Exercise: Supply Chain Management

Operations Management, 11e (Heizer/Render)
Chapter 11 Supply Chain Management

Section 1 The Supply Chain's Strategic Importance

1) Even though a firm may have a low cost strategy, supply-chain strategy can select suppliers primarily on response or differentiation.
Answer: FALSE

2) The supply chain for a brewery would include raw ingredients such as hops and barley but not the manufactured goods such as bottles and cans.
Answer: FALSE

3) When using the low-cost strategy for supply chain management, a firm should use buffer stocks to ensure speedy supply.
Answer: FALSE

4) Savings in the supply chain exert more leverage as the firm's net profit margin decreases.
Answer: TRUE

5) A firm that employs a response strategy should minimize inventory throughout the supply chain.
Answer: FALSE
6) Supply chain decisions are not generally strategic in nature, because purchasing is not a large expense for most firms.
Answer: FALSE

7) Because service firms do not acquire goods and services externally, their supply chain management issues are insignificant.
Answer: FALSE

8) Which of the following characteristics is NOT common to all four of Darden Restaurants' supply channels?
A) supplier qualification
B) product tracking
C) independent audits
D) refrigeration
E) just-in-time delivery
Answer: D

9) Which of the following would NOT typically be considered as part of a manufacturing firm's supply chain?
A) suppliers
B) distributors
C) wholesalers
D) retailers
E) landscaping contractors
Answer: E
10) In most manufacturing industries, which of the following would likely represent the largest cost to the firm?
A) transportation
B) purchasing
C) insurance
D) financing
E) advertising
Answer: B

11) Among which of the following industries are purchasing costs the LOWEST percentage of sales?
A) automobiles
B) petroleum
C) restaurants
D) lumber
E) chemicals
Answer: C

12) Which of the following is a primary