SCM 300 Test Questions with Correct
Answers
Return on Assets (ROA) - Answer-financial ratio of a firms net income in relation to its
total assets; also referred to as Return on Investment (ROI). Indication of how
effectively management is using total assets.Example: Profits before taxes $50,000
Gross Profits $500,000 the ROI would be 10% a reduction of 20k on purchase spend
would in turn lead to a 14% ROI (70,000/500,000). This shows the importance to firms
in making purchases.
Purchasing - Answer-key business function that is responsible for acquisition of required
material, services and equipment. Broadly classified into two categories: merchants and
industrial buyers.
Contracting - Answer-is acquisition of services-Both of these have been placed as
Supply Management
Layouts - Answer-found in every area of business; can improve coordination across
departmental lines and functional area boundaries.
Layout Planning - Answer-Planning that involves decisions about the physical
arrangement of economic activity centers needed by a facility's various processes
Flexible Flow Layouts - Answer-layout that organizes resources (employees and
equipment) by function rather than by service or product. Low Volume and high
customization. Make to order system
Line Flow Layouts - Answer-layout in which workstations or departments are arranged
in a linear path. Demand: Standard Items High volumes; Layout: Product focused/
Assembly lines, continuous flows
Hybrid Layout - Answer-An arrangement in which some portions of the facility have a
flexible-flow layout and others have a line-flow layout. Demand: Customized Items, Low
Volumes, process focused
Fixed Position Layout - Answer-an arrangement in which the service or manufacturing
site is fixed in place; employees, along with their equipment, come to the site to do their
work. Works best when it is impossible to move item being worked on.
Performance Criteria - Answer-managers must chose which factors to emphasize in
order to develop a good layout system to meet their needs. Some of the choices are:
customer satisfaction, levels of capital investment, ease of stockpicking, ease of
equipment maintenance and amount of flexibility needed
, OWMM Cells - Answer-a one-person cell in which a worker operates several different
machines simultaneously to achieve a line flow. Several different machines are normally
part of the cell. Reduces both inventory and labor
GT Cells - Answer-an option to achieving line-flow layouts with low volume processes;
this technique creates cells not limited to just one worker and has a unique way of
selecting work to be done by the cell. Groups work into families and this groups type of
work together with similar traits such as bolts being manufactured. Families may be
grouped according to size, shape or manufacturing process.
Merchants - Answer-includes wholesalers and retailers, who primarily purchase for
resale purposes, generally purchase in volume to take advantage of quantity discounts,
transportation of economy and storage efficiency
Industrial buyers - Answer-primary task is to purchase raw materials for conversion
purposes. Also purchase services, capital equipment and maintenance, repair and
operating supplies. Example: manufacturers, restaurants and florists
Forward Integration - Answer-refers to acquiring downstream customers(acquiring a
distributor)Taking over the role of companies closer to the customer. Example: We will
no longer sell Coca-Cola through our distributors, from now on, we'll only sell Coke out
of Coca-Cola stores
Backward (vertical) integration - Answer-acquiring upstream suppliers(acquiring supplier
that produced components needed)Taking over the role of your supplier. Example:
We're not going to buy bread for our sandwiches, we'll make the bread ourselves from
now on
Advantages of e-procurement system - Answer-1- Time savings
2- Cost savings
3- Accuracy
4-Real Time
5- Mobility
6- Trackability: enables buyers to track each purchase
7- Management
8- Benefits to the supplier :lower barrier to entries and transaction costs
is the Efficient Integration of suppliers, transporters, manufacturers, warehouses,
retailers and all other parties associated with the delivery of the final product.· Achieve
Goals - Cost, Speed, Quality..
· Efficient Execution - Get things done right, but with minimal effort and resources
Manage Resources - People, Materials, Machines.. - Answer-Supply Chain
Management
Answers
Return on Assets (ROA) - Answer-financial ratio of a firms net income in relation to its
total assets; also referred to as Return on Investment (ROI). Indication of how
effectively management is using total assets.Example: Profits before taxes $50,000
Gross Profits $500,000 the ROI would be 10% a reduction of 20k on purchase spend
would in turn lead to a 14% ROI (70,000/500,000). This shows the importance to firms
in making purchases.
Purchasing - Answer-key business function that is responsible for acquisition of required
material, services and equipment. Broadly classified into two categories: merchants and
industrial buyers.
Contracting - Answer-is acquisition of services-Both of these have been placed as
Supply Management
Layouts - Answer-found in every area of business; can improve coordination across
departmental lines and functional area boundaries.
Layout Planning - Answer-Planning that involves decisions about the physical
arrangement of economic activity centers needed by a facility's various processes
Flexible Flow Layouts - Answer-layout that organizes resources (employees and
equipment) by function rather than by service or product. Low Volume and high
customization. Make to order system
Line Flow Layouts - Answer-layout in which workstations or departments are arranged
in a linear path. Demand: Standard Items High volumes; Layout: Product focused/
Assembly lines, continuous flows
Hybrid Layout - Answer-An arrangement in which some portions of the facility have a
flexible-flow layout and others have a line-flow layout. Demand: Customized Items, Low
Volumes, process focused
Fixed Position Layout - Answer-an arrangement in which the service or manufacturing
site is fixed in place; employees, along with their equipment, come to the site to do their
work. Works best when it is impossible to move item being worked on.
Performance Criteria - Answer-managers must chose which factors to emphasize in
order to develop a good layout system to meet their needs. Some of the choices are:
customer satisfaction, levels of capital investment, ease of stockpicking, ease of
equipment maintenance and amount of flexibility needed
, OWMM Cells - Answer-a one-person cell in which a worker operates several different
machines simultaneously to achieve a line flow. Several different machines are normally
part of the cell. Reduces both inventory and labor
GT Cells - Answer-an option to achieving line-flow layouts with low volume processes;
this technique creates cells not limited to just one worker and has a unique way of
selecting work to be done by the cell. Groups work into families and this groups type of
work together with similar traits such as bolts being manufactured. Families may be
grouped according to size, shape or manufacturing process.
Merchants - Answer-includes wholesalers and retailers, who primarily purchase for
resale purposes, generally purchase in volume to take advantage of quantity discounts,
transportation of economy and storage efficiency
Industrial buyers - Answer-primary task is to purchase raw materials for conversion
purposes. Also purchase services, capital equipment and maintenance, repair and
operating supplies. Example: manufacturers, restaurants and florists
Forward Integration - Answer-refers to acquiring downstream customers(acquiring a
distributor)Taking over the role of companies closer to the customer. Example: We will
no longer sell Coca-Cola through our distributors, from now on, we'll only sell Coke out
of Coca-Cola stores
Backward (vertical) integration - Answer-acquiring upstream suppliers(acquiring supplier
that produced components needed)Taking over the role of your supplier. Example:
We're not going to buy bread for our sandwiches, we'll make the bread ourselves from
now on
Advantages of e-procurement system - Answer-1- Time savings
2- Cost savings
3- Accuracy
4-Real Time
5- Mobility
6- Trackability: enables buyers to track each purchase
7- Management
8- Benefits to the supplier :lower barrier to entries and transaction costs
is the Efficient Integration of suppliers, transporters, manufacturers, warehouses,
retailers and all other parties associated with the delivery of the final product.· Achieve
Goals - Cost, Speed, Quality..
· Efficient Execution - Get things done right, but with minimal effort and resources
Manage Resources - People, Materials, Machines.. - Answer-Supply Chain
Management
