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Exam 10: Supply Chain Design

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Question 1

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A U.S.company faced with spiraling costs in their customer care center recreated that service in Luxembourg at a fraction of the cost.This is an example of:

A) offshoring.
B) forward integration.
C) backward integration.
D) postponement.

E) A) and B)
F) B) and D)

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Question 2

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This figure represents the impact of supply chain performance on total costs.Use it to answer the next two questions. -Refer to the figure above.Which is the best statement if a company simultaneously moves from point A to point B and from point D to point C?

A) The new supply chain efficiency curve is superior to the old one.
B) The new costs are higher,but the performance is better.
C) The new supply chain is still inferior to the supply chain efficiency curve.
D) The new performance is worse,but the costs are lower.

E) A) and B)
F) None of the above

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Question 3

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Use the following scenario to answer the questions below. You currently make a part on old equipment at a cost of $50,000 per year and a variable cost of $20 / unit.You have found an outside supplier who will make the part for $15 / unit if you will pay their annual fixed costs of $200,000 / year.The following table summarizes the details of this make versus buy decision. -Refer to the instruction above.For what range of output would you prefer to buy?

Which one of the following is TRUE for supply chain management?

One disadvantage of centralized placement is increased shipping costs from the distribution center to the customer.

What's the difference between postponement and channel assembly? Provide examples of both.

An efficient supply chain should be preferred when:

Use the following scenario to answer the questions below. You currently make a part on old equipment at a cost of $50,000 per year and a variable cost of $20 / unit.You have found an outside supplier who will make the part for $15 / unit if you will pay their annual fixed costs of $200,000 / year.The following table summarizes the details of this make versus buy decision. -Refer to the instruction above.For what range of output would you prefer to make?

Use the following scenario to answer the questions below. A company must decide if it will make or buy an item it needs.The company can make the item for $10 / unit,but must spend $15,000 per year in tooling to do so.An outside firm has quoted a total price of $12 / unit to supply the quantity required. -Refer to the instruction above.Which alternative should be selected if annual requirements are 5,000 units?

________,the annual sales at cost divided by the average aggregate inventory value,is the number of times a year that a firm completely replenishes its inventory.

Efficient supply chains work best when contribution margins are high.

The fundamental purpose of supply chain design for a manufacturer is to control inventories by managing the flow of materials.

The VP of Finance studied the printing costs at the university and knew it was time for bold,decisive action.The annual fixed cost of printing at the school was $850,000 and the per-page cost was one cent.Fortunately,his brother-in-law happened to own a company that would lease the printers to the university for only $600,000.The only issue to be decided was what the per-page cost would be for the leased printers.On average,the university had been printing about 10,000,000 pages per year.What would a break-even per-page printing cost be given the average printing volume?

What are some financial measures of supply chain performance? Which one is the most important and why?

________ is a reduction in inventory and safety stock because of the merging of variable demands from customers.

Last year,RJT Enterprises had average inventories (raw materials,work-in-process,and finished goods)of $7.5 million.During this same year the cost of goods sold was $30 million.The company operates 50 weeks per year. a.What is their total inventory (measured as weeks of supply)? b.What is their inventory turnover?

The clever wine shop owner held a tasting,accepted customer orders and payments,and then placed an order with the vineyard.Since he paid the vineyard after he received the shipment (and well after he charged his customers),his ________ time was negative.

Responsive supply chains work best when frequent product introduction exists.

Discuss the trade-offs with locating the inventory at the factory versus locating it closer to the customer at a warehouse,distribution center,wholesaler,or retailers.

Selling expenses,fixed expenses and depreciation are all considered operating expenses.