Test Bank for Foundations of Operations Management
3th Canadian Edition by Ritzman
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Foundations of Operations Management, 3e Cdn. (Ritzman)
Chapter 2: Supply Chain Management
2.1 End-of-Chapter Problems
1) Supply-chain management is the synchronization of firm's processes and
those of its suppliers to match the flow of materials, services, and information
with customer demand. Answer: TRUE
Diff: 2 Type: TF
Reference: Introduction
2) Inventory is a stock of material used to satisfy customer demand or support
the production of goods and services.
Answer: TRUE
Diff: 2 Type: TF
Reference: Overview of Supply-Chain Management
3) Work-in-process inventory is considered an input to the
transformation processes of the firm.
Answer: FALSE
Diff: 2 Type: TF
Reference: Overview of Supply-Chain Management
4) The finished goods of one firm may actually be the raw materials for
another firm.
Answer: TRUE
Diff: 2 Type: TF
Reference: Overview of Supply-Chain Management
5) Backward integration describes the practice of gaining control over supplies by
acquiring a controlling interest in one or more of a company's major suppliers .
Answer: TRUE
1
,Diff: 2 Type: TF
Reference: Overview of Supply-Chain Management
6) Manufacturing firms typically enter into contracts with Tier 2 suppliers with
the expectation that these suppliers will then incorporate the guidelines of
these contracts into the agreements they in turn enter into with Tier 1 suppliers.
Answer: FALSE
Diff: 2 Type: TF
Reference: Overview of Supply-Chain Management
7) The order-fulfillment process involves the activities to deliver a product
or service to the customer.
Answer: TRUE
Diff: 2 Type: TF
Reference: Measures of Supply-Chain Performance
8) Forward placement is a reduction in inventory and safety stock because of
the merging of variable demands from customers.
Answer: FALSE
Diff: 2 Type: TF
Reference: Overview of Supply-Chain Management
9) Forward placement means locating stock closer to the manufacturing
facility. Answer: FALSE
Diff: 2 Type: TF
Reference: Overview of Supply-Chain Management
10) Vendor-managed inventories are an example of the forward placement
tactic. Answer: TRUE
Diff: 2 Type: TF
Reference: Supplier Relationship Process
11) Postponement is a tactic used by mass-customization firms to delay the
customization of a product or service until the last possible moment.
Answer: TRUE
Diff: 1 Type: TF
Reference: Supply Chain Strategies
2
,12) Make-to-stock firms tend to use the postponement
tactic. Answer: FALSE
Diff: 2 Type: TF
Reference: Supply Chain Strategies
13) The most used form of e-purchasing today is electronic data interchange.
Answer: TRUE
Diff: 2 Type: TF
Reference: Supplier Relationship Process
14) An electronic marketplace where buying and selling firms come together to
do business is called a catalog hub.
Answer: FALSE
Diff: 2 Type: TF
Reference: Supplier Relationship Process
15) Green purchasing involves identifying, assessing, and managing the flow of
environmental waste and finding ways to reduce it and minimize its impact
on the environment.
Answer: TRUE
Diff: 2 Type: TF
Reference: Supplier Relationship Process
16) The competitive orientation to supplier relations is that the buyer and
supplier are partners.
Answer: FALSE
Diff: 2 Type: TF
Reference: Supplier Relationship Process
17) Sole sourcing is the awarding of a contract for an item or service to only
one supplier.
Answer: TRUE
Diff: 2 Type: TF
Reference: Supplier Relationship Process
18) Sole sourcing of an item is never a good
tactic. Answer: FALSE
3
, Diff: 2 Type: TF
Reference: Supplier Relationship Process
19) Value analysis is a systematic effort to reduce the cost or improve
the performance of products or services.
Answer: TRUE
Diff: 2 Type: TF
Reference: Supplier Relationship Process
20) In presourcing, suppliers are selected early in the concept development stage.
Answer: TRUE
Diff: 2 Type: TF
Reference: Supplier Relationship Process
21) Inventory turnover is obtained by dividing the average aggregate
inventory value by sales per week at cost.
Answer: FALSE
Diff: 2 Type: TF
Reference: Measures of Supply-Chain Performance
22) The percentage of incomplete orders shipped is a performance measure for
the purchasing process of supply chain management.
Answer: FALSE
Diff: 2 Type: TF
Reference: Measures of Supply-Chain Performance
23) Responsive supply chains work best with predictable demand.
Answer: FALSE
Diff: 2 Type: TF
Reference: Supply Chain Strategies
24) Responsive supply chains work best when frequent product introduction
exists. Answer: TRUE
Diff: 2 Type: TF
Reference: Supply Chain Strategies
25) Efficient supply chains work best when contribution margins are high.
Answer: FALSE
4
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