Chapter 1—Introduction to Supply Chain Management
TRUE/FALSE
1. According to the textbook, the keys to successful supply chain management include trust and
honest, accurate communications between supply chain partners.
ANS: T PTS: 1 REF: p. 2-9
2. According to the textbook, rapidly changing communication technology makes the development
of global partnerships more difficult than in the past.
ANS: F PTS: 1 REF: p. 5
3. According to the textbook, supply chains include raw material suppliers, intermediate component
manufacturers, end-product manufacturers, wholesale distributors, and retailers.
ANS: T PTS: 1 REF: p. 6
4. According to the textbook, retail stores are considered the focal firms in modern supply chains.
ANS: F PTS: 1 REF: p. 6
5. Reverse logistics activities include the return of defective and damaged items to the manufacturer,
and the recycling of used packaging.
ANS: T PTS: 1 REF: p. 6
6. Trucking companies, airfreight shipping companies, and information system providers can all be
considered service providers to the supply chain.
ANS: T PTS: 1 REF: p. 7
7. According to the textbook, a supply chain's end customers are the only true source of income for
all supply chain organizations.
ANS: T PTS: 1 REF: p. 7
8. Effective supply chain management relies on competitive bidding, corporate privacy, and
contracts based on short-term performance.
ANS: F PTS: 1 REF: p. 8
9. The bullwhip effect is the result of companies producing excessive defective products; defective
items are whipped back from the end customer toward the manufacturer of the defect.
,ANS: F PTS: 1 REF: p. 11
10. According to the textbook, in the 1950's and 1960's, mass production techniques focused on
creating supplier partnerships, improving process design and flexibility, and improving product quality.
ANS: F PTS: 1 REF: p. 12
11. According to the textbook, third-party logistics providers (3LPs) do not offer assistance with
helping products clear customs.
ANS: F PTS: 1 REF: p. 14
12. According to the textbook, environmental and social impacts are considered outside of supply
chain management.
ANS: F PTS: 1 REF: p. 15
13. According to the textbook, 'integration' is one of the four supply chain elements.
ANS: T PTS: 1 REF: p. 15
14. ISO9000 is a standardized program for certifying suppliers.
ANS: T PTS: 1 REF: p. 16
15. The universally accepted definition of supply chain management is "the management and
integration of the parties involved in producing the end items coveted by consumers."
ANS: F PTS: 1 REF: p. 17
16. The assembly or production of finished products, producing the right amount of product, and
ensuring that finished products meet specific quality, cost, and customer service requirements can all be
considered elements of operations.
ANS: T PTS: 1 REF: p. 17
17. Improved quality is one benefit of using a lean production system.
ANS: T PTS: 1 REF: p. 19
18. Successful supply chain integration occurs when supply chain participants realize that the needs
and desires of the end item manufacturer dictate the objectives and policies of all the other supply chain
participants.
ANS: F PTS: 1 REF: p. 21-22
19. Trends in supply chain management include increasing inventory levels and considering the
elimination of logistics intensive online retailing.
, ANS: F PTS: 1 REF: p. 22-27
20. Trends in supply chain management include increasing supply chain responsiveness and
considering the negative environmental impacts of supply chains.
ANS: T PTS: 1 REF: p. 24
MULTIPLE CHOICE
1. Which of the following is an illustration of a company that has vertically integrated?
a. A computer manufacturer that acquires its computer components supplier
b. A computer manufacturer that acquires warehouses to aid in its product distribution
c. A computer components supplier that begins to assemble computers for sale to consumers
d. All of these
ANS: D PTS: 1 REF: p. 5
2. Successful modern supply chain management typically includes the practice of:
a. Keeping high inventories throughout the supply chain
b. Always purchasing materials with the lowest per unit cost
c. The sharing of information between supply chain partners
d. Leadership through the practice of issuing ultimatums to your supply chain partners
ANS: C PTS: 1 REF: p. 5
3. According to the textbook, which of the following statements is TRUE? Consumers buy products
based on a combination of:
a. Cost, quality, manufacturer, and simplicity of use
b. Cost, quality, availability, and brand
c. Cost, quality, advertising, store preference, and appearance
d. Cost, quality, availability, maintainability, and reputation
ANS: D PTS: 1 REF: p. 6
4. Which of the following is a reverse logistics activity:
a. Recycling products and components
b. Delivering finished goods to your customer
c. Developing a collaborative relationship with your supplier
d. Managing the quality of products
ANS: A PTS: 1 REF: p. 6
5. According to the textbook, conditions which must be present for successful supply chain
management include:
a. Vertical Integration
b. Corporate contracts regarding performance expectations
c. Short-term company focused performance
d. Cooperation among firms
, ANS: D PTS: 1 REF: p. 8
6. A certain supply chain is made up of:
1. Raw Materials Supplier
2. Components Manufacturer
3. A firm that manufacturers Sub-assemblies
4. End Item Manufacturer
5. Wholesale Distributor
6. Local Retail Chain Warehouse
Who is considered the second tier supplier of the firm that manufacturers Sub-assemblies?
a. Raw Materials Supplier
b. Wholesale Distributor
c. The final end item consumer
d. Components Manufacturer
e. Local Retail Chain Warehouse
ANS: A PTS: 1 REF: p. 9
7. A certain supply chain is made up of:
1. Raw Materials Supplier
2. Components Manufacturer
3. A firm that manufacturers Sub-assemblies
4. End Item Manufacturer
5. Wholesale Distributor
6. Local Retail Chain Warehouse
Who is considered the End Item Manufacturer's second tier supplier?
a. Raw Materials Supplier
b. Wholesale Distributor
c. The final end item consumer
d. Components Manufacturer
e. Local Retail Chain Warehouse
ANS: D PTS: 1 REF: p. 9
8. The following is an example of the bullwhip effect:
a. Barkley's produces a defective product and thus realizes an excessive increase in consumer
returns
b. Barkley's products are so successful that it adds a new retailer for distribution
c. Barkley's incorrectly anticipates consumer demand resulting in stockouts at several popular
retailers
d. Barkley's is unhappy with the performance of a distributor which causes a chain-reaction
of replacements to companies involved in its supply chain
ANS: C PTS: 1 REF: p. 11
9. The term Supply Chain Management and the field of study it represents today seems to have
emerged in the:
a. 1980's
TRUE/FALSE
1. According to the textbook, the keys to successful supply chain management include trust and
honest, accurate communications between supply chain partners.
ANS: T PTS: 1 REF: p. 2-9
2. According to the textbook, rapidly changing communication technology makes the development
of global partnerships more difficult than in the past.
ANS: F PTS: 1 REF: p. 5
3. According to the textbook, supply chains include raw material suppliers, intermediate component
manufacturers, end-product manufacturers, wholesale distributors, and retailers.
ANS: T PTS: 1 REF: p. 6
4. According to the textbook, retail stores are considered the focal firms in modern supply chains.
ANS: F PTS: 1 REF: p. 6
5. Reverse logistics activities include the return of defective and damaged items to the manufacturer,
and the recycling of used packaging.
ANS: T PTS: 1 REF: p. 6
6. Trucking companies, airfreight shipping companies, and information system providers can all be
considered service providers to the supply chain.
ANS: T PTS: 1 REF: p. 7
7. According to the textbook, a supply chain's end customers are the only true source of income for
all supply chain organizations.
ANS: T PTS: 1 REF: p. 7
8. Effective supply chain management relies on competitive bidding, corporate privacy, and
contracts based on short-term performance.
ANS: F PTS: 1 REF: p. 8
9. The bullwhip effect is the result of companies producing excessive defective products; defective
items are whipped back from the end customer toward the manufacturer of the defect.
,ANS: F PTS: 1 REF: p. 11
10. According to the textbook, in the 1950's and 1960's, mass production techniques focused on
creating supplier partnerships, improving process design and flexibility, and improving product quality.
ANS: F PTS: 1 REF: p. 12
11. According to the textbook, third-party logistics providers (3LPs) do not offer assistance with
helping products clear customs.
ANS: F PTS: 1 REF: p. 14
12. According to the textbook, environmental and social impacts are considered outside of supply
chain management.
ANS: F PTS: 1 REF: p. 15
13. According to the textbook, 'integration' is one of the four supply chain elements.
ANS: T PTS: 1 REF: p. 15
14. ISO9000 is a standardized program for certifying suppliers.
ANS: T PTS: 1 REF: p. 16
15. The universally accepted definition of supply chain management is "the management and
integration of the parties involved in producing the end items coveted by consumers."
ANS: F PTS: 1 REF: p. 17
16. The assembly or production of finished products, producing the right amount of product, and
ensuring that finished products meet specific quality, cost, and customer service requirements can all be
considered elements of operations.
ANS: T PTS: 1 REF: p. 17
17. Improved quality is one benefit of using a lean production system.
ANS: T PTS: 1 REF: p. 19
18. Successful supply chain integration occurs when supply chain participants realize that the needs
and desires of the end item manufacturer dictate the objectives and policies of all the other supply chain
participants.
ANS: F PTS: 1 REF: p. 21-22
19. Trends in supply chain management include increasing inventory levels and considering the
elimination of logistics intensive online retailing.
, ANS: F PTS: 1 REF: p. 22-27
20. Trends in supply chain management include increasing supply chain responsiveness and
considering the negative environmental impacts of supply chains.
ANS: T PTS: 1 REF: p. 24
MULTIPLE CHOICE
1. Which of the following is an illustration of a company that has vertically integrated?
a. A computer manufacturer that acquires its computer components supplier
b. A computer manufacturer that acquires warehouses to aid in its product distribution
c. A computer components supplier that begins to assemble computers for sale to consumers
d. All of these
ANS: D PTS: 1 REF: p. 5
2. Successful modern supply chain management typically includes the practice of:
a. Keeping high inventories throughout the supply chain
b. Always purchasing materials with the lowest per unit cost
c. The sharing of information between supply chain partners
d. Leadership through the practice of issuing ultimatums to your supply chain partners
ANS: C PTS: 1 REF: p. 5
3. According to the textbook, which of the following statements is TRUE? Consumers buy products
based on a combination of:
a. Cost, quality, manufacturer, and simplicity of use
b. Cost, quality, availability, and brand
c. Cost, quality, advertising, store preference, and appearance
d. Cost, quality, availability, maintainability, and reputation
ANS: D PTS: 1 REF: p. 6
4. Which of the following is a reverse logistics activity:
a. Recycling products and components
b. Delivering finished goods to your customer
c. Developing a collaborative relationship with your supplier
d. Managing the quality of products
ANS: A PTS: 1 REF: p. 6
5. According to the textbook, conditions which must be present for successful supply chain
management include:
a. Vertical Integration
b. Corporate contracts regarding performance expectations
c. Short-term company focused performance
d. Cooperation among firms
, ANS: D PTS: 1 REF: p. 8
6. A certain supply chain is made up of:
1. Raw Materials Supplier
2. Components Manufacturer
3. A firm that manufacturers Sub-assemblies
4. End Item Manufacturer
5. Wholesale Distributor
6. Local Retail Chain Warehouse
Who is considered the second tier supplier of the firm that manufacturers Sub-assemblies?
a. Raw Materials Supplier
b. Wholesale Distributor
c. The final end item consumer
d. Components Manufacturer
e. Local Retail Chain Warehouse
ANS: A PTS: 1 REF: p. 9
7. A certain supply chain is made up of:
1. Raw Materials Supplier
2. Components Manufacturer
3. A firm that manufacturers Sub-assemblies
4. End Item Manufacturer
5. Wholesale Distributor
6. Local Retail Chain Warehouse
Who is considered the End Item Manufacturer's second tier supplier?
a. Raw Materials Supplier
b. Wholesale Distributor
c. The final end item consumer
d. Components Manufacturer
e. Local Retail Chain Warehouse
ANS: D PTS: 1 REF: p. 9
8. The following is an example of the bullwhip effect:
a. Barkley's produces a defective product and thus realizes an excessive increase in consumer
returns
b. Barkley's products are so successful that it adds a new retailer for distribution
c. Barkley's incorrectly anticipates consumer demand resulting in stockouts at several popular
retailers
d. Barkley's is unhappy with the performance of a distributor which causes a chain-reaction
of replacements to companies involved in its supply chain
ANS: C PTS: 1 REF: p. 11
9. The term Supply Chain Management and the field of study it represents today seems to have
emerged in the:
a. 1980's
