Managing Supply Chain And Operations: An Integrative Approach, 2nd Edition Test Bank

Managing Supply Chain and Operations, 2e (Foster) Chapter 2 Supply Chain and Operations Strategy 2.1 Understand and Use Generic SC&O Strategies 1) Which of the following is not one of the strategies in Porter’s Generic Strategies model? A) Cost B) Differentiation C) Focus D) Speed Answer: D Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 2) According to Fisher’s strategy model, supply chains for function products should focus on being A) efficient. B) responsive. C) local. D) global. Answer: A Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 3) According to Fisher’s strategy model, supply chains for innovative products should focus on being A) efficient. B) responsive. C) local. D) global. Answer: B Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 4) According to Fisher’s strategy model, supply chains for custom-built, made-to-order windows should focus on being A) efficient. B) responsive. C) local. D) global. Answer: B Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Reflective Thinking 1 Copyright © 2018 Pearson Education, Inc. 5) The ability of a supply chain to quickly respond to short-term changes in demand or supply is called A) agility. B) adaptability. C) lean. D) alignment. Answer: A Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 6) The capability to adjust a supply chain’s design to meet major structural shifts in the market is called A) agility. B) adaptability. C) lean. D) alignment. Answer: B Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 7) Zara, a Spanish fashion retailer, is able to have their supply chain design, create, and deliver product in 15 days as compared to a couple of months for their competitors. This gives them the ability to quickly respond to short-term changes in demand and is called A) adaptability. B) lean. C) agility. D) alignment. Answer: C Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Reflective Thinking 8) In the context of firm and SC&O strategy, necessary attributes that allow a firm to enter into and compete in a market are called A) order winners. B) order qualifiers. C) agility. D) alignment. Answer: B Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 9) Operations strategy focuses on allocating resources within the firm to provide value to customers. Answer: TRUE Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 2 Copyright © 2018 Pearson Education, Inc. 10) Focus strategy, which is part of Porter’s generic strategies, focuses on reducing cost. Answer: FALSE Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 11) Differentiation strategy, which is part of Porter’s generic strategies, emphasizes select customers or markets. Answer: FALSE Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 12) In Fisher’s strategy model, functional products require efficient supply chains. Answer: TRUE Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 13) In Fisher’s strategy model, innovative products are matched with efficient supply chains. Answer: FALSE Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 14) Agility is the capability to adjust a supply chain’s design to meet major structural shifts in the market. Answer: FALSE Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 15) Supply chain adaptability is important to capturing the value of long-terms changes in the competitive market landscape. Answer: TRUE Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 16) Order winners are minimal necessary attributes that allow a firm to enter into and compete in a market. Answer: FALSE Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 17) According to Fisher’s strategy model, supply chains for functional products should focus on being ________. Answer: efficient Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 3 Copyright © 2018 Pearson Education, Inc. 18) According to Fisher’s strategy model, supply chains for innovative products should focus on being ________. Answer: responsive Diff: Challenging Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 19) According to Fisher’s strategy model, supply chains for standardized kitchen appliances should focus on being ________. Answer: efficient Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Reflective Thinking 20) The ability of a supply chain to quickly respond to short-term changes in demand or supply is called ________. Answer: agility Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 21) The capability to adjust a supply chain’s design to meet major structural shifts in the market is called ________. Answer: adaptability Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 22) Recognizing that their product is moving from being an innovative, disruptive product to a more mature product, the firm shifts their supply chain focus to efficiency. This capability of the firm is called ________. Answer: adaptability Diff: Challenging Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Reflective Thinking 23) In the context of firm and SC&O strategy, attributes that differentiate a company’s product from those of its competitors are called ________. Answer: order winners Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 24) In the context of firm and SC&O strategy, necessary attributes that allow a firm to enter into and compete in a market are called ________. Answer: order qualifiers Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 4 Copyright © 2018 Pearson Education, Inc. 25) Discuss Michael Porter’s generic strategies and how they apply to the way firms compete in a market. Answer: Michael Porter suggests that there are three main ways that companies may gain an advantage over their competition. Some companies, such as Walmart, use a cost strategy and find ways to reduce costs and provide customers with a lower price than competitors. Others, such as Amazon.com, use a focus strategy and seek to service only select customers and provide these niche customers with a narrow range of unique products and services. Others still, such as Apple, Inc., use a differentiation strategy and seek to provide such distinctive products or services that competitors cannot compete with them. In each case, the company focuses on unique ways to gain advantage over competitors and win customers. The company must then develop plans in order to achieve a life-long commitment from customers. Diff: Challenging Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 26) Discuss Fisher’s strategy model and how it can be used to achieve alignment between a firm’s generic strategy and SC&O strategy. Answer: Alignment in SC&O strategy matches capabilities with the supply chain needs of the customer. The Fisher strategy model shows one example of alignment. In this model, managers match the type of supply chain they use with their customer’s needs. Functional products, such as kitchen appliances, tend to be more mass produced, and interactive products, such as tailored clothing or custom-made shoes, tend to be more customized. Trade-offs between functionality and interactivity have to be made relative to efficiency and responsiveness in the supply chain. Diff: Moderate Learning Obj.: LO 2.1: Understand and Use Generic SC&O Strategies AACSB: Application of Knowledge 2.2 Explain How to Apply SC&O Strategy Process and Content 1) Which of the following are key requirements for a successful strategic plan? A) Resources similar to your competitor B) Dynamic capabilities C) Fit with the current environment D) All of the above E) Only B and C above Answer: E Diff: Moderate Learning Obj.: LO 2.2: Explain How to Apply SC&O Strategy Process and Content AACSB: Application of Knowledge 2) The network of people that helps create value for a firm’s customers is part of the firm’s A) capabilities. B) competencies. C) opportunities. D) None of the above Answer: A Diff: Moderate Learning Obj.: LO 2.2: Explain How to Apply SC&O Strategy Process and Content AACSB: Application of Knowledge 5 Copyright © 2018 Pearson Education, Inc. 3) The absence of unique resources necessary to compete in its competitive landscape is one of the reasons for an unsuccessful strategic plan. Answer: TRUE Diff: Easy Learning Obj.: LO 2.2: Explain How to Apply SC&O Strategy Process and Content AACSB: Application of Knowledge 4) The correct hierarchy for strategic planning is to develop company strategy first, followed by development of the mission and vision and then the operational subplans. Answer: FALSE Diff: Moderate Learning Obj.: LO 2.2: Explain How to Apply SC&O Strategy Process and Content AACSB: Application of Knowledge 5) Catchball is the strategic back-and-forth dialogue process to develop an error-free sales forecast. Answer: FALSE Diff: Moderate Learning Obj.: LO 2.2: Explain How to Apply SC&O Strategy Process and Content AACSB: Application of Knowledge 6) Abilities that companies compete on that are difficult for competitors to replicate are known as capabilities. Answer: FALSE Diff: Moderate Learning Obj.: LO 2.2: Explain How to Apply SC&O Strategy Process and Content AACSB: Application of Knowledge 7) Resources that are rare help a firm to sustain competitive advantage. Answer: FALSE Diff: Moderate Learning Obj.: LO 2.2: Explain How to Apply SC&O Strategy Process and Content AACSB: Application of Knowledge 8) The Japanese term for “a compass,” which indicates a vision or purpose to all existence is ________. Answer: Hoshin Diff: Moderate Learning Obj.: LO 2.2: Explain How to Apply SC&O Strategy Process and Content AACSB: Application of Knowledge 9) The Japanese term for management control or policy deployment is ________. Answer: Kanri Diff: Moderate Learning Obj.: LO 2.2: Explain How to Apply SC&O Strategy Process and Content AACSB: Application of Knowledge 10) The planning tool commonly used by Japanese managers for policy deployment through a strategic planning process that utilizes project-based improvement is known as ________. Answer: Hoshin Kanri Diff: Moderate Learning Obj.: LO 2.2: Explain How to Apply SC&O Strategy Process and Content AACSB: Application of Knowledge 6 Copyright © 2018 Pearson Education, Inc. 11) The strategic back-and-forth dialogue between successive levels of managers and their teams is called ________. Answer: catchball Diff: Moderate Learning Obj.: LO 2.2: Explain How to Apply SC&O Strategy Process and Content AACSB: Application of Knowledge 12) The network of people, knowledge, information systems, tools, and business processes that create value for customers is ________. Answer: capabilities Diff: Moderate Learning Obj.: LO 2.2: Explain How to Apply SC&O Strategy Process and Content AACSB: Application of Knowledge 13) Abilities that companies compete on that are difficult for competitors to replicate are known as ________. Answer: core competencies Diff: Moderate Learning Obj.: LO 2.2: Explain How to Apply SC&O Strategy Process and Content AACSB: Application of Knowledge 14) Discuss the supply chain and operations strategic hierarchy. What is the role of capabilities and competencies in this process? Answer: The strategic planning process starts with a forecast and requires an understanding of the economic environment. Mission and vision also help inform strategic decision making. Managers use the forecast, mission, and vision, coupled with customer research and market analysis, to set strategic plans. From the strategic plan, operational subplans are established in the areas of finance, operations, supply chain management, information systems, human resources, and marketing. These operational subplans are portions of the strategic plan pertaining to the differing functional areas of the firm that help ensure attainment of strategic objectives. Strategic alignment occurs when there is consistency in choices made in the subplans to support the overall company strategy. The firm also needs to ensure that it possesses capabilities to best meet its strategic objectives. A company must first have employees with the skills and training necessary to provide its unique brand of service. Capabilities are the network of people, knowledge, information systems, tools, and business processes that create value for customers.When a company has capabilities that align with key customers’ needs, it can gain competitive advantage. Moreover, companies that focus on their core competencies hone only those capabilities that tie most closely to their customer values and that provide companies with a unique competitive advantage. Diff: Moderate Learning Obj.: LO 2.2: Explain How to Apply SC&O Strategy Process and Content AACSB: Application of Knowledge 7 Copyright © 2018 Pearson Education, Inc. 2.3 Explain How Managers Use Supply Chain Strategy to Build Relationships 1) Which type of supply chain relationship typically involves development of relational capabilities? A) Transactional B) Complementary C) Synergistic D) None of the above Answer: C Diff: Moderate Learning Obj.: LO 2.3: Explain How Managers Use Supply Chain Strategy to Build Relationships AACSB: Application of Knowledge 2) Which type of supply chain relationship has a tendency to keep both the buyer and supplier at arm’s length? A) Transactional B) Complementary C) Synergistic D) None of the above Answer: A Diff: Moderate Learning Obj.: LO 2.3: Explain How Managers Use Supply Chain Strategy to Build Relationships AACSB: Application of Knowledge 3) Which type of supply chain relationship leverages another firm’s competencies to maintain world class service? A) Transactional B) Complementary C) Synergistic D) None of the above Answer: B Diff: Moderate Learning Obj.: LO 2.3: Explain How Managers Use Supply Chain Strategy to Build Relationships AACSB: Application of Knowledge 4) The relationship between Apple and its contract manufacturer Foxconn can be described as a A) transactional relationship. B) complementary relationship. C) synergistic relationship. D) None of the above Answer: B Diff: Moderate Learning Obj.: LO 2.3: Explain How Managers Use Supply Chain Strategy to Build Relationships AACSB: Reflective Thinking 8 Copyright © 2018 Pearson Education, Inc. 5) The relationship between a buyer and its supplier chosen solely on the basis that the supplier had the lowest bid can be described as a A) transactional relationship. B) complementary relationship. C) synergistic relationship. D) None of the above Answer: A Diff: Moderate Learning Obj.: LO 2.3: Explain How Managers Use Supply Chain Strategy to Build Relationships AACSB: Reflective Thinking 6) Complementary relationships in a supply chain typically involve development of relational capabilities. Answer: FALSE Diff: Challenging Learning Obj.: LO 2.3: Explain How Managers Use Supply Chain Strategy to Build Relationships AACSB: Application of Knowledge 7) Transactional relationships in a supply chain have a tendency to keep both the buyer and supplier at arm’s length. Answer: TRUE Diff: Moderate Learning Obj.: LO 2.3: Explain How Managers Use Supply Chain Strategy to Build Relationships AACSB: Application of Knowledge 8) An arm’s length relationship with supply chain partners that is managed by scripted interactions is known as a ________. Answer: transactional relationship Diff: Moderate Learning Obj.: LO 2.3: Explain How Managers Use Supply Chain Strategy to Build Relationships AACSB: Application of Knowledge 9) A relationship that occurs when companies understand that their core competencies need another firm’s competencies in order to compete is known as a ________. Answer: complementary relationship Diff: Moderate Learning Obj.: LO 2.3: Explain How Managers Use Supply Chain Strategy to Build Relationships AACSB: Application of Knowledge 10) A relationship between two companies who are committed to work together in a way that the result is greater than the sum of the individual parts is known as a ________. Answer: synergistic relationship Diff: Moderate Learning Obj.: LO 2.3: Explain How Managers Use Supply Chain Strategy to Build Relationships AACSB: Application of Knowledge 9 Copyright © 2018 Pearson Education, Inc. 11) Describe the types of relationships in a supply chain and how they drive value for the focus firm in a supply chain. Answer: The different types of relationships managers typically encounter are transactional relationships, complementary relationships, and synergistic relationships. Each of these distinctions is important, and managers must understand which strategy best serves their company. A firm that pursues a cost advantage through its supply chain partners generally employs a transactional relationship in which buyers and sellers are typically at an arm’s length. A complementary relationship occurs when a company that clearly understands its core competencies needs another firm’s competencies so as to maintain world-class service. Generally, such a company understands that it holds a competitive advantage in one area but does not have expertise in another. The synergistic relationship is a relationship between two companies that are committed to work together in a way that the result is greater than the sum of the individual parts and is typically characterized by an intense, long-lasting relationship in order to create new product ideas, increase their productivity, and create a greater ability to change. Diff: Moderate Learning Obj.: LO 2.3: Explain How Managers Use Supply Chain Strategy to Build Relationships AACSB: Application of Knowledge 2.4 Execute Strategy 1) In terms of a firm’s strategy execution hierarchy, which is in correct order? A) Tactics-strategy-operations B) Operations-tactics-strategy C) Strategy-tactics-operations D) Strategy-operations-tactics Answer: C Diff: Easy Learning Obj.: LO 2.4: Execute Strategy AACSB: Application of Knowledge 2) Goals that help a firm “win a battle, but not necessarily win the war” are known as A) operational subplans. B) organizational strategy. C) vision. D) tactics. Answer: A Diff: Moderate Learning Obj.: LO 2.4: Execute Strategy AACSB: Reflective Thinking 3) Goals for improving product quality are part of the A) tactics. B) operational subplans. C) organizational strategy. D) vision. Answer: B Diff: Moderate Learning Obj.: LO 2.4: Execute Strategy AACSB: Reflective Thinking 10 Copyright © 2018 Pearson Education, Inc. 4) A logistician creating logistics systems to reduce the complexity faced by the firm’s customers is a A) low-cost strategy. B) differentiation strategy. C) niche strategy. D) process strategy. Answer: B Diff: Challenging Learning Obj.: LO 2.4: Execute Strategy AACSB: Reflective Thinking 5) A manufacturer creating the capability for quick changes in products, product mixes, and/or production volume is a A) low-cost strategy. B) differentiation strategy. C) niche strategy. D) process strategy. Answer: C Diff: Challenging Learning Obj.: LO 2.4: Execute Strategy AACSB: Reflective Thinking 6) Which process in the SCOR model includes activities related to procuring goods and services to meet planned and actual demand? A) Plan B) Source C) Make D) Deliver Answer: B Diff: Easy Learning Obj.: LO 2.4: Execute Strategy AACSB: Application of Knowledge 7) Which process in the SCOR model balances aggregate demand and supply to develop the best course of action for other processes/activities within the organization’s supply chain? A) Plan B) Source C) Make D) Deliver Answer: A Diff: Moderate Learning Obj.: LO 2.4: Execute Strategy AACSB: Application of Knowledge 8) Short term steps used to achieve strategic goals are known as tactics. Answer: TRUE Diff: Moderate Learning Obj.: LO 2.4: Execute Strategy AACSB: Application of Knowledge 11 Copyright © 2018 Pearson Education, Inc. 9) Short term steps used to achieve strategic goals are known as ________. Answer: tactics Diff: Moderate Learning Obj.: LO 2.4: Execute Strategy AACSB: Application of Knowledge 2.5 Understand and Apply Strategic Metrics and Measurements 1) Parts per million defects is an example of A) strategic metric. B) financial metric. C) relationship metric. D) operational metric. Answer: D Diff: Challenging Learning Obj.: LO 2.5: Understand and Apply Strategic Metrics and Measurements AACSB: Application of Knowledge 2) Corporate responsibility and sustainability are examples of A) strategic metric. B) financial metric. C) relationship metric. D) operational metric. Answer: A Diff: Moderate Learning Obj.: LO 2.5: Understand and Apply Strategic Metrics and Measurements AACSB: Application of Knowledge 3) Total cost of ownership is an example of A) strategic metric. B) financial metric. C) relationship metric. D) operational metric. Answer: B Diff: Challenging Learning Obj.: LO 2.5: Understand and Apply Strategic Metrics and Measurements AACSB: Application of Knowledge 4) Total cost of ownership is an example of operational metric. Answer: FALSE Diff: Challenging Learning Obj.: LO 2.5: Understand and Apply Strategic Metrics and Measurements AACSB: Application of Knowledge 5) Focusing on the entire acquisition process to develop strategic advantage rather than just to ensure production has sufficient inventories is called ________. Answer: systems thinking Diff: Challenging Learning Obj.: LO 2.5: Understand and Apply Strategic Metrics and Measurements AACSB: Application of Knowledge 12 Copyright © 2018 Pearson Education, Inc. 2.6 Describe the Changing Strategic Environment 1) The key understanding to unlocking the strategic advantage of data analytics is A) that all management is decision making. B) the ability to effectively manipulate and understand data. C) to make evidence-based decisions using the data. D) All of the above E) Only A and B above Answer: D Diff: Easy Learning Obj.: LO 2.6: Describe the Changing Strategic Environment AACSB: Application of Knowledge 2) The movement of product upstream in the supply chain is called A) reverse logistics. B) forward logistics. C) collaborative logistics. D) supplier logistics. Answer: A Diff: Easy Learning Obj.: LO 2.6: Describe the Changing Strategic Environment AACSB: Application of Knowledge 3) Sustainability within the SC&O context is A) reducing the impact on the environment. B) operating today in a way that does not threaten the future. C) working collaboratively with suppliers to reduce package sizes. D) All of the above Answer: D Diff: Easy Learning Obj.: LO 2.6: Describe the Changing Strategic Environment AACSB: Reflective Thinking 4) One major reason for the rise of the field of data analytics is that the cost of data storage has dramatically decreased. Answer: TRUE Diff: Easy Learning Obj.: LO 2.6: Describe the Changing Strategic Environment AACSB: Application of Knowledge 5) The ability to operate today in a way that does not threaten the future is known as ________. Answer: sustainability Diff: Moderate Learning Obj.: LO 2.6: Describe the Changing Strategic Environment AACSB: Application of Knowledge 13 Copyright © 2018 Pearson Education, Inc. 6) Using value analysis to identify total costs from a supply chain-environmental perspective is known as ________. Answer: life-cycle costing Diff: Challenging Learning Obj.: LO 2.6: Describe the Changing Strategic Environment AACSB: Application of Knowledge 14 Copyright © 2018 Pearson Education, Inc.