Chap 008

Chapter 08 - Global Sourcing and Procurement

Chapter 08Global Sourcing and Procurement

Learning Objectives for Chapter 8:

1. Understand how important sourcing decisions go beyond simple material purchasing decisions.

2. Demonstrate the “bullwhip effect” and how it is important to synchronize the flow of material between supply chain partners.

3. Describe how characteristics of supply and demand have an impact on structuring supply chains.

4. Know the reason for outsourcing capabilities.5. Illustrate what “green” sourcing is.6. Analyze the total cost of ownership.7. Calculate inventory turnover and days of supply.

True / False Questions

1. Strategic sourcing is the development and management of supplier relationships to acquire goods and services in a way that aids in achieving the immediate needs of the business. True False

2. Two common measures to evaluate supply-chain efficiency are the consumer price index and the beta flow system. True False

8-1


3. Two common measures to evaluate supply-chain efficiency are the inventory turnover and weeks-of-supply ratios. True False

4. Inventory turn values that are considered good differ by industry and the type of products being handled. True False

5. Retailer behavior when stocking up during promotion periods (where the prices of goods are reduced) is called backward buying. True False

6. The phenomenon that magnifies the variability in order quantities for goods as orders move through the supply-chain from the customer to the producer is called the bullwhip effect. True False

8-2


7. Functional products include staples that people buy in a wide range of retail outlets, such as grocery stores and gas stations. True False

8. The optimal strategy for functional products is to use an efficient supply-chain. True False

9. The optimal strategy for functional products is to use a responsive supply-chain. True False

10. The optimal strategy for innovative products is to use an efficient supply-chain. True False

11. The best strategy for innovative products is to use either a responsive or an agile supply-chain. True False

12. Outsourcing is the act of moving some of a firm's internal activities and decision responsibility to outside providers. True False

13. Outsourcing allows a firm to achieve an improved focus on its core competencies. True False

14. Logistics is a term indicating transportation choices for goods produced internationally but consumed domestically. True False

8-3


15. Logistics is a term that refers to the management functions that support the complete cycle of material flow, from the purchase and internal control of production materials; to the planning and control of work-in-process; to the purchasing, shipping, and distribution of the finished product. True False

16. A financially-driven reason for outsourcing is that it can turn fixed costs into variable costs. True False

17. A financially-driven reason for outsourcing is that it can shorten cycle time. True False

18. An organizationally-driven reason for outsourcing is that it can improve effectiveness by focusing on what the firm does best. True False

19. An organizationally-driven reason for outsourcing is that it can transform the organization. True False

20. A financially-driven reason for outsourcing is that it can reduce costs through a lower cost structure. True False

21. An improvement-driven reason for outsourcing is that it can increase product and service value, customer satisfaction, and shareholder value. True False

8-4


22. A financially-driven reason for outsourcing is that it can help gain access to new markets, especially in developing countries. True False

23. A stable supply process is one where product volumes are high, demand is predictable and there is a long product life. True False

24. A stable supply process is one where the manufacturing process and the underlying technology are mature and the supply base is well established. True False

25. Firms producing functional products are forced to introduce a steady stream of innovations in order to survive. True False

26. Inventory turnover and weeks of supply are mathematically the inverse of one another. True False

27. Green sourcing is only about finding new environmentally friendly technologies and increasing the use of recyclable materials. True False

28. An important opportunity in green sourcing is waste reduction opportunities. True False

29. Green sourcing requires incorporating new criteria for evaluating alternatives. True False

8-5


30. The total cost of ownership (TCO) is an estimate of the cost of an item that includes all the costs related to the procurement and use of an item, but does not include any of the costs related to disposing of the item after it is no longer useful. True False

31. The total cost of ownership (TCO) can be categorized into three areas: acquisition costs, ownership costs, and post-ownership costs. True False

32. In Total cost of ownership analysis overemphasis on purchase price frequently results in failure to address other significant costs. True False

33. In conducting a Total Cost of Ownership analysis, it is probably best to use a team representing the key functional areas. True False

Multiple Choice Questions

34. The inventory turnover ratio used in measuring supply-chain efficiency is found by the ratio of which of the following? A. Cost of goods sold/Average aggregate inventory valueB. Fixed costs/Variable costsC. Sales costs/Marketing costsD. Cost of goods sold/Cost to sell goodsE. Operations flow costs/Suppliers flow costs

8-6


35. The total value of all items held in inventory for the firm at cost is which of the following? A. Cost of goods to be soldB. Average aggregate inventory valueC. Weeks supply of goodsD. Inventory turnoverE. None of the above

36. If the average aggregate inventory value is $45,000 and the cost of goods sold is $10,000, which of the following is weeks of supply? A. 45,000B. 234C. 120D. 23.4E. 4.5

37. If the average aggregate inventory value is $1,200,000 and the cost of goods sold is $600,000, which of the following is weeks of supply? A. 1,040B. 606C. 104D. 60.6E. 2.0

38. If the average aggregate inventory value is $1,200,000 and the cost of goods sold is $600,000, which of the following is inventory turnover? A. 60B. 10.4C. 2D. 0.5E. None of the above

8-7


39. If the average aggregate inventory value is $100,000 and the cost of goods sold is $450,000, which of the following is inventory turnover? A. 19.23B. 4.5C. 0.8654D. 0.2222E. None of the above

40. In Hau Lee's uncertainty framework to classify supply chains, a supply chain for functional products with an evolving supply process is called which of the following? A. EfficientB. Forward lookingC. AgileD. Risk hedgingE. Responsive

41. In Hau Lee's uncertainty framework to classify supply chains, a supply chain for functional products with a stable supply process is called which of the following? A. EfficientB. Forward lookingC. AgileD. Risk hedgingE. Responsive

42. In Hau Lee's uncertainty framework to classify supply chains, a supply chain for innovative products with an evolving supply process is called which of the following? A. EfficientB. Forward lookingC. AgileD. Risk hedgingE. Responsive

8-8


43. In Hau Lee's uncertainty framework to classify supply chains, a supply chain for innovative products with a stable supply process is called which of the following? A. EfficientB. Forward lookingC. AgileD. Risk hedgingE. Responsive

44. The effect of the lack of synchronization among supply-chain members is referred to as which of the following? A. Forward buyingB. Continuous replenishmentC. Bullwhip effectD. Metcalf's LawE. Being out of step

45. In outsourcing which of the following internal activities and decision responsibilities can not be transferred to outside contractors? A. Activities involving peopleB. Activities involving facilitiesC. Activities involving equipmentD. Activities involving shareholdersE. Activities involving technology

46. Which of the following is an organizationally-driven reason for outsourcing? A. Improve effectiveness by focusing on what the firm does bestB. Turn fixed costs into variable costsC. Reduce costs through lowered cost structure and increased flexibilityD. Improve risk managementE. Improve credibility and image by associating with superior providers

8-9


47. Which of the following is not an organizationally-driven reason for outsourcing? A. Improve effectiveness by focusing on what the firm does bestB. Improve flexibility to meet changing demand for products and servicesC. Increase product and service value by improving response to customer needsD. Improve credibility and image by associating with superior providersE. All of the above are organizationally-driven reasons for outsourcing

48. Which of the following is an improvement-driven reason for outsourcing? A. Shorten cycle timeB. Improve effectiveness by focusing on what the firm does bestC. Increase product and service value by improving response to customer needsD. Turn fixed costs into variable costsE. Reduce costs through a lower cost structure

49. Which of the following is not an improvement-driven reason for outsourcing? A. Improve Quality and productivityB. Enhance effectiveness by focusing on what you do bestC. Improve risk managementD. Obtain expertise, skills and technologies not otherwise availableE. Improve credibility and image by associating with superior providers

50. When considering outsourcing, what should firms be sure to avoid? A. Losing control of non-core activities which don't distinguish the firmB. Allowing outsourcing to develop into a substitute for innovationC. Giving the outsourcing partner opportunities to become a strong competitorD. Allowing employees transferred to the outsourcing partner to rejoin the firmE. Adverse corporate tax implications of asset transfers to the outsourcing partner

51. Which is the most challenging kind of supply chain to manage according to Hau Lee? A. Agile supply chainB. Efficient supply chainC. Risk-hedging supply chainD. Erratic supply chainE. Responsive supply chain

8-10


52. Which of the following of Fisher's product categories includes fashionable clothing, personal computers and other products that typically have a very brief life cycle? A. Functional productsB. Dysfunctional productsC. Innovative productsD. Bullwhip productsE. Value density products

53. Which of the following is not an improvement-driven reason to outsource? A. Improve risk managementB. Increase commitment in a non-core areaC. Shorten cycle timeD. Improve quality and productivityE. Obtain expertise, skills and technologies that are otherwise not available

54. Which of the following is one of the strategic characteristics to consider when deciding how supplier relationships should be structured on the continuum between vertical integration (do not outsource) to arm's length relationships (outsource)? A. CostB. LocationC. InvestmentD. CoordinationE. Transportation

55. The six-step process for green sourcing does not include which of the following? A. Assess the opportunity.B. Assess the supply base.C. Confer with environmental groups.D. Engage sourcing agents.E. Institutionalize the sourcing strategy.

8-11


56. The six-step process for green sourcing includes which of the following? A. Provide a press release to local (and perhaps national) media.B. Include members of environmental groups in the decision.C. Notify the state and federal environmental agencies of your plans.D. Perform an environmental impact study.E. Develop the sourcing strategy.

57. Ownership costs are incurred after the initial purchase and are associated with the ongoing use of the product or material. Which of the following is not an ownership cost listed in the text? A. Financing costsB. Energy costsC. TaxesD. AestheticsE. Worker fatigue

58. Acquisition costs include which of the following costs? A. Quality costsB. Maintenance and repair costsC. Environmental costsD. Supply chain costsE. Customer dissatisfaction costs

59. Ownership costs include which of the following costs? A. Environmental costsB. Warranty costsC. Supply chain costsD. Quality costsE. Taxes

8-12


Fill in the Blank Questions

60. What is the effect of the lack of synchronization among supply-chain members called? ________________________ ________________________________________

61. The acronym RFP stands for: ________________________ ________________________________________

62. When a customer allows their supplier to manage an item or group of items for them it is called ________________________ ________________________________________

63. Name the four types of supply chain in Hau Lee's uncertainty framework for classifying supply chains. ________________________ ________________________ ________________________ ________________________ ________________________________________

64. In Hau Lee's uncertainty framework to classify supply chains, a supply chain that combines the strengths of a "risk-hedging" and a "responsive" supply chain is called what? ______________________________________ ________________________________________

65. If the average aggregate inventory value is $4,000 and the cost of goods sold is $104,000, what are the weeks of supply? _______________________ ________________________________________

8-13


66. If the weeks of supply is 10 and the average aggregate inventory value is $1,000,000, what is the cost of goods sold? _______________________ ________________________________________

67. If inventory turnover is 20 and cost of goods sold is $100,000, what is the average aggregate inventory value? _______________________. ________________________________________

68. Having a supply chain that is environmentally responsible is called: _______________________. ________________________________________

69. The step in the Six-step Process for Green Sourcing where quantitative and qualitative criteria to evaluate the sourcing process is developed is called: _______________________. ________________________________________

70. The step in the Six-step Process for Green Sourcing where a set of metrics against which the supplier will be measured for the contract's duration is called: _______________________. ________________________________________

71. An estimate of the cost of an item that includes all the costs related to the procurement and use of an item, including any related costs in disposing of the item after it is no longer useful is called what? _______________________. ________________________________________

72. Measures of sourcing efficiency are _______________________ and _______________________. ________________________________________

8-14


73. In Hau Lee's uncertainty framework to classify supply chains, an _______________________ supply chain process should be used for functional products ________________________________________

74. In Hau Lee's uncertainty framework to classify supply chains, a _______________________ supply chain process should be used for innovative products. ________________________________________

8-15


Chapter 08 Global Sourcing and Procurement Answer Key

True / False Questions

1. Strategic sourcing is the development and management of supplier relationships to acquire goods and services in a way that aids in achieving the immediate needs of the business. TRUE

AACSB: AnalyticDifficulty: EasyLearning Objective: 1Taxonomy: KnowledgeTopic: Strategic Sourcing

2. Two common measures to evaluate supply-chain efficiency are the consumer price index and the beta flow system. FALSE

AACSB: AnalyticDifficulty: EasyLearning Objective: 7Taxonomy: KnowledgeTopic: Measuring Sourcing Performance

3. Two common measures to evaluate supply-chain efficiency are the inventory turnover and weeks-of-supply ratios. TRUE


8-16


4. Inventory turn values that are considered good differ by industry and the type of products being handled. TRUE


5. Retailer behavior when stocking up during promotion periods (where the prices of goods are reduced) is called backward buying. FALSE


6. The phenomenon that magnifies the variability in order quantities for goods as orders move through the supply-chain from the customer to the producer is called the bullwhip effect. TRUE


7. Functional products include staples that people buy in a wide range of retail outlets, such as grocery stores and gas stations. TRUE

AACSB: AnalyticDifficulty: MediumLearning Objective: 3Taxonomy: UnderstandingTopic: Strategic Sourcing

8-17


8. The optimal strategy for functional products is to use an efficient supply-chain. FALSE

AACSB: AnalyticDifficulty: MediumLearning Objective: 3Taxonomy: KnowledgeTopic: Strategic Sourcing

9. The optimal strategy for functional products is to use a responsive supply-chain. FALSE


10. The optimal strategy for innovative products is to use an efficient supply-chain. FALSE


11. The best strategy for innovative products is to use either a responsive or an agile supply-chain. TRUE


8-18


12. Outsourcing is the act of moving some of a firm's internal activities and decision responsibility to outside providers. TRUE

AACSB: AnalyticDifficulty: EasyLearning Objective: 4Taxonomy: KnowledgeTopic: Outsourcing

13. Outsourcing allows a firm to achieve an improved focus on its core competencies. TRUE


14. Logistics is a term indicating transportation choices for goods produced internationally but consumed domestically. FALSE


15. Logistics is a term that refers to the management functions that support the complete cycle of material flow, from the purchase and internal control of production materials; to the planning and control of work-in-process; to the purchasing, shipping, and distribution of the finished product. TRUE


8-19


16. A financially-driven reason for outsourcing is that it can turn fixed costs into variable costs. TRUE

AACSB: AnalyticDifficulty: MediumLearning Objective: 4Taxonomy: KnowledgeTopic: Outsourcing

17. A financially-driven reason for outsourcing is that it can shorten cycle time. TRUE


18. An organizationally-driven reason for outsourcing is that it can improve effectiveness by focusing on what the firm does best. TRUE


19. An organizationally-driven reason for outsourcing is that it can transform the organization. FALSE


8-20


20. A financially-driven reason for outsourcing is that it can reduce costs through a lower cost structure. TRUE


21. An improvement-driven reason for outsourcing is that it can increase product and service value, customer satisfaction, and shareholder value. FALSE


22. A financially-driven reason for outsourcing is that it can help gain access to new markets, especially in developing countries. TRUE


23. A stable supply process is one where product volumes are high, demand is predictable and there is a long product life. FALSE


8-21


24. A stable supply process is one where the manufacturing process and the underlying technology are mature and the supply base is well established. TRUE


25. Firms producing functional products are forced to introduce a steady stream of innovations in order to survive. FALSE

AACSB: AnalyticDifficulty: EasyLearning Objective: 3Taxonomy: UnderstandingTopic: Strategic Sourcing

26. Inventory turnover and weeks of supply are mathematically the inverse of one another. TRUE

AACSB: AnalyticDifficulty: EasyLearning Objective: 7Taxonomy: AnalysisTopic: Measuring Sourcing Performance

27. Green sourcing is only about finding new environmentally friendly technologies and increasing the use of recyclable materials. FALSE

AACSB: AnalyticDifficulty: EasyLearning Objective: 5Taxonomy: UnderstandingTopic: Green Sourcing

8-22


28. An important opportunity in green sourcing is waste reduction opportunities. TRUE


29. Green sourcing requires incorporating new criteria for evaluating alternatives. TRUE


30. The total cost of ownership (TCO) is an estimate of the cost of an item that includes all the costs related to the procurement and use of an item, but does not include any of the costs related to disposing of the item after it is no longer useful. FALSE

AACSB: AnalyticDifficulty: EasyLearning Objective: 6Taxonomy: KnowledgeTopic: Total Cost of Ownership

31. The total cost of ownership (TCO) can be categorized into three areas: acquisition costs, ownership costs, and post-ownership costs. TRUE

AACSB: AnalyticDifficulty: EasyLearning Objective: 6Taxonomy: KnowledgeTopic: Total Cost of Ownership

8-23


32. In Total cost of ownership analysis overemphasis on purchase price frequently results in failure to address other significant costs. TRUE

AACSB: AnalyticDifficulty: EasyLearning Objective: 6Taxonomy: UnderstandingTopic: Total Cost of Ownership

33. In conducting a Total Cost of Ownership analysis, it is probably best to use a team representing the key functional areas. TRUE

AACSB: AnalyticDifficulty: EasyLearning Objective: 6Taxonomy: UnderstandingTopic: Total Cost of Ownership

Multiple Choice Questions

34. The inventory turnover ratio used in measuring supply-chain efficiency is found by the ratio of which of the following? A. Cost of goods sold/Average aggregate inventory valueB. Fixed costs/Variable costsC. Sales costs/Marketing costsD. Cost of goods sold/Cost to sell goodsE. Operations flow costs/Suppliers flow costs

AACSB: AnalyticDifficulty: EasyLearning Objective: 7Taxonomy: UnderstandingTopic: Measuring Sourcing Performance

8-24


35. The total value of all items held in inventory for the firm at cost is which of the following? A. Cost of goods to be soldB. Average aggregate inventory valueC. Weeks supply of goodsD. Inventory turnoverE. None of the above


36. If the average aggregate inventory value is $45,000 and the cost of goods sold is $10,000, which of the following is weeks of supply? A. 45,000B. 234C. 120D. 23.4E. 4.5


37. If the average aggregate inventory value is $1,200,000 and the cost of goods sold is $600,000, which of the following is weeks of supply? A. 1,040B. 606C. 104D. 60.6E. 2.0


8-25


38. If the average aggregate inventory value is $1,200,000 and the cost of goods sold is $600,000, which of the following is inventory turnover? A. 60B. 10.4C. 2D. 0.5E. None of the above


39. If the average aggregate inventory value is $100,000 and the cost of goods sold is $450,000, which of the following is inventory turnover? A. 19.23B. 4.5C. 0.8654D. 0.2222E. None of the above


40. In Hau Lee's uncertainty framework to classify supply chains, a supply chain for functional products with an evolving supply process is called which of the following? A. EfficientB. Forward lookingC. AgileD. Risk hedgingE. Responsive


8-26


41. In Hau Lee's uncertainty framework to classify supply chains, a supply chain for functional products with a stable supply process is called which of the following? A. EfficientB. Forward lookingC. AgileD. Risk hedgingE. Responsive


42. In Hau Lee's uncertainty framework to classify supply chains, a supply chain for innovative products with an evolving supply process is called which of the following? A. EfficientB. Forward lookingC. AgileD. Risk hedgingE. Responsive


43. In Hau Lee's uncertainty framework to classify supply chains, a supply chain for innovative products with a stable supply process is called which of the following? A. EfficientB. Forward lookingC. AgileD. Risk hedgingE. Responsive


8-27


44. The effect of the lack of synchronization among supply-chain members is referred to as which of the following? A. Forward buyingB. Continuous replenishmentC. Bullwhip effectD. Metcalf's LawE. Being out of step


45. In outsourcing which of the following internal activities and decision responsibilities can not be transferred to outside contractors? A. Activities involving peopleB. Activities involving facilitiesC. Activities involving equipmentD. Activities involving shareholdersE. Activities involving technology


46. Which of the following is an organizationally-driven reason for outsourcing? A. Improve effectiveness by focusing on what the firm does bestB. Turn fixed costs into variable costsC. Reduce costs through lowered cost structure and increased flexibilityD. Improve risk managementE. Improve credibility and image by associating with superior providers


8-28


47. Which of the following is not an organizationally-driven reason for outsourcing? A. Improve effectiveness by focusing on what the firm does bestB. Improve flexibility to meet changing demand for products and servicesC. Increase product and service value by improving response to customer needsD. Improve credibility and image by associating with superior providersE. All of the above are organizationally-driven reasons for outsourcing

AACSB: AnalyticDifficulty: MediumLearning Objective: 4Taxonomy: UnderstandingTopic: Outsourcing

48. Which of the following is an improvement-driven reason for outsourcing? A. Shorten cycle timeB. Improve effectiveness by focusing on what the firm does bestC. Increase product and service value by improving response to customer needsD. Turn fixed costs into variable costsE. Reduce costs through a lower cost structure


49. Which of the following is not an improvement-driven reason for outsourcing? A. Improve Quality and productivityB. Enhance effectiveness by focusing on what you do bestC. Improve risk managementD. Obtain expertise, skills and technologies not otherwise availableE. Improve credibility and image by associating with superior providers


8-29


50. When considering outsourcing, what should firms be sure to avoid? A. Losing control of non-core activities which don't distinguish the firmB. Allowing outsourcing to develop into a substitute for innovationC. Giving the outsourcing partner opportunities to become a strong competitorD. Allowing employees transferred to the outsourcing partner to rejoin the firmE. Adverse corporate tax implications of asset transfers to the outsourcing partner


51. Which is the most challenging kind of supply chain to manage according to Hau Lee? A. Agile supply chainB. Efficient supply chainC. Risk-hedging supply chainD. Erratic supply chainE. Responsive supply chain


52. Which of the following of Fisher's product categories includes fashionable clothing, personal computers and other products that typically have a very brief life cycle? A. Functional productsB. Dysfunctional productsC. Innovative productsD. Bullwhip productsE. Value density products


8-30


53. Which of the following is not an improvement-driven reason to outsource? A. Improve risk managementB. Increase commitment in a non-core areaC. Shorten cycle timeD. Improve quality and productivityE. Obtain expertise, skills and technologies that are otherwise not available


54. Which of the following is one of the strategic characteristics to consider when deciding how supplier relationships should be structured on the continuum between vertical integration (do not outsource) to arm's length relationships (outsource)? A. CostB. LocationC. InvestmentD. CoordinationE. Transportation


55. The six-step process for green sourcing does not include which of the following? A. Assess the opportunity.B. Assess the supply base.C. Confer with environmental groups.D. Engage sourcing agents.E. Institutionalize the sourcing strategy.

AACSB: AnalyticDifficulty: EasyLearning Objective: 5Taxonomy: KnowledgeTopic: Green Sourcing

8-31


56. The six-step process for green sourcing includes which of the following? A. Provide a press release to local (and perhaps national) media.B. Include members of environmental groups in the decision.C. Notify the state and federal environmental agencies of your plans.D. Perform an environmental impact study.E. Develop the sourcing strategy.


57. Ownership costs are incurred after the initial purchase and are associated with the ongoing use of the product or material. Which of the following is not an ownership cost listed in the text? A. Financing costsB. Energy costsC. TaxesD. AestheticsE. Worker fatigue

AACSB: AnalyticDifficulty: MediumLearning Objective: 6Taxonomy: KnowledgeTopic: Total Cost of Ownership

58. Acquisition costs include which of the following costs? A. Quality costsB. Maintenance and repair costsC. Environmental costsD. Supply chain costsE. Customer dissatisfaction costs

AACSB: AnalyticDifficulty: MediumLearning Objective: 6Taxonomy: UnderstandingTopic: Total Cost of Ownership

8-32


59. Ownership costs include which of the following costs? A. Environmental costsB. Warranty costsC. Supply chain costsD. Quality costsE. Taxes

AACSB: AnalyticDifficulty: MediumLearning Objective: 6Taxonomy: UnderstandingTopic: Total Cost of Ownership

Fill in the Blank Questions

60. What is the effect of the lack of synchronization among supply-chain members called? ________________________ The bullwhip effect


61. The acronym RFP stands for: ________________________ Request for proposal


8-33


62. When a customer allows their supplier to manage an item or group of items for them it is called ________________________ Vendor managed inventory


63. Name the four types of supply chain in Hau Lee's uncertainty framework for classifying supply chains. ________________________ ________________________ ________________________ ________________________ 1. Efficient; 2. Responsive; 3. Risk-hedging, 4. Agile


64. In Hau Lee's uncertainty framework to classify supply chains, a supply chain that combines the strengths of a "risk-hedging" and a "responsive" supply chain is called what? ______________________________________ Agile


8-34


65. If the average aggregate inventory value is $4,000 and the cost of goods sold is $104,000, what are the weeks of supply? _______________________ 2 weeks


66. If the weeks of supply is 10 and the average aggregate inventory value is $1,000,000, what is the cost of goods sold? _______________________ $5,200,000

AACSB: AnalyticDifficulty: MediumLearning Objective: 7Taxonomy: AnalysisTopic: Measuring Sourcing Performance

67. If inventory turnover is 20 and cost of goods sold is $100,000, what is the average aggregate inventory value? _______________________. $5,000

AACSB: AnalyticDifficulty: MediumLearning Objective: 7Taxonomy: AnalysisTopic: Measuring Sourcing Performance

68. Having a supply chain that is environmentally responsible is called: _______________________. Green Sourcing

AACSB: AnalyticDifficulty: EasyLearning Objective: 5Taxonomy: KnowledgeTopic: Green Sourcing

8-35


69. The step in the Six-step Process for Green Sourcing where quantitative and qualitative criteria to evaluate the sourcing process is developed is called: _______________________. Develop the sourcing strategy

AACSB: KnowledgeDifficulty: MediumLearning Objective: 5Taxonomy: KnowledgeTopic: Green Sourcing

70. The step in the Six-step Process for Green Sourcing where a set of metrics against which the supplier will be measured for the contract's duration is called: _______________________. Institutionalize the sourcing strategy

AACSB: KnowledgeDifficulty: MediumLearning Objective: 5Taxonomy: KnowledgeTopic: Green Sourcing

71. An estimate of the cost of an item that includes all the costs related to the procurement and use of an item, including any related costs in disposing of the item after it is no longer useful is called what? _______________________. Total cost of ownership

AACSB: KnowledgeDifficulty: MediumLearning Objective: 6Taxonomy: KnowledgeTopic: Total Cost of Ownership

72. Measures of sourcing efficiency are _______________________ and _______________________. inventory turnover and weeks of supply

AACSB: KnowledgeDifficulty: MediumLearning Objective: 1Taxonomy: KnowledgeTopic: Strategic Sourcing

8-36


73. In Hau Lee's uncertainty framework to classify supply chains, an _______________________ supply chain process should be used for functional products efficient


74. In Hau Lee's uncertainty framework to classify supply chains, a _______________________ supply chain process should be used for innovative products. responsive processes


8-37

Chap 008

Documents

true false questions

supplychain efficiency

efficient supplychain

responsive supplychain

global sourcing

supply chain partners

days of supply

characteristics of supply