episode 05 exercise answer 01

Part 1: Solution

CanGo's first task is to assess external threats and develop the best alternative to deal with uncertainties in the supply chain.

Let's see how well you answered the questions.

	1.	One of the threats CanGo considers is that of writers selling directly to the public on the Web. This process, through which organizations bypass other levels early in the supply chain so that those organizations can sell directly to the consumer, is called
		a. vertical integration.
		b. suppy integration.
		c. disintermediation.
		d. direct marketing.
		Your Answer:
		Correct Answer: c
		Disintermediation is the process of removing middlemen or intermediaries from the supply chain. Disintermediation can lead to new efficiencies in the supply chain by removing costs and unnecessary steps.

	2.	In order for CanGo to integrate vertically, it would
		a. open up a physical retail store.
		b. buy a book wholesaler.
		c. buy another Web company that sells books.
		d. All of the above are examples of vertical integration.
		Your Answer:
		Correct Answer: b
		Opening a retail store would not be vertical integration because retail stores are not another layer in the supply chain. They are simply other channels to the consumer. Similarly, buying another Web company would simply be a horizontal expansion for CanGo. However, buying a book wholesaler would bring an additional layer of the supply chain under the CanGo umbrella.

	3.	Forward vertical integration refers to
		a. buying a supplier that supplies parts or products.
		b. buying a source of raw material.
		c. buying a distributor of your products or an organization closer to the customer.
		d. more tightly integrating your trading partners.
		Your Answer:
		Correct Answer: c
		Forward vertical integration involves purchasing organizations that are closer to the customer and more forward in the supply chain. Backward vertical integration involves purchasing suppliers or organizations that are further removed from the customer or further backward in the supply chain.

	4.	Outsourcing is a term used when a company
		a. purchases goods and services that were initially produced within the firm.
		b. uses work-at-home employees who would not otherwise be able to find employment.
		c. uses finished goods warehousing at the customer location to reduce delivery time.
		d. decides to use multiple vendors for each part.
		Your Answer:
		Correct Answer: a
		Outsourcing is purchasing goods and services that were initially produced by the organization internally. Outsourcing has become more popular in recent years, especially for complex services such as information systems technology and Web site hosting. In recent years, many companies have also outsourced parts of their distribution systems, especially logistics.

	5.	Tighter integration and improved communication between different organizations in the supply chain, especially between manufacturers and retailers, has been made possible primarily by
		a. outsourcing.
		b. technology.
		c. increased inventory.
		d. multiple suppliers.
		Your Answer:
		Correct Answer: b
		Technology, especially EDI and more recently the Internet, has allowed retailers and manufacturers to communicate much faster and more accurately. This increased communication has allowed organizations to reduce inventory levels and many of the associated risks.

	6.	ERP systems are an outgrowth of
		a. just-in-time systems.
		b. the reengineering movement.
		c. TQM systems.
		d. MRP systems.
		Your Answer:
		Correct Answer: d
		ERP systems are an extension of the MRP systems started in the 60's and 70's and the later MRP II systems of the 80's. With each stage in its evolution, these systems incorporated the planning and control of more of an organization's resources.

	7.	The automatic transmission of information from the computer systems in one organization to those in another organization is known as
		a. EDI
		b. MRP
		c. ERP
		d. CTC
		Your Answer:
		Correct Answer: a
		EDI, or electronic data interchange, is the direct transfer of information from one computer system to another. Although the original EDI applications used direct lines and later value-added networks (VAN's), EDI is increasingly performed over the Internet.

page 4 of 11 | go to page: 1 2 3 4 5 6 7 8 9 10 11