Chilcutt OM 300 Exam 3 UPDATED
QUESTIONS AND CORRECT ANSWERS
Supply chain - CORRECT ANSWER the network of activities that deliver a product or
service to the customer.
Activities within the supply chain - CORRECT ANSWER 1. Obtaining raw materials
2. Transforming raw materials into basic finished goods
3. Further processing of basic finished goods into customized products that are sold
Supply chain echelon/tiers - CORRECT ANSWER -the lower the tier level, the closer
the level to the customer
Objective of supply chain management - CORRECT ANSWER build a chain of
suppliers that focuses on maximizing value to the ultimate customer
Supply Chain Management - CORRECT ANSWER The business function that
coordinates all of the network links
-coordinates movement of goods through supply chain from suppliers to manufacturers to
distributors
-promotes information sharing in the supply chain, such as forecasts, sales data, &
promotions
The Supply Chain's Strategic Importance - CORRECT ANSWER supply chain
management is the integration of the activities that:
-procure materials and services
-transform them into intermediate goods and final products, &
-deliver them through a distribution system
Activities performed as part of supply chain management - CORRECT ANSWER 1.
Suppliers
,2. Distributors
3. Warehousing and inventory
4. Transportation vendors
5. Order fulfilment
6. Credit and cash transfers
7. Accounts payable and receivable
8. Sharing customer, forecasting, and production information
Outsourcing - CORRECT ANSWER -transfers traditional internal activities and
resources of a firm to outside vendors
-utilizes the efficiency that comes with specialization
-firms outsource:
Information technology, accounting, legal, logistics, & production
6 sourcing strategies - CORRECT ANSWER 1. Negotiating with many suppliers
2. Long-term partnering with few suppliers
3. Vertical integration
4. Joint ventures
5. Keiretsu
6. Virtual companies that use suppliers on an as needed basis
Many Suppliers - CORRECT ANSWER -Commonly used for commodity products
-Purchasing is typically based on price
-Suppliers compete with one another
-Supplier is responsible for maintaining necessary levels of technology, expertise, forecasting
abilities, as well as cost, quality, and delivery competencies
Few Suppliers - CORRECT ANSWER -Buyer forms longer term relationships with
fewer suppliers
-Create value through economies of scale and learning curve improvements
,-Suppliers more willing to participate in JIT programs and contribute design innovations and
technological expertise
-Cost of changing suppliers is huge
Trade secrets and other alliances
Vertical Integration - CORRECT ANSWER -developing the ability to produce goods
or services previously purchased
-integration may be forward, towards the customers, or backwards, towards suppliers
-can improve cost, quality, and inventory but requires capital, managerial talent, and demand
-risky in industries with undergoing technological changes
Joint venture - CORRECT ANSWER -formal collaborations:
Enhance skills, secure supply, & reduce costs
-cooperate without diluting the brand or conceding competitive advantage
Keiretsu Networks - CORRECT ANSWER -part collaboration, part purchasing from
few suppliers, and part vertical integration
-supplier becomes part of the company coalition
-often provide financial support for suppliers through ownership or loans
-members expect long-term relationships and provide technical expertise and stable quality
production
-may extend through several tiers of the supply chain
Virtual Companies - CORRECT ANSWER -Rely on a variety of good, stable
relationships to provide services on demand
-Exceptionally lean performance, specialized management expertise, low capital investment,
flexibility, and speed
Supply chain risk - CORRECT ANSWER -More reliance on supply chains means more
risk
, -customer and its suppliers are more dependent on each other as the number of suppliers used
decreases
-risk is compounded by globalization and logistical complexity
Types of risk - CORRECT ANSWER Traditional Concerns:
-vender reliability
-vendor quality
Concerns Due To Globalization:
-increase shipping times =>less reliable logistics
-tariffs and quotas impacting companies ability to do business
-more complex information flows
-greater political/currency risks
Mitigation Tactic (supplier fails to deliver/supplier with quality problems) - CORRECT
ANSWER -use multiple suppliers, contract with penalties, subcontractors on retainer,
pre-planning
-improver supplier selection process, require supplier certification, train and monitor
suppliers
Mitigation Tactic (logistic delays or damage/distribution) - CORRECT ANSWER -
have redundant transportation modes and warehouses, improve packaging design, contracts
with penalties
- careful partner selection, contracts with penalties, monitoring of partners
Mitigation Tactic (political/economic) - CORRECT ANSWER -political risk insurance,
diversify across multiple countries, use franchising and licensing agreements
-hedge to combat exchange rate risk, purchase contracts that address price fluctuations
Mitigation Tactic (natural catastrophes/theft, vandalism, terrorism) - CORRECT
ANSWER -insurance, diversify across multiple countries, alternate sourcing
-insurance, patent protection, security measures (RFID & GPS)
QUESTIONS AND CORRECT ANSWERS
Supply chain - CORRECT ANSWER the network of activities that deliver a product or
service to the customer.
Activities within the supply chain - CORRECT ANSWER 1. Obtaining raw materials
2. Transforming raw materials into basic finished goods
3. Further processing of basic finished goods into customized products that are sold
Supply chain echelon/tiers - CORRECT ANSWER -the lower the tier level, the closer
the level to the customer
Objective of supply chain management - CORRECT ANSWER build a chain of
suppliers that focuses on maximizing value to the ultimate customer
Supply Chain Management - CORRECT ANSWER The business function that
coordinates all of the network links
-coordinates movement of goods through supply chain from suppliers to manufacturers to
distributors
-promotes information sharing in the supply chain, such as forecasts, sales data, &
promotions
The Supply Chain's Strategic Importance - CORRECT ANSWER supply chain
management is the integration of the activities that:
-procure materials and services
-transform them into intermediate goods and final products, &
-deliver them through a distribution system
Activities performed as part of supply chain management - CORRECT ANSWER 1.
Suppliers
,2. Distributors
3. Warehousing and inventory
4. Transportation vendors
5. Order fulfilment
6. Credit and cash transfers
7. Accounts payable and receivable
8. Sharing customer, forecasting, and production information
Outsourcing - CORRECT ANSWER -transfers traditional internal activities and
resources of a firm to outside vendors
-utilizes the efficiency that comes with specialization
-firms outsource:
Information technology, accounting, legal, logistics, & production
6 sourcing strategies - CORRECT ANSWER 1. Negotiating with many suppliers
2. Long-term partnering with few suppliers
3. Vertical integration
4. Joint ventures
5. Keiretsu
6. Virtual companies that use suppliers on an as needed basis
Many Suppliers - CORRECT ANSWER -Commonly used for commodity products
-Purchasing is typically based on price
-Suppliers compete with one another
-Supplier is responsible for maintaining necessary levels of technology, expertise, forecasting
abilities, as well as cost, quality, and delivery competencies
Few Suppliers - CORRECT ANSWER -Buyer forms longer term relationships with
fewer suppliers
-Create value through economies of scale and learning curve improvements
,-Suppliers more willing to participate in JIT programs and contribute design innovations and
technological expertise
-Cost of changing suppliers is huge
Trade secrets and other alliances
Vertical Integration - CORRECT ANSWER -developing the ability to produce goods
or services previously purchased
-integration may be forward, towards the customers, or backwards, towards suppliers
-can improve cost, quality, and inventory but requires capital, managerial talent, and demand
-risky in industries with undergoing technological changes
Joint venture - CORRECT ANSWER -formal collaborations:
Enhance skills, secure supply, & reduce costs
-cooperate without diluting the brand or conceding competitive advantage
Keiretsu Networks - CORRECT ANSWER -part collaboration, part purchasing from
few suppliers, and part vertical integration
-supplier becomes part of the company coalition
-often provide financial support for suppliers through ownership or loans
-members expect long-term relationships and provide technical expertise and stable quality
production
-may extend through several tiers of the supply chain
Virtual Companies - CORRECT ANSWER -Rely on a variety of good, stable
relationships to provide services on demand
-Exceptionally lean performance, specialized management expertise, low capital investment,
flexibility, and speed
Supply chain risk - CORRECT ANSWER -More reliance on supply chains means more
risk
, -customer and its suppliers are more dependent on each other as the number of suppliers used
decreases
-risk is compounded by globalization and logistical complexity
Types of risk - CORRECT ANSWER Traditional Concerns:
-vender reliability
-vendor quality
Concerns Due To Globalization:
-increase shipping times =>less reliable logistics
-tariffs and quotas impacting companies ability to do business
-more complex information flows
-greater political/currency risks
Mitigation Tactic (supplier fails to deliver/supplier with quality problems) - CORRECT
ANSWER -use multiple suppliers, contract with penalties, subcontractors on retainer,
pre-planning
-improver supplier selection process, require supplier certification, train and monitor
suppliers
Mitigation Tactic (logistic delays or damage/distribution) - CORRECT ANSWER -
have redundant transportation modes and warehouses, improve packaging design, contracts
with penalties
- careful partner selection, contracts with penalties, monitoring of partners
Mitigation Tactic (political/economic) - CORRECT ANSWER -political risk insurance,
diversify across multiple countries, use franchising and licensing agreements
-hedge to combat exchange rate risk, purchase contracts that address price fluctuations
Mitigation Tactic (natural catastrophes/theft, vandalism, terrorism) - CORRECT
ANSWER -insurance, diversify across multiple countries, alternate sourcing
-insurance, patent protection, security measures (RFID & GPS)
