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Section 5Â Â Managing the Integrated Supply Chain 1) The bullwhip effect refers to the increasing fluctuations in orders that often occur as orders move through the supply chain. 2)Â Drop shipping results in time and shipping cost savings. 3) The supply chain management opportunity called postponement involves delaying deliveries to avoid accumulation of inventory at the customer’s site. 4) A blanket order is a long-term purchase commitment to a supplier for items that are to be delivered against short-term releases to ship. 5) What is the practice of keeping a product generic as long as possible before customizing? A) postponement B) keiretsu C) vendor-managed inventory D) forward integration E) backward integration 6) Local optimization is a supply-chain complication best described as: A) optimizing one’s local area without full knowledge of supply chain needs. B) obtaining very high production efficiency in a decentralized supply chain. C) the prerequisite of global optimization. D) the result of supply chains built on suppliers with compatible corporate cultures. E) the opposite of the bullwhip effect. 7) The bullwhip effect: A) occurs as orders are relayed from retailers to distributors to wholesalers to manufacturers. B) results in increasing fluctuations at each step of the sequence. C) increases the costs associated with inventory in the supply chain. D) occurs because of distortions in information in the supply chain. E) All of the above are true. 8) A restaurant runs a special promotion on lobster and plans to sell twice as many lobsters as usual. When this large order is sent to the distributor, the distributor assumes the large size is a trend, not a one-time event. The distributor therefore places an even larger order with the lobsterman. This behavior is the result of which of the following? A) double marginalization B) the bullwhip effect C) CPFR D) postponement E) vendor-managed inventory 9) Which of the following is NOT an opportunity for effective management in the supply chain? A) accurate “pull” data B) vendor-managed inventory C) postponement D) local optimization E) CPFR A) is equivalent to cross-docking. B) is the opposite of a blanket order. C) means the supplier will ship directly to the end consumer, rather than to the seller. D) is the same thing as keiretsu. E) is a good reason to find a new firm to ship your products.

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