Chapter 2 Supply Chain Performance: Achieving Strategic Fit and Scope

2.2 Multiple Choice Questions

1) 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.
D) determines the nature of procurement and transportation of materials as well as
manufacture and distribution of the product.
2) The value that potential customers place on product cost and delivery time
determines a company's
A) customer needs. B) competitive strategy.
C) supply chain surplus. D) product life cycle.
3) The value chain in a company begins with
A) the customer. B) marketing and sales.
C) new product development. D) operations.
4) Seven-Eleven in Japan's operations and distribution strategy focuses on
A) convenience in the form of easy access to stores.
B) constantly adding new products and services.
C) low cost for gasoline, which drives traffic to the store.
D) being responsive and having an excellent information infrastructure.
5) Which element in the value chain is responsible for transforming inputs into
outputs?
A) Operations B) Marketing
C) Distribution D) All elements of the value chain do this.
6) Which of these services facilitates the function of the value chain but is not
considered a core element of the supply chain?
A) Marketing B) Information Technology

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C) Distribution D) Service
7) A company's product development 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.
D) determines the nature of procurement and transportation of materials as well as
manufacture and distribution of the product.
8) A company's marketing and sales 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.
D) determines the nature of procurement and transportation of materials as well as
manufacture and distribution of the product.
9) A company's supply chain 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.
D) determines the nature of procurement and transportation of materials as well as
manufacture and distribution of the product.
10) The value chain consists of direct and indirect activities. Which of the following
is an indirect activity for an enterprise?
A) Marketing B) Distribution C) Human Resources D) Service
11) A ________ strategy specifies the portfolio of new products that a company will
try to develop.

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A) Product Development B) Marketing and Sales
C) Supply Chain D) Finance
12) A ________ strategy specifies how the market will be segmented and how the
product will be positioned, priced, and promoted.
A) Product Development B) Marketing and Sales
C) Supply Chain D) Finance
13) Which of the following determines the nature of procurement of raw materials,
transportation of materials to and from the company, manufacture of the product
or operation to provide the service, and distribution of the product to the customer
along with follow-up service?
A) Competitive strategy B) Product development strategy
C) Marketing and sales strategy D) Supply chain strategy
14) 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
15) 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
16) A supply chain strategy involves decisions regarding all of the following except
A) inventory. B) transportation.
C) new product development. D) operating facilities.
17) The uncertainty of customer demand for a product is the
A) rate of strategic uncertainty. B) demand uncertainty.
C) implied demand uncertainty. D) average forecast error.
18) The uncertainty that exists due to the portion of demand that the supply chain is
required to meet is the
A) rate of strategic uncertainty. B) demand uncertainty.

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C) implied demand uncertainty. D) average forecast error.
19) 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
20) 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.
21) 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.
22) 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.
B) understand customers and supply chain uncertainty.
C) match supply chain responsiveness with the implied uncertainty of demand.
D) combine customer and supply chain uncertainty and map it on the implied uncertainty
spectrum.
23) Supply chain responsiveness includes the ability to do which of the following?
A) Handle supply uncertainty
B) Understand customers and supply chain uncertainty

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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
24) Supply chain responsiveness includes the ability to do which of the following?
A) Understand customers and supply chain
B) Meet a very high service level
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
25) Supply chain responsiveness includes the ability to do which of the following?
A) Understand customers and supply chain
B) Match supply chain responsiveness with the implied uncertainty of demand
C) Meet short lead times
D) Ensure that all functional strategies within the supply chain support the supply chain's
level of responsiveness
26) 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.
27) 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.
28) 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.
29) 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.

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C) uncertainty/responsiveness map. D) zone of strategic fit.
30) 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.
31) 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.
32) 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.
C) tailor the supply chain to best meet the needs of each product's demand.
D) set up a supply chain that meets the needs of the customer segment with the highest
implied uncertainty.
33) Which of the following would be a demand and supply characteristic toward the
beginning stages of a product's life cycle?
A) Demand has become more certain and supply is predictable.
B) Margins are lower due to an increase in competitive pressure.
C) Product availability is crucial to capturing the market.
D) Price becomes a significant factor in customer choice.
34) Between 1993 and 2006, Dell's competitive strategy was to provide a large
variety of customizable products at a reasonable price. Given the focus on
customization, Dell's supply chain was designed to
A) be responsive. B) provide a different product.
C) operate on a low-cost basis. D) provide sustainable products.

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35) For a company to achieve strategic fit, it must accomplish the following keys:
A) All functional strategies must fit together to form a coordinated overall strategy.
B) The different functions in a company must appropriately structure their processes and
resources to be able to execute these strategies successfully
C) The overall supply chain must operate at the lowest cost possible to achieve success.
D) The design of the overall supply chain and the role of each stage must be aligned to
support the supply chain strategy.
36) Efficient supply chains
A) respond quickly to demand.
B) have higher margins because price is not a prime customer driver.
C) maintain buffer inventory to deal with demand/supply uncertainty.
D) maximize performance at a minimum cost.
37) The functions and stages that devise an integrated strategy with a shared
objective are referred to as
A) competitive strategy. B) supply chain strategy.
C) scope of strategic fit. D) scope of marketing strategy.
38) With the ________ view, firms attempt to align all operations within a function.
In this view, all supply chain functions including sourcing, manufacturing,
warehousing, and transportation must align their strategy to minimize total
functional cost.
A) Intrafunctional scope B) Intraoperation scope
C) Interfunctional scope D) Intercompany scope
39) The key weakness of the ________ view is that different functions within a firm
may have conflicting objectives.
A) Intrafunctional scope B) Intraoperation scope
C) Interfunctional scope D) Intercompany scope
40) Which of these has the broader range?
A) Intrafunctional scope B) Intercompany scope
C) Interfunctional scope D) Intraoperational scope

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41) Scope of strategic fit refers to both the
A) function within the firm and the satisfaction of the customer.
B) satisfaction of the customer and the profits returned to the shareholders.
C) function within the firm and stages across the supply chain.
D) profits returned to the shareholders and the stages across the supply chain.
42) The authors cite IKEA as achieving an intercompany scope of strategic fit which
serves to
A) minimize IKEA's costs. B) align the strategic fit with the consumer surplus.
C) minimize the costs of all supply chain elements.
D) increase the supply chain surplus.
43) A company's partners in the supply chain determine
A) the company's success. B) the scope of strategic fit.
C) the relevance of sustainability initiatives. D) the need for customers.
44) Company A and Company B of the same supply chain rely on market
responsiveness tonattract customers. Each company has access to the other
company's designs, production schedules, and goals, and if Company A needs
product overnight, Company B gladly ships it, knowing that in the long run it works
to the benefit of both. Such an arrangement is an example of
A) intrafunctional scope. B) intraoperation scope.
C) interfunctional scope. D) intercompany scope.
45) Increased product variety and shrinking product life cycles usually result in
A) the deliberate phase-out of older products.
B) a decrease in overall uncertainty for the supply chain.
C) an increase in the time allowed for a supply chain to develop specific competencies.
D) a deliberate proliferation in the variety of components used for all products produced.
46) Risks and opportunities have increased for supply chains due to
A) the decreasing value of the U.S. dollar. B) increasing globalization.
C) the increasing population. D) a decline in energy prices.

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47) Over the past several decades
A) the life cycle of products has increased.
B) most firms have become more vertically integrated.
C) the number of owners per supply chain has increased.
D) product variety has decreased.
48) One motivation for companies to shed noncore functions to their supply chains
has been to
A) increase supply chain membership and participation.
B) increase supply chain complexity to ease supply chain alignment.
C) maximize focus on local objectives.
D) take advantage of supplier and customer competencies that they did not possess.
49) Which of these examples ripped from the headlines of business periodicals is
most accurate?
A) Netflix has two content delivery systems that are inexpensive to operate.
B) Blockbuster's reliance on streaming services was overwhelmed by a lack of bandwidth
at the dawn of the 21st century.
C) Once an increase in demanded customization seized the market, Dell was unable to
rely on its retail store strategy.
D) Redbox's reliance on streaming services ended Dell's run as a leader in the industry.
50) Concerns related to the environment and sustainability
A) are becoming less important to the consuming public.
B) are sometimes dictated by regulations and sometimes by perception.
C) result in increased cost for the supply chain.
D) are relevant to only the retail member of each supply chain.