Chapter 11 SCM

A firm that employs a low-cost strategy should minimize inventory throughout the supply chain.

• TRUE

• FALSE

In most manufacturing industries, which of the following would likely represent the largest cost to the firm?

• transportation

• purchasing

• insurance

• financing

The transfer of some of what are traditional internal activities and resources of a firm to outside vendors is

• a standard use of the make-or-buy decision.

• not allowed by the ethics code of the Supply Management Institute.

• offshoring.

• outsourcing.

The ________ decision involves choosing between producing a component or a service internally and purchasing it externally.

Transferring to external vendors a firm's activities that have traditionally been internal is known as _________.

With the "many suppliers" sourcing strategy, the order usually goes to the supplier that offers the highest quality.

• TRUE

• FALSE

Vertical integration, whether forward or backward, requires the firm to become more specialized.

• TRUE

• FALSE

A fast-food retailer that acquired a spice manufacturer would be practicing forward integration.

• TRUE

• FALSE

Keiretsu refers to a company coalition that is part collaboration, part purchasing from many suppliers, and part vertical integration.

• TRUE

• FALSE

Long-term "partnering" relationships are one of the main goals of the "many suppliers" sourcing strategy.

• TRUE

• FALSE