWER: True 2. In the context of intellectual property of multinational enterprises, patents protect services. a. True b. Fals e ANSWER: False 3. In the context of sourcing, a single supplier often provides economies of scale and the ability to form close partnerships. a. True b. Fals e ANSWER: True 4. The center-of-gravity method increases the weighted distance between the facility to be located and its supply and demand points. a. True b. Fals e ANSWER: False 5. Supply chain optimization includes minimizing the total costs of manufacturing and transportation, which might consider sourcing, distribution, and placement of inventory throughout the supply chain. a. True b. Fals e ANSWER: True 6. Third-party logistics providers can leverage business intelligence and analytics to create efficiencies and economies of scale in the supply chain. a. True b. Fals e ANSWER: True 7. In location decision process, which of the following factors are considered in local site location decision? a. International monetary policy b. Time zones c. Sustainability issues Copyright Cengage Learning. Powered by Cognero.

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Chapter 6 - Supply Chain Design d. Foreign languages ANSWER: c 8. A firm that specializes in certain types of goods-producing activities, such as customized design, manufacturing, assembly, and packaging, and works under contract for end users is called a _____. a. third-party logistics provider b. contract manufacturer c. distribution center d. vendor-managed inventory supplier ANSWER: b 9. Which of the following is a disadvantage of push systems? a. They are not effective when sales patterns are consistent. b. They are not effective when there are few distribution centers and products. c. They increase transportation costs in a supply chain. d. They result in higher costs when forecasting sales is difficult. ANSWER: d 10. At Blyrie Apparels, the apparel stocks in the firm's outlets are changed every week. This is based on the changing fashion preferences of its customers. Its managers also coordinate in real-time among its other stores and satisfy its customers' requirements. In this case, Blyrie Apparels most likely uses _____. a. the center-of-gravity method b. the push-pull boundary c. an efficient supply chain d. a responsive supply chain ANSWER: d 11. The center-of-gravity method is often used to locate__________. a. availability of raw materials b. demand markets c. site locations d. service facilities ANSWER: d 12. A__________produces only what is needed at upstream stages in the supply chain in response to customer demand signals from downstream stages. a. third-party logistics provider b. push system c. pull system d. distribution center ANSWER: c Copyright Cengage Learning. Powered by Cognero.

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Chapter 6 - Supply Chain Design 13. In location decision process, community location decision involves: a. evaluating international monetary policies and cultural practices. b. coping with issues such as tariffs, customs, and trade restrictions. c. choosing a general region of a country. d. selecting a specific city in which to locate. ANSWER: d 14. __________refers to acquiring capabilities toward distribution, or even customers. a. Contract manufacturing b. Outsourcing c. Backward integration d. Forward integration ANSWER: d 15. Which of the following is considered economic factors in location decisions? a. Community attitudes b. Operating costs c. Transportation services d. Climatic conditions ANSWER: b 16. Which of the following is an advantage of pull systems? a. They are efficient even when schedules are missed. b. They minimize inventory and production costs. c. They forecast changes in customer demand. d. They reduce transportation costs. ANSWER: b 17. Fourlotts Corp. provide integrated services that include storing manufactured goods, packaging, and delivering it to the dealers or customers. Given this information, Fourlotts Corp. is most likely a _____. a. third-party logistics provider b. contract manufacturer c. distribution center d. supplier ANSWER: a 18. Greyon Suits, a company that specializes in making hand-made suits, moved its sourcing and operations from Lumeria back to its home country. This led to easier management and decreased carbon footprint. In this case, Greyon Suits is involved in _____. a. offshoring b. reshoring c. insourcing Copyright Cengage Learning. Powered by Cognero.

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Chapter 6 - Supply Chain Design d. outsourcing ANSWER: b 19. In the context of sourcing, multiple suppliers: a. often provide the ability to form close partnerships. b. often provide economies of scale. c. lower the risk of supply disruption. d. lower the chances of using a push or pull system. ANSWER: c 20. Which of the following statements is true of Inditex's supply chain? a. It can deliver most goods in 24 hours in Europe and the United States. b. It can be viewed as a push system. c. It is efficient rather than responsive. d. It avoids proximity sourcing as its products are expensive. ANSWER: a 21. Which of the following statements is true of the transportation problem? a. It cannot be applied when shipping routes have differing transportation costs. b. Its objective is to satisfy all destination demands with a minimum transportation cost. c. It cannot be applied when there is a variety of shipping routes. d. Its objective is to locate service facilities. ANSWER: b 22. __________is the process of having suppliers provide goods and services that were previously provided internally. a. Insourcing b. Outsourcing c. Backward integration d. Forward integration ANSWER: b 23. Rues and West Inc. is an automobile manufacturing firm. It produces and assembles all the parts of automobiles in its factory and, later, ships the finished products to its storehouses. The managers at the storehouses distribute the goods to wholesalers. Customers then buy the products from the wholesalers. In this scenario, the push–pull boundary for Rues and West Inc. is at the _____. a. factory b. wholesalers c. storehouses d. assembly section Copyright Cengage Learning. Powered by Cognero.

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Chapter 6 - Supply Chain Design ANSWER: b 24. In the context of supply chain design trade-offs, which of the following is true of a push system? a. It works best when there are a large number of distribution centers. b. It is more appropriate for make-to-order items. c. It has an advantage of immediate availability of goods to consumers. d. It works best with variable sales patterns. ANSWER: c 25. Unlike firms that outsource, firms engaged in offshoring: a. manage to reduce travel expenses. b. are able to enforce intellectual property rights easily. c. maintain ownership of the facility in another country. d. have better control on quality. ANSWER: c 26. Which of the following statements is true of a responsive supply chain? a. It works best when demand is stable and predictable. b. It works best when product life cycles are short and change often because of innovation. c. It works best when customers require standardization rather than customization. d. It works best when contribution margins are low. ANSWER: b 27. A difference between efficient supply chains and responsive supply chains is that responsive supply chains _____. a. focus on flexibility and responsive service b. focus on maximizing efficiencies in process flow c. seek to balance capacity and demand, resulting in low levels of inventory d. seek to minimize cost of routing products from factory to customers ANSWER: a 28. The "Wi" typically used in the numerator and denominator of the center-of-gravity equations represents the__________. a. quality of goods or services moved to or from location i b. x coordinate of location i c. volume of goods or services moved to or from location i d. y coordinate of location i ANSWER: c 29. Steve, an entrepreneur, decides to open a flower shop and looks for an appropriate location for his shop. He wants to use the center-of-gravity method for the purpose. He researches the zip codes in his area and finds the following Copyright Cengage Learning. Powered by Cognero.

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Chapter 6 - Supply Chain Design information: Identify a true statement about the best center of gravity for the possible shop location. a. The x-axis and the y-axis are less than 5.0. b. The x-axis is less than 7.0 and the y-axis is more than 7.0. c. The x-axis is more than 7.0 and the y-axis is less than 7.0. d. The x-axis and the y-axis are more than 7.0. ANSWER: c 30. Which of the following statements is true of outsourcing decisions? a. Break-even analysis can be used to provide insight into outsourcing decisions. b. The simplest outsourcing decision is a single supplier versus multiple suppliers. c. If a company decides to make a part in-house, it does not incur any fixed costs. d. If a company outsources its work to external supplier, the variable cost per unit will be low. ANSWER: a 31. Identify a true statement about responsive supply chains. a. They use only a few, large distribution centers to generate economies of scale. b.They use optimization models that minimize costs of routing products from factory through distribution centers to retail stores and customers. c. They are designed for efficiency and low cost by minimizing inventory and maximizing efficiencies in process flow. d.They are supported by information technology that provides real-time information to managers across the supply chain. ANSWER: d 32. __________is a noneconomic factor in location decisions. a. Construction b. Availability of labor c. Depreciation and maintenance d. Insurance ANSWER: b

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