Chapter 1: What Is Logistics Management
inventory carrying costs
Capital cost, storage space cost, inventory service cost, inventory risk cost
d
What is true about the 5 S's? They are an independent system to organize tools They tell us there is no such thing as being too lean They were invented by Subaru as part of the Subaru philosophy They remind us that resiliency matters All of the above
a
When considering logistics tradeoffs and what type of service level to emphasize, your company should consider which of the following? What are the most important service characteristics to its customers How to be competitive based on price There are really no such thing as tradeoffs None of the above
packaging costs
also increase, primarily because you want to protect the product from loss, damage, or pilferage to a greater extent due to the greater potential loss. You
inventory costs
costs go up because more dollars are tied up in inventory, insurance costs will be higher, more security is needed, and the loss is higher if something negative does occur.
superior service
creates a "lock-in" whereby it is harder for the buyer to find a substitute for the supplier
processing
deals with the flow of information and the visibility of shipments during movement and storage.
product density
how much space a product takes up versus how much it weighs
transportation costs
inbound and outbound transportation
transportation costs
increase for many of the same reasons, plus you may want to use more expensive modes to get the product where it is going faster—to close a sale and free up cash faster.
logistics
part of supply chain management!!!
kaizen events
short term approach to enhancing efficiency that focuses on improving an existing process or an activity within a process - How can this process be improved? - If we make this change, how will the rest of the process be affected?
sort, simplify, sweep, standardize, sustain
what are the 5 S's from LS methodology?
defects, overproduction, waiting, not utilizing staff, transportation, inventory, motion, excess processing
what are the 8 wastes?
weigh out
when a product fills the weight requirement for a truck before it fills the available space
cube out
when a product fills up a trailer in terms of space before it hits the imposed weight limit
warehousing costs
• Warehousing and storage • Plant and warehouse site selection
lean practices
"Eliminating all processes, steps and materials that do not add value."
quantity utility
focuses on delivering customers the right amount of product. The Costco distribution center (DC) mentioned above may receive full truckload shipments of toilet paper, coffee, and canned corn at about the same time. Stores, however, do not need a whole truck of any of these items.
kaizen events
gatherings of people who are involved in the day to day management of the process
service logistics
All the people, facilities and supplies in place to effectively deliver services to customers.
b
Because of government regulations, a standardized trailer can weigh up to no more than 40,000 lbs. What type of tradeoff does this regulation affect? Logistics vs. the value of an item Logistics vs. Weight Density Logistics vs. Susceptibility to loss and damage All of the above
a
Because product returns are typically much higher with online sales than with in-store sales, online retailers should: Understand why customers return products and develop strategies for reducing the number of returns. Limit returns for online items or charge hefty restocking fees. Find ways to drive customers into shopping at bricks-and-mortar stores. All of the above
personalization
Consumer requirements in Logistics Industries: "want it now" _________________ millennial preferences Omnichannel shopping Aging consumer needs
humanitarian logistics
Effective planning, flow and storage of goods, information to alleviate the suffering of people
supply chain management
Encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third party service providers, and customers. In essence, supply chain management integrates supply and demand management within and across companies.
process
Functional areas can be integrated through a _______________ within the firm and cross the supply chain
supply
Globalization ____________ chains becoming increasingly longer due to sourcing materials from throughout the world With the move toward lean operations, inventory levels have been consistently reduced
logistics is part of supply chain management
How are logistics and supply chain management related?
a
In considering the eight wastes, which of the following is an example of overproduction? Giving the customer more product than ordered Holding excess inventory Cleaning more frequently than needed None of the above
a
In logistics, processing deals primarily with which of the following? The flow of information and the visibility of shipments during movement and storage The processing of payments quickly to improve cash flow Reducing waste Managing paperwork None of the above
a
In the 1980s, what was the largest category of logistics spending? Inventory carrying cost Trucking cost Air freight cost Administrative costs
a
In the 5 S's, which of the following is another way to say simplify? There is a place for everything, and everything in its place Eliminate the things that are not being used Standardize and develop repeatable processes Eliminate unnecessary movement waste
cost performance
Increase Role of IT Information and visibility within and across organizations improves ______________ _______________ and operational efficiency
customer service
Increasing Competitive Pressure _____________ ______________ is the hardest component for competitors to replicate of the marketing mix components Differentiates from larger competitors
smaller
Increasing Number of Delivery Points Retail outlets are beginning to expand their product offerings Now the manufacturer must be able to handle _____________ orders
inventory cost, transporatation
Increasing the number of warehouses increase what and decreases what?
decrease
Investments in information technology should decrease the cost of lost sales
e
Listening to employee suggestions for improvement is an example of which 5S methodology for eliminating waste? Sort Simplify Sweep Standardize Sustain
order
Logistics Activities include: Transport Inventory __________ processing Materials handling
pricing
Logistics and Marketing Interface Activities Customer Services $$________________ Packaging Retail Location
purchasing
Logistics and Production Interface Activities Product scheduling Plant Location _______________$$
more important
Logistics is starting to become what in today's competitive environment?
tradeoffs
Logistics management is about understanding...
increasing competitive pressure, shifts in channel power, globalization, increase in IT, product proliferation
More focus is placed on logistics because of...
c
Moving groups of people and suppliers, setting up camps, replenishing supplies and people, breaking camp and moving out describes which type of logistics? Event logistics Passenger logistics Military logistics Service logistics Humanitarian logistics
military logistics
Moving groups of people and supplies, setting up camps, replenishing supplies and people, breaking camp down again and moving it out.
stock keeping units
Product Proliferation proliferation greatly increases the challenges of inventory management Logistics professionals are not consulted about the impact of the increasing number of...
total cost concept
Recognizes that minimizing costs and satisfying customer demands can represent conflicting objectives
logistics
Supply chain management INCLUDES...
AI
Technology Adoption in Logistics Industries: Autonomous vehicles _______ Uberization 3D printing Big data Alternative funds
b
The amount of money that is spent on logistics in the U.S. economy in dollar terms is which of the following? Is flat Has increased over time Has decreased over time Not enough information to answer this question
category killer
The develop of __________ ____________- stores has resulted in a shift of channel power from manufacturers or retailers - Best Buy - Walmart
minimize
The goal of logistics is to minimize the system of logistics cost components while providing a specified level of customer service that meets the company's broader strategic objectives
event logistics
The resources (facilities, people, and infrastructures) used to organize, deliver and execute an event from initial schedule through teardown and clean up.
true
True or False?: While supply chain management is the current trend, functional logistics knowledge never goes out of style.
decreases
Using faster modes of transportation ______________ the cost of lost sales
a
Value can only be assessed from the standpoint of _______________? The eyes of the customer Shareholder value A company's stock price None of the above
inventory carrying costs, lot quantity costs, order processing costs, transportation costs, warehousing costs, cost of service level
What are all of the elements of logistics costs?
customer relationship, customer services, demand, orders, manufacturing flow, supplier relationship, product development, returns
What are all of the process in supply chain management?
b
What are service logistics? The basis for customer service, which is the heart of logistics Focused on all the people, facilities, and supplies in place to effectively deliver services to customers The resources (facilities, people, and infrastructures) used to organized, deliver, and execute an event from initial schedule through teardown and clean-up All of the above
time, place, and quanity
What are the three economic utilities in logistics?
processes, components, network structure
What are the three key elements in supply chaine management?
c
What does humanitarian logistics involves? Moving groups of people and supplies, setting up camps, replenishing supplies and people, breaking camp down again, and moving it out Focusing on B2B issues Planning the effective flow and storage of goods as well as the exchange of information to alleviate the suffering of people All of the above
a
What has improved logistics done for India? Raised the standard of living for rural farmers Virtually eliminated poverty Eliminated hunger All of the above
a
What is a Kaizen event? An event you hold to introduce lean principles in order to improve processes A specific methodology used to introduce the idea of the eight wastes An important method for improving organizational sustainability All of the above
eliminate waste
What is the fundamental concept from lean?!
minimize the system of logistics cost components
What is the goal of logistics?
b
What is the largest category of spending within logistics costs in the U.S. today? Inventory cost Trucking cost Air freight cost Administrative costs
d
What is the waste of motion? Movement of materials or information that does not add value Paying for a more expensive mode of transport than your customer needs Moving goods multiple times Movement of people that does not add value All of the above
d
When considering product fragility, which of the following is not true? As fragility increases, so does transportation costs As fragility increases, so does packaging cost As fragility increases, so does warehousing cost As fragility increases, so does pilferage cost
d
When thinking about the various types of logistics, which of the following is true? There is very little in common from one type to the other They are all virtually identical--only the names are changed The book focuses on service logistics Many of the key logistics principles discussed are applicable to all of the various types of logistics
e
Which of the following are potential causes of logistics disruptions? Natural Disasters Transporation Strikes Border Delays Piracy All of the above
c
Which of the following describes event logistics? The management of logistics to deliver relief after a disaster Focused on all the people, facilities, and supplies in place to effectively deliver services to customers The resources (facilities, people, and infrastructures) used to organize, deliver and execute an event from initial schedule through teardown and clean-up Very predictable because every event is vastly different
c
Which of the following describes more developed economies? Rely on rail as a primary means of freight transportion Spend more on logistics because their products tend to be imported and shipped greater distance Spend less on logistics costs because their logistics systems are more efficient Logistics costs are unrelated to an economy's stage of development
b
Which of the following does not describe transportation waste? a. Moving things by a more expensive mode than the customer needs. b. Excess movement done by people c. Transshipping orders d. Buying things from distant locations instead of locally e. All of the above f. Only a, c, and d
b
Which of the following is not one of the 5 S's? Sustain Source Sort Sweep
b
Which of the following is not one of the eight wastes? Not utilizing staff talents Kaizen events Inventory Defects
e
Which of the following is not one of the seven rights of logistics? Right transportation Right place Right cost Right time None of the above; that is, they are all part of the seven rights
c
Which of the following is true regarding how a product's value influences logistics costs? Warehousing cost is unaffected by the value as warehousing depends on the space something takes up Transportation is unaffected by value as it is based on space and weight Inventory costs go up because more valuable products tie up more cash All of the above
c
Which of the following is true regarding the tradeoff between transportation costs and service? Companies should use whatever transportation is required to achieve the customer's desired service level. Companies should make the customer pay for transportation costs. As the money we spend on transportation goes up, the companies cost of lost sales generally goes down. It is always a good investment to spend more money on transport to achieve higher service levels.
a
__________ creates possession utility. Marketing Getting things where they are needed Logistics Supply chain management
order processing costs
communications, information systems costs
possessions utility
created by marketing when it translates customer needs into product and service requirements, promotes the resulting product's value, and facilitates exchange so the customer may "possess" it.
process mapping
creating an accurate depiction of a process and performance
cost of service level
customer service costs, parts and service, returns
place utility
involves delivering an item exactly where it is needed. One of the main reasons that you shop online is place utility.
related
lot quantity costs and inventory carrying costs are inversely...
globalization
macroeconomic trends in Logistics Industries: ________________ volatile commodity prices climate disruption urbanization
lot quantity costs
materials handling, procurement, production setup
passenger logistics
moving people
time utility
occurs when a product arrives when it is needed. In just-in-time manufacturing, parts and components are carefully staged with precise delivery times to arrive just when they are needed for assembly or sale.
safety
operational requirements in Logistics Industries: free trade agreements environmental legislation ____________ requirements resource availability
logistics management
part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers' requirements.
cube
the amount of space a product uses
form utility
the primary responsibility of purchasing and operations managers who acquire inputs and transform them into products or services of greater customer value.
total cost concept
the sum of logistics operations as a system and seek to minimize the total cost of the system rather than the individual functions - stereo system (tuner, media player, speakers)
