TEST BANK

CHAPTER 5: THE SUPPLY CHAIN MANAGEMENT CONCEPT

1. An underperforming supply chain is defined as one that exhibits poor service, unproductive assets, or high
variable operating costs ___________.
2. The supply chain management concept originated in what discipline? c. logistics
3. The early to mids -1990s_witnessed a growing recognition that there could be value in coordinating various
business functions within and across organizations.
4. What concept can be viewed as a combination of processes, functions, activities, relationships, and pathways
along which products, services, information, and financial transactions move in and between enterprises from
original producer to ultimate end user or consumer? b. supply chain
5. Although nearly any organization can be part of a supply chain, supply chain management requires (SCM)
companies to adopt an enterprise-to-enterprise point of view ___________
6. The two most prominent SCM process frameworks are the Supply Chain Operations Reference (SCOR)
Model and the Global Supply Chain Forum (GSCF) Model ___________.
7. Which organizational function is not a focus of the Supply Chain Operations Reference (SCOR) Model?
a. marketing
8. Source, plan, make, and enable are processes associated with the Supply Chain Operations Reference
(SCOR) Model.
9. Which of the following is not one of the processes in the Supply Chain Operations Reference (SCOR) Model?
c. demand management
10. The current Global Supply Chain Forum (GSCF) Model identifies eight key processes associated with supply
chain management.
11. Customer relationship management, supplier relationship management, order fulfillment, and returns
management are processes associated with the Global Supply Chain Forum (GSCF) Model ___________.
12. Contemporary supply chains are increasingly required to be fast and agile ___________.
13. An organization’s ability to respond to changes in demand with respect to volume and variety refers to agility
14. Which of the following is not a potential outcome from a supply chain’s failure to be fast and agile?d.
increased stock price
15. What is a perfect order? a. simultaneous achievement of relevant customer metrics
16. Leagility refers to focusing part of one’s supply chain on a timely response to fluctuating customer orders
and/or product variety and another part of the supply chain on leveling out the planning requirements to smooth
production output.
17. What concept refers to the variability in demand orders among supply chain participants?b. bullwhip effect
8. Which of the following is not a way to reduce inventory levels? c. supply–push replenishment
19. Which of the following is not an attribute of relational exchanges? d. opportunism
20. Cooperative supply chain relationships developed to enhance the overall business performance of both parties
is a definition of supply chain collaboration ___________.
21. Supply chain collaboration can be classified as transactional, strategic, or tactical information sharing in
nature.
22. Strategic collaborations offer the best opportunity for improving supply chain performance.
23. Tailored business relationships between two supply chain members refer to supply chain partnership _
24. Which of the following is not an attribute of supply chain partnerships?c. high independence among the
partners
25. According to the text, technology has been at the center of the changes taking place that affect the supply
chain.
26. Two key factors, computing power and Internet, have sparked much of the technological change affecting
supply chains.
27. The general idea behind third-party logistics is that one company allows a specialist company to provide it
with one or more logistics functions.
28. Which of the following statements is true?d. A common cause of third-party logistics failure is
unreasonable and unrealistic expectations.

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29. What is a fourth-party logistics provider?a. a company that ensures that various third-party logistics
companies are working toward the relevant supply chain goals and objectives
30. Which of the following statements is false? c. Senior management commitment to supply chain
management occurs in one of every two organizations.
31. Supply chain analytics combines technology with manual employee effort to identify trends, perform
comparisons, and highlight opportunities in supply chain processes, even when large amounts of data are
involved.
32. A recent study of senior executives found that 15 percent (within 2 percent) had implemented analytics
focused on supply chain activities.

33. In a(n) single integrator approach, all relevant software applications are provided by a single vendor.
34. Which of the following is not a barrier to supply chain management? d. use of supply chain facilitators
35. Corporate culture refers to “how we do things around here” and reflects an organization’s vision, values,
and strategic plans.
36. Which of the following is not a term for a long-term mutually beneficial supply chain agreement c.
coopetition
37. Which concept refers to the situation in which one organization owns multiple participants in the supply
chain? b. vertical integration
38. There are three primary methods that organizations can pursue when attempting to integrate their supply
chains. Which of the following is not one of them? d. centralized organization

True-False Questions

1. Research on underperforming supply chains suggests that logistics can be crucial to achieving desired levels
of supply chain performance. (True)
2. The supply chain concept originated in the manufacturing literature. (False)
3. Supply chains are a new concept in the sense that they were first identified in the 1970s and 1980s. (False)
4. Customers can be a potential value co-creator of supply chain activities. (True)
5. Supply chain management requires companies to adopt an enterprise-to-enterprise point of view. (True)
6. The two prominent supply chain management frameworks are the Supply Chain Operations Reference
(SCOR) model and the Process Classification Framework (PCF). (False)
7. The Supply Chain Operations Reference (SCOR) model identifies five key processes associate with supply
chain management. (False)
8. The Global Supply Chain Forum (GSCF) model identifies eight relevant processes associated with supply
chain management. (True)
9. Because customer needs and wants change relatively quickly, supply chains should be fast and lean. (False)
10. With respect to supply chains, relevancy focuses on an organization’s ability to respond to changes in
demand with respect to volume and variety. (False)
11. A perfect order simultaneously achieves relevant customer metrics. (True)
12. Leagility refers to a supply chain that combines the lean and agile paradigms. (True)
13. The leagility effect refers to variability in demand orders among supply chain members. (False)
14. Supply chain disruptions (e.g., terrorist attacks, natural disasters) have caused some supply chains to reassess
their emphasis on inventory reduction. (True)
15. Relational changes cannot be successful without information sharing among various participants. (True)
16. Big-box retailers have been at the center of changes taking place that affect the supply chain. (False)
17. A primary objective of supply chain management is to optimize the performance of the supply chain as a
whole. (True)

18. Coopetition refers to cooperative relationships between members of a supply chain to enhance the overall
business performance of all parties. (False)
19. Tactical information sharing offers the best opportunity for improving supply chain performance. (False)
20. A willingness to share information and buying decisions based on value rather than cost or price are two
characteristics of supply chain partnerships. (True)

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21. The Internet has been referred to as the greatest force of commoditization known to man, for both goods and
services. (True)
21. Enhanced communications across organizations in a supply chain is only dependent on the technological
capabilities of the organizations. (False)
22. The general idea behind third-party logistics is that one company allows a specialist company to provide it
with one or more logistics functions. (True)
23. The decision to use third-party logistics companies can be driven by strategic or tactical considerations.
(True)
24. Two causes of failure in third-party logistics arrangements involve unreasonable expectations and lack of
flexibility. (True)
25. A fourth-party logistics provider is a supply chain facilitator that has achieved ISO 9000 certification. (False)
26. Regulatory considerations represent a bigger obstacle than political considerations to supply chain
management. (False)
27. The overall global climate for business has shifted toward allowing more cooperation among firms—which
should help supply chain management. (True)
28. Top management is sometimes hesitant to fully commit to supply chain management. (True)
29. Actual senior management commitment to supply chain management occurs in one of every two
organizations. (False)
30. One cause of the bullwhip effect is asymmetrical information among supply chain participants. (True)
31. Supply chain analytics combines technology with manual employee effort to identify trends, perform
comparisons, and highlight opportunities in supply chain processes, even when large amounts of data are
involved. (True)
32. A recent survey of 1,000 senior executives indicated that approximately 30 percent of them had implemented
analytics focused on supply chain activities. (False)
33. Today, computer hardware is a larger barrier than computer software to interorganizational collaboration.
(False)
34. A best-of-breed approach chooses the best software application for a particular function. (True)
35. Corporate cultures should not be considered when designing a supply chain. (False)
36. Supply chain integration tends to be more challenging in global, as opposed to domestic, supply chains.
(True)
37. An individual firm can be involved in only one supply chain at a time. (False)
38. Supply chain agreements should be designed to reward all participants when collaborative ventures are
successful and all participants should share the consequences when these ventures are less successful than
desired. (True)
39. Horizontal integration refers to where one organization owns multiple participants in a supply chain. (False)
40. Broadly speaking, organizations can pursue three primary methods—vertical integration, formal contracts,
and informal agreements—when attempting to integrate their supply chains. (True)