Chapter 14 Transportation in a Supply Chain

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

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

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

________ 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

Which transportation network design option has the elimination of intermediate warehouses and its simplicity of operation and coordination as its major advantage?

Direct shipping network

________ 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

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 government

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

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

air

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

an LTL carrier

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

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

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 for the use of

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

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

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

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

supports 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 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

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

transportation cost