Test 1: Quiz 1 and 2 Questions

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Which is the correct equation for Return on logistics assets (ROLA):

(Revenue - Costs)/Assets

Which is the correct equation for Return on logistics assets (ROLA):

(revenue - cost)/Assets

What are the two largest cost categories in logistics systems?

1. Transportation 2. Inventory

Determine the optimum service level. Sales response rate= 0.20% change in revenue for 1% change in service level (fill-rate) Trading margin= $0.80 per case Carrying cost= 25% per year Annual sales through warehouse= 75,000 cases Standard product cost= $12.00 Demand standard deviation= 800 cases over lead time Lead time= 2 weeks

95%

Determine the optimum service level. Sales response rate= 0.20% change in revenue for 1% change in service level (fill-rate) Trading margin= $0.80 per case Carrying cost= 25% per year Annual sales through warehouse= 75,000 cases Standard product cost= $12.00 Demand standard deviation= 800 cases over lead time Lead time= 2 weeks

95%

Determine the optimum service level. Sales response rate= 0.20% change in revenue for 1% change in service level (fill rate), Trading margin= $0.80 per case, Carrying cost= 25% per year, Annual sales through warehouse= 75,000 cases Standard product cost= $12.00, Demand standard deviation= 800 cases over lead time, Lead time= 2 weeks

95%

Determine the optimum service level given the following data for a particular product: Sales Response Rate = 0.2% change in revenue for a 1% change in the service level Trading Margin = 1.25 per case Carrying Cost = 25% per year Monthly sales through the warehouse = 20,000 cases Standard product cost = $20 Demand standard deviaEon = 350 cases per week Lead Time = 4 weeks

97 - 98 %

Determine the optimum service level given the following data for a particular product: Sales Response Rate = 0.2% change in revenue for a 1% change in the service level Trading Margin = 1.25 per case Carrying Cost = 25% per year Monthly sales through the warehouse = 20,000 cases Standard product cost = $20 Demand standard deviation = 350 cases per week Lead Time = 4 weeks

97 - 98%

Determine the optimum Customer Service Level from the following data: Sales Response rate = .10% change in revenue for 1% change in service level Trading Margin = $0.50 per case Carrying Cost = .25% per year Monthly sales throughout warehouse= 2500 cases Standard product cost = $45 Demand standard deviation= 500 cases for 1 week Lead time= 3weeks

97%

Determine the optimum service level given the following data for a particular product: Sales Response Rate = 0.2% change in revenue for a 1% change in the service level, Trading Margin = 1.25 per case, Carrying Cost = 25% per year, Monthly sales through the warehouse = 20,000 cases Standard product cost = $20, Demand standard deviation = 350 cases per week Lead Time = 4 weeks

97-98%

According to the return on logistics assets equation (ROLA), which of the following are correct?

A&C are correct

According to the return on logistics assets equation (ROLA), which of the following are correct?

A. as assets decrease, ROLA increases C. as costs decrease, ROLA increases

Order filling requires

All of the above

Convenience products are goods and services that consumers purchase...

All of the above...

Optimum profit is the point where profit contribution equals marginal cost. As annual sales increase what happens to marginal cost?

An increase

What will increase the profit contribution when determining the optimum service level?

An increase in the sales response rate

Which of the following information is not needed to find delta P?

Annual carrying cost

John produces and sells a line of baked goods, mainly bread. Distribution is primarily through grocery stores. Identify as a convenience good, shopping good, or specialty good.

Convenience Good

All of the following are one of the six concepts for logistics strategy formulation except:

Cost Cutting

All of the following are one of the six concepts for logistics strategy formulation except:

Cost Cutting -Concepts for logistic strategy formulation: Total Cost Differentiated Distribution mixed strategy postponement shipment consolidation product standardization

Customer service transaction elements include all of the following, EXCEPT:

Ease of Theft

Staple food products fall under which of the following Supply Chain Strategies?

Efficient Supply Chain with predictable demand

Which of the following refers to members of the supply channel beyond a firm's immediate suppliers and customers?

Extended Supply Chain

(T/F) The highest penalty for customer service failures is refusal to purchase new items.

False

A Supply-to-Stock strategy (Efficient Supply Chain) consists of the following characteristics: excess capacity, quick changeovers, short lead times, flexible processing, premium transportation, and single order processing.

False

A Supply-to-Stock strategy (Efficient Supply Chain) consists of the following characteristics: excess capacity, quick changeovers, short lead times, flexible processing, premium transportation, and single order processing. T/F?

False

A company will always be able to increase sales by continuing to increase customer service.

False

Convenience products are those that are directed to ultimate customers.

False

Furniture is an example of a convenience good.

False

Game playing is the most popular method for gathering customer service information

False

Game playing is the most popular method for gathering customer service information.

False

If a company's trade margin is $.85/unit, its sales response rate is .18% change in revenue for a 1% change in service level , its standard product cost is $2.50/unit, and its annual sales are 64500 cases then the companies ΔP is equal to 256.71.

False

If a company's trade margin is $.85/unit, its sales response rate is .18% change in revenue for a 1% change in service level, its standard product cost is $2.50/unit, and its annual sales are 64500 cases then the companies delta P is equal to 256.71.

False

In order to maximize your return on logistics assets you take the difference from your costs and sales and divide that by your total assets.

False

In shipment consolidation, smaller shipments orders save you money rather than larger shipment orders due to the fact that you save money on man power.

False

Joe's Car Shop sells custom made cars. The cars Joe sells are considered shopping products.

False

Logistics adds value to products or services such as time and possession.

False

Logistics costs account for almost 30% of GDP.

False

Logistics costs account for almost 30% of GDP. T/F?

False

Logistics is used in several diverse areas but was first applied in manufacturing.

False

Logistics is used in several diverse areas nut was first applied to manufacturing.

False

Logistics strategy consists of three objectives: cost reduction, capital growth, and service improvement.

False

Medical care is a convenience good.

False

Optimum profit is the point where profit contribution margin equals carrying cost.

False

Order cycle time is the time elapsed between when a customer order, purchase order, or service request is placed by a customer and when the order is shipped.

False

Out of the four values that business creates in products and services, Logistics controls the form and place values.

False

Price is always an important criterion for specialty goods purchaser.

False

SWOT analysis, which is a strategic planning method, stands for Strengths, Weaknesses, Operations and Threats.

False

Supplies are industrial goods that are ordered frequently and contribute both directly and indirectly to production.

False

Supplies are industrial goods that are ordered frequently and contribute both directly and indirectly to production. T/F?

False

Supply chain management and logistics management are the same and deal with the entire supply chain

False

The Physical Distribution Channel refers to the time and space gap between a firm's immediate material sources and its processing points.

False

The Product Cycle time is the time elapsed when a customer order, purchase order, or service request is placed by a customer and when it is received by that customer.

False

The Product Cycle time is the time elapsed when a customer order, purchase order, or service request is placed by a customer and when it is received by that customer. T/F?

False

The objectives of logistics strategy are to minimize cost, maximize investment, and to maximize customer service.

False

The shape of the total cost curve is always going to be upwards sloping.

False

Transportation and order processing are the primary costs for logistics firms.

False

Optimum profit is the point where profit contribution margin equals carrying cost. T/F?

False (marginal cost)

Logistics strategy consists of three objectives: cost reduction, capital growth, and service improvement. T/F?

False (minimize cost, minimize investment, maximize customer service)

SWOT analysis, which is a strategic planning method, stands for Strengths, Weaknesses, Operations and Threats. T/F?

False (strengths, weaknesses, opportunities, and threats)

When choosing an efficient supply chain strategy, a company would choose Supply-to-Order?

False (supply-to-stock)

Transportation and Inventory are the two largest cost categories in logistics while administration and Inventory cost have the most frequent trade off in logistics

False. Most frequent trade off in logistics is between transportation and inventory costs.

___________ is an investment strategy that involves the buying of money market instruments or currencies in anticipation of a price rise or a future increase in demand.

Forward Buying

The hybrid-powered car is considered to be in which stage of its product-life-cycle?

Growth

Optimum profit is the point where profit contribution equals marginal cost. As annual sales increase what happens to marginal cost?

Increases

Which of the following would not result in a higher return on logistics assets?

Increasing Costs

During which phase of the product life cycle would you more likely use a responsive supply chain?

Introduction

Which of the following is a predictable/mature product?

Jello

What is the most important common service complaint and service element?

Late delivery and Speed of delivery

What is the most important common service complaint and service element?

Late delivery and speed of delivery

Logistics costs are NOT sensitive to such characteristics as

Lead Time

Logistics costs are NOT sensitive to such characteristics as:

Lead time

Which is NOT one of the most important customer Service elements?

Order Constraints

Which is NOT one of the most important customer service elements?

Order Constraints

Which is NOT one of the most important customer Service elements?

Order Constraints (elements: Price, product quality, service)

____is the time elapsed between when a customer order, purchase order, or service request is placed by a customer and when it is received by that customer.

Order Cycle Time

Business logistics splits into 2 categories. Which of the following are those two categories?

Physical supply & Physical distribution

Which of the following is not a primary process of a firms supply chain?

Product Scheduling

Not a customer service goal.

Purchasing Strategy

Which of the following is not a Customer Service Goal

Purchasing Strategy

Which of the following is not a Customer Service Goal?

Purchasing Strategy

Which of the following is not a customer service goal?

Purchasing Strategy

Which of the following is not a geographic product pricing method?

Quantity Discounts

what is the correct equation for Return on Logistics Assets

ROLA=(Revenue-Costs)/Assets

Which of the following is NOT one of the 4 major components of corporate strategy?

Retailer

Which of the following is NOT one of the 4 major components of corporate strategy?

Retailers

Which of the following is not one of the four major components of corporate strategy?

Retailers

Logistics primary key activities include which of the following:

Setting customer service goals Transportation Inventory Management Location

An automobile can be classified as a consumer good as well as a

Shopping Good

An automobile can be classified as a consumer good as well as a ________

Shopping Good

What is an example of Customer goods?

Shopping Goods

The following are characteristics of a Supply to Stock Supply Chain Strategy EXCEPT

Short Lead Times

The following are characteristics of a Supply to Stock Supply Chain Strategy EXCEPT

Short lead times

The following are characteristics of a Supply to Stock Supply Chain Strategy EXCEPT ...

Short lead times

Product availability and order cycle time are dominant physical distribution variables.

TRUE

Which of the following is an example of a predictable (aka mature) product

Tomato Soup

Which of the following is an example of a predictable (aka mature) product?

Tomato Soup

A mixed distribution strategy will have lower costs than a pure or single strategy.

True

A mixed distribution strategy will have lower costs than a pure or single strategy. T/F?

True

A supply-to-stock strategy is one where the supply channel is set up for maximum efficiency.

True

According to the weight-bulk ratio graph, as transportation costs decrease, the weight-to-bulk ratio increase

True

An item with a high value-weight ratio would have a low transportation cost and a high storage cost as a percent of sales price.

True

An item with a high value-weight ratio would have a low transportation cost and a high storage cost as a percent of sales price. T/F?

True

Capital reduction is strategy directed toward minimizing the level of investment in the logistics system.

True

Customers are more demanding of their supply chain because they desire quick response

True

Customers are more demanding of their supply chain because they desire quick response and mass customization.

True

Functional products with a predictable demand should be on an efficient supply chain. T/F?

True

More than any other factor, the level of logistics customer service provided dramatically affects system design.

True

Order-cycle-time is the time period from when a product is ordered or acquired until the time it is received by a customer. T/F?

True

Order‐cycle‐time is the time period from when a product is ordered or acquired until the time it is received by a customer.

True

Product Availability and order cycle time are dominant physics distribution variables of customer service.

True

Product availability and order cycle time are dominant physical distribution variables.

True

Product availability and order cycle time are dominant physical distribution variables. T/F?

True

Strategy is the process whereby plans are formulated for positioning the firm to meet its objectives.

True

Strategy is the process whereby plans are formulated for positioning the firm to meet objectives.

True

The dominant customer service elements are logistical in nature.

True

The main purpose of Logistics is to get the right goods to the right place at the designated time in good condition at the lowest cost and highest return on investment.

True

The main purpose of logistics is to get the right goods to the right place at the designated time in good condition and at the lowest cost and highest return on investment.

True

The most important service element is speed of delivery and most common customer complaint is late delivery. T/F?

True

The two points method for determining the sales-service relationship should be used in the diminishing return portion of the sales-service relationship curve. T/F?

True

Time is the only difference between the three levels of logistical planning which are Strategic, tactical, and operational.

True

Time is the only difference between the three levels of logistical planning which are strategic, tactical, and operational.

True

Value in logistics is primarily expressed in terms of time and place.

True

Setting points on the Sales-Service Relationship curve is involved in which Sales-Service Relationship Model?

Two-Point Method

Setting points on the Sales-Service Relationship curve is involved in which Sales-Service Relationship Model?

Two-Point method

A new version of an MP3 player would be classified as a/an ____________ product and therefore would use a _____________ supply chain?

Unpredictable, supply-to-order

In a generalized logistics system with Trade-offs when determining a balance between inventory cost and transportation cost with cost on the Y axis and customer service on the X axis the lowest total cost is at what point on the graph.

Where inventory cost and transportation cost intersect

What will increase the profit contribution when determining the optimum service level?

an increase in the sales response rate

what would be an example of a functional-efficient supply chain

bread

convenience goods, shopping goods, and specialty goods are______ goods?

customer

What would decrease the assets in the return on logistics assets (ROLA) formula?

decrease in assets, and an increase in cost

Buyer surveys are the best way to gather customer service information because they always give unbiased and reliable feedback.

false

In order to maximize your return on logistics assets you take the difference from your costs and sales and divide that by your total assets.

false

Joe's Car Shop sells custom made cars. The cars Joe sells are considered shopping products.

false

The two largest cost categories in logistics systems are transportation and inventory but are never used as trade offs for one another.

false

Transportation and Inventory are the two largest cost categories in logistics while administration and Inventory cost have the most frequent trade-off in logistics.

false

long term forecasts are more accurate than short terms forecasts

false

When classifying a product into customer of industrial goods one must look at the

function of the product

Which of the following is not a level of logistical planning?

geographic

Optimum profit is the point where profit contribution equals marginal cost. As annual sales increase what happens to marginal cost?

increases

raw materials, manufactured materials, supplies, and accessories are ______ goods?

industrial

Minimize cost minimize investment maximize customer service

objectives of logistics strategy

which is NOT one of the most important customer service elements?

order constraints

weight-bulk ratio, value-weight ratio, substitutability, risk are _________ characteristics?

product

work release is based on actual demand or the actual status of the downstream customers may cause long delivery lead times acts reactively

pull systems

which of the following is not a customer service goal

purchasing strategy

Work release is based on downstream demand forecasts keeps inventory to meet actual demand acts proactively

push systems

If the terms of sale is F.O.B. Origin, Freight prepaid then:

the buyer pays freight charges

The supply chain encompasses all activities associated with the flow and transformation of goods from:

the raw materials to the end user

which of the following is an example of a predictable (aka mature) product

tomato soup

what is a primary key activity/process?

transportation

An item with a high value-weight ratio would have a low transportation cost and a high storage cost as a percent of sales price.

true

Product Availability and order cycle time are dominant physics distribution variables of customer service

true

Stock availability has a dramatic effect on total order cycle time because it often forces product and information flows to move out of the established channel

true

aggregate forecasts are more accurate than disaggregate forcasts

true

the extended supply chain refers to those members of the supply chain beyond the firm's immediate suppliers or customers

true

A new version of an MP3 player would be classified as a/an ____________ product and therefore would use a _____________ supply chain?

unpredictable, supply-to-order

A new version of an MP3 player would be classified as a/an ____________ product and therefore would use a _____________ supply chain?

unpredictable, supply‐to‐ order

shipping tables and chairs in boxes unassembled is which of the following product characteristics

weight-bulk ratio


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