Chapter 14 SUPPLY CHAIN

Which of these statements about use fees for a highway is best?

A flat rate results in higher use by most individuals.

Which mode of transportation is the most expensive?

Air

Which of the following is the fastest delivery method of transportation?

Air

________ carriers offer a very fast and fairly expensive mode of transportation for cargo.

Air

Which transportation network design option establishes an extra layer between suppliers and retailers to store inventory and to serve as a transfer location?

All shipments via central DC

Ocean Carriers form --- to cooperate on capacity by lane. These carriers will put in one vessel each. There will be a string of ships from different carriers.

Alliances

When you move any goods, it comes with a--

Bill of Lading: whoever has the bill, owns the goods; it tells what type of goods and who transports

Which transportation network design option has the elimination of intermediate warehouses

Direct shipping network

T/F A carrier uses transportation to minimize the total cost (transportation, inventory, information, and facility) while providing an appropriate level of responsiveness to the customer.

F

T/F A carrier's decisions are affected by the prices that the market will bear, but not the responsiveness it seeks to provide its target segment.

F

T/F A dabba uses the Mumbai railway system to carry about 40 lunches each day.

F

T/F A distributor makes investment decisions regarding the transportation infrastructure and then makes operating decisions to try to maximize the return from these assets.

F

T/F A firm can meet customer needs by using tailored transportation to provide the appropriate transportation choice based on customer and product characteristics, but at a higher cost.

F

T/F Firms can significantly reduce the safety inventory they require by physically aggregating inventories in one location, which will also decrease transportation cost.

F

T/F Milk runs reduce outbound transportation costs by consolidating large shipments.

F

T/F Rail is the dominant mode of freight transportation in the United States and accounts for over 75 percent of the nation's freight bill.

F

T/F The mode of transportation that results in the lowest transportation cost will lower total costs for a supply chain.

F

T/F Transportation plays a key role in every supply chain because products are usually produced and consumed in the same location.

F

Top Cargo Air Lines

FedEx, UPS, Emirates, etc

The first container ship was ---, which shipped --- containers

Ideal X; 58

UPS world port is in ---

Louisville, KY

What does a Freight Forwarder do?

Mediates imports and exports, and consolidates cargo from different shippers.

________ are the preferred mode of transport for online businesses such as Amazon.com and Dell, as well as for companies such as W.W. Grainger and McMaster-Carr that send small packages to customers.

Package carriers

Which mode of transportation is used primarily for petroleum and natural gas?

Pipeline

________ typically move commodities over large distances at lower costs per unit shipped.

Rail

T/F A milk run is a route in which a truck either delivers product from a single supplier to multiple retailers or goes from multiple suppliers to a single retailer.

T

T/F Ignoring inventory costs when making transportation decisions can result in choices that worsen the performance of a supply chain.

T

T/F Quasi-market prices for transportation infrastructure result in higher prices at peak locations and times and lower prices otherwise.

T

T/F Tailored transportation is the use of different transportation networks and modes based on customer and product characteristics.

T

T/F Temporal aggregation decreases a firm's responsiveness because of shipping delay but also decreases transportation costs because of economies of scale that result from larger shipments.

T

T/F The most important operational decision related to transportation in a supply chain is the routing and scheduling of deliveries.

T

T/F The use of software to determine transportation routes has been the most common IT application in transportation.

T

T/F The vehicle-related cost is incurred whether the vehicle is operating or not and is considered fixed for short-term operational decisions by the carrier.

T

T/F Transportation cost depends on the prices offered by different carriers and the extent to which the shipper uses inexpensive and slow, or expensive and fast, means of transportation.

T

T/F Transportation is a significant component of the costs incurred by most supply chains.

T

You negotiate in --- even thought the most popular type of container is --- ft long.

TEUs; 40 ft long

Which transportation network design option uses a combination of other options to reduce the cost and improve responsiveness of the supply chain?

Tailored network

Which of the following uses transportation to minimize the total cost (transportation, inventory, information, and facility) while providing an appropriate level of responsiveness to the customer?

The shipper

In almost all countries, roads, seaports, airports, rail and canals have this in common.

They were built and/or managed by the govt.

The movement of product from one location to another as it makes its way from the beginning of a supply chain to the customer's hands is referred to as

Transportation

These container ships built in 2013 for Maersk Line are the world's largest ships

Triple E class container ships

Which mode of transportation is the dominant form of freight transportation?

Truck

Which mode of transportation is the least expensive?

Water

Serving a high density of customers at a long distance is best done using

a cross dock distribution center with milk runs.

At a train station where lines intersect, the Mumbai dabbawalas perform

a cross-dock function.

Serving a low density of customers at a long distance is best done using

a package carrier

Serving a high density of customers at a short distance is best done using

a private fleet with milk runs

Serving a medium density of customers at a medium distance is best done using

an LTL carrier

Triple E class containers are typically in trade lanes in-

back and forth between Europe and Asia because it is too large for US ports

The Mumbai dabbawalas perform

both a forward and a reverse logistics function.

The ________ is the party that moves or transports the product.

carrier

The most common problems in the use of IT in transportation relate to

cross-enterprise collaboration

The most common use of information technology in transportation is to

determine transportation routes using software.

The cost of various facilities in the shipper's supply chain network is

facility cost

Most industries you are not allowed to collude on rates and manage capacity to set rates, but in ocean shipping you are allowed to do so through-

forming Conferences (because the profit margin is low in this industry)

Real time location tracking of vehicles relies on

global positioning systems

The skillful supply chain manager declared she would not only disaggregate cycle inventory, but she would also aggregate safety inventory and use an inexpensive mode of transportation for replenishing cycle inventory and fast mode when using safety inventory for her product that had

high value and high demand

The competent supply chain manager decided to aggregate all inventories and as required, use fast mode of transportation for filling customer orders of his

high value and low demand product.

Pirates target --- not ---.

individuals not containers

Ignoring uncertainty in demand encourages a greater use of

inexpensive and inflexible transportation modes.

The complexity and scale of transportation makes it an excellent area within the supply chain

information technology systems

The cost of holding inventory incurred by the shipper's supply chain network is

inventory cost

Temporal aggregation

is the process of combining orders across time.

Cheaper modes of transport typically have

longer lead times and larger minimum shipment quantities

A shrewd supply chain manager would aggregate only safety inventory and use an inexpensive mode of transportation for replenishing cycle inventory if she is dealing with a

low value product and low demand

It is best to disaggregate all inventories and use an inexpensive mode of transportation for replenishment when you have a

low-value product and high demand

Inexpensive and inflexible transportation modes tend to

perform well when everything goes as planned

The cost of loading/unloading orders, as well as other processing costs associated with transportation, is considered

processing cost

Transportation plays a key role in every supply chain because

products are rarely produced and consumed in the same location

The ________ is the party that requires the movement of the product between two points in the supply chain.

shipper

Managers should ensure that a firm's transportation strategy

support its competitive strategy

Investment decisions regarding the transportation infrastructure (rails, locomotives, trucks, airplanes, etc.) are the primary concern of

the carrier

When infrastructure is publicly owned, it is important to price usage to reflect

the marginal impact on the cost to society

The most important operational decision related to transportation in a supply chain is

the routing and scheduling of deliveries

The key players in any transportation that takes place within a supply chain are

the shipper and the carrier

Serving a medium density of customers at a short distance is best done using

third party milk runs

The total amount paid to various carriers for transporting products to customers is

transportation cost

TEU is-

twenty-foot equivalent unit: a container that's 20 ft long

The cost to build one container ship is about-

$200 million

Suppose that a highway is governed by a use fee charged to motorists that is based on congestion, operation and maintenance. The total traffic t is used to determine the cost of 5t2. What is the marginal cost?

10t

Suppose that a highway is governed by a use fee charged to motorists that is based on congestion, operation and maintenance. The total traffic t is used to determine the cost of 5t2 + 7t. What is the marginal cost?

10t+7

Triple E class ships can hold how many TEUs?

18,000

Air cargo's share of world trade is --% by weight but --% by value.

2;40

Memphis is the --- largest cargo airport in the world.

2nd

Suppose that a highway is governed by a use fee charged to motorists that is based on congestion, operation and maintenance. The total traffic t is used to determine the cost of 5t2. What is the average cost per motorist?

5t

Suppose that a highway is governed by a use fee charged to motorists that is based on congestion, operation and maintenance. The total traffic t is used to determine the cost of 5t2 + 7t. What is the average cost per motorist?

5t+7

It takes how many vessels to start a service from one city to another (over ocean)?

6 vessels, which totals over $1 billion to start a service

--- of the world's cargo moves by container

90%