Logistics Final Exam Essay Questions

What are freight forwarders?

Freight forwarders operate as agents that act as consolidators of freight.

What is pipeline stock?

Pipeline stock is inventory that is en route between various nodes in a logistics system.

What is speculative stock?

Speculative stock is inventory that is held for several reasons to include seasonal demand, projected price increases, and potential product shortages

What is stowability?

Stowability refers to how easy the commodity is to pack into a load, and possible considerations involve the commodity's ability to be loaded with hazardous materials or the ability to load freight on top of the commodity.

What is the building-blocks concept?

The building-block concept is a key factor in unit loads. Building blocks have certain dimensions that allow them to stack or load on a pallet or similar piece of equipment.

How is the building blocks concept applied to the handling of packaged goods?

The building-blocks hierarchy is important to remember because each of the different building blocks is inside another and their total effect must be to protect the product, they function in a complementary sense.

What services do freight forwarders perform?

The forwarder may offer pickup and delivery services. In addition, they can specialize by handling domestic or international shipments; by handling surface or air shipments; or by handling certain products.

What are the four factors that determine a products freight classification?

The four factors that are used to determine a product's freight classification are; density, stowability, ease of handling, and liability to damage and theft.

Why does warehousing exist in a supply chain?

Warehousing is the part of the firm's logistics system that stores products such as raw materials, parts, good-in-process, and finished goods, at and between points of origin and the point of consumption. Warehousing and transportation are known as substitutes for each other.

Safety stock refers to inventory that is held in addition to cycle stock to guard against uncertainty in demand and/or lead time.

What is safety stock?

Distinguish between a commodity rate and a class rate.

A commodity rate considers the weight of the product being shipped and the distance of the delivery, whereas a class rate considers the weight of the product, the type of product, and the distance of the delivery.

Discuss the disadvantages of locating manufacturing, assembly, or distribution facilities in countries with relatively low wages.

A possible disadvantage is that there are sometimes limits on the number of supervisory personnel that can be brought in from outside the country. There may also be regulations that specify that nationals be trained for and employed in supervisory posts. Countries with low labor costs may also have a number of sweatshops, which can be viewed as organizations that exploit workers and that do not comply with fiscal and legal obligations towards employees.

How might the general functions of packaging come into conflict?

All of these functions need to be addressed, so it can cause for a lot of decisions needing to be made. Some of the decisions may not be entirely beneficial to other departments, even though it boosts one departments output. The end conflict is the creation of a bottle-neck, which is one of the biggest concerns in a supply chain system because bottle-necks can directly affect engineering, manufacturing, and production.

Discuss why contract warehousing is a preferred alternative for many organizations.

Contract warehousing is a preferred alternative because it provides unique and specially tailored warehousing and logistics services exclusively to one client, where the vendor and client share the risks. It has evolved to include more value-adding services than public warehousing such as customization, reverse logistics, and repair and refurbishment.

What is cycle stock?

Cycle stock refers to inventory that is needed to satisfy normal demand during the course of an order cycle.

What is density?

Density refers to how heavy a product is in relation to its size,and it is viewed as the primary factor for setting a product's classification.

How might different organizational functions have different inventory management objectives?

Different organizational functions have different inventory management objectives, like marketing, for example, wants to ensure that sufficient inventory is available for customer demand to avoid potential stockout situations which leads to higher inventory levels. While the finance group seeks to minimize the cost associated with holding inventory, which leads to lower inventory levels.

What is the ease of handling?

Ease or difficult of handling refers to handling challenges that might be represented by a commodity size, weight, and so on.

Discuss the advantages of locating manufacturing, assembly, or distribution facilities in countries with relatively low wages.

Labor wage rates appear to be a key determinant as supply chains become more global. At prevailing wage rates, a company could have approximately similar compensation costs by hiring nine Mexican workers to just one U.S. worker. Nine workers might generate more total output than one worker, so there could be productivity advantages as well.

What is liability to damage and theft?

Liability for loss and damage considers among others a commodity's propensity to damage other freight, its perishability, and its value.

How do product characteristics influence packaging and materials handling considerations?

One consideration is a product's physical characteristics all substances are either a solid, liquid, or a gas and each form has specific packaging requirements. Another physical characteristic is the product's ability to withstand the elements, for example some products can be exposed to freezing conditions, while others cannot. Another characteristic that can affect packaging conditions is product density.

What are ordering costs?

Ordering costs are the expenses incurred to create and process an order to a supplier.

Discuss how a transportation manager might take advantage of the trade-offs between price and service.

The rate and service flexibility allows transportation managers to take advantage of tradeoffs between price and service, and these price and service trade-offs are limited only by the transportation manager's creativity and originality.

What are the three general functions of packaging?

The three different functions are to promote, protect, and identify relevant product.

What are the three primary factors that determine transportation rates?

The three primary factors that determine transportation rates are the product itself, the weight of the product, and the distance the product has to go to be delivered.

What is the trade-off between inventory carrying costs and ordering costs?

The trade-off that exists between carrying and ordering costs is that they respond in opposite ways to the number of orders or size of orders. so, an increase in the number of orders leads to higher order costs and lower carrying costs.

How do freight forwarders function?

They function by consolidating shipments from small shippers, buying transportation in volume rates, and then charging shippers a rate somewhere between the non-volume rate and the volume rate.

How do containers help to facilitate intermodal transportation?

They help as containers are interchangeable among rail, truck, and water carriers. containers can be used in intermodal applications and provide the advantages offered by each of these applications.