Test 1: Quiz 1 and 2 Questions
Which is the correct equation for Return on logistics assets (ROLA):
(Revenue - Costs)/Assets
Which is the correct equation for Return on logistics assets (ROLA):
(revenue - cost)/Assets
What are the two largest cost categories in logistics systems?
1. Transportation 2. Inventory
Determine the optimum service level. Sales response rate= 0.20% change in revenue for 1% change in service level (fill-rate) Trading margin= $0.80 per case Carrying cost= 25% per year Annual sales through warehouse= 75,000 cases Standard product cost= $12.00 Demand standard deviation= 800 cases over lead time Lead time= 2 weeks
95%
Determine the optimum service level. Sales response rate= 0.20% change in revenue for 1% change in service level (fill-rate) Trading margin= $0.80 per case Carrying cost= 25% per year Annual sales through warehouse= 75,000 cases Standard product cost= $12.00 Demand standard deviation= 800 cases over lead time Lead time= 2 weeks
95%
Determine the optimum service level. Sales response rate= 0.20% change in revenue for 1% change in service level (fill rate), Trading margin= $0.80 per case, Carrying cost= 25% per year, Annual sales through warehouse= 75,000 cases Standard product cost= $12.00, Demand standard deviation= 800 cases over lead time, Lead time= 2 weeks
95%
Determine the optimum service level given the following data for a particular product: Sales Response Rate = 0.2% change in revenue for a 1% change in the service level Trading Margin = 1.25 per case Carrying Cost = 25% per year Monthly sales through the warehouse = 20,000 cases Standard product cost = $20 Demand standard deviaEon = 350 cases per week Lead Time = 4 weeks
97 - 98 %
Determine the optimum service level given the following data for a particular product: Sales Response Rate = 0.2% change in revenue for a 1% change in the service level Trading Margin = 1.25 per case Carrying Cost = 25% per year Monthly sales through the warehouse = 20,000 cases Standard product cost = $20 Demand standard deviation = 350 cases per week Lead Time = 4 weeks
97 - 98%
Determine the optimum Customer Service Level from the following data: Sales Response rate = .10% change in revenue for 1% change in service level Trading Margin = $0.50 per case Carrying Cost = .25% per year Monthly sales throughout warehouse= 2500 cases Standard product cost = $45 Demand standard deviation= 500 cases for 1 week Lead time= 3weeks
97%
Determine the optimum service level given the following data for a particular product: Sales Response Rate = 0.2% change in revenue for a 1% change in the service level, Trading Margin = 1.25 per case, Carrying Cost = 25% per year, Monthly sales through the warehouse = 20,000 cases Standard product cost = $20, Demand standard deviation = 350 cases per week Lead Time = 4 weeks
97-98%
According to the return on logistics assets equation (ROLA), which of the following are correct?
A&C are correct
According to the return on logistics assets equation (ROLA), which of the following are correct?
A. as assets decrease, ROLA increases C. as costs decrease, ROLA increases
Order filling requires
All of the above
Convenience products are goods and services that consumers purchase...
All of the above...
Optimum profit is the point where profit contribution equals marginal cost. As annual sales increase what happens to marginal cost?
An increase
What will increase the profit contribution when determining the optimum service level?
An increase in the sales response rate
Which of the following information is not needed to find delta P?
Annual carrying cost
John produces and sells a line of baked goods, mainly bread. Distribution is primarily through grocery stores. Identify as a convenience good, shopping good, or specialty good.
Convenience Good
All of the following are one of the six concepts for logistics strategy formulation except:
Cost Cutting
All of the following are one of the six concepts for logistics strategy formulation except:
Cost Cutting -Concepts for logistic strategy formulation: Total Cost Differentiated Distribution mixed strategy postponement shipment consolidation product standardization
Customer service transaction elements include all of the following, EXCEPT:
Ease of Theft
Staple food products fall under which of the following Supply Chain Strategies?
Efficient Supply Chain with predictable demand
Which of the following refers to members of the supply channel beyond a firm's immediate suppliers and customers?
Extended Supply Chain
(T/F) The highest penalty for customer service failures is refusal to purchase new items.
False
A Supply-to-Stock strategy (Efficient Supply Chain) consists of the following characteristics: excess capacity, quick changeovers, short lead times, flexible processing, premium transportation, and single order processing.
False
A Supply-to-Stock strategy (Efficient Supply Chain) consists of the following characteristics: excess capacity, quick changeovers, short lead times, flexible processing, premium transportation, and single order processing. T/F?
False
A company will always be able to increase sales by continuing to increase customer service.
False
Convenience products are those that are directed to ultimate customers.
False
Furniture is an example of a convenience good.
False
Game playing is the most popular method for gathering customer service information
False
Game playing is the most popular method for gathering customer service information.
False
If a company's trade margin is $.85/unit, its sales response rate is .18% change in revenue for a 1% change in service level , its standard product cost is $2.50/unit, and its annual sales are 64500 cases then the companies ΔP is equal to 256.71.
False
If a company's trade margin is $.85/unit, its sales response rate is .18% change in revenue for a 1% change in service level, its standard product cost is $2.50/unit, and its annual sales are 64500 cases then the companies delta P is equal to 256.71.
False
In order to maximize your return on logistics assets you take the difference from your costs and sales and divide that by your total assets.
False
In shipment consolidation, smaller shipments orders save you money rather than larger shipment orders due to the fact that you save money on man power.
False
Joe's Car Shop sells custom made cars. The cars Joe sells are considered shopping products.
False
Logistics adds value to products or services such as time and possession.
False
Logistics costs account for almost 30% of GDP.
False
Logistics costs account for almost 30% of GDP. T/F?
False
Logistics is used in several diverse areas but was first applied in manufacturing.
False
Logistics is used in several diverse areas nut was first applied to manufacturing.
False
Logistics strategy consists of three objectives: cost reduction, capital growth, and service improvement.
False
Medical care is a convenience good.
False
Optimum profit is the point where profit contribution margin equals carrying cost.
False
Order cycle time is the time elapsed between when a customer order, purchase order, or service request is placed by a customer and when the order is shipped.
False
Out of the four values that business creates in products and services, Logistics controls the form and place values.
False
Price is always an important criterion for specialty goods purchaser.
False
SWOT analysis, which is a strategic planning method, stands for Strengths, Weaknesses, Operations and Threats.
False
Supplies are industrial goods that are ordered frequently and contribute both directly and indirectly to production.
False
Supplies are industrial goods that are ordered frequently and contribute both directly and indirectly to production. T/F?
False
Supply chain management and logistics management are the same and deal with the entire supply chain
False
The Physical Distribution Channel refers to the time and space gap between a firm's immediate material sources and its processing points.
False
The Product Cycle time is the time elapsed when a customer order, purchase order, or service request is placed by a customer and when it is received by that customer.
False
The Product Cycle time is the time elapsed when a customer order, purchase order, or service request is placed by a customer and when it is received by that customer. T/F?
False
The objectives of logistics strategy are to minimize cost, maximize investment, and to maximize customer service.
False
The shape of the total cost curve is always going to be upwards sloping.
False
Transportation and order processing are the primary costs for logistics firms.
False
Optimum profit is the point where profit contribution margin equals carrying cost. T/F?
False (marginal cost)
Logistics strategy consists of three objectives: cost reduction, capital growth, and service improvement. T/F?
False (minimize cost, minimize investment, maximize customer service)
SWOT analysis, which is a strategic planning method, stands for Strengths, Weaknesses, Operations and Threats. T/F?
False (strengths, weaknesses, opportunities, and threats)
When choosing an efficient supply chain strategy, a company would choose Supply-to-Order?
False (supply-to-stock)
Transportation and Inventory are the two largest cost categories in logistics while administration and Inventory cost have the most frequent trade off in logistics
False. Most frequent trade off in logistics is between transportation and inventory costs.
___________ is an investment strategy that involves the buying of money market instruments or currencies in anticipation of a price rise or a future increase in demand.
Forward Buying
The hybrid-powered car is considered to be in which stage of its product-life-cycle?
Growth
Optimum profit is the point where profit contribution equals marginal cost. As annual sales increase what happens to marginal cost?
Increases
Which of the following would not result in a higher return on logistics assets?
Increasing Costs
During which phase of the product life cycle would you more likely use a responsive supply chain?
Introduction
Which of the following is a predictable/mature product?
Jello
What is the most important common service complaint and service element?
Late delivery and Speed of delivery
What is the most important common service complaint and service element?
Late delivery and speed of delivery
Logistics costs are NOT sensitive to such characteristics as
Lead Time
Logistics costs are NOT sensitive to such characteristics as:
Lead time
Which is NOT one of the most important customer Service elements?
Order Constraints
Which is NOT one of the most important customer service elements?
Order Constraints
Which is NOT one of the most important customer Service elements?
Order Constraints (elements: Price, product quality, service)
____is the time elapsed between when a customer order, purchase order, or service request is placed by a customer and when it is received by that customer.
Order Cycle Time
Business logistics splits into 2 categories. Which of the following are those two categories?
Physical supply & Physical distribution
Which of the following is not a primary process of a firms supply chain?
Product Scheduling
Not a customer service goal.
Purchasing Strategy
Which of the following is not a Customer Service Goal
Purchasing Strategy
Which of the following is not a Customer Service Goal?
Purchasing Strategy
Which of the following is not a customer service goal?
Purchasing Strategy
Which of the following is not a geographic product pricing method?
Quantity Discounts
what is the correct equation for Return on Logistics Assets
ROLA=(Revenue-Costs)/Assets
Which of the following is NOT one of the 4 major components of corporate strategy?
Retailer
Which of the following is NOT one of the 4 major components of corporate strategy?
Retailers
Which of the following is not one of the four major components of corporate strategy?
Retailers
Logistics primary key activities include which of the following:
Setting customer service goals Transportation Inventory Management Location
An automobile can be classified as a consumer good as well as a
Shopping Good
An automobile can be classified as a consumer good as well as a ________
Shopping Good
What is an example of Customer goods?
Shopping Goods
The following are characteristics of a Supply to Stock Supply Chain Strategy EXCEPT
Short Lead Times
The following are characteristics of a Supply to Stock Supply Chain Strategy EXCEPT
Short lead times
The following are characteristics of a Supply to Stock Supply Chain Strategy EXCEPT ...
Short lead times
Product availability and order cycle time are dominant physical distribution variables.
TRUE
Which of the following is an example of a predictable (aka mature) product
Tomato Soup
Which of the following is an example of a predictable (aka mature) product?
Tomato Soup
A mixed distribution strategy will have lower costs than a pure or single strategy.
True
A mixed distribution strategy will have lower costs than a pure or single strategy. T/F?
True
A supply-to-stock strategy is one where the supply channel is set up for maximum efficiency.
True
According to the weight-bulk ratio graph, as transportation costs decrease, the weight-to-bulk ratio increase
True
An item with a high value-weight ratio would have a low transportation cost and a high storage cost as a percent of sales price.
True
An item with a high value-weight ratio would have a low transportation cost and a high storage cost as a percent of sales price. T/F?
True
Capital reduction is strategy directed toward minimizing the level of investment in the logistics system.
True
Customers are more demanding of their supply chain because they desire quick response
True
Customers are more demanding of their supply chain because they desire quick response and mass customization.
True
Functional products with a predictable demand should be on an efficient supply chain. T/F?
True
More than any other factor, the level of logistics customer service provided dramatically affects system design.
True
Order-cycle-time is the time period from when a product is ordered or acquired until the time it is received by a customer. T/F?
True
Order‐cycle‐time is the time period from when a product is ordered or acquired until the time it is received by a customer.
True
Product Availability and order cycle time are dominant physics distribution variables of customer service.
True
Product availability and order cycle time are dominant physical distribution variables.
True
Product availability and order cycle time are dominant physical distribution variables. T/F?
True
Strategy is the process whereby plans are formulated for positioning the firm to meet its objectives.
True
Strategy is the process whereby plans are formulated for positioning the firm to meet objectives.
True
The dominant customer service elements are logistical in nature.
True
The main purpose of Logistics is to get the right goods to the right place at the designated time in good condition at the lowest cost and highest return on investment.
True
The main purpose of logistics is to get the right goods to the right place at the designated time in good condition and at the lowest cost and highest return on investment.
True
The most important service element is speed of delivery and most common customer complaint is late delivery. T/F?
True
The two points method for determining the sales-service relationship should be used in the diminishing return portion of the sales-service relationship curve. T/F?
True
Time is the only difference between the three levels of logistical planning which are Strategic, tactical, and operational.
True
Time is the only difference between the three levels of logistical planning which are strategic, tactical, and operational.
True
Value in logistics is primarily expressed in terms of time and place.
True
Setting points on the Sales-Service Relationship curve is involved in which Sales-Service Relationship Model?
Two-Point Method
Setting points on the Sales-Service Relationship curve is involved in which Sales-Service Relationship Model?
Two-Point method
A new version of an MP3 player would be classified as a/an ____________ product and therefore would use a _____________ supply chain?
Unpredictable, supply-to-order
In a generalized logistics system with Trade-offs when determining a balance between inventory cost and transportation cost with cost on the Y axis and customer service on the X axis the lowest total cost is at what point on the graph.
Where inventory cost and transportation cost intersect
What will increase the profit contribution when determining the optimum service level?
an increase in the sales response rate
what would be an example of a functional-efficient supply chain
bread
convenience goods, shopping goods, and specialty goods are______ goods?
customer
What would decrease the assets in the return on logistics assets (ROLA) formula?
decrease in assets, and an increase in cost
Buyer surveys are the best way to gather customer service information because they always give unbiased and reliable feedback.
false
In order to maximize your return on logistics assets you take the difference from your costs and sales and divide that by your total assets.
false
Joe's Car Shop sells custom made cars. The cars Joe sells are considered shopping products.
false
The two largest cost categories in logistics systems are transportation and inventory but are never used as trade offs for one another.
false
Transportation and Inventory are the two largest cost categories in logistics while administration and Inventory cost have the most frequent trade-off in logistics.
false
long term forecasts are more accurate than short terms forecasts
false
When classifying a product into customer of industrial goods one must look at the
function of the product
Which of the following is not a level of logistical planning?
geographic
Optimum profit is the point where profit contribution equals marginal cost. As annual sales increase what happens to marginal cost?
increases
raw materials, manufactured materials, supplies, and accessories are ______ goods?
industrial
Minimize cost minimize investment maximize customer service
objectives of logistics strategy
which is NOT one of the most important customer service elements?
order constraints
weight-bulk ratio, value-weight ratio, substitutability, risk are _________ characteristics?
product
work release is based on actual demand or the actual status of the downstream customers may cause long delivery lead times acts reactively
pull systems
which of the following is not a customer service goal
purchasing strategy
Work release is based on downstream demand forecasts keeps inventory to meet actual demand acts proactively
push systems
If the terms of sale is F.O.B. Origin, Freight prepaid then:
the buyer pays freight charges
The supply chain encompasses all activities associated with the flow and transformation of goods from:
the raw materials to the end user
which of the following is an example of a predictable (aka mature) product
tomato soup
what is a primary key activity/process?
transportation
An item with a high value-weight ratio would have a low transportation cost and a high storage cost as a percent of sales price.
true
Product Availability and order cycle time are dominant physics distribution variables of customer service
true
Stock availability has a dramatic effect on total order cycle time because it often forces product and information flows to move out of the established channel
true
aggregate forecasts are more accurate than disaggregate forcasts
true
the extended supply chain refers to those members of the supply chain beyond the firm's immediate suppliers or customers
true
A new version of an MP3 player would be classified as a/an ____________ product and therefore would use a _____________ supply chain?
unpredictable, supply-to-order
A new version of an MP3 player would be classified as a/an ____________ product and therefore would use a _____________ supply chain?
unpredictable, supply‐to‐ order
shipping tables and chairs in boxes unassembled is which of the following product characteristics
weight-bulk ratio