TRA4203
Jim Bob Airlines has one 55 seat plan. On its last five flights it had 49 passengers from MSY to DFW, 48 passengers from DFW to OKL, 44 passengers from OKL to TUL, 36 passengers from TUL to FWB, and 33 passengers from FWB to MSY. For the last five flights, what was the load factor? (Make sure your answer is accurate to one decimal place)
(49+48+44+36+33)=210/55=3.182/5= .7636 [(49+48+44+36+33)/55]/5=76.4%
Using Wilson's EOQ formula, what will happen to the average inventory level (Q*/2) if unit cost is INCREASED by 4.1% and annual demand is DECREASED by 4.1% at the same time?
(Q*/2) will decrease.
Assume that the cost of the most efficient logistics system for a 98% service goal is $3.1 million higher than the existing system's cost. If for each dollar of additional sales, the company incurs 76 cents in out-of-pocket costs, what incremental sales volume, in dollars, will the company need to recover the increase in logistics costs? Your answer must be accurate to the nearest dollar.
12,916,667 This is a simple break-even calculation. How much will you invest to achieve improvements? You must recover this cost. Determine how much profit you earn from each additional dollar of sales. Take the amount you have to recover and divide by the amount of profit for each additional dollar of sales. (3.1 million/.24)
Your firm has a ROS of 10.2 percent. The company's goal is to increase sales by $238,356 this year. How much, in dollars, would you have to reduce your logistics costs to provide the same marginal amount of profit?
238,356 x .102 = 24,312
Transportation may account for as much as ____ percent of the cost of reverse flow
25%
Retailers lose, on average _____ percent of sales due to returns
3-5%
The CBL Exam Company is attempting to locate a new plant to serve the Midwest. The company has two raw material sources and three market areas. You want to centrally locate a plant relative to all sources and markets based on transportation rates. The least cost location for the new plant is at the grid VERTICAL coordinate of: ................X....Y...Tons Source A...9...7....600 Source B...7...3....400 Market X...1...7....200 Market Y...5...1....400 Market Z...9...1....300
3.95
The profit leverage provided by logistics can be significant. If a firm has a net profit of 10.3% on a sales volume of $1,858,112 and the company has instituted a logistics improvement program that results in savings of $493,519, what equivalent sales increase would be required to equal such a cost saving?
493,519/.103 = 4,791,447
The profit leverage provided by logistics can be significant. If a firm has a net profit of 7.1% on a sales volume of $5,645,401 and the company has instituted a logistics improvement program that results in savings of $607,335, what equivalent sales increase would be required to equal such a cost saving?
607,335/.071 = 8,554,014.08
The CBL Exam Company is attempting to locate a new plant to serve the Midwest. The company has two raw material sources and three market areas. You want to centrally locate a plant relative to all sources and markets based on transportation rates. The least cost location for the new plant is at the grid HORIZONTAL coordinate of: ................X....Y...Tons Source A...9...7....600 Source B...7...3....400 Market X...1...7....200 Market Y...5...1....400 Market Z...9...1....300
7.11
Dynamic
A ______ analysis examines a logistics system over a long time period or range of output.
The global logistics channel intermediary that supervises the movement of goods through customs and ensures that the documentation accompanying a shipment is complete and accurate is known as
A customs house broker
Short-Run Analysis
A specific point in time or level of production is chosen and costs are developed for the various logistics cost centers described previously.
Inverse
A(n) _______ relationship exists between the cost of lost sales and inventory cost.
Managers have several options for software development and implementation. They include:
A. internal development B. third party logistics firms C. external software vendors. D. All of the above Answer is D
Other things being equal, HIGH inventory carrying costs will tend to lead to:
A. use of a slower mode of transportation, such as railroads B. reducing customer service levels by lowering safety stock C. use of a more expensive mode of transportation such as motor carriers or airlines D.ordering more frequently E. B., C. and D. Answer is E.
Each of the following is an inventory holding cost EXCEPT:
Accounting cost.
True
Acme Battery distributes its batteries to warehouses, where they are stored until ordered by a retailer. The warehouses are located close by the retail markets served. This is the logistics channel approach to logistics.
A newly launched twenty-first century addition to production strategy which leverages lean manufacturing strategies, Six Sigma best practices, and real-time actionable intelligence from the factory floor is called
Adaptive Manufacturing
ALL of the following are advantages of electronic procurement.
Advantages: lowering of procurement operating costs; the reduction of paperwork and the associated cost of paper processing, filing, and storing is a major cost-saving area of e-commerce; reduced sourcing time means increased productivity because a procurement specialist spends less time per order and can place more orders in a given time period. Disadvantages: Most frequently voiced concern about using the internet for procurement is security. lack of face-to-face contact between the buyer and the seller.
Marketing
All four subdivisions of logistics have some common characteristics. Which of the below does not belong in the list
Companies do not know their true costs for all of the following reasons EXCEPT:
All of the above
Economies and companies could improve their "wealth" by
Allowing specialization of tasks
In his book The Wealth of Nations, Adam Smith stated that economies and companies could improve their wealth by
Allowing specialization of tasks.
True
An aircraft manufacturer is a good example of an organization with a heavy inbound flow and a simple outbound flow.
Reduction in packaging waste by using alternate materials
An important sustainability issue that has received much more scrutiny in recent years is the:
Sales Forecast
Analyses that attempt to predict the future sales of a product
Heuristic Models
Are able to accommodate broad problem definitions
Business Function
Are activities specific to that function area of operation. pg 2-figure 1-1
Recycling and environmental concerns
Are often related to regulatory policy at the local, state, and federal levels
As market forces continue to exert pressure on companies to improve profitability, the quest for lower-cost manufacturing has been a factor in the relocation of manufacturing from Mexico to ________?
Asia
In some instances, the seller does not have the inventory but knows when it will be produced internally or delivered from a supplier to the seller's distribution centers. In this case, the delivery date is based on the concept of:
Available to Promise
These are designated by the U.S. secretary of the treasury for the purpose of storing, repacking, sorting or cleaning imported merchandise entered for warehousing without paying import duties while the goods are in storage.
Bonded Warehouses
If there were long time intervals between orders, the members of the supply chain were faced with much uncertainty about the level and pattern of the demand, which usually resulted in higher inventory or stockout costs, a phenomenon called:
Bullwhip effect
The grid technique is used to determine a fixed facility location that represents the least-cost center for moving incoming materials and outbound product within a geographic grid. This least cost center is also referred to as
Center of gravity
The macro approach that locates a warehouse or distribution center at a point that minimizes transportation costs for products moving between a manufacturing plant and the markets, and is relatively simplistic:
Center of gravity approach
An index
Combines two or more metrics into a single indicator
Transportation efficiency promotes __________ in the supply chain.
Competition
Facility Utilization and Equipment Utilization Strategies are
Complementary
Which is an advantage of the grid technique for facility location?
Computationally, it is relatively easy to use
Assume that a company has sales of $15.1 million (measured at cost, not sales price). Also assume that the firm's inventory turn is equal to 2 and the inventory carrying costs are equal to 25.6%. If inventory turns are increased from 2 to 6, this would result in decreasing inventory carrying costs by (your answer must be accurate to the nearest dollar):
Correct Answer: 1,288,533 (15,100,000/2) x .256= 1,932,800 (15,100,000/6) x .256= 644,266.667 1,932,800 - 644,266.667 = 1,288,533
Hasty Manufacturing orders 89,000 annually. They order 7 times a year. They hold 7,271 units in safety stock. The MAXIMUM number of units Hasty Manufacturing holds throughout the year is
Correct Answer: 19,985 (89,000/7)+7,271=19,985.2857
Given that inventory valued at full cost equals $18.2 million, variable cost of the inventory is 63.2% of the full cost, and the inventory carrying cost is 32.9%, then the cost of carrying the inventory investment for one year is (your answer must be accurate to the nearest dollar):
Correct Answer: 3,784,290 ± 1,000 Full Cost x variable%) and then multiply by the ICC. (18,200,000 x .632) x .329= 3,784,290
Hasty Manufacturing orders 57,000 annually. They order 9 times a year. They hold 8,191 units in safety stock. The MINIMUM number of units Hasty Manufacturing holds throughout the year is:
Correct Answer: 8,191 -exact number of safety stock
Possession Utility
Created through the basic marketing activities related to the promotion and sales of products and services.
Packaging is
Critical to logistics
DECREASING the number of warehouses will __________ the warehousing and inventory costs, but may __________ transportation costs.
Decrease, increase
Assuming the cost to place an order is constant, all other things remaining the same, INCREASING the order quantity (Q*) causes total ANNUAL ordering costs to
Decrease.
Quantity Utility
Delivering the proper quantities of an item to where it is demanded.
One of the four supply chain flows in Figure 1 - 8 that has received increased attention from supply chain managers due to the growth in technology is:
Demand flow
How do you calculate inventory turnover rate?
Divide COGS by inventory
True
During the 1990s and 2000s, logistics costs as a percentage of gross national product declined.
Seasonal stocks are NOT influenced by
EOQ
Seven Rs
Ensuring the availability of the right product, in the right quantity, and the right condition, at the right place, at the right time, for the right customer at the right cost, is which definition of logistics?
ERP
Enterprise Resource Planning Are core software programs used by companies to integrate and coordinate information in every area of the business. help organizations manage company-wide business process, using a common database and shared management reporting tools
Dynamic Analysis
Examines a logistics system over a long time period or range of output.
A financial based 3PL is a firm that takes a financial interest in an organization in order to underwrite the outsourcing of that firm's logistics
FALSE
A horizontal relationship refers to firms on the same level in the supply chain
FALSE
Drivers and facilitators are internal issues that an organization must address before seeking a 3PL
FALSE
Once a 3PL provider is chosen, it is not necessary for an organization to seek continuous improvements as the 3PL will handle that function
FALSE
The "IT gap" refers to the difference between the internal IT capabilities of 3PL users and the IT expertise of the 3PL providers
FALSE
The most frequently outsourced function is freight bill payment
FALSE
The range of relationships with 3PLs ranges from being a vendor to being a vertical supplier
FALSE
A Third Party Logistics firm is defined as a company that owns trucks and warehouses so as to offer integrated services
FLSE
The authors of your textbook would agree ______ would usually be the most optimal in terms of a domestic shipment for receiving inbound materials
FOB origin
As a firm spends more on transportation service, cost of lost sales increases.
False
Increasing inventory turns from 10 to 15 has a greater impact than increasing inventory turns from 1 to 2.
False
T/F: Both economic and safety regulation of the US transportation industry have been declining since the onset of deregulation in the late 1970s.
False
T/F: If a firm concentrates on reducing the individual costs of each separate logistics function or activity, overall logistics costs will ALWAYS be reduced
False
T/F: Increasing inventory turns from 10 to 15 has a greater impact than increasing inventory turns from 1 to 2.
False
T/F: Management will automatically achieve least total cost logistics by minimizing inventory carrying costs.
False
T/F: The manufacturer must lead the channel design process regardless of the relative market power and financial strength of the members of the supply chain.
False
The utility created through the basic marketing activities is known as place utility
False
In the short run, the firm's network is _________ while in the long run it is ________.
Fixed, Variable
"An operation's ability to respond efficiently to changes in products, processes and competitive environments" refers to ________
Flexibility
Which type of global logistics channel intermediary enables goods to move through customs more easily by consolidating small shipments into more economical sizes?
Foreign Freight Forwarder
In the Item Procurement Importance Matrix, what item is described as low risk, low value?
Generics
Customer
Getting the right product to the right customer, in the right quantity, in the right condition, at the right place, and the right time, at the right cost. (Called the seven R's of logistics)
Time Utility
Goods and services available where customers need them and at the point when customers demand them. The economic value added to a good or service by having it at a demand point at a specific time when it is needed.
HR
Human Resources Recruit, train, evaluate, and compensate employees HR uses sales forecasts developed by the individual departments to plan personnel needs
____________, is a set of international standards that establish the minimum requirements for all organization's quality system.
ISO 9000
False
In a logistics system, warehousing should be optimized at the expense of related logistics activities, such as transportation and procurement.
Application of the grid technique to the location of a city warehouse
Incorporates a blanket rate structure that applies the same rate from an origin to any point within the city or commercial zone
The objective of inventory management is to:
Increase corporate profitability.
As customer service levels approach higher levels required inventory levels begin to ______ at a ______ rate
Increase; Increasing
IS
Information systems Computers, people, procedures, and software that store, organize, and deliver information
All of the following are reasons for holding inventory EXCEPT:
Inventories eliminate the variation in supply and demand.
Business proccess
Is a collection of activities that takes one or more kinds of input and creates an output such as a report or forecast.
Finance
It can be argued that ? is the second language of logistics and supply chain management.
Which is true regarding the facility/supply chain network design decision?
It should be coordinated closely with the corporate and overall business strategies that may be in place
Which of the following statements about just-in-time (JIT) is FALSE?
JIT programs usually do not impact inventory turnover rates.
Quantity utility
Logistics creates which utility through production forecasting, production scheduling and inventory control?
General definition
Logistics is the process of anticipating customer needs and wants; acquiring the capital, materials, people, technologies, and information necessary to meet those needs and wants; optimizing the goods- or service-producing network to fulfill customer requests; and utilizing the network to fulfill customer requests in a timely manner. This is a
Functional Areas of Operations
M/S SCM A/S HR
A DRP system is usually coupled with a _______ system in an attempt to manage the flow and timing of both inbound materials and outbound finished goods.
MRP
One of the major challenges of supply chain management is
Maintaining the visibility of inventory.
Inventory
Management of materials in motion and at rest
Which of these does NOT belong in the recommendations of the Reserve Logistics Educational Council
Manufacturing
Customer service
Marketers have begun to recognize the strategic value of place in the marketing mix, as well as the benefits resulting from high-quality logistical services. As a result, which has been recognized as the interface activity between marketing and logistics?
M/S
Marketing and Sales Developing products Determining pricing Promoting products to customers Taking customers' orders Helping create a sales forecast
Short-distance movement
Materials handling is concerned with
Place Utility
Moving goods from production points to market points where demand exists.
Railroads fall into a group called
Natural Monopolies
Raw Data
Numbers collected from sales, manufacturing and other operations, without any manipulation, calculation, or arrangement for presentation
Which is true regarding optimization models?
Optimization models are based on precise mathematical procedures that are guaranteed to find the "best" solution for the problem under evaluation
If you were to "manage" Wilson's EOQ as a means of reducing your company inventories, which variable of Wilson's EOQ would make the most sense to change.
Ordering Cost.
Safety Stock
Overinvestment in inventory-extra raw material and packagining
The utility that is created by moving goods from production points to market points where demand exists is referred to as
Place
Which of the following is NOT a principle reason for holding finished goods inventory?
Prevention of production shutdowns due to parts shortages.
Utility/Value
Providing time and place utility or value of materials and products in support of organization objectives
JIT is a _______ system.
Pull
Lean production relies on
Pull-based systems
What is the effect of tapering rates on facility location?
Pulls the location toward the source or market
Which of the below is NOT part of the seven Rs of logistics?
Quality
What is the best financial metric to show the profit an organization generates in relationship to assets utilized?
ROA
Accounting and finance A/F
Recording raw data about transactions (including sales), raw material purchases, payroll, and receipt of cash from customers
Links
Represent the transportation network and connect the nodes in the logistics system. The networks can be composed of individual modes of transportation and of combinations and variations.
You have an annual demand of 269,000 units, inventory carrying costs of 26.5%, a unit cost of $52.34, and an ordering cost of $67.56. Calculate Q*.
SQRT[(2 x 269,000 x 67.56)/(.265 x 52.34)] =36,347,280/13.8701 =SQRT(36,347,280/13.8701) =1,618.8
The type of functional inventory that helps a firm from being out of stock due to unexpected increases in demand is:
Safety stock.
Gross Margin equals
Sales - COGS
Ensuring the availability of the right product, in the right quantity, and the right condition, at the right place, at the right time, for the right customer at the right cost, is which definition of logistics?
Seven Rs
Logisticians seek cost trade-offs. A "positive" cost trade-off is a situation where:
Some costs increase, some decrease, and the net effect is that total costs decrease.
Green procurement strategies usually require collaboration with _____________
Suppliers or vendors
SCM
Supply Chain Management Making the coffee (manufacturing/production) Buying raw materials (purchasing) Production plans used to develop requirements for raw materials and packaging
Component Support
Supply Management for the plant (inbound logistics) and distribution management for the firm's customers (outbound logistics)
Logistics Channel
Supply chain of network organizations engaged in transfer, storage, handling, communication, and other functions that contribute to the efficient flow of goods.
Integrated information systems
Systems in which functional areas share data
Collaboration is usually defined as a "business practice that encourages individual organizations to share information and resources for the benefit of all"
TRUE
Many organizations have directed significant attention toward working more closely with supply chain partners, including not only customers and suppliers but also various types of logistics suppliers
TRUE
Outsourcing and contract logistics are terms sometimes used to describe third-party logistics
TRUE
T/F: By using the latest information technology it is possible to substitute information for inventory and other logistics expenses.
TRUE
T/F: The "cost-of-service" pricing approach establishes a lower limit of transportation prices or rates
TRUE
T/F: When a traffic manager reduces the number of carriers used, market power is increased.
TRUE
The first stage in the process model for forming and sustaining supply chain relationships involves the process by which a manufacturer becomes fully aware of its logistics and supply chain needs
TRUE
All the following are inventory risk costs EXCEPT
Taxes
Council of Supply Chain Management Professionals
That part of the supply chain process that plans, implements, and control the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption in order to meet customer requirements.
Business Logistics
That part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, service, and related information from point of origin to point of consumption in order to meet customer requirements.
International Society of Logistics
The art and science of management, engineering, and technical activities concerned with requirements, design, and supplying and maintaining resources to support objectives, plans, and operations.
Dictionary
The branch of military science having to do with procuring, maintaining, and transporting material, personnel, and facilities.
Assemble-to-order production
The finished product is generally a combination of common components and a limited number of options or accessories made available to the customer
Please read the following statements: T/F? Statement I. All logistics budgets are dynamic. Statement II. Some logistics costs are static.
The first statement is false, the second statement is true.
Customer Service
The interface activity between marketing and logistics and have aggressively and effectively promoted customer service as a key element of the marketing mix.
True
The inverse relationship that exists between the cost of lost sales and inventory costs is the inventory effect.
False
The mathematical calculation of the point of equality between systems under analysis is used for short-run/static analysis.
ALL of the following have affected international logistics EXCEPT:
The passage of the Sarbanes-Oxley Act by the United Nations.
Promotion costs
The product's dollar value typically affects the cost of logistics activities. Which is not one of these costs?
Order Cycle
The time that elapses from when a customer places an order until the order is received.
False
The utility created through the basic marketing activities is known as place utility.
Place
The utility that is created by moving goods from production points to market points where demand exists is referred to as
Form utility
The value that is added to goods through a manufacturing or assembly process is:
All of the following are criteria for an expert system EXCEPT:
There is no variability in people's ability to perform the task
Pareto Analysis may be used to classify parts, customers, or activities. When determining the Pareto segments to classify parts, you should
There will rarely be a clean break at the 80% (or 20%) point so your cut-off is subjective; however the general 80-20 relationship still holds.
Having the product available when the user wants it.
Time utility depends on
False
To hold down distribution cost, the lowest cost carrier should always be used
A private warehouse requires a high volume of warehouse throughput for efficient operation....
To spread out fixed cost over large output volumes
True
Transportation is the physical movement or flow of goods.
Piggyback is a form of intermodal transportation that primarily involves the following two transport modes:
Truck and rail
As the dollar value of product decreases, its inventory value decreases.
True
T/F: Cross-docking bypasses the storage activity by transferring items directly from the receiving dock to the shipping dock.
True
T/F: EOQ models exist that include adjustments for volume transportation rates and for quantity discounts.
True
T/F: The most vital ingredient or component of a decision support system (DSS) is the quality of the data used as input
True
Trasportation is the physical movement or flow of goods.
True
Excessive inventory levels will always lower corporate return on net worth by
Tying up cash that could be used for other investment opportunities and/or reducing debt.
Goods can be stored in a bonded warehouse for:
Up to 3 years
On a "PER UNIT" basis:
Variable costs are fixed with volume and fixed costs vary with volume
On a "PER UNIT" basis
Variable costs are fixed with volume and fixed costs vary with volume.
The _________ of demand, customer orders, delivery status, inventory stock levels, and production schedules provides managers with the knowledge needed to make effective situational assessments and develop appropriate responses.
Visibility
The key financial consideration in choosing between private and 3PL distribution options is
Volume of product being moved
This information technology is a shelf-level collaboration solution between consumer goods manufacturers and retailers, wherein the manufacturers pull in the point-of-sale (POS) data and other data that minimizes the bullwhip effect
Warehouse technology
Trade imbalances affect
Water Carriers
Heavy inbound
Water Cruisers is located in Jacksonville, Florida, and makes small yachts and luxury pontoon boats for customers on the East coast of the United States. Each boat requires thousands of parts purchased from over 1,000 vendors. A number of boats are in production at any one time, so a large number of parts constantly arrive and are stored. Once a boat is finished, it is sailed up the coast to a convenient port for customer delivery. Which type of logistics system does Water Cruisers use?
Which are the major modes of international transportation
Water and Air
Materials handling
What activity is described as the movement of goods into a warehouse, the placement of goods in a warehouse, and the movement of goods from storage to order picking areas and eventually to dock areas for transportation out of the warehouse?
Nodes
What are fixed spatial points where goods stop for storage or processing?
Transportation costs
What is often the largest component of logistics costs?
Scanning of bar-coded RFID tags
What technology has helped make the physical inventory-taking process more efficient and effective?
Short run analysis
When a specific point in time, or level of production, is chosen and costs are developed for the various logistics cost centers, it is called
The breaking bulk and repackaging at a distribution center
Which of the answers below is an example of the creation of form utility by a logistics activity?
Which of the following is NOT among the underpinnings of the JIT approach
Zero inventories
Hasty Manufacturing orders 96,000 annually. They order 4 times a year. They hold 3,477 units in safety stock. The AVERAGE number of units Hasty Manufacturing holds throughout the year is:
[(96,000/4)/2]+3,477 = 15,477
A maquiladora plant is:
a U.S. plant performing manufacturing, processing, or assembly activity in Mexico.
A project layout is
a fixed location layout where the product remains in place for the duration of production
What advantage does the transit privilege give to shippers located at intermediate locations?
a lower, long-distance through rate charged for the shipment
An "executive dashboard" is
a small number (usually less than five) of KPIs.
Focused production is
a strategy in which a given plant produces one or two items of the company's total product line
The value that is added to goods through a manufacturing or assembly process is: a. Form utility b. Place utility c. Time utility d. Possession utility
a. Form utility
On-demand supply chain software that is not installed on a company computer is gaining in popularity. An issue to be addressed with this purchase option is
a. Functionality may not be as robust as traditional software b. Data control is an issue c. Total cost of ownership could exceed purchase cost over the long run d. All of these Answer is D.
As the dollar value of a product increases, packaging costs will: a. Increase b. Decrease c. Stay the same d. Can't be determined
a. Increase
As the weight density of a product decreases, transportation cost per pound will: a. Increase b. Decrease c. Stay the same d. Can't be determined
a. Increase
Traditionally, information has been viewed as flowing in the opposite direction of products, that is, from the market/customer back to the wholesalers, manufacturers, and vendors
a. This is still true and has not changed. b. Computerization has greatly increased the flow of information from the source. c. The "Big Box" stores have developed their own sources. d. None of these answers. Answer is D
Vertical collaboration refers to a. collaboration among buyers and sellers in the supply chain. b. collaboration among carriers and shippers. c. collaboration that moves up the supply chain. d. collaboration with competitors
a. collaboration among buyers and sellers in the supply chain.
The distances in today's global supply chains produce
a. higher cost b. longer transit time c. more disruptions d. all of these Answer is D
Whether the relationship may or may not be with a provider of logistics services, today's supply chain relationships are most effective when collaboration occurs among the ____________ who are involved. a. participants b. third party logistics providers c. customers d. suppliers
a. participants
Approximately two-thirds of 3PL customers think their providers supply a. tactical or operational services. b. strategic or integrative services. c. trucking and warehouse services. d. a firm that can supply a competency that is not core to the firm.
a. tactical or operational services
Complexity in the supply chain is caused by
a. the number of SKUs. b. locations of customers and suppliers. c. transportation requirements. d. All of these answers. Answer is D
Economic deregulation sparked competition among carriers in several areas. Which of these is not an area of competition?
accessibility
Distribution facilities can provide numerous services, depending on the requirements of the supply chain. Which of these is NOT a typical service?
activity
The textbook provides an example of how SanDisk improved forecast accuracy by 25%, and achieved higher inventory turns and a lower cost structure as a result of implementing
an advanced planning solution
A third-party logistics firm may be defined as
an external supplier that performs or manages all or part of a company's logistics functions
The decision to alter the supply chain process is essentially ______ issue.
an optimization
Total life cycle considerations (TLC)
are figuring more prominently into reverse logistics programs.
WIP inventories are
associated with manufacturing
The grid technique
assumes that the raw materials sources and finished goods markets are fixed
As a firm spends more on transportation service, cost of lost sales: a. Increase b. Decrease c. Stay the same d. Can't be determined
b. Decrease
The utility that is created by moving goods from production points to market points where demand exists is referred to as: a. Form b. Place c. Time d. Possession
b. Place
Logistics creates which utility through production forecasting, production scheduling and inventory control? a. Form utility b. Quantity utility c. Time utility d. Possession utility
b. Quantity utility
Horizontal collaboration refers to a relationship that is ___________ and/or ____________. a. 3PLs to 3PLs and/or service provider to service provider b. buyer to buyer and/or seller to seller c. flat across the chain and/or involving partners equal in size d. collaboration with horizontal and/or vertical competitors
b. buyer to buyer and/or seller to seller
While available evidence supports the fact that the president or CEO and the finance executive are often involved with the identification of the need for logistic services, a. customers are demanding a change. b. executives from other areas in the company are also aware of such needs but to a lesser degree. c. a 4PL will suggest greater collaboration. d. off shore sourcing will point to greater need.
b. executives from other areas in the company are also aware of such needs but to a lesser degree.
What is often the largest component of logistics costs? a. inventory costs b. transportation costs c. shipper-related costs d. administrative costs
b. transportation costs
The roles of the distribution center include __________
balancing supply and demand, protecting against uncertainty, and promoting transportation economies.
Horizontal collaboration refers to a relationship that is ___________ and/
buyer to buyer and/or seller to seller
Full collaboration is the dynamic combination of a. buyers, sellers, retailers, and 3PLs. b. buyers, sellers, retailers, 3PLs, and appropriate government agencies. c. both vertical and horizontal collaboration. d. buyers and sellers only.
c. both vertical and horizontal collaboration
A(n) _______ relationship exists between the cost of lost sales and inventory cost. a. reverse b. proportional c. inverse d. non linea
c. inverse
What vendor selection criteria are described by production capability, labor relations, and operating controls?
capability
Desirability refers to
characteristics that influence modal selection
Vertical Collaboration refers to:
collaboration among buyers and sellers in the supply chain.
_ exist for basic raw materials such as grain, oil, and sugar
commodity markets
Collaboration occurs when
companies leverage each other on an operational basis so that together they perform better than they did separately
All of the following are advantages of containers in international distribution EXCEPT:
containers are available in only one size
Time-Reduction Logistics Initiatives
could change push to pull
Many organizations are working more closely with
customers
. A third-party logistics firm may be defined as a. an outsource service. b. a firm that owns trucks and warehouses. c. a firm that owns trucks and warehouses and provides computer support. d. an external supplier that performs or manages all or part of a company's logistics functions
d. an external supplier that performs or manages all or part of a company's logistics functions
Marketers have begun to recognize the strategic value of place in the marketing mix, as well as the benefits resulting from high-quality logistical services. As a result, which has been recognized as the interface activity between marketing and logistics? a. product b. promotion c. price d. customer service
d. customer service
Many organizations are working more closely with a. customers. b. customers and suppliers. c. third-party logistics firms. d. customers, suppliers, and various types of logistics suppliers
d. customers, suppliers, and various types of logistics suppliers
Time utility depends on a. when the carrier picks up the shipment. b. transportation companies delivering on time. c. proper forecasting. d. having the product available when the user wants it
d. having the product available when the user wants it
Materials handling is concerned with a. inventory levels. b. breaking bulk. c. scheduling trade-offs. d. short-distance movement
d. short-distance movement
. The least-frequently used IT-based services by customers of 3PLs are: a. transportation management (execution) b. warehouse/distribution management c. global trade management and transport sourcing d. strategic and customer-related
d. strategic and customer-related
Which of the answers below is an example of the creation of form utility by a logisticsactivity? a. When lumber is cut and made into a chair b.When a firm's finance manager approves customer purchases on a credit basis c.When Dell combines components with software to produce a computer to a customer's specifications d.The breaking bulk and repackaging at a distribution center
d.The breaking bulk and repackaging at a distribution center
Supply chain software that provides a platform for manufacturers, distributors, and retailers to aggregate and organize item-related data such as item number, price, description, and weight is called
data synchronization tools
A metric requires
definition
Which is NOT a manufacturing method?
delayed differentiation
Which of these is NOT a production method
delayed differentiation
Batching economies or cycle stocks usually arise from three sources. Which of these is NOT a source?
demand
Dependent demand relates to
demand for another inventory item or product
The Supply Chain Concept
developed from the previous Physical Distribution concept.
Inventory and the GDP grew by ______ amounts between 1994 and 2010
different
Which of the following is the "marketing mix"?
distribution, price, product, promotion
Corporate Leaders
do not clearly understand the importance of supply chain excellence
Ordering cost refers to the expense of placing an order and
does not include the cost of the product.
A ______ analysis examines a logistics system over a long time period or range of output.
dynamic
Processes that can produce a range of products are said to have
economies of scope.
What is an amalgam of catalogs from vendors within a market that is available via the Internet called?
electronic marketplace
Air carriers were historically looked upon as
emergency only carriers
Explain the "Cost of Service" pricing model
establishes a lower limit of transportation prices or rates.
There are four steps in the Managing Sourcing and Procurement Processes. Which does not belong?
examine off shore and e-procurement suppliers
Which of the following is NOT one of the five drivers of sustainable supply chain management practice?
execution
In the event of a "stockout" at your location, one of the things that could happen is
extra shipping cost may be incurred
In a logistics system, warehousing should be optimized at the expense of related logistics activities such as transportation and procurement.
false
To hold down distribution cost, the lowest cost carrier should always be used.
false
Nodes
fixed spatial points where goods stop for storage or processing. Manufacturing or assembling facilities and warehouses where the organization stores materials for conversion into finished products or stores finished products for delivery to the customer.
Security legislation
has caused expense issues for carriers
ERP systems
have information elements needed by SCIS applications.
Each of the following functional areas would typically be included within logistics EXCEPT
human resources/personnel management
In the Assess Supply Market step, the firm
identifies all possible suppliers that might be able to satisfy the user's needs
INCREASING the number of warehouses will __________ the warehousing and inventory costs, but may __________ transportation costs
increase, decrease
Methods of decreasing inventory related costs include all of the following measures EXCEPT:
increasing the number of expedited orders
Channel structure management includes decisions regarding the use of outsourcing, channel inventories, ____________, and channel structure
information systems
The challenge to develop and sustain an efficient and effective supply chain(s) requires organizations to address a number of issues. Which is NOT included?
inventory carrying costs
the term functional silos refers to
lack of coordination between departments
Benefits to a carrier of improved routing and scheduling include all of the following EXCEPT
lessening of competition
The supply chain should
manage materials/products, information, financials, and demand.
Which of these does NOT belong in the recommendations of the Reverse Logistics Educational Council?
manufacturing
All four subdivisions of logistics have some common characteristics. Which of the below does not belong in the list
marketing
What activity is described as the movement of goods into a warehouse, the placement of goods in a warehouse, and the movement of goods from storage to order picking areas and eventually to dock areas for transportation out of the warehouse?
materials handling
Scorecard and key performance indicators (KPIs) refer to
metrics to manage logistics operations
What are fixed established spatial points where goods stop for storage or processing?
nodes
Outsourcing involves
obtaining materials, parts, and products from other companies
The demographics of our society has changed because
of the increase in two-career families and single-parent households
The primary facility operations focus is
on the movement and storage of product.
In selecting a transport mode or carrier, the most important factor for most shippers would be:
on-time pickups and deliveries
The most compelling financial strategy
operational efficiency
The most compelling financial strategy is
operational efficiency
Which of the following is NOT an element of Order Management
optimizing mode mix
Whether the relationship may or may not be with a provider of logistics services, today's supply chain relationships are MOST EFFECTIVE when collaboration occurs among the ____________ who are involved.
participants
Asset utilization is a very important aspect of
private distribution facilities.
An organization selling its products FOB destination holds the title to the goods until:
products reach the customer's facility
The main strategy behind routing guides is to
promote supply chain excellence
The product's dollar value typically affects the cost of logistics activities. Which is NOT one of these costs?
promotion costs
There are four major categories with examples that provide a useful way for examining logistics and supply chain performance: They are time, ______, cost, and supporting metrics
quality
Logistics creates which utility through production forecasting, production scheduling and inventory control
quantity utility
Which of the following is NOT a reactive capability strategy?
resource requirements planning
In the SCOR Model there are five major categories of metrics that need to be used to measure the performance of Process D1: reliability, ___________, agility, costs, and asset management
responsiveness
Which of these is NOT a freight document?
routing guide
Which of the following is NOT a result (directly or indirectly) of the Motor Carrier Act of 1980?
service levels provided by carriers have declined
When a specific point in time, or level of production, is chosen and costs are developed for the various logistics cost centers, it is called
short run analysis
Stockout
shortfall of raw material or packaging
Which of the following is not part of the Supply Chain network?
stores
A warehouseperson may offer REDUCED rates to the user of a public warehouse if the user:
stores goods regularly
The least-frequently used IT-based services by customers of 3PLs are:
strategic and customer-related
Green procurement strategies usually require collaboration with ________
suppliers or vendors
Form utility drives the need for
supply chain capabilities, time utility, and place utility
Due to mergers and acquisitions in the software industry and ERP vendors moving into the supply chain applications market space, it is possible to purchase
supply chain software suites that combine planning, execution, event management, and related capabilities
From a business and supply chain perspective, _______ are usually based upon a recognition that industrial systems need to be in harmony with nature by not depleting resources beyond their replacement or regeneration rate.
sustainability practices
From a business and supply chain perspective, ______________ are usually based upon a recognition that industrial systems need to be in harmony with nature by not depleting resources beyond their replacement or regeneration rate.
sustainability practices
Approximately two-thirds of 3PL customers think their providers supply
tactical or operational services.
When a firm "customizes" their supply chain, it is
tailoring the chain to be responsive to the needs of individual customer segments
A critical ingredient for the Third Era of globalization is:
technological advances, especially in information technology and communications.
If demand DECREASES by 13% and the value of each unit DECREASES by 13%, what will happen to the EOQ? (Assume that everything else remains the same).
the EOQ will remain the same
The order cycle time is the time that elapses between:
the customer's order placement and the time the customer receives the product
Promotion
the effort through direct and indirect contact with the customer to increase the desire to possess a good or to benefit from a service.
Capacity is
the maximum amount of work that an organization is capable of completing in a given period of time
The recent increased focus on reverse flows is attributable to
the significant increase in volume of reverse flows
The first facility consideration is to determine
the size of each operation within the network.
The transportation activity adds _______ utility to products.
time and place
Companies with 10,000 purchase transactions or more per year should consider
transactional procurement solutions
What is often the largest components of logistics costs?
transportation costs
Given the importance of global trade to the US, a delicate balance exists between security and the efficient flow of global commerce
true
The inverse relationship that exists between the cost of lost sales and inventory costs is the inventory effect.
true
Inventory is an ASSET on the balance sheet and a(n) __________ on the income statement.
variable expense
The product's dollar value typically affects the cost of logistics activities.
warehousing, transportation, packaging costs
Some individuals describe the current consumer as the "click here" generation because
we no longer wait for information to be "pushed out" to us.
Transportation terms of sale establish
when ownership and title of the goods passes from seller to buyer
Questions regarding financial vs. non-financial benefits of collaboration include
whether collaboration pays for itself
Which of the following is NOT a savings associated with volume buying?
• Lower per unit purchasing prices • Lower transportation costs • Lower warehouse handling costs • Lower order processing costs • Lower production lot quantity costs • Lower stock-out costs
