Question 1

The difference between the values of the buyer and seller is referred to as the

Accepted Answer

A)   value discrepancy.
B)   spread.
C)   bargaining surplus.
D)   negotiation gap.

Question 2

A good supplier scoring and assessment process will primarily track performance along the price dimension when evaluating a supplier.

Accepted Answer

A) True 
 B)False

Question 3

To create a win-win negotiation, the two parties must

Accepted Answer

A)   guarantee each other an agreed upon level of business.
B)   identify more than one issue to negotiate.
C)   identify an impartial mediator to oversee the negotiations.
D)   possess an equivalent level of power.

Question 4

Sourcing a product overseas may have

Accepted Answer

A)   higher product cost and will generally incur a higher inbound transportation cost.
B)   higher product cost but will generally incur a lower inbound transportation cost.
C)   lower product cost and will generally incur a lower inbound transportation cost.
D)   lower product cost but will generally incur a higher inbound transportation cost.

Question 5

Quantity discounts lower the unit cost

Accepted Answer

A)   but tend to increase the required batch size and as a result, reduce the cycle inventory.
B)   but tend to increase the required batch size and as a result the cycle inventory.
C)   and tend to reduce the required batch size and as a result the cycle inventory.
D)   and tend to reduce the required batch size and as a result, increase the cycle inventory.

Question 6

Effective sourcing processes within a firm can improve profits for the firm and total supply chain surplus in a variety of ways.

Accepted Answer

A) True 
 B)False

Question 7

Craigslist and eBay are examples of

Accepted Answer

A)   receivables aggregation.
B)   inventory aggregation.
C)   information aggregation.
D)   relationship aggregation.

Question 8

The decision to have a third party perform a supply chain function is called

Accepted Answer

A)   insourcing.
B)   outsourcing.
C)   offshoring.
D)   onshoring.

Question 9

A third party can increase the supply chain surplus by aggregating demand across multiple firms and gaining production economies of scale that no single firm can on its own. This is called

Accepted Answer

A)   capacity aggregation.
B)   inventory aggregation.
C)   warehouse aggregation.
D)   relationship aggregation.

Question 10

Which type of contract is used when agents act on behalf of a principal and the dealer's margin is set to be the same as the supply chain margin, and the dealer exerts the right amount of effort?

Accepted Answer

A)   Buyback or returns contract
B)   Revenue-sharing contract
C)   Quantity flexibility contract
D)   Two-part tariffs

Question 11

The value of better information coordination will be linked to the amount of variability introduced into the supply chain as a result of the bullwhip effect.

Accepted Answer

A) True 
 B)False

Question 12

Unless adding a supplier with a unique and valuable capability clearly adds to total cost, the firm's supply base may be too small.

Accepted Answer

A) True 
 B)False

Question 13

Supplier viability can be especially important if the supplier is providing mission-critical products and it would be easy to find a replacement for them.

Accepted Answer

A) True 
 B)False

Question 14

An intermediary can increase the supply chain surplus by decreasing the number of relationships required between multiple buyers and sellers. This is called

Accepted Answer

A)   capacity aggregation.
B)   inventory aggregation.
C)   warehouse aggregation.
D)   relationship aggregation.

Question 15

An intermediary can increase the supply chain surplus by aggregating inventories across large numbers of customers. This is called

Accepted Answer

A)   capacity aggregation.
B)   inventory aggregation.
C)   warehouse aggregation.
D)   relationship aggregation.

Question 16

Understanding the impact of incentives on the actions of a supply chain partner is especially important when

Accepted Answer

A)   there are two or more members in the supply chain.
B)   the third party's actions are not fully observable.
C)   more than two firms competing for the same pool of customers.
D)   the supply chain uses outsourcing.

Question 17

Revenue-sharing contracts counter double marginalization by decreasing the cost per unit charged to the retailer, thus effectively decreasing the cost of understocking.

Accepted Answer

A) True 
 B)False

Question 18

Cost of Goods Sold (COGS)  represents

Accepted Answer

A)   less than 20 percent of sales for most major manufacturers.
B)   less than 50 percent of sales for most major manufacturers.
C)   well over 50 percent of sales for most major manufacturers.
D)   well over 80 percent of sales for most major manufacturers.

Question 19

Consider the factors influencing total cost and supplier performance. Which of the following is the LEAST quantifiable factor?

Accepted Answer

A)   Supplier price
B)   Supplier terms
C)   Support
D)   Warehousing cost

Question 20

A downside to which contract is that it leads to surplus inventory that must be salvaged or disposed?

Accepted Answer

A)   Buyback or returns contract
B)   Revenue-sharing contract
C)   Quantity flexibility contract
D)   Hybrid contract

Exam 15: Sourcing Decisions in a Supply Chain

The value of better information coordination will be linked to the amount of variability introduced into the supply chain as a result of the bullwhip effect.

Correct AnswerverifiedShow Answer

Which type of contract is used when agents act on behalf of a principal and the dealer's margin is set to be the same as the supply chain margin, and the dealer exerts the right amount of effort?

Correct AnswerverifiedShow Answer

Effective sourcing processes within a firm can improve profits for the firm and total supply chain surplus in a variety of ways.

Correct AnswerverifiedShow Answer

Supplier viability can be especially important if the supplier is providing mission-critical products and it would be easy to find a replacement for them.

Correct AnswerverifiedShow Answer

An intermediary can increase the supply chain surplus by aggregating inventories across large numbers of customers. This is called

Correct AnswerverifiedShow Answer

A good supplier scoring and assessment process will primarily track performance along the price dimension when evaluating a supplier.

Correct AnswerverifiedShow Answer

Craigslist and eBay are examples of

Correct AnswerverifiedShow Answer

A third party can increase the supply chain surplus by aggregating demand across multiple firms and gaining production economies of scale that no single firm can on its own. This is called

Correct AnswerverifiedShow Answer

An intermediary can increase the supply chain surplus by decreasing the number of relationships required between multiple buyers and sellers. This is called

Correct AnswerverifiedShow Answer

Cost of Goods Sold (COGS) represents

Correct AnswerverifiedShow Answer

A downside to which contract is that it leads to surplus inventory that must be salvaged or disposed?

Correct AnswerverifiedShow Answer

Understanding the impact of incentives on the actions of a supply chain partner is especially important when

Correct AnswerverifiedShow Answer

Sourcing a product overseas may have

Correct AnswerverifiedShow Answer

Unless adding a supplier with a unique and valuable capability clearly adds to total cost, the firm's supply base may be too small.

Correct AnswerverifiedShow Answer

Quantity discounts lower the unit cost

Correct AnswerverifiedShow Answer

Consider the factors influencing total cost and supplier performance. Which of the following is the LEAST quantifiable factor?

Correct AnswerverifiedShow Answer

Revenue-sharing contracts counter double marginalization by decreasing the cost per unit charged to the retailer, thus effectively decreasing the cost of understocking.

Correct AnswerverifiedShow Answer

The decision to have a third party perform a supply chain function is called

Correct AnswerverifiedShow Answer

The difference between the values of the buyer and seller is referred to as the

Correct AnswerverifiedShow Answer

To create a win-win negotiation, the two parties must

Correct AnswerverifiedShow Answer

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