SCMN 3720 exam 1
T/F Various studies indicate that the use of a TMS helps an organization reduce freight costs by 12 to 20%.
False
T/F The supply chain management concept captured the attention of senior level executives in many organizations starting in the 1970's.
False-1990's
T/F China is to have the biggest population by 2050
False-India
T/F Approximately 10% of the freight ton-mile traffic in the US is carried by air.
False-Less than 1%
T/F The United States has the largest export trade flow in the world
False-china does, but US have the largest import flow
T/F The demand for transportation is considered an Independent Demand
False-it is a derived demand
T/F The primary reason for the creation of the US interstate roadway system was to promote commerce.
False-it was defense
T/F Increasing the deductible on an insurance policy is a risk avoidance strategy
False=risk retention
Pure competition
Has lots of sellers and they cannot out do the other=nail salon-all sell the same exact thing
How have transportation routes affected population distribution?
People populate near water ways and from past transcontinental R&R settlements
What are the 3 main phases in the evolution of the supply chain concept
Physical= distribution= logistics=
Place air, rial, bus, and light Duty Vehicles in descending order of ton-miles of freight in the US
Trucking, rail, pipeline, water, air
T/F A skimming price is a high price intended to attract a market that is insensitive to price, and it is a means to maximize profit
True
T/F A transportation shipment of 75 ton for 125 miles would be 9375 ton-miles
True
T/F According to a Zurich Insurance LTD study, nearly 14% of supply chain disruptions around the world have a financial cost in excess of $1.1 million
True
T/F Aggregate transportation expenditures are about 9% of GDP in the US.
True
T/F Air transportation has more passenger-miles than railroads and bus services combined
True
T/F In 2030, it is estimated that 60% of the world's population that will live in urban areas.
True
T/F Insurance is a common method of risk transfer
True
T/F It is possible to achieve a 12 to 18 month ROI on a TMS investment
True
T/F Not putting all your eggs in one basket is a hedging strategy
True
T/F Product density, stow-ability and handling, and liability are classification factors used to determine the rating of a specific commodity
True
T/F Replacing high levels of safety stocks with timely information is one effective method to reduce the bullwhip effect in a supply chain.
True
T/F TMS software sales are projected to reach $30 billion by the end of 2025
True
T/F The 3 major flows in a supply chain are products, information, and money
True
T/F The risk of temperature control failure in a refrigerator trailer is the product contamination risk category
True
T/F The use of aerodynamic devices and low rolling resistance tires can result in a net fuel savings of 10% or more.
True
T/F Third degree price discrimination is defined as charging different prices to different buyers who use the same commodity or service
True
T/F Two separate concepts in Cost of Service pricing are prices base on average or marginal cost.
True
T/F Under transportation regulation, the amount found in a Tariff as payment to a carrier for performing a given transport service is called a rate
True
Which countries were the top 5 importers in 2015?
USA, China, Germany, Japan, France
T/F Demand for transportation at the macro-level is elastic, while demand for transportation at the micro-level is inelastic
false-macro level is inelastic, micro level is elastic
What are the four categories of risk management?
risk avoidance, risk reduction, risk transfer, risk retention
What is the glue that holds the supply chain together?
Transportation
What were the $ difference for the USA in 2015?
$700 billion
What % of average household expenditures in the U.S. goes to transportation, and where does it stand relative to other categories?
17% and above Insurance, food, healthcare, apparel
What % of U.S. GDP does transportation account for, and where does it stand relative to housing, food, and healthcare?
9% for transportation, health care second at 15.4%, housing first at 17.8%
Describe Oligopolies
A competition between a few large sellers of a relatively homogeneous product, each seller must take into account competitors' reactions in making pricing decisions
Define transportation risk
A future freight movement event with a probability of occurrence and the potential for impacting supply chain performance. When something bad happens and you can't get to your client (disruption) but it is a risk because it is something that can happen
Define "capability"
Ability to service customers (time sensitivity). The ability of the carrier to provides special service requirements such as refrigeration.
Explain the concepts of absolute and comparative advantage, how they are different, and why they are relevant to transportation
Absolute advantage=highest advantage to specialize in a product Comparative advantage=good at making multiple products but pick one because they may make it better for less expensive
What was the justification used to pass the legislation to build the U.S. Interstate Highway System?
After World War 2 the US wanted to be able to mobilize at any time
Explain "economies of sale" and how this relates to the impact of lowering transportation costs.
As production of a good increases the cost of producing each additional unit falls. If production of goods is falling, companies can ship more product at a lower price.
Define "security"
Can we make sure the goods arrived un-harmed? Safety of the goods in transit
Which countries were the top 5 exporters in 2015?
China, USA, Germany, Japan, Netherlands
What type of transportation demand is inelastic, what type is elastic?
Demand for aggregate transportation is inelastic but individual modes have elastic demands. Aggregate means every mode of transportation=if they all cut their prices, they all lose money. But airlines compete against each other
Define "derived demand"
Down the line-such as the demand for freight doesn't exist without a need for goods. Someone needs a good that isn't there.
what are ELDs and how are they used in trucking?
Electronic Logging Device=gives wireless data back to some sort of HQ on how fast an engine is turning and truck GPS position/speed and provides a means for drivers to log their activities of sleep
T/F Maersk Lines is teaming with Microsft to use Block chain technology in ocean shipping
False
T/F Reliability is the transportation service characteristic defined as the trustworthiness of the carrier.
False
T/F Reverse logistics systems are developed for receiving payment from customers.
False
T/F The simplest way to eliminate risk is risk reduction
False
T/F The transportation industry created 37% of greenhouse gas emissions in 2015.
False
T/F The two parameters involved in risk assessment are cost and impact.
False
T/F The use of ELDs is trucking was mandated by the US Congress effective December 2016
False
T/F Truck platooning is an autonomous concept that does not use human drivers
False
T/F Under pure competition, there are many sellers and the product is heterogeneous
False
T/F Using the least cost service provider is a transportation risk reduction strategy.
False
Define "reliability"
How consistent are the transit times? It's the consistency of travel time. Objective measure, no bias. Getting loads from one place to another and arriving in a narrow window
Define "accessibility"
How easy is it to get your pickup and delivery point? trucking by far most accessible.
How are land values affected by transportation routes?
If there are good transportation routes, people can live further from the cities. In new areas driving up the property values in the area due to their closeness, the land becomes more useful. can drive costs down
What are some examples of sustainability initiatives?
Improved fuel efficiency, advanced technology engines, renewable energy equipment, emission reduction
What conditions exist in Pure Competition?
Large number of seller, all sellers and buyers are of such a small size that no one can influence prices or supply, there is a homogeneous product or service, there is unrestricted entry, and high elasticity of demand
If everything else is the same, why is the price to ship a full truckload less than the sum of the prices for LTL quantities that fill up the same size truck?
Less product density, more handle. If I have to move 10000 lbs and you are paying me, I need to find loads to fill the truck up, more handling, more money
Place air, rial, bus, and light Duty Vehicles in descending order of passenger miles
Light duty vehicles, air, bus, rail
What are two types of costs that can be used to base prices upon in cost-of-service pricing?
Marginal and average cost
Describe Monopies
Market with only one seller of a product or service, no close competitor or substitute
Give an example of how Block chain is expected to be used in transportation
Microsoft is on it. Benefits=reduced paper work, reduced costs, increase transparency, reduce fraud. It allows businesses to track assets along the supply chain, introducing increased transparency and cost savings.
Explain place, time, and quantity utility
Need to have the right place, right time not early or late, quantity inventory must be on schedule for just in time (ie ponchos at a football game)
What is the difference between a rate and a price, and how has economic deregulation impacted the use of these terms?
Price=what the market will bear. Rate=an amount or level of payment, more pre-regulation, more cost based. Gov issued rates for the rail road monopoly so people wouldn't get ripped off. Then the gov built roads and trucking started and there were enough companies that the gov didn't need to set rates because the trucking competition controlled the price
What do reverse logistics do?
Process of planning, implementing, and controlling the efficient, cost-efficient flow of raw materials, in process inventory, finished goods, and related info from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal
What are the benefits of a TMS?
Reduced order costs, load consolidation, carrier & mode selection, Identify invoice discrepancies, track carrier performance, lower admin costs, more accurate "available to promise", contract savings, effective asset utilization
What are the key planning support capabilities of a TMS?
Route planning, tactical planning, strategic decision-making, and execution and transaction processing
Monopolistic
Small sellers with differentiation, the biggest one is not big enough to influence market. Such as mac and cheese or peanut butter, BBQ places in Auburn-all selling similar things, small companies not dominating the market
What are some important milestones in US transportation?
Steam boat, car, Transcontinental R&R (1869), turnpikes
Define "elasticity"
The degree to which consumers or producers change their demand or amount supplied in the response to changes in price or income. Elasticity is the supply or demand of something. Elasticity= % change in quantity/% change in price. If the elasticity is greater than or equal to 1, the curve is elastic. If it less than one, the curve is said to be inelastic.
What's the current state of self driving trucks?
The first delivery was a load of beer, Mercedes. They test them on remote tracks. Uber is out!
Define landed cost
The total cost of moving something from one place to another
Define "landed cost" and explain why this concept is important in transportation
The total cost of moving something from one place to another. It is important because some ways of transportation are cheaper than others must pay transportation cost, customs duty, insurances
What is value-of-service pricing based on?
The value of a product based on how the consumer views it, on what the market will bare, shipping diamonds vs. dirt. In a capitalistic economy, you can charge what ever you want, and consumers can go with someone else
Explain Lardner's Law
When transportation costs is reduced, the area where the producer can compete is increased in a directly proportional basis. ie. transportation cost cut in half, the company can deliver to twice as many costumers.
What 3 basic criteria are typically most important in determining how much to charge or pay for a shipment?
Zip to zip weight type of commodity
Define transportation disruption
any significant delay, interruption, or stoppage in the flow of trade caused by a natural disaster, heightened threat level an act of terrorism, or any transportation security incident
What classification factors are used to determine the rating of a specific commodity?
exception rates and commodity rate, less dense. Commodity (coal, products you need to move-charge you based on the value=liability), storability and handling (if fragile they need to handle it a certain way-charge more), weight/density (if foam and takes up a lot of space, they will charge you more)
What are the 4 steps in the risk management process?
identify=determine the potential transportation disruptions Review=monitor and update the plan, identifying new risks Analyze=evaluate the likelihood and impact of each disruption Manage=apply risk management and mitigation strategies
What are the transportation measurement units for passengers and freight?
passenger mile ton-miles
Backhaul
picking something up on your way back=more money, want to eliminate to optimize costs
How does transportation affect the environment?
pollution, safety, energy
What are the 6 primary categories of risk?
product loss product damage product contamination delivery delay supply chain interruption security breach
What are the 3 flows in the supply chain concept, and where does demand fit in?
product/services, info, finances
What are some major contributing factors influencing global flows and trade?
technology, population size, urbanization, etc.
Headhaul
the demand that is initiated by the original movement of the carriers equipment and the shippers goods (Will pay for the whole trip if there is nothing to pick up on the way back).
What is truck platooning?
the first guy is driving the truck, and truck behind him are computer automated
Explain the bullwhip effect
the further away you are, the more surplus you need which takes more to store but if you didn't have extra, might get in trouble
Define transportation risk management
the identification, analysis, assessment, control, and avoidance, minimization or elimination of unacceptable risks
Define business continuity planning
the task of identifying, developing, acquiring, documenting, and testing procedures and resources that will ensure continuity of a firm's key operations in the event of an accident, disaster, emergency, and/or threat
Define "transit time"
the tiotal time moving from supplier to customer
What is the difference about Monopolistic Competition from above?
there are many small sellers, but with some differentiation of each product
What are some examples of the historical significance of transportation?
transcontinental R&R, Nile river, roman roads
T/F While there are many sellers in monopolistic competition, there is some differentiation in the product
true
business continuity planning
what we will do if the worst possible thing happens (what you do after it happens)
risk management plan
what you put in place to minimize impacts (what you do from keeping these things from happening)