According to Table 11.1 on Supply Chain Costs as a Percentage of Sales, what percentage of sales is typically spent on purchases in the automobile industry?
Explanation
This question tests the ability to interpret data from tables provided in the text. It highlights that in many industries, like automotive, a very large portion of a firm's revenue is spent on purchases from its supply chain.
Other questions
What is the primary objective of supply chain management?
Hau Lee Furniture, Inc., has sales of $100,000, material costs of $60,000, production costs of $20,000, and fixed costs of $10,000. If a supply chain strategy reduces material costs by $5,000, what is the new profit?
What is the term for transferring a firm's traditional internal activities and resources to outside vendors?
Which sourcing strategy involves seeking responses to a 'request for quotation' with the order typically going to the lowest bidder, thus fostering competition among suppliers?
Developing the ability to produce goods or services that were previously purchased from external suppliers is known as what type of vertical integration?
What is a Japanese term for a company coalition where suppliers are often financial supporters of the manufacturer and are assured long-term, collaborative relationships?
According to the table on Supply Chain Risks and Tactics, what is a recommended risk reduction tactic for dealing with 'Supplier failure to deliver'?
The increasing fluctuation in orders that often occurs as orders are relayed up the supply chain from retailers to manufacturers is known as the:
Which of the following is identified as a common cause of the bullwhip effect, rather than an opportunity to manage the integrated supply chain?
The practice of withholding any modification or customization to a product for as long as possible in the production process is known as:
If a company has $11.4 billion invested in inventory and total assets of $44.4 billion, what is its percentage invested in inventory?
PepsiCo, Inc., had a cost of goods sold of $14.2 billion and a total average inventory investment of $1.69 billion. What was its inventory turnover?
Which part of the five-part Supply Chain Operations Reference (SCOR) model encompasses the management of production execution, testing, and packaging?
What is a 'blanket order' in the context of supply chain management?
Which of the following is a primary benefit of centralized purchasing in a company with multiple facilities?
An online auction where a buyer initiates the process by describing a desired product, and potential suppliers bid the price down, is known as a:
Which shipping system, common for international shipments, combines various methods like trucking, railroads, and airfreight, often using standardized containers to facilitate transfer?
The process of sending returned products back up the supply chain for purposes such as resale, repair, reuse, remanufacture, recycling, or disposal is called:
In the bullwhip effect analysis from Example S2, what is the bullwhip measure for Furniture Makers of America, given a variance of demand of 180 and a variance of orders of 300?
Xiaotian Geng is evaluating disaster risk for her suppliers. The probability of a 'super-event' affecting all suppliers is 0.5 percent, and the probability of a 'unique-event' affecting a single supplier is 4 percent. What is the probability of a total disruption if she uses two suppliers?
What is the first stage in the four-stage process of building a supply base?
Which negotiation strategy requires the supplier to open its books to the purchaser, with the contract price based on time and materials or a fixed cost with an escalation clause?
Which warehousing function involves gathering shipments from multiple sources to send outbound in one cheaper, fully loaded truck?
What is a 'closed-loop supply chain'?
A shipment of new connectors is valued at $1,750, and the annual holding cost is 40 percent. What is the daily cost of holding this product, assuming a 365-day year?
What is the core idea behind the 'few suppliers' sourcing strategy?
What is the defining characteristic of 'virtual companies' in the context of supply chain management?
What is the primary role of international quality certifications like ISO 9000 in the supplier selection process?
A hybrid risk-mitigation technique where two suppliers each provide a different component but have the capability of producing each other's component as a backup is known as:
If the variance of a company's orders is greater than the variance of its incoming demand, what can be concluded about the bullwhip measure?
In the factor-weighting approach to supplier evaluation, after developing a list of criteria, what is the next step?
What is the primary purpose of an activity known as 'channel assembly'?
Using the factor-weighting data for Smith Dye in Example S3, what is the weighted score for the 'Quality performance' criterion, if the score is 3 and the weight is 0.10?
What is a major disadvantage of the 'few suppliers' sourcing strategy?
Which of the following describes the 'break-bulk' function of a warehouse?
What does Vendor-Managed Inventory (VMI) entail?
In the context of warehouse storage, how should items be prioritized for placement to minimize travel distance?
What is the primary trade-off that managers must consider when evaluating quantity discounts?
In the SCOR model, what does the 'Cash-to-cash cycle time' metric measure?
What is the primary reason for using a factor-weighting approach for supplier selection instead of just choosing the lowest bidder?
What is the primary function of collaborative planning, forecasting, and replenishment (CPFR)?
What is the purpose of logistics management?
In the context of the bullwhip effect, what is meant by 'shortage gaming'?
According to the Institute for Supply Management's ethical guidelines, what should a supply chain professional do regarding conflicts of interest?
Which of the six sourcing strategies would be most appropriate for commodity products where price is the primary concern?
What is drop shipping?
In the warehouse storage example (Example S5), why is lumber placed further back than paint, even though lumber has a higher number of monthly trips?
According to the corporate strategy impact table (Table 11.2), what is the primary supplier selection criteria for a company pursuing a Differentiation Strategy?
If Coca-Cola's cost of goods sold is $10.8 billion and its inventory investment is $0.76 billion, what is its inventory turnover?