Test Database

Chapter 3 – Business and Supply Chain Strategies

True or False

1. Crafting business strategy begins by identifying the marketplace issues driving the firm’s external environment.

a. True

b. False

2. The supply chain strategy drives the corporate business strategy.

a. True

b. False

3. The enterprise mission statement usually consists of many goals.

a. True

b. False

4. When using the best-cost provider generic competitive strategy, a company seeks to blend products with high differentiation with a lower cost than what competitors can match.

a. True

b. False

5. According to the SCOR model of supply chain performance attributes, reliability, responsiveness, and agility are considered internally-focused performance attributes.

a. True

b. False

6. Companies that pursue a transportation strategy of temporal aggregation will seek to delay delivery in order to combine orders into larger shipments.

a. True

b. False

7. A key dimension of applying technology to a supply chain is to move the organization from infomation to automation.

a. True

b. False

8. In a supply chain, if the marketplace requirements and supply channel performance are in alignment, they are strategically “fit.”

a. True

b. False

9. The possibility of risk has a serious negative effect on supply chain best practices.

a. True

b. False

10. The efficiency frontier in risk management refers to the level where risk exceeds the cost of mitigation.

Multiple Choice

11. When developing the operations strategy for manufacturing and distribution organizations, one of the most important considerations is that

a. it strives to achieve minimal capital investmentb. it seeks to fully utilize existing assetsc. it optimizes the total value of labor and inventoryd. it supports the overall competitive strategy of the firm

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12. The business planning level concerned with the establishment of business area functional plans would be

a. strategic planningb. tactical planningc. operations planningd. short-term planning

13. Which of the following planning areas requires the most control?

a. strategic planningb. tactical planningc. operations planningd. short-term planning

14. Companies such as Mercedes Benz and Rolex would most likely follow which of the following competitive values

a. Quality

b. Product design

c. Image

d. Service

15. Low impact failures that happen relatively frequently are: a. a quality management challengeb. an example of resiliencec. a measure of preventiond. a high-priority fail sale opportunity

16. A food supplier has introduced a new line of products for upscale restaurants. Which of the following performance objectives would be the most appropriate for the new product line?

a. speed to marketb. production cost per unitc. conformance to specificationd. number of late deliveries

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17. When crafting business strategy, external environmental scanning reveals which of the following?

a. strength of resources and competenciesb. strength of the company value chainc. the business’s competitive strengthsd. strength of functional strategies versus the competition

18. Which of the following will most destabilize the equilibrium of a business ecosystem?

a. transportation/infrastructure deficienciesb. period of rising pricesc. occurrence of a disruptive eventd. product innovation

19. An effective process for determining the strengths and weaknesses of an organization is to

a. identify the firm’s key success factor (KSFs)b. perform a SWOT analysisc. evaluate the content of competitors’ marketplace strategiesd. determine the marketplace’s economic features

20. An important method to determine the strength of the competition is

a. value chain analysis

b. benchmarking

c. performance to company key success factors (KSFs)

d. strategic vision analysis

21. A supply chain where SCM operations assist in competitive advantage is considered at what stage of supply chain strategy?

a. functionalb. internal integration c. external collaborationd. dynamic, adaptive

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22. A useful way of assembling a market focus is to

a. establish the performance metrics for order and delivery responsiveness

b. distinguish between order winners and order qualifiersc. determine the level of competitive differentiation of the firm’s product

portfoliod. determine the competitiveness of the firm’s distribution channel design

23. A manufacturing company has long-ago selected a make-to-order strategy to service customers. Channel inventories would be characterized as

a. high levels of finished goodsb. low number of component varieties but large stocked inventoriesc. low volumes of component inventories d. minimal to no finished goods

24. For an company moving to an e-business strategy, managers will most likely find that inventory and outbound transportation will do which of the following:

a. inventory is centralized while outbound transportation cost will dramatically increase

b. inventory and outbound transportation will increasingly be outsourced to channel partners

c. inventory is decentralized while outbound transportation costs will dramatically increase

d. inventory variety will be greatly increased while inbound transportation cost will increase

25. As the number of facilities in the supply chain grows, inbound transportation costs will

a. declineb. remain constantc. grow

26. When considering the impact of the trade-off between flexibility and cost, which one of these statements is true?

a. high-volume, low-variety production equipment provides high flexibility at a low cost

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b. low-volume, high-variety production equipment provides high flexibility at a high cost

c. high-volume, low-variety production equipment provides minimal flexibility at a high cost

d. low-volume, low-variety equipment provides high flexibility at a low cost

27. For a make-to-order manufacturer of specialized products, when architecting strategic supply chain performance goals which one of the following performance drivers would be of low importance?

a. customer focusb. channel designc. transportationd. inventory

28. Using a balanced scorecard to determine the performance of a supply chain enables organizations to consider

a. channel collaboration, consensus, and total supply chain performance as the key measurements

b. progress of the internal business to strategic goals as the key measurements

c. a variety of new supply chain-based metrics as the key measurementsd. supply chain return on capital employed, asset utilization, profitability,

and growth as the key measurements

29. A company seeks to less the impact of a significant disruptive event by ensuring the organization. This form of risk response is termed

a. avoidanceb. acceptancec. mitigationd. transfer

30. The basic calculation for determining the level of risk is

a. time-to-recovery times probability of occurrenceb. probability of occurrence times the magnitude of lossc. exposure to risk time time-to-recoveryd. time-to-recovery times estimated magnitude of loss

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Answer Key1. T2. F3. T4. T5. F6. T7. F8. T9. F10. F11. d12. b13. d14. c15. a16. c17. c18. d19. b20. b21. c22. b23. d24. a25. c26. b 27. d28. a29. d30. b