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Chapter 2
Supply Chain Performance: Achieving Strategic Fit and Scope
True/False
- A company’s competitive strategy defines the set of customer needs that it seeks to satisfy through its products and services. Answer: True Difficulty: Easy
- The value chain emphasizes the close relationship between all the functional strategies within a company. Answer: True Difficulty: Moderate
- A company’s product development strategy defines the set of customer needs that it seeks to satisfy through its products and services. Answer: False Difficulty: Moderate
- A company’s product development strategy specifies the portfolio of new products that it will try to develop. Answer: True Difficulty: Easy
- A company’s supply chain strategy specifies how the market will be segmented and how the product will be positioned, priced, and promoted. Answer: False Difficulty: Easy
- A company’s supply chain strategy determines the nature of procurement and transportation of materials as well as the manufacture and distribution of the product. Answer: True Difficulty: Easy
- The degree of supply chain responsiveness should be consistent with the implied uncertainty. Answer: True Difficulty: Easy
- The degree of supply chain responsiveness does not need to be consistent with the implied uncertainty. Answer: False Difficulty: Moderate
- To achieve complete strategic fit, a firm must ensure that all functions in the value chain have consistent strategies that support the competitive strategy. Answer: True Difficulty: Moderate
- To achieve complete strategic fit, a firm must ensure that all functions in the value chain have diverse strategies that support functional goals. Answer: False Difficulty: Moderate
- Because demand and supply characteristics change, the supply chain strategy must change over the product life cycle if a company is to continue achieving strategic fit. Answer: True Difficulty: Easy
- The supply chain strategy must be established at the beginning of the product life cycle and not changed if a company is to continue achieving strategic fit. Answer: False Difficulty: Easy
- To retain strategic fit, supply chain strategy must be adjusted over the life cycle of a product and as the competitive landscape changes. Answer: True Difficulty: Moderate
- The intercompany scope of strategic fit is essential today because the competitive playing field has shifted from company versus company to supply chain versus supply chain. Answer: True Difficulty: Moderate
- The intercompany scope of strategic fit is no longer relevant today because the competitive playing field has shifted from company versus company to supply chain versus supply chain. Answer: False Difficulty: Easy
- The intercompany scope of strategic fit requires firms to evaluate every action in the context of the entire supply chain. Answer: True Difficulty: Moderate
- There is a close connection between the design and management of supply chain flows and the success of a supply chain. Answer: True Difficulty: Easy Multiple Choice
- A company’s competitive strategy a. defines the set of customer needs that it seeks to satisfy through its products and services. b. specifies the portfolio of new products that it will try to develop. c. specifies how the market will be segmented and how the product will be positioned, priced, and promoted.
b. Product development strategy c. Marketing and sales strategy d. Supply chain strategy e. none of the above Answer: d Difficulty: Easy
6. Which of the following defines the set of customer needs that a company seeks to satisfy through its products and services? a. Competitive strategy b. Product development strategy c. Marketing and sales strategy d. Supply chain strategy e. none of the above Answer: a Difficulty: Moderate 7. Which of the following specifies how the market will be segmented and how the product will be positioned, priced, and promoted? a. Competitive strategy b. Product development strategy c. Marketing and sales strategy d. Supply chain strategy e. none of the above Answer: c Difficulty: Moderate 8. Which of the following specifies the portfolio of new products that a company will try to develop? a. Competitive strategy b. Product development strategy c. Marketing and sales strategy d. Supply chain strategy e. all of the above Answer: b Difficulty: Easy 9. A supply chain strategy includes a. supplier strategy. b. operations strategy. c. logistics strategy. d. all of the above e. none of the above Answer: d Difficulty: Moderate 10. A supply chain strategy involves decisions regarding a. inventory. b. transportation. c. operating facilities. d. information flows.
e. all of the above Answer: e Difficulty: Moderate
11. A supply chain strategy involves decisions regarding all of the following except a. inventory. b. transportation. c. new product development. d. operating facilities. e. information flows. Answer: c Difficulty: Moderate 12. Which of the following is a key to the success or failure of a company? a. The competitive strategy and all functional strategies must fit together to form a coordinated overall strategy. b. Each functional strategy must support other functional strategies and help a firm reach its competitive strategy goal. c. The different functions in a company must appropriately structure their processes and resources to be able to execute strategies successfully. d. All of the above are keys to success. e. None of the above are a key to success. Answer: d Difficulty: Moderate 13. Which of the following is not a key to the success or failure of a company? a. The competitive strategy and all functional strategies must fit together to form a coordinated overall strategy. b. Each functional strategy must support other functional strategies and help a firm reach its competitive strategy goal. c. The different functions in a company must appropriately structure their processes and resources to be able to execute strategies successfully. d. All of the above are keys to success. e. None of the above are a key to success. Answer: d Difficulty: Moderate 14. Which of the following is not a key to the success or failure of a company? a. The competitive strategy and all functional strategies must fit together to form a coordinated overall strategy. b. The competitive strategy and all functional strategies operate independently of each other. c. The different functions in a company must appropriately structure their processes and resources to be able to execute strategies successfully. d. Each functional strategy must support other functional strategies and help a firm reach its competitive strategy goal. e. All of the above are keys to success. Answer: b Difficulty: Moderate 15. Which of the following are basic steps to achieving strategic fit?
c. Variety of products required increases d. Required service level increases e. none of the above Answer: e Difficulty: Moderate
21. Which of the following customer needs will cause implied uncertainty of demand to increase? a. Product margin b. Lead time decreases c. Average stockout rate d. Average forced season end markdown e. none of the above Answer: b Difficulty: Moderate 22. Which of the following characteristics of customer demand have a correlation with implied uncertainty? a. Product margin b. Average forecast error c. Average stockout rate d. Average forced season end markdown e. all of the above Answer: e Difficulty: Moderate 23. Which of the following is not a characteristic of customer demand correlated with implied uncertainty? a. Product margin b. Unpredictable and low yields c. Average stockout rate d. Average forced season end markdown e. None of the above are correlated with implied uncertainty Answer: b Difficulty: Moderate 24. Which of the following supply chain capabilities will cause supply uncertainty to increase? a. Frequent breakdowns b. Unpredictable and low yields c. Poor quality d. Limited supply capacity e. all of the above Answer: e Difficulty: Easy 25. Which of the following supply chain capabilities will cause supply uncertainty to increase? a. Evolving production process b. Inflexible supply capacity c. Limited supply capacity
d. Unpredictable and low yields e. all of the above Answer: e Difficulty: Easy
26. Which of the following supply chain capabilities will cause supply uncertainty to decrease? a. Evolving production process b. Inflexible supply capacity c. Limited supply capacity d. Unpredictable and low yields e. none of the above Answer: e Difficulty: Moderate 27. Which of the following is not a supply chain capability that will impact supply uncertainty? a. Evolving production process b. Inflexible supply capacity c. Limited supply capacity d. Product margin e. Unpredictable and low yields Answer: d Difficulty: Moderate 28. The first step in achieving strategic fit between competitive and supply chain strategies is to a. understand the supply chain and map it on the responsiveness spectrum. b. understand customers and supply chain uncertainty. c. match supply chain responsiveness with the implied uncertainty of demand. d. ensure that all functional strategies within the supply chain support the supply chain’s level of responsiveness. e. none of the above Answer: b Difficulty: Hard 29. The second step in achieving strategic fit between competitive and supply chain strategies is to a. understand the supply chain and map it on the responsiveness spectrum. b. understand customers and supply chain uncertainty. c. match supply chain responsiveness with the implied uncertainty of demand. d. ensure that all functional strategies within the supply chain support the supply chain’s level of responsiveness. e. none of the above Answer: a Difficulty: Hard 30. The final step in achieving strategic fit between competitive and supply chain strategies is to a. understand the supply chain and map it on the responsiveness spectrum.
d. Ensure that all functional strategies within the supply chain support the supply chain’s level of responsiveness e. all of the above Answer: c Difficulty: Moderate
36. The cost of making and delivering a product to the customer is referred to as a. supply chain responsiveness. b. supply chain efficiency. c. cost-responsiveness efficient frontier. d. implied uncertainty. e. none of the above Answer: b Difficulty: Easy 37. The curve that shows the lowest possible cost for a given level of responsiveness is referred to as the a. supply chain responsiveness curve. b. supply chain efficiency curve. c. cost-responsiveness efficient frontier. d. responsiveness spectrum. e. none of the above Answer: c Difficulty: Moderate 38. A firm that is not on the cost-responsiveness efficient frontier can improve a. both responsiveness and cost performance. b. only responsiveness. c. only cost performance. d. responsiveness, but not cost performance. e. neither responsiveness nor cost performance. Answer: a Difficulty: Easy 39. A firm that is on the cost-responsiveness efficient frontier can improve a. responsiveness only by increasing cost and becoming less efficient. b. cost performance only by reducing responsiveness. c. both responsiveness and cost performance by improving processes and changing technology to shift the efficient frontier. d. all of the above e. neither responsiveness nor cost performance. Answer: d Difficulty: Moderate 40. A graph with two axes with implied uncertainty along the horizontal axis and responsiveness along the vertical axis is referred to as the a. implied uncertainty spectrum. b. responsiveness spectrum. c. uncertainty/responsiveness map. d. zone of strategic fit. e. none of the above
Answer: c Difficulty: Moderate
41. The relationship where increasing implied uncertainty from customers and supply sources is best served by increasing responsiveness from the supply chain is known as the a. implied uncertainty spectrum. b. responsiveness spectrum. c. uncertainty/responsiveness map. d. zone of strategic fit. e. none of the above Answer: d Difficulty: Moderate 42. To achieve complete strategic fit, a firm must a. consider all functional strategies within the value chain. b. ensure that all functions in the value chain have consistent strategies that support the competitive strategy. c. ensure that all substrategies within the supply chain such as manufacturing, inventory, and purchasing be consistent with the supply chain’s level of responsiveness. d. all of the above e. none of the above Answer: d Difficulty: Hard 43. The drive for strategic fit should come from a. the supply chain manager. b. the strategic planning department. c. the highest levels of the organization, such as the CEO. d. middle management. e. sales and marketing. Answer: c Difficulty: Hard 44. The important points to remember about achieving strategic fit are a. there is one best supply chain strategy for all competitive strategies. b. there is no right supply chain strategy independent of the competitive strategy. c. there is a right supply chain strategy for a given competitive strategy. d. all of the above e. b and c only Answer: e Difficulty: Hard 45. The preferable supply chain strategy for a firm that sells multiple products and serves customer segments with very different needs is to a. set up independent supply chains for each different product or customer segment. b. set up a supply chain that meets the needs of the highest volume product or customer segment.
b. intracompany intrafunctional scope. c. intracompany interoperational scope. d. intercompany interfunctional scope. e. agile intercompany scope. Answer: a Difficulty: Easy
51. The scope of strategic fit that includes all operations within a function in a company is a. intracompany intraoperational scope. b. intracompany intrafunctional scope. c. intracompany interoperational scope. d. intercompany interfunctional scope. e. agile intercompany scope. Answer: b Difficulty: Easy 52. The scope of strategic fit where all functional strategies are developed to support both each other and the competitive strategy in order to maximize company profit is a. intracompany intraoperational scope. b. intracompany intrafunctional scope. c. intracompany interoperational scope. d. intercompany interfunctional scope. e. agile intercompany scope. Answer: c Difficulty: Easy 53. The scope of strategic fit that requires that each company evaluate its actions in the context of the entire supply chain is a. intracompany intraoperational scope. b. intracompany intrafunctional scope. c. intracompany interoperational scope. d. intercompany interfunctional scope. e. agile intercompany scope. Answer: d Difficulty: Easy 54. A firm’s ability to achieve strategic fit when partnering with supply chain stages that change over time is referred to as a. intracompany intraoperational scope. b. intracompany intrafunctional scope. c. intracompany interoperational scope. d. intercompany interfunctional scope. e. agile intercompany scope. Answer: e Difficulty: Easy Essay/Problems
- Discuss the two keys to the success or failure of a company.
Answer : A company’s success or failure is thus closely linked to the following keys:
1. The competitive strategy and all functional strategies must fit together to form a coordinated overall strategy. Each functional strategy must support other functional strategies and help a firm reach its competitive strategy goal. 2. The different functions in a company must appropriately structure their processes and resources to be able to execute these strategies successfully. Difficulty: Hard
- List and explain the three basic steps to achieving strategic fit. Answer: There are three basic steps to achieving strategic fit: 1. Understanding the customer and supply chain uncertaint y. First a company must understand the customer needs for each targeted segment and the uncertainty the supply chain faces in satisfying these needs. These needs help the company define the desired cost and service requirements. The supply chain uncertainty helps the company identify the extent of disruption and delay the supply chain must be prepared for. 2. Understanding the supply chain capabilities. There are many types of supply chains, each of which is designed to perform different tasks well. A company must understand what its supply chain is designed to do well. 3. Achieving strategic fit. If a mismatch exists between what the supply chain does particularly well and the desired customer needs, the company will either need to restructure the supply chain to support the competitive strategy or alter its strategy. Difficulty: Moderate
- List the attributes along which customer demand from different segments can vary. Answer: In general, customer demand from different segments may vary along several attributes as follows: The quantity of the product needed in each lot The response time that customers are willing to tolerate The variety of products needed The service level required The price of the product The desired rate of innovation in the product Difficulty: Moderate
- List the abilities included in supply chain responsiveness. Answer: Supply chain responsiveness includes a supply chain’s ability to do the following: Respond to wide ranges of quantities demanded Meet short lead times Handle a large variety of products Build highly innovative products Meet a very high service level Handle supply uncertainty
