Logistics and Supply Chain Management Final Test

A typical chain runs from the customer back to the supplier, and upstream refers specifically to activities performed after the focal firm.

Raw-material procurement is a downstream activity, while customer payment is an upstream activity.

A typical chain includes suppliers, manufacturers, distributors or wholesalers, retailers, and end customers; sourcing before the manufacturer is upstream, while fulfillment after it is downstream.

Upstream and downstream distinguish types of firms rather than activities, and information or financial flows are not considered.

The components are an information flow, the forecasts are a product flow, and the payments are a financial flow.

The components form the product flow, the forecasts form the information flow, and the payments form the financial or cash flow.

The components form the product flow, the forecasts form the financial flow, and the payments form the information flow.

The components form the information flow, the forecasts form the product flow, and the payments form the financial flow.

Inbound logistics delivers finished goods to customers, while outbound logistics receives raw materials from suppliers.

Inbound and outbound logistics both focus on moving finished products from a manufacturer to end customers.

Outbound logistics consists only of processing customer returns, while inbound logistics includes all finished-goods delivery.

Inbound logistics covers sourcing, receiving, and transporting inputs into the firm, while outbound logistics covers order processing, picking, packing, shipping, and delivery to customers.

The objective is to maximize total supply-chain surplus; strategy or design makes long-term decisions, planning makes medium-term decisions, and operation makes short-term decisions.

The objective is to maximize total supply-chain surplus; strategy is medium-term, planning is long-term, and operation is long-term.

The objective is to maximize one firm's profit regardless of other partners; strategy is medium-term, planning is long-term, and operation is daily.

The objective is only to minimize logistics cost; all strategic, planning, and operational decisions are short-term.

Use a fully push system in which forecasts trigger production and distribution of every finished item before customer orders arrive.

Use forecasts for upstream planning and purchasing, but trigger final assembly and distribution from actual customer demand.

Use a fully pull system in which actual orders alone trigger every upstream purchase, with no forecast-based planning.

Use forecasts to trigger final assembly and use customer orders only to replenish already completed inventory.

The firm has strategic fit because low transportation cost always improves competitive performance.

The firm should change only its marketing promise because the supply chain is already correctly aligned.

The firm lacks strategic fit, so slow transportation and low inventory are likely to cause service failures and customer dissatisfaction.

The mismatch has no effect if the firm maintains enough inventory to cover every possible demand.

Implied demand uncertainty comes from customer requirements such as shorter lead times, greater variety, and customization; supply uncertainty comes from factors such as breakdowns, variable yields, and limited capacity.

Implied demand uncertainty comes from machine breakdowns, while supply uncertainty comes from customer requests for customization.

Both types of uncertainty refer only to variability in production yields and have no relationship to customer requirements.

Implied demand uncertainty is caused by supplier breakdowns, while supply uncertainty is caused by the number of sales channels.

An efficient design using standardized products, large batches, high utilization, and minimal inventory regardless of uncertainty.

A responsive design that uses flexible capacity but deliberately maintains minimal inventory and long lead times.

A design that achieves full responsiveness and full efficiency at no additional cost, eliminating the trade-off between them.

A responsive design using modular products, flexible capacity, buffer inventory, and aggressive lead-time reduction.

Capacity means buffer inventory, inventory means reaction speed, time means the ability to produce, information means demand pricing, and price means visibility.

Capacity is the ability to produce or deliver, inventory buffers uncertainty, time controls reaction speed, information provides visibility, and price can influence demand.

Capacity changes customer prices, inventory controls visibility, time is a buffer against shortages, information determines market price, and price is production capability.

Capacity is a pricing tool, inventory provides information, time controls supplier capacity, information is physical stock, and price measures lead time.

Intraoperation scope

Intrafunctional scope

Intercompany scope

Interfunctional scope

Reliability, Responsiveness, Agility, Cost, Transport Capacity

Reliability, Responsiveness, Flexibility, Cost, Profitability

Customer Service, Inventory, Agility, Cost, Asset Utilization

Reliability, Responsiveness, Agility, Cost, Asset Management Efficiency

Facilities affect location and capacity; inventory buffers uncertainty; transportation affects speed and cost; information provides visibility; sourcing affects reliability and flexibility; and pricing can influence demand.

Facilities, inventory, transportation, customer service, sourcing, and pricing are the six drivers.

Facilities, inventory, transportation, pricing, sourcing, and financial reporting are the six drivers.

Capacity, inventory, transportation, information, supplier relations, and customer retention are the six drivers.

Raw materials are completed products, work-in-process consists of finished goods, and finished goods are inputs awaiting production.

Raw materials are inputs awaiting production, work-in-process consists of partially completed products, and finished goods are completed products awaiting sale or delivery.

Raw materials are goods sold to customers, work-in-process consists of returned products, and finished goods are component inventories.

Raw materials, work-in-process, and finished goods all refer to the same physical inventory at different points in time.

Cycle stock exists only for emergencies, safety stock supports routine replenishment, and seasonal stock is obsolete inventory.

Seasonal stock consists of unusable products, dead stock is held for future price increases, and cycle stock protects against supplier failures.

Cycle stock supports routine demand, safety stock buffers uncertainty, seasonal or speculative stock anticipates changing conditions, and dead stock ties up capital without current demand.

Cycle, safety, and seasonal inventory are interchangeable forms of the same buffer and therefore have identical cost effects.

EOQ balances ordering and holding costs; a larger order quantity reduces ordering frequency but raises average inventory and holding cost.

EOQ is intended to maximize safety stock, while the reorder point determines product design and branding.

EOQ applies only to periodic-review systems and seeks to maximize the value of each purchase order.

As order quantity increases, both ordering cost per period and average holding cost per period always decrease.

The client owns and operates the warehouse, and the process begins with picking because receiving is unnecessary.

An external provider only transports finished goods, while warehousing and order fulfillment remain entirely with the client.

The warehouse is used primarily to manufacture raw materials, so customer order fulfillment is deliberately bypassed.

An external specialist can operate the facility and perform receiving, put-away, storage, picking, packing, and dispatch, including suitable value-added services.

U-flow encourages material to travel back and forth repeatedly, and only warehouse occupancy should be measured.

U-flow organizes receiving, storage, picking, and packing in a largely one-directional sequence; order accuracy, dock-to-stock time, throughput, and labor productivity are suitable KPIs.

U-flow means that several carriers must share one vehicle, and inventory accuracy is not a warehouse responsibility.

U-flow eliminates the need for picking and packing, so only carrier on-time performance matters.

Ocean transportation combined with a stocking point

Rail transportation combined with cross-docking

Air transportation combined with cross-docking

Pipeline transportation combined with a milk run

Risk has an identifiable likelihood and potential impact, while uncertainty involves unknown probabilities; SCRM identifies, assesses, mitigates, and monitors risks through measures such as dual sourcing, contingency plans, and buffers.

Risk concerns events whose probabilities cannot be estimated, while uncertainty concerns events with fully known probabilities and impacts.

Uncertainty can always be eliminated through inventory, while risk should never be assessed.

SCRM is primarily a marketing activity whose only effective tool is purchasing insurance for all disruptions.

The technologies will eliminate all demand and supply uncertainty and make supply-chain risk management unnecessary.

RFID is useful only for customer billing, while the other technologies have no effect on physical supply-chain operations.

AI and autonomous vehicles replace the need for warehouses, suppliers, and network-design decisions.

The technologies can improve transparency, automation, forecasting, and decision quality while supporting greener operations, but implementation may require system integration, cybersecurity controls, new skills, and capital investment.