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SCMT 4653 EXAM 2 QUESTIONS AND ANSWERS
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SCMT 4653 EXAM 2 QUESTIONS AND ANSWERS
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SCMT 4653 EXAM 2 QUESTIONS AND ANSWERSWhat is an efficient supply chain strategy - answers- it is a strategy with an intense
focus on driving down cost across all supply chain processes and functional areas. Its
goal is to supply products with predictable demand at the lowest possible cost. With this
type of strategy, everything is directed towards cost reduction.
Efficient supply chain characteristics - answers- -the original strategic approach to
supply chain management
-appropriate under the right conditions
-competitive advantage achieved through "cost leadership"
Efficient supply chain development - answers- -henry ford refined mass production
-produced large quantities of vehicles that leveraged economies of scale and drove
down unit costs
Normal supply chain (steps) - answers- -supplier sourcing
-inbound transportation
-inbound distribution
-manufacturing
-outbound distribution
-outbound transportation
-retailer
Effect of an efficient supply chain - answers- every step of the supply chain has an
intense focus on driving down the cost per unit
Efficient supplier sourcing - answers- select low cost suppliers and negotiate large
volume discounts for buying in bulk or commiting to longer term contractual agreements
(w volume commitments)
Efficient inbound transportation - answers- -lowest cost per mile rate
-reduce trans. Consts by only sending full shipments to the inbound dc
Efficient inbound distribution - answers- -drive down dist. Costs by receiving full
shipments on lower line po's
Shipments will arrive in full pallet or case quantities that make it more efficient
Efficient manufacturing - answers- -planned production schedules that are optimized w
long runs of single items
-reduces production costs per unit and minimizes changeover costs
Efficient outbound distribution - answers- -move large efficient volumes of finished
goods through the dc,
, Efficient outbound transportation - answers- -reduce costs w crossdocking onto full
outbound shipments to retail locations
Efficient strategy benefitis - answers- -reduces numerous supply chain costs because
of consistent and coordinated actions that create "fit"
-aligns with cost leadership strategy
-provide some inventory buffers during supply chain disruptions
Should we always use an efficient supply chain? - answers- np, there are certain
conditions that really create the best opportunity to use this approach
Set of conditions to use an efficient strategy - answers- -market characteristics
-process characteristics
What do efficient market characteristics help supply chains do - answers- efficiently
plan and optimize sourcing, production, transportation, and distribution tradeoff
decisions.
Products that work well with this strategy are often lower margin functional items that
are cannot bear the higher costs associated with premium services.
Process characteristics of efficient strategies - answers- longer economical production
runs
-higher factory utilization rates
-higher finished goods inventories
-larger economical buy quantities
-larger shipment sizes
-larger batch order processing
-supplier selection based on cost
Examples of efficient supply chain strategies - answers- -chemical manufacturers
-lumber producers
-agricultural providers
-basf, cargill, georgia pacific
Efficient strategy tradeoffs - answers- you run the risk of having too much unsold or
obsolete inventory near the end of a supply chain where inventory is the most
expensive. This is typically at a retail location and it often requires costly markdowns or
write-offs to move through the inventory.
When does the final customer put cash into the supply chain - answers- at the end
Risks in a supply chain - answers- efficient supply chain incur all kinds of costs before
the final consumer product is actually purchased. That can be risky. Firms run the risk of
incurring all kinds of costly value added supply chain services without ever selling a
thing. That is the tradeoff decision that firms with this strategy make. And that is also
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