Chapter 10

Total Flash Cards » 35
 
1. 

One advantage of outsourcing is that it:

a. gives the company a high degree of control over its operations.

b. increases the company’s access to state-of-the-art products and processes.

c. protects the company’s proprietary designs and processes.

d. encourages the development of the company’s core competencies.

 

increases the company’s access to state-of-the-art products and processes.

 
2. 

Which of these is a direct cost associated with outsourcing?

a. Direct material

b. Direct labor

c. Variable overhead

d. Price from invoice

 

Price from invoice

 
3. 

Which of these is an indirect cost associated with insourcing?

a. Maintenance

b. Purchasing

c. Receiving

d. Quality control

 

Maintenance

 
4. 

A company using portfolio analysis correctly decides to streamline the purchasing process for a few items by use of EDI and automated requisitions to the greatest extent possible. The quadrant that these items fall in is most probably the:

a. Bottleneck quadrant.

b. Critical quadrant.

c. Leverage quadrant.

d. Routine quadrant

 

Routine quadrant

 
5. 

Competitive bidding, active sourcing, and using industry standards are all actions that are appropriate if the sourcing strategy is to:

a. Form partnerships with suppliers.

b. Maximize commercial advantage.

c. Simplify the acquisition process.

d. Ensure supply continuity

 

Maximize commercial advantage.

 
6. 

An item that is expensive, complex, and has few qualified suppliers can be described as having:

a. high value potential and high complexity.

b. high value potential and low complexity.

c. low value potential and high complexity.

d. low value potential and low complexity

 

high value potential and high complexity.

 
7. 

When compared with single sourcing, multiple sourcing has the advantage of:

a. spreading risk.

b. volume leveraging.

c. lower transportation costs.

d. reduced quality variability.

 

spreading risk.

 
8. 

Single sourcing is a better choice than multiple sourcing from the perspective of:

a. increased competition.

b. ensuring that a supplier will not become complacent.

c. spreading risk.

d. access to the supplier’s design and engineering capabilities.

 

access to the supplier’s design and engineering capabilities.

 
9. 

A sourcing strategy in which two suppliers are used for the same purchased product or service is:

a. cross sourcing.

b. dual sourcing.

c. contingency sourcing.

d. Multi sourcing.

 

dual sourcing.

 
10. 

This table contains a list of three companies that have been rated on four weighted performance dimensions. Which of the following statements regarding this information is best?

Performance Dimension

Strickland

Thatherton

Mega-Low

Amerigas

Quality (W=0.5)

4

4

2

4

Cost (W=0.4)

4

3

5

3

Speed (W=0.1)

2

2

4

5

a. Strickland is superior to Mega-Low.

b. Thatherton is superior to Amerigas.

c. Amerigas is superior to Strickland.

d. Mega-Low is superior to Thatherton.

 

Strickland is superior to Mega-Low.

 
11. 

Which of these statements about supply base trends is best?

a. The decrease in supply base is realized primarily at the lowest level as the number of third and fourth tier suppliers has been dramatically slashed during the last few years.

b. Although the supply base has fallen considerably, the number of first-tier suppliers in most supply chains has actually increased.

c. A recent trend is to rely on a large supplier to design and build entire subsystems.

d. The supply base has actually increased when inflation is taken into account.

 

A recent trend is to rely on a large supplier to design and build entire subsystems.

 
12. 

A recent survey of executives at Global 1000 companies uncovered what fear?

a. The fear of a supply chain disruption.

b. The fear of the unknown.

c. The fear of improperly weighting performance dimensions.

d. The fear of misclassifying direct and indirect costs.

 

The fear of a supply chain disruption.

 
13. 

Which of these factors is most likely to increase the risk of a missed shipment, communication problem, or human error?

a. Supply base reduction.

b. Global outsourcing.

c. Multi criteria decision models.

d. Electronic data interchange.

 

Global outsourcing.

 
14. 

The use of supply chain partners to provide products or services is called:

a. In sourcing.

b. offloading.

c. partnering.

d. outsourcing.

 

outsourcing.

 
15. 

__________ are high level, often strategic decisions regarding which products or services will be provided internally and which will be provided by external supply chain members

 

sourcing decisions

 
16. 

__________ is the name for a technique requiring a company to identify and determine all of the major costs associated with different sourcing possibilities

 

total cost analysis

 
17. 

The bulk of insourcing costs are usually __________ costs

 

indirect cost

 
18. 

A company using portfolio analysis decides to form partnerships with suppliers; the products in question probably fall in the __________ quadrant

 

critical

 
19. 

A company using portfolio analysis identifies a number of products that fall in the routine quadrant. The company has a highly competent information technology department, so a logical way they might choose to automate the purchasing process is through __________ .

 

EDI Electronic Data Interchange

 
20. 

Use of a single supplier for a part or service in part of the business and another supplier with the same capability for a different part or service in another area of the business is known as __________.

 

Cross Sourcing

 
21. 

Among the disadvantages of __________ are that different product attributes with varying qualities may be produced and that it can actually result in increased prices over time.

 

multiple sourcing

 
22. 

Top executives name __________as a significant threat to their companies’ revenue streams.

 

supply chain disruptions

 
23. 

List three OUTSOURCING advantages and disadvantages

 

Adv: High strategic flexibility, low interest risk, improved cash flow

DisAdv: possibility of choosing bad supplier, communication/coordination challenges/ loss of control over the process and core technologies

 
24. 

What are the four sourcing strategies?

 

cross sourcing

dual sourcing

single sourcing

multiple sourcing

 
25. 

Identify three major trends in supply management

 

supply base reduction

global sourcing

environmentalism

 
26. 

Operations managers for a company using outsourcing must determine whether they have the capacity and resources they need, the most appropriate manufacturing or service processes to use, and the information systems they will rely on to coordinate operations.

 

False

 
27. 

Outsourcing can be risky because it decreases the firm’s strategic flexibility.

 

False

 
28. 

Total cost analysis divides costs into direct (costs that are tied to the level of operations or supply chain activities) and indirect (costs that are not tied to the level of operations or supply chain activity).

 

True

 
29. 

A company that uses portfolio analysis would probably classify things like office supplies in the Bottleneck quadrant.

 

False

 
30. 

Portfolio analysis begins with assignment to a quadrant before a sourcing strategy is formulated.

 

True

 
31. 

A manufacturer seeking to reduce the variability of quality should use multiple sourcing.

 

False

 
32. 

A manufacturer that wants to make sure that suppliers do not become complacent should use multiple sourcing.

 

True

 
33. 

Cross sourcing is a strategy in which two suppliers are used for the same purchased product or service.

 

False

 
34. 

The weighted-point evaluation system allows for a completely objective decision to be made.

 

False

 
35. 

A recent trend in supply management is a reduction in the total supply base, although the authors note that the number of first-tier suppliers has actually increased slightly.

 

False