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Chapter 17
Information Technology and the Supply Chain
True/False
1. Information is crucial to the performance of a supply chain because it provides the basis upon which supply chain managers make decisions.
Answer: True
Difficulty: Easy
2. Information is the supply chain driver that serves as the glue allowing the other three drivers to work together to create an integrated, coordinated supply chain.
Answer: True
Difficulty: Moderate
3. Information makes the supply chain visible to a manager so that he can make decisions to improve the supply chain’s performance.
Answer: True
Difficulty: Moderate
4. Information is not necessary for management to make decisions over a broad scope that crosses both functions and companies.
Answer: True
Difficulty: Easy
5. Information must be 100 percent correct in order to make good decisions.
Answer: False
Difficulty: Moderate
6. To make good decisions, a manager needs to have accurate information regardless of how long it takes to acquire it.
Answer: False
Difficulty: Hard
7. Often companies will have large amounts of data that are not helpful with decision making.
Answer: True
Difficulty: Moderate
8. Information is only a key ingredient at each stage of the supply chain, not within each phase of supply chain decision making.
Answer: False
Difficulty: Moderate
9. The driver of IT in the supply chain has increasingly been the enterprise software developed to enable processes both within and across companies.
Answer: True
Difficulty: Moderate
10. The unsuccessful categories of software will be those focused on the supply chain macro processes.
Answer: False
Difficulty: Easy
11. This broadening of scope across which companies make decisions emphasizes the importance of including processes all along the supply chain when making decisions.
Answer: True
Difficulty: Moderate
12. To increase the supply chain surplus (and therefore their firm’s own profitability) most effectively, firms must focus primarily on improving internal processes.
Answer: False
Difficulty: Moderate
13. Functional performance is important to customers because it provides them with capabilities to create a competitive advantage.
Answer: True
Difficulty: Moderate
14. The ability to integrate is important to a customer because applications that are easy to integrate are generally harder to get implemented and producing value.
Answer: False
Difficulty: Moderate
15. Firms that work well with implementation partners and build up large groups of customers trained on their solutions have built a highly defensible position.
Answer: True
Difficulty: Moderate
16. The goal of the CRM macro process is to negotiate an effective contract that establishes parameters for a supplier in a way that best meets enterprise needs.
Answer: False
Difficulty: Hard
17. Weakness in the CRM process results in demand being lost and a poor customer experience because orders are not processed and executed effectively.
Answer: True
Difficulty: Easy
18. CRM processes are crucial to the supply chain because of the lack of interaction between an enterprise and its customers.
Answer: False
Difficulty: Moderate
19. The customer must be the starting point when trying to increase the supply chain surplus because all demand, and therefore revenue, ultimately arises from them.
Answer: True
Difficulty: Moderate
20. When forecasting demand, ISCM interaction with SRM is essential as the SRM applications have the most data and insight on customer behavior.
Answer: False
Difficulty: Easy
21. The ISCM processes should have strong integration with the SRM macro process, because supply planning, fulfillment, and field service are all dependent on suppliers and therefore the SRM processes.
Answer: True
Difficulty: Moderate
22. Every industry has the same key success factors.
Answer: False
Difficulty: Easy
23. Some of the worst IT disasters are due to the fact that companies try to implement IT systems in a wide variety of processes at the same time.
Answer: True
Difficulty: Easy
24. Companies should use IT systems to make decisions, because the software available today can make many supply chain decisions for management.
Answer: False
Difficulty: Easy
Multiple Choice
1. Information technology (IT) consists of the tools
a. used to gain awareness of information.
b. to analyze information.
c. to act on information to improve the performance of the supply chain.
d. all of the above
e. b and c only
Answer: e
Difficulty: Easy
2. Information is
a. the supply chain driver that serves as the glue allowing the other three drivers to work together to create an integrated, coordinated supply chain.
b. crucial to supply chain performance.
c. the key to the success of a supply chain.
d. all of the above
e. a and c only
Answer: d
Difficulty: Easy
3. Information
a. provides the foundation on which supply chain processes execute transactions and managers make decisions.
b. makes the supply chain visible to a manager.
c. enables management to make decisions over a broad scope that crosses both functions and companies.
d. all of the above
e. b and c only
Answer: d
Difficulty: Moderate
4. Information Technology (IT)
a. consists of the hardware and software throughout a supply chain that gather, analyze, and act on information.
b. serves as the eyes and ears (and sometimes a portion of the brain) of management in a supply chain.
c. can have a significant impact on a firm’s performance.
d. all of the above
e. a and b only
Answer: d
Difficulty: Moderate
5. Which of the following is not a characteristic information must have to be useful when making supply chain decisions?
a. Information must be accurate.
b. Information must be accessible in a timely manner.
c. Information must be interesting.
d. Information must be of the right kind.
e. All of the above are useful characteristics.
Answer: c
Difficulty: Moderate
6. To be accurate, information must
a. give the true picture of the state of the supply chain.
b. be 100 percent correct.
c. paint a picture of reality that is at least directionally correct.
d. all of the above
e. a and c only
Answer: e
Difficulty: Moderate
7. To be accessible in a timely manner, information must be
a. out of date.
b. current.
c. easily accessible.
d. all of the above
e. b and c only
Answer: e
Difficulty: Moderate
8. To be of the right kind, information needs to be
a. useful.
b. irrelevant.
c. meaningless.
d. all of the above
e. b and c only
Answer: a
Difficulty: Moderate
9. Information is a key ingredient
a. at each stage of the supply chain.
b. within each phase of supply chain decision making.
c. only at each stage of the supply chain.
d. none of the above
e. a and b only
Answer: e
Difficulty: Moderate
10. Enterprise software
a. collects transaction data.
b. analyzes transaction data to make decisions.
c. executes decisions both within an enterprise and across its supply chain.
d. all of the above
e. a and b only
Answer: b
Difficulty: Moderate
11. The successful categories of software in the evolution taking place in enterprise software will be
a. those focused on the supply chain macro processes.
b. those not focused on the supply chain macro processes.
c. those focused on basic functions.
d. none of the above
e. both a and c
Answer: b
Difficulty: Moderate
12. The emergence of supply chain management has broadened the scope across which companies make decisions to
a. the supplier.
b. the enterprise.
c. the entire supply chain.
d. the customer.
e. none of the above
Answer: c
Difficulty: Easy
13. Which of the following is not one of the supply chain macro processes?
a. Customer Relationship Management (CRM)
b. Internal Supply Chain Management (ISCM)
c. Supplier Relationship Management (SRM)
d. Transaction Management Foundation (TMF)
e. All of the above are supply chain macro processes.
Answer: c
Difficulty: Easy
14. Processes that focus on downstream interactions between the enterprise and its customers are included in
a. Customer Relationship Management (CRM).
b. Internal Supply Chain Management (ISCM).
c. Supplier Relationship Management (SRM).
d. Transaction Management Foundation (TMF).
e. none of the above
Answer: a
Difficulty: Easy
15. Processes that focus on internal operations within the enterprise are considered
a. Customer Relationship Management (CRM).
b. Internal Supply Chain Management (ISCM).
c. Supplier Relationship Management (SRM).
d. Transaction Management Foundation (TMF).
e. none of the above
Answer: b
Difficulty: Easy
16. Processes that focus on upstream interactions between the enterprise and its suppliers are part of
a. Customer Relationship Management (CRM).
b. Internal Supply Chain Management (ISCM).
c. Supplier Relationship Management (SRM).
d. Transaction Management Foundation (TMF).
e. none of the above
Answer: c
Difficulty: Easy
17. Software that provides the foundation upon which the macro processes rest through basic ERP systems, infrastructure software, and integration software is
a. Customer Relationship Management (CRM).
b. Internal Supply Chain Management (ISCM).
c. Supplier Relationship Management (SRM).
d. Transaction Management Foundation (TMF).
e. none of the above
Answer: d
Difficulty: Easy
18. To increase the supply chain surplus (and therefore their firm’s own profitability) most effectively, firms must
a. expand their scope beyond their enterprise.
b. focus primarily on improving internal processes.
c. think in terms of all three supply chain macro processes.
d. all of the above
e. a and c only
Answer: d
Difficulty: Moderate
19. Which of the following is not a factor determining the success of software firms focused on a macro process?
a. functional performance
b. color and images on working screens
c. integration with other macro processes
d. strength of the software firm’s ecosystem
e. none of the above
Answer: b
Difficulty: Moderate
20. Functional performance is important to customers because
a. advanced functionality is rarely utilized.
b. it provides them with capabilities to create a competitive advantage.
c. the ease of use is crucial to successful use.
d. all of the above
e. b and c only
Answer: e
Difficulty: Moderate
21. The ability to integrate is important to a customer because
a. applications that are easy to integrate are generally easier to get implemented and producing value.
b. applications that integrate across macro processes will be able to provide the benefits of making decisions for the extended supply chain.
c. firms that do not have integrated solutions in all three macro processes have a competitive advantage.
d. both a and b
e. both a and c
Answer: d
Difficulty: Moderate
22. A firm’s ecosystem
a. is the network of software partners and, more importantly, systems integrators and installed base.
b. provides assistance in selling and implementing software.
c. will determine how strong the network will be that provides support to a customer both during implementation and down the road.
d. all of the above
e. a and c only
Answer: d
Difficulty: Moderate
23. The goal of the CRM macro process is to
a. negotiate an effective contract that best meets enterprise needs.
b. improve the design of products.
c. fulfill demand generated by ISCM processes.
d. generate customer demand and facilitate transmission and tracking of orders.
e. none of the above
Answer: d
Difficulty: Moderate
24. Weakness in the CRM process results in
a. orders that are not processed and executed effectively.
b. demand being lost.
c. a poor customer experience.
d. all of the above
e. a and b only
Answer: d
Difficulty: Easy
25. Which of the following is a key process under CRM?
a. Strategic Planning
b. Fulfillment
c. Field Service
d. Demand Planning
e. Order Management
Answer: e
Difficulty: Moderate
26. Which of the following is not a key process under CRM?
a. Market
b. Demand Planning
c. Order Management
d. Sell
e. Call Center
Answer: b
Difficulty: Hard
27. The CRM processes are crucial to the supply chain because
a. all demand, and therefore revenue, ultimately arises from the customer.
b. CRM processes (and also CRM software) must be integrated with internal operations to optimize performance.
c. customer-focused units should be working independently from internal operations.
d. all of the above
e. a and b only
Answer: c
Difficulty: Moderate
28. The customer must be the starting point when trying to increase the supply chain surplus because
a. customer-focused units are more effective when working independently.
b. all demand, and therefore revenue, ultimately arises from them.
c. internal operations cannot optimize performance.
d. all of the above
e. a and c only
Answer: b
Difficulty: Hard
29. Which of the following is a key process under ISCM?
a. Design Collaboration
b. Negotiate
c. Supply Collaboration
d. Supply Planning
e. Order Management
Answer: d
Difficulty: Moderate
30. Which of the following is not a key process under ISCM?
a. Strategic Planning
b. Fulfillment
c. Supply Collaboration
d. Demand Planning
e. Field Service
Answer: c
Difficulty: Moderate
31. There needs to be strong integration between the ISCM and CRM macro processes because
a. the ISCM macro process aims to fulfill demand that is generated by CRM processes.
b. CRM applications have the most data and insight on customer behavior to be used in forecasting.
c. fulfillment and field service are all dependent on suppliers.
d. all of the above
e. a and b only
Answer: e
Difficulty: Moderate
32. The ISCM processes should have strong integration with the SRM macro process because
a. SRM applications have the most data and insight on customer behavior to be used in forecasting.
b. supply planning, fulfillment, and field service are all dependent on suppliers.
c. order management must integrate closely with fulfillment and be an input for effective demand planning.
d. all of the above
e. a and b only
Answer: b
Difficulty: Moderate
33. Which of the following is a major SRM process?
a. Strategic Planning
b. Order Management
c. Design Collaboration
d. Supply Planning
e. Fulfillment
Answer: c
Difficulty: Moderate
34. Which of the following is not a major SRM process?
a. Supply Planning
b. Buy
c. Design Collaboration
d. Source
e. Negotiate
Answer: a
Difficulty: Hard
35. ERP systems
a. were focused on building transaction management and process automation systems.
b. proved to be the foundation for future decision support applications.
c. excelled at the automation of simple transactions and processes as well as the creation of an integrated way to store and view.
d. all of the above
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