Supply Chain Management, 8e (Chopra)
Chapter 1 Understanding the Supply Chain
LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on
the success of a firm.
1) All stages of an enterprise are involved, either directly or indirectly, in fulfilling a customer request.
Answer: TRUE
Diff: 1
Topic: 1.1: What Is 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) A supply chain is static, and involves the constant flow of information, product, and funds among
different stages.
Answer: FALSE
Diff: 1
Topic: 1.1: What Is 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) Of the three flows in the supply chain, only funds flow one way.
Answer: TRUE
Diff: 1
Topic: 1.1: What Is 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.
4) Supply chain cost is the difference between customer value and supply chain surplus.
Answer: TRUE
Diff: 2
Topic: 1.1: What Is 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) The primary reason that supply chain surplus is difficult to measure in accounting terms is that
customers are difficult to identify.
Answer: FALSE
Diff: 2
Topic: 1.1: What Is 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.
1
Copyright © 2026
,6) Most supply chains are strictly linear chains of supply chain members.
Answer: FALSE
Diff: 2
Topic: 1.2: Process Views 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.
7) A supply chain includes only the organizations directly involved in supplying components needed for
manufacturing.
Answer: FALSE
Diff: 2
Topic: 1.2: Process Views 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.
8) The objective of every supply chain is to maximize the speed that materials move.
Answer: TRUE
Diff: 1
Topic: 1.2: Process Views 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.
9) The objective of the customer arrival process is to ensure that orders are quickly and accurately entered
and communicated to other affected supply chain processes.
Answer: FALSE
Diff: 2
Topic: 1.2: Process Views 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.
10) The objective of customer order entry is to maintain a record of product receipt and complete
payment.
Answer: FALSE
Diff: 3
Topic: 1.2: Process Views 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
Copyright © 2026
,11) The difference between the value of the product and its price remains with the customer as consumer
surplus.
Answer: TRUE
Diff: 1
Topic: 1.1: What Is 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.
12) There is a close connection between the design and management of supply chain flows and the
success of a supply chain.
Answer: TRUE
Diff: 1
Topic: 1.2: Process Views 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.
13) Each stage in a supply chain is connected through the flow of products, information, and funds. These
flows often occur in both directions and are usually managed by
A) pricing department.
B) one of the stages.
C) upper management.
D) engineering department.
Answer: B
Diff: 2
Topic: 1.1: What Is 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.
14) What is the main reason that supply chain surplus is considered a better measure of success than
individual stage profitability?
A) Supply chain surplus directly correlates with the total revenue generated by customers.
B) Individual profitability often leads to conflicting decisions that can reduce overall surplus.
C) Measuring individual profitability is easier and more precise than measuring supply chain surplus.
D) Supply chain surplus guarantees immediate cost reductions at all stages.
Answer: B
Diff: 2
Topic: 1.1: What Is 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
Copyright © 2026
, 15) Why do distributors play a critical role in Indian supply chains compared to U.S. supply chains?
A) Indian distributors have better technology than their U.S. counterparts.
B) The small size of Indian retail outlets requires frequent and smaller deliveries.
C) Indian manufacturers lack the capacity to ship directly to retailers.
D) U.S. distributors prefer to stock products from only one manufacturer.
Answer: B
Diff: 2
Topic: 1.1: What Is 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.
16) What supply chain decision would likely maximize customer value for a high-demand humidifier at
Home Depot?
A) Keeping the model available for immediate purchase in all stores.
B) Stocking the model exclusively in regional warehouses for faster delivery.
C) Shipping the model only when customers place online orders.
D) Offering discounts on models with longer delivery times.
Answer: A
Diff: 2
Topic: 1.1: What Is 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.
17) How does Walmart's approach to integrating its online and brick-and-mortar supply chains reflect the
importance of supply chain adaptability?
A) Walmart reduced its investment in transportation infrastructure to focus on online sales.
B) The company shifted entirely to online sales, abandoning brick-and-mortar stores.
C) Walmart focused exclusively on fast-moving consumer goods to maintain profitability.
D) It expanded fulfillment channels and leveraged store capabilities to meet changing customer needs.
Answer: D
Diff: 2
Topic: 1.1: What Is 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.
4
Copyright © 2026
Chapter 1 Understanding the Supply Chain
LO 1.1: Discuss the goal of a supply chain and explain the impact of supply chain decisions on
the success of a firm.
1) All stages of an enterprise are involved, either directly or indirectly, in fulfilling a customer request.
Answer: TRUE
Diff: 1
Topic: 1.1: What Is 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) A supply chain is static, and involves the constant flow of information, product, and funds among
different stages.
Answer: FALSE
Diff: 1
Topic: 1.1: What Is 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) Of the three flows in the supply chain, only funds flow one way.
Answer: TRUE
Diff: 1
Topic: 1.1: What Is 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.
4) Supply chain cost is the difference between customer value and supply chain surplus.
Answer: TRUE
Diff: 2
Topic: 1.1: What Is 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) The primary reason that supply chain surplus is difficult to measure in accounting terms is that
customers are difficult to identify.
Answer: FALSE
Diff: 2
Topic: 1.1: What Is 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.
1
Copyright © 2026
,6) Most supply chains are strictly linear chains of supply chain members.
Answer: FALSE
Diff: 2
Topic: 1.2: Process Views 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.
7) A supply chain includes only the organizations directly involved in supplying components needed for
manufacturing.
Answer: FALSE
Diff: 2
Topic: 1.2: Process Views 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.
8) The objective of every supply chain is to maximize the speed that materials move.
Answer: TRUE
Diff: 1
Topic: 1.2: Process Views 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.
9) The objective of the customer arrival process is to ensure that orders are quickly and accurately entered
and communicated to other affected supply chain processes.
Answer: FALSE
Diff: 2
Topic: 1.2: Process Views 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.
10) The objective of customer order entry is to maintain a record of product receipt and complete
payment.
Answer: FALSE
Diff: 3
Topic: 1.2: Process Views 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
Copyright © 2026
,11) The difference between the value of the product and its price remains with the customer as consumer
surplus.
Answer: TRUE
Diff: 1
Topic: 1.1: What Is 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.
12) There is a close connection between the design and management of supply chain flows and the
success of a supply chain.
Answer: TRUE
Diff: 1
Topic: 1.2: Process Views 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.
13) Each stage in a supply chain is connected through the flow of products, information, and funds. These
flows often occur in both directions and are usually managed by
A) pricing department.
B) one of the stages.
C) upper management.
D) engineering department.
Answer: B
Diff: 2
Topic: 1.1: What Is 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.
14) What is the main reason that supply chain surplus is considered a better measure of success than
individual stage profitability?
A) Supply chain surplus directly correlates with the total revenue generated by customers.
B) Individual profitability often leads to conflicting decisions that can reduce overall surplus.
C) Measuring individual profitability is easier and more precise than measuring supply chain surplus.
D) Supply chain surplus guarantees immediate cost reductions at all stages.
Answer: B
Diff: 2
Topic: 1.1: What Is 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
Copyright © 2026
, 15) Why do distributors play a critical role in Indian supply chains compared to U.S. supply chains?
A) Indian distributors have better technology than their U.S. counterparts.
B) The small size of Indian retail outlets requires frequent and smaller deliveries.
C) Indian manufacturers lack the capacity to ship directly to retailers.
D) U.S. distributors prefer to stock products from only one manufacturer.
Answer: B
Diff: 2
Topic: 1.1: What Is 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.
16) What supply chain decision would likely maximize customer value for a high-demand humidifier at
Home Depot?
A) Keeping the model available for immediate purchase in all stores.
B) Stocking the model exclusively in regional warehouses for faster delivery.
C) Shipping the model only when customers place online orders.
D) Offering discounts on models with longer delivery times.
Answer: A
Diff: 2
Topic: 1.1: What Is 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.
17) How does Walmart's approach to integrating its online and brick-and-mortar supply chains reflect the
importance of supply chain adaptability?
A) Walmart reduced its investment in transportation infrastructure to focus on online sales.
B) The company shifted entirely to online sales, abandoning brick-and-mortar stores.
C) Walmart focused exclusively on fast-moving consumer goods to maintain profitability.
D) It expanded fulfillment channels and leveraged store capabilities to meet changing customer needs.
Answer: D
Diff: 2
Topic: 1.1: What Is 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.
4
Copyright © 2026
