Chapter 14

12) Which mode of transportation is the most expensive? A) Air B) Truck C) Rail D) Water

A) Air

35) ________ carriers offer a very fast and fairly expensive mode of transportation for cargo. A) Air B) Truck C) Rail D) Water

A) Air

16) Which transportation network design option has the elimination of intermediate warehouses and its simplicity of operation and coordination as its major advantage? A) Direct shipping network B) Direct shipping with milk runs C) All shipments via central DC D) Shipping via DC using milk runs

A) Direct shipping network

5) 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? A) The shipper B) The supplier C) The manufacturer D) The carrier

A) The shipper

32) Major infrastructure elements for transportation systems would not include A) air. B) rail. C) canals. D) seaports.

A) air.

30) The ________ is the party that moves or transports the product. A) carrier B) producer C) shipper D) consumer

A) carrier

22) Temporal aggregation A) is the process of combining orders across time. B) increases a firm's responsiveness. C) decreases transportation costs because of economies of scale. D) all of the above

A) is the process of combining orders across time.

1) 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 A) transportation. B) retailing. C) distribution. D) manufacturing.

A) transportation

8) The total amount paid to various carriers for transporting products to customers is A) transportation cost. B) inventory cost. C) facility cost. D) processing cost.

A) transportation cost.

34) The text states that the effectiveness of carriers is influenced by infrastructure. Which of the following would not fall into this category? A) Ports B) Effective management C) Roads D) Airports

B) Effective management

37) ________ 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. A) Air B) Package carriers C) Rail D) Water

B) Package carriers

14) Which mode of transportation is the dominant form of freight transportation? A) Air B) Truck C) Rail D) Water E) Pipeline

B) Truck

27) Ignoring uncertainty in demand encourages a greater use of A) expensive but flexible transportation modes. B) inexpensive and inflexible transportation modes. C) inexpensive and flexible transportation modes. D) expensive and inflexible transportation modes.

B) inexpensive and inflexible transportation modes.

9) The cost of holding inventory incurred by the shipper's supply chain network is A) transportation cost. B) inventory cost. C) facility cost. D) processing cost.

B) inventory cost.

2) Transportation plays a key role in every supply chain because A) products are normally produced and consumed in the same location. B) products are rarely produced and consumed in the same location. C) the cost of transportation is inconsequential. D) transportation is not a factor in determining profitability.

B) products are rarely produced and consumed in the same location.

31) Which of the following is the fastest delivery method of transportation? A) Rail B) Truck C) Air D) Intermodal

C) Air

17) Which transportation network design option establishes an extra layer between suppliers and retailers to store inventory and to serve as a transfer location? A) Direct shipping network B) Direct shipping with milk runs C) All shipments via central DC D) Shipping via DC using milk runs

C) All shipments via central DC

36) ________ typically move commodities over large distances at lower costs per unit shipped. A) Air B) Truck C) Rail D) Package carriers

C) Rail

10) The cost of various facilities in the shipper's supply chain network is A) transportation cost. B) inventory cost. C) facility cost. D) processing cost.

C) facility cost.

28) Inexpensive and inflexible transportation modes tend to A) perform poorly. B) perform very poorly when plans change. C) perform well when everything goes as planned. D) all of the above

C) perform well when everything goes as planned.

29) The ________ is the party that requires the movement of the product between two points in the supply chain. A) carrier B) producer C) shipper D) consumer

C) shipper

26) Managers should ensure that a firm's transportation strategy A) involves cost minimization. B) involves profit maximization. C) supports its competitive strategy. D) is separate from competitive strategy.

C) supports its competitive strategy.

19) What trade-offs do managers need to consider when making transportation decisions? A) Transportation cost versus inventory cost B) Transportation cost versus customer responsiveness C) Inventory cost versus customer responsiveness D) A and B only

D) A and B only

25) Which of the following are computational procedures that can be used to make decisions regarding the routing and scheduling of deliveries? A) the savings matrix method B) the generalized assignment method C) the loss prevention method D) A and B only

D) A and B only

15) Which mode of transportation is used primarily for petroleum and natural gas? A) Air B) Truck C) Water D) Pipeline

D) Pipeline

33) A shipper uses transportation to minimize the total cost while providing an appropriate level of responsiveness to the customer. Which of the following is not considered to be a major part of the total cost? A) Sourcing B) Inventory C) Information D) Production

D) Production

7) Which of the following is not a cost the shipper needs to consider when making transportation decisions? A) Transportation cost B) Inventory cost C) Facility cost D) Quantity-related cost

D) Quantity-related cost

38) There are three basic questions to be considered when designing a transportation network between two stages of a supply chain. Which of the following is not a question to be considered? A) Should transportation be direct or through an intermediate site? B) Should intermediate site stock product or only serve as a cross-docking location? C) Should each delivery route supply a single destination or multiple destinations (milk run)? D) Should transportation costs be minimized?

D) Should transportation costs be minimized?

18) Which transportation network design option uses a combination of other options to reduce the cost and improve responsiveness of the supply chain? A) Direct shipping network B) Direct shipping with milk runs C) Shipping via DC using milk runs D) Tailored network

D) Tailored network

6) Which of the following is not a factor that affects carrier decisions? A) Vehicle-related cost B) Fixed operating cost C) Quantity-related cost D) Transportation cost

D) Transportation cost

13) Which mode of transportation is the least expensive? A) Air B) Truck C) Rail D) Water

D) Water

23) Tailored transportation is the use of different transportation networks and modes based on A) customer density. B) customer distance from warehouse. C) customer size and location. D) all of the above

D) all of the above

20) The fundamental supply chain decision(s) involving the trade-off between transportation and inventory costs is (are) A) choice of transportation mode. B) inventory aggregation. C) level of customer responsiveness. D) both A and B

D) both A and B

21) Cheaper modes of transport typically have A) shorter lead times and smaller minimum shipment quantities. B) shorter lead times and larger minimum shipment quantities. C) longer lead times and smaller minimum shipment quantities. D) longer lead times and larger minimum shipment quantities.

D) longer lead times and larger minimum shipment quantities.

11) The cost of loading/unloading orders, as well as other processing costs associated with transportation, is considered A) transportation cost. B) inventory cost. C) facility cost. D) processing cost.

D) processing cost.

4) Investment decisions regarding the transportation infrastructure (rails, locomotives, trucks, airplanes, etc.) are the primary concern of A) the shipper. B) the supplier. C) the manufacturer. D) the carrier.

D) the carrier.

24) The most important operational decision related to transportation in a supply chain is A) minimizing cost of transportation. B) maximizing profitability of the supply chain. C) reducing the level of cycle inventory. D) the routing and scheduling of deliveries.

D) the routing and scheduling of deliveries.

3) The key players in any transportation that takes place within a supply chain are A) the shipper and the receiver. B) the shipper and the supplier. C) the shipper and the manufacturer. D) the shipper and the carrier.

D) the shipper and the carrier.

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

False

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

False

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

False

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

False

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

False

Milk runs reduce outbound transportation costs by consolidating large shipments

False

Rail is the dominant mode of freight transportation in the United States and accounts for over 75 percent of the nation's freight bill

False

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

False

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

False

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

True

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

True

Tailored transportation is the use of different transportation networks and modes based on customer and product characteristics

True

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

True

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

True

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

True

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

True

Transportation is a significant component of the costs incurred by most supply chains

True