LSCM 3960
Hasty Manufacturing orders 80,000 annually. They order 7 times a year. They hold 8,119 units in safety stock. The MAXIMUM number of units Hasty Manufacturing holds throughout the year is:
19,548 Q + safety stock
Given that inventory valued at full cost equals $14.4 million, variable cost of the inventory investment for one year is (your answer must be accurate to the nearest dollar):
2,825,798
The CBL Exam Company is attempting to locate a new plant to serve the Midwest. The company has two raw material sources and three market areas. You want to centrally locate a plant relative to all sources and markets based on transportation rates. The least cost location for the new plant is at the grid VERTICAL coordinate of: X Coordinate Y Coordinate Tons Source A 9 7 600 Source B 7 3 400 Market X 1 7 200 Market Y 9 1 400 Market Z 5 1 300
3.95
Jim Bob Airlines has one 60 seat plane. On its last five flights it had 31 passengers from MSY to DFW, 33 passengers from DFW to OKL, 50 passengers from OKL to TUL, 33 passengers from TUL to FWB, and 44 passengers from FWB to MSY. For the last five flights, what was the load factor? (Make sure your answer is accurate to the decimal place.)
63.67
The CBL Exam Company is attempting to locate a new plant to serve the Midwest. The company has two raw material sources and three market areas. You want to centrally locate a plant relative to all sources and markets based on transportation rates. The least cost location for the new plant is at the grid HORIZONTAL coordinate of: X Coordinate Y Coordinate Tons Source A 9 7 600 Source B 7 3 400 Market X 1 7 200 Market Y 9 1 400 Market Z 5 1 300
7.11
Hasty Manufacturing orders 60,000 annually. They order 7 times a year. They hold 3,779 units in safety stock. The AVERAGE number of units Hasty Manufacturing holds throughout the year is:
8,064.7 (Q/2) + safety stock
Hasty Manufacturing orders 98,000 annually. They order 9 times a year. They hold 9,036 units in safety stock. The MINIMUM number of units Hasty Manufacturing holds throughout the year is:
9,036 0 + safety stock
Assume that a company has sales of $16.1 million (measured at cost, not sales price). Also assume that the firm's inventory turn is equal to 3 and the inventory carrying costs are equal to 32.5%. If inventory turns are increased from 3 to 7, this would result in decreasing inventory carrying costs by (your answer must be accurate to the nearest dollar):
996.667
Both economic and safety regulation of the US transportation industry have been declining since the onset of deregulation in the late 1970s. True or False
False
If a firm concentrates on reducing the individual costs of each separate logistics function or activity, overall logistics costs will ALWAYS be reduced. True or False
False
In order to achieve least total cost logistics, management must minimize all logistics costs. True or False
False
Increasing inventory turns from 10 to 15 has a greater impact than increasing inventory turns from 1 to 2. True or False
False
Management will automatically achieve less total cost logistics by minimizing inventory carrying costs True or False
False
Most customers place more value on speed of delivery in filling orders than on order reliability and/or order consistency. True or False
False
The manufacturer must lead the channel design process regardless of the relative market power and financial strength of the members of the supply chain. True of False
False
When a traffic manager increases the number of carriers used, market power is increased. True or False
False
Cross-docking bypasses the storage activity by transferring items directly from the receiving dock to the shipping. True or False
True
Decreasing inventory turnover may lead to increased profitability. True or False
True
EOQ models exist that include adjustments for volume transportation rates and for quantity discounts True or False
True
For most shippers, in the selection of a specific transport mode or carrier, consistency of service is much more important than time-in transit. True or False
True
The "cost-of-service" pricing approach establishes a lower limit of transportation prices or rates. True or False
True
The "value-of-service" pricing approach establishes an upper limit of transportation prices or rates. True or False
True
When a traffic manager reduces the number of carriers used, market power is increased. True or False
True
Seasonal stocks are NOT influenced by a. EOQ b. weather c. transportation d. holidays
a. EOQ
A DRP system is usually coupled with a _______________ system in an attempt to manage the flow and timing of both inbound materials and outbounds finished goods a. MIP b. JIT c. Kan Ban d. VMI/Consignment
a. MRP
What is the best financial metric to show the profit an organization generates in relationship to assets utilized? a. ROA b. profit c. return on net worth d. stock price
a. ROA
Ensuring the availability of the right product, in the right quantity, and the right condition, at the right place, at the right time, for the right customer at the right cost, is which definition of logistics? a. Seven Rs b. Council of Logistics Management c. Society of Logistic Engineers d. supply chain logistics
a. Seven Rs
An "executive dashboard" is a. a small number (usually less than five) of KPIs b. used by senior management to track profits c. a metric used by the Board of Directors d. a trend that has only recently developed
a. a small number (usually less than five) of KPIs
Economic deregulation sparked competition among carriers in several areas. Which of these is not an area of competition? a. accessibility b. pricing c. performance d. services
a. accessibility
Economies and companies could improve their "wealth" by a. allowing specialization of tasks b. ensuring that logistics is used to gain advantage in the marketplace c. becoming multi-national d. moving production off shore
a. allowing specialization of tasks
In his book, The Wealth of Nations, Adam Smith stated that economies and companies improve their wealth by a. allowing specialization of tasks b. ensuring that logistics is used to gain advantage in the marketplace c. becoming multi-national d. moving production off shore
a. allowing specialization of tasks
Recycling and environmental concerns a. are often related to regulatory policy at the local, state, and federal levels b. have led to waste streams being managed by 3PLs c. require the review of the feasibility of the materials requirements plan d. have led to green laws
a. are often related to regulatory policy at the local, state, and federal levels
What vendor selection criteria are described by production capability, labor relations, and operating controls? a. capability b. quality c. reliability d. financial
a. capability
Vertical collaboration refers to a. collaboration among buyers and sellers in the supply chain b. collaboration among carriers and shippers c. collaboration that moves up the supply chain d. collaboration with competitors
a. collaboration among buyers and sellers in the supply chain
Packaging is a. critical to logistics b. critical to manufacturing c. critical to product differential d. a factor in outsourcing
a. critical to logistics
Each of the following functional areas would typically be included within logistics: a. customer service, order processing, transportation, warehousing and storage b. human resources/personnel management, finance, accounting, engineering c. order processing, retailing, wholesaling, manufacturing d. transportation, purchasing, research and design e. warehousing and storage, wholesaling, returns, accounting
a. customer service, order processing, transportation, warehousing and storage
A metric requires a. definiton b. competition analysis c. trade association oversight d. measures
a. definiton
Dependent demand relates to a. demand for another inventory item or product b. the spare part needed to fill the order c. VMI inventories d. the cost of capital for the firm
a. demand for another inventory item or product
Which of the following is the "marketing mix"? a. distribution, price, product, promotion b. price, finance, management, customer service c. product, engineering, research, and design d. profit, accounting, distribution, retailing e. promotion, wholesaling, warehousing, purchasing
a. distribution, price, product, promotion
What is an amalgam of catalogs from vendors within a market that is available via the internet called? a. electronic marketplace b. buy-side system c. sell-side system d. on-line trading community
a. electronic marketplace
Air carriers were historically looked upon as a. emergency only carriers b. having equipment shortages c. a fringe participant d. insignificant
a. emergency only carriers
There are four steps in the Managing Sourcing and Procurement Processes. Which does not belong? a. examine off shore and e-procurement suppliers b. evaluate the effectiveness of the strategic sourcing process c. determine the necessary levels of investment d. determine the type of purchase
a. examine off shore and e-procurement suppliers
In the Item Procurement Importance Matrix, what item is described as low risk, low value? a. generics b. commodities c. criticals d. distinctives
a. generics
Traditional customer profitability analyses would start with ______________ less returns and allowances (net sales) and subtracts the cost of goods sold a. gross sales b. back orders c. the forecast d. gross margin
a. gross sales
Applying internet technology to the order management process has allowed organizations to not only take time out of the process but also to a. increase the velocity of cash back to the selling organization b. attract new customers c. develop "Clicks" and "Bricks" firms d. manage inventory more effectively
a. increase the velocity of cash back to the selling organization
INCREASING the number of warehouses will _____________ the warehousing and inventory costs, but may ________________ transportation costs. a. increase, decrease b. decrease, decrease c. increase, increase d. decrease, increase
a. increase, decrease
The internal balancing method deals with a. inventory and production flexibility b. price and lead time c. functional silos d. channel selection
a. inventory and production flexibility
Resource requirements planning (RRP) a. is a long-run, macro-level planning tool b. checks the feasibility of the master production schedule c. checks the feasibility of the materials requirement plan d. is a long-range materials plan that translates annual business plans
a. is a long-run, macro-level planning tool
Exponential smoothing a. is one of the most commonly used techniques b. uses primarily weighted averages to compensate for errors c. is used to determine random variations d. is used to reduce channel fluctuations
a. is one of the most commonly used techniques
One of the major challenges of supply chain management is a. maintaining the visibility of inventory b. forward buying c. building safety-stock inventory d. pushing inventory back to vendors
a. maintaining the visibility of inventory
What activity is described as the movement of goods into a warehouse, the placement of goods in a warehouse, and the movement of goods from storage to order picking areas and eventually to dock areas for transportation out of the warehouse? a. materials handling b. physical distribution c. business logistics d. order fulfillment
a. materials handling
The current logistics management approach is supported by which performance measurement concept? a. metrics b. total cost c. least total cost d. the D1 concept developed by the Supply Chain Council
a. metrics
The logistics/supply chain network transformation team a. must be aware of the firm's overall business and corporate strategies and the supply chain in which it participates b. will not consider the potential involvement of third-party logistics suppliers as part of their responsibilities c. includes workers from divisional levels only d. should not include outside consultants
a. must be aware of the firm's overall business and corporate strategies and the supply chain in which it participates
In selecting a transport mode or carrier, the most important factor for most shippers would be: a. on-time pickups and deliveries b. carrier reputation c. quality of carrier sales force d. lowest freight rate e. satisfactory insurance coverage
a. on-time pickups and deliveries
Which is true regarding optimization models? a. optimization models are based on precise mathematical procedures that are guaranteed to find the "best" solution for the problem b. optimization models are able to accommodate broad problem definitions, rather than provide an optimum solution c. The Grid Technique is a powerful optimization model d. Optimization models will guarantee increased profits
a. optimization models are based on precise mathematical procedures that are guaranteed to find the "best" solution for the problem
Whether the relationship may or may not be with a provider of logistics services, today's supply chain relationships are MOST EFFECTIVE when collaboration occurs among the ____________ who are involved. a. participants b. third party logistics providers c. customers d. suppliers
a. participants
An inbound-to-operations logistics system is also referred to as a. physical supply b. physical distribution c. dedicated fulfillment d. demand management
a. physical supply
Lean production relies on a. pull-based systems b. push-based systems c. the Toyota production system (TPS) d. just-in-time system
a. pull-based systems
Gross margin equals a. sales minus COGS b. COGS - taxes c. sales + taxes d. COGS - sales
a. sales minus COGS
A warehouseperson may offer REDUCED rates to the use of a public warehouse if the user: a. stores goods regularly b. stores higher valued goods c. stores goods with low density d. reduces the amount of packaging on fragile goods e. all of the above
a. stores goods regularly
Approximately two-thirds of 3PL customers think their providers supply a. tactical or operational services b. strategic or integrative services c. trucking and warehouse services d. a firm that can supply a competency that is not core to the firm
a. tactical or operational services
A major challenge is _____________ of total cost of the return flow processes. a. the estimation b. the management c. the tracking d. the control
a. the estimation
The classical objective of a network design model has been a. to establish the number, location, and size of finished goods distribution centers and associated product flows b. to find the best location for a forward facing warehouse c. to examine the finished goods flow from the warehouse to the customer d. to measure and control site locations
a. to establish the number, location, and size of finished goods distribution centers and associated product flows
Which are the major modes of international transportation a. water and air b. water and rail c. rail and motor d. rail and air
a. water and air
Trade imbalance affect a. water carriers b. motor carriers c. railroads d. pipeline
a. water carriers
Transportation terms of sale establish a. when ownership and title of the goods passes from seller to buyer b. what must be shown on the bill of landing c. which transportation mode must be used d. who handles freight claims
a. when ownership and title of the goods passes from seller to buyer
When a firm "sources strategically," it is a. working together with customers and suppliers in a creative, positive way b. seeking least cost vendors c. matching product and raw material flows to minimize transportation costs d. reacting to current competitive situations
a. working together with customers and suppliers in a creative, positive way
Using Wilson's EOQ formula, what will happen to the average inventory level (Q*/2) if unit cost is INCREASED by 4.1% and annual demand is DECREASED by 4.1% at the same time? a. (Q*/2) will increase b. (Q*/2) will decrease c. (Q*/2) will remain the same
b. (Q*/2) will decrease
Transportation may account for as much as ____ percent of the cost of reverse flow. a. 20 b. 25 c. 40 d. 50
b. 25
As market forces continue to exert pressure on companies to improve profitability, the quest for lower-cost manufacturing has been a factor in the relocation of manufacturing from Mexico to ____________? a. South America b. Asia c. Russia d. Canada
b. Asia
A project layout is: a. a floor plan of the production facility b. a fixed location layout where the product remains in place for the duration of production c. a product-focused layout in which machines and workers are arranged according to the progressive sequence of operations d. a process-focused layout that groups together similar equipment or functions
b. a fixed location layout where the product remains in place for the duration of production
A demand-driven system is also known as: a. a supply chain b. a pull system c. a marketing system d. a multi-echelon system
b. a pull system
A newly launched twenty-first century addition to production strategy which leverages lean manufacturing strategies, Six Sigma best practices, and real-time actionable intelligence from the factory floor is called: a. just-in-time inventory b. adaptive manufacturing c. machine flexibility d. capacity requirements planning
b. adaptive manufacturing
Which of the following is NOT part of the Supply Chain network? a. plants b. all choices are a part of the supply chain network c. terminals d. distribution centers e. stores
b. all choices are a part of the supply chain network
The decision to alter the supply chain process is essentially ___________ issue. a. management b. an optimization c. a supply chain d. a customer satisfaction
b. an optimization
Heuristic models a. may, but generally do not provide an optimum solution b. are able to accommodate broad problem definitions c. have fallen from use because of SAILS d. are unable to incorporate certain rules into the decision-making process
b. are able to accommodate broad problem definitions
WIP inventories are a. NOT included on the balance sheet b. associated with manufacturing c. the same as VMI inventories d. NOT impacted by EOQ
b. associated with manufacturing
Order management system represents the principal means by which a. price and lead time add value b. buyers and sellers communicate information relating to individual orders of product c. orders are handled inside the company d. customers are segmented by profitability
b. buyers and sellers communicate information relating to individual orders of product
Activity Based Costing a. is useful for distributions centers but not customers b. can be combined with customer segmentation c. is too sophisticated for many applications d. is a very new management science
b. can be combined with customer segmentation
In the Executive Sourcing Strategy step, the most important thing is to a. appoint the sourcing committee members from the affected groups b. choose a supplier or suppliers, depending on the objectives of the sourcing decision c. verify which vendors are either TOM or ISO 9000 d. determine which vendors have the lowest prices
b. choose a supplier or suppliers, depending on the objectives of the sourcing decision
A situation where a garage returns worn tires for retreading and receives them back is called a a. reverse logistics system b. closed-loop system c. waste stream d. value added system
b. closed-loop system
_______________ exist for basic raw materials such as grain, oil, and sugar. a. price lists b. commodity markets c. negotiations d. price quotes
b. commodities markets
Collaboration occurs when a. a firm seeks advantages by sourcing with critical partners b. companies leverage each other on an operational basis so that together they perform better than they did separately c. many logistics or supply chain improvements can be made within one firm by eliminating "stovepipes" d. senior executives focus on supply chain economies to improve their firms' financials
b. companies leverage each other on an operational basis so that together they perform better than they did separately
If demand and lead time are constant, only __________ is necessary. a. associated stock b. cycle stock c. safety stock d. speculative stock e. seasonal stock
b. cycle stock
Which is NOT a manufacturing method? a. make to stock b. delayed differentiation c. build to order d. assemble to order
b. delayed differentiation
Which of these is NOT a production method a. make-to-stock b. delayed differentiation c. build to order d. assemble to order
b. delayed differentiation
Inventory and the GDP grew by ___________ amounts between 1994 and 2010 a. the same b. different c. inversely proportional d. exponential
b. different
Processes that can produce a range of products are said to have a. economies of scale b. economies of scope c. routing flexibility d. work centers
b. economies of scope
Four types of forecast error measures can be used. Which of the following is NOT one of the four types? a. cumulative sum of forecast errors b. exponential smoothing for trends c. mean squared error d. mean absolute deviation
b. exponential smoothing for trends
What vendor selection criteria are described by price and financial stability? a. capability b. financial c. quality d. reliability
b. financial
Each of the following functional areas would typically be included within logistics EXCEPT a. customer service b. human resources/personnel management c. order processing d. transportation e. warehousing and storage
b. human resources/personnel management
Application of the grid technique to the location of a city warehouse a. is no different from applying it in any other situation b. incorporation a blanket rate structure that applies the same rate from an origin to any point within the city or commercial zone c. considers the costs of moving raw materials into the facility, and moving finished goods to the customers d. accounts for information like highway access and facility availability within the grid coordinates
b. incorporation a blanket rate structure that applies the same rate from an origin to any point within the city or commercial zone
Assuming the cost to place an order is constant, all other things remaining the same, DECREASING the order quantity (Q*) causes total ANNUAL ordering costs to: a. decrease b. increase c. remain the same d. cannot be determined
b. increase
All of the following are reasons for holding inventory EXCEPT: a. inventories enable specialization in manufacturing b. inventories eliminate the variation in supply and demand c. inventories enable the firm to achieve economies of scale d. inventories provide protection from uncertainties in demand in the order cycle e. inventories act as a buffer between critical interfaces within the channel of distribution
b. inventories eliminate the variation in supply and demand
Capital cost focuses on the cost of capital tied up in _____________ and the resulting lost opportunity from investing that capital elsewhere a. plants b. inventory c. distribution centers d. WIP
b. inventory
For most firms, the MOST important measure of customer service is: a. profitability of the particular channel of distribution b. inventory availability within a specified order cycle time c. the length of the order cycle d. the number of decentralized transaction within a business cycle e. the ability to backorder
b. inventory availability within a specified order cycle time
Which is true regarding the facility/supply chain network design decision? a. the facility's impact on other functional areas should be considered, but it is not as important b. it should be coordinated closely with the corporate and overall business strategies that may be in place c. global locations should not be considered d. generally, qualitative criteria are considered first
b. it should be coordinated closely with the corporate and overall business strategies that may be in place
Which management area in an organization does not normally have transportation responsibility? a. marketing b. manufacturing c. procurement d. logistics
b. manufacturing
All four subdivisions of logistics have some common characteristics. Which of the below does not belong in the list: a. transportation b. marketing c. scheduling d. forecasting
b. marketing
All of the following are goals of purchasing EXCEPT: a. provide an uninterrupted flow of materials, supplies and services required to operate the organization b. maximize the number of public warehouses utilized in order to avoid the high fixed costs of plant warehouses c. keep inventory investment and loss at a minimum d. maintain adequate quality standards e. find or develop new and existing suppliers
b. maximize the number of public warehouses utilized in order to avoid the high fixed costs of plant warehouses
The demographics of our society has changed because a. the "Baby Boom" generation is now turning 60 b. of the increase in two-career families and single-parent households c. of immigration d. birth rates have changed
b. of increase in two-career families and single-parent households
The traditional role of customer service at the interface between marketing and logistics manifests itself through the ______________ dimension of the marketing mix. a. price b. place c. product d. promotion
b. place
The utility that is created by moving goods from production points to market points where demand exists is referred to as a. form b. place c. time d. possession
b. place
Customer relationship management is the art and science of a. demand management b. positioning customers to improve the profitability of the organization c. management discipline d. customer profitability
b. positioning customers to improve the profitability of the organization
An organization selling its products FOB destination holds the title to the goods until: a. picked up by the trucker b. products reach the customer's facility c. the customer is invoiced d. the customer receives the goods into their inventory system
b. products reach the customer's facility
Logistics creates which utility through production forecasting, production scheduling and inventory control? a. form utility b. quantity utility c. time utility d. possession utility
b. quantity utility
An important sustainability issue that has received much more scrutiny in recent years is the: a. focus on adequate inventory levels b. reduction in packaging waste by using alternate materials c. effort to move warehouse storage closer to consumers d. emphasis on materials handling and warehouse design
b. reduction in packaging waste by using alternate materials
In the SCOR Model there are five major categories of metrics that need to be used to measure the performance of Process D1: reliability, ____________, agility, costs, and asset management. a. ROA b. responsiveness c. supply chain d. cash to cash cycle
b. responsiveness
The type of functional inventory that helps a firm from being out of stock due to unexpected increases in demand to a. cycle stock b. safety stock c. promotional stock d. speculative stock e. transit stock
b. safety stock
When a specific point in time, or level of production, is chosen and costs are developed for the various logistics cost centers, it is called a. least cost analysis b. short run analysis c. cost center analysis d. link node analysis
b. short run analysis
A warehouseperson may offer HIGHER rates to the user of a public warehouse if the user: a. stores goods regularly b. stores higher valued goods c. stores goods with high density d. increases the amount of packaging on fragile goods
b. stores higher valued goods
When a firm "customizes" their supply chain, it is a. trying to improve asset utilization b. tailoring the chain to be responsive to the needs of individual customer segments c. responding to competitive situations d. revising its supply chain in light of current economic conditions
b. tailoring the chain to be responsive to the needs of individual customer segments
All the following are inventory risk costs EXCEPT: a. obsolescence b. taxes c. damage d. shrinkage e. relocation costs
b. taxes
The first facility consideration is to determine a. how close to source it should be b. the size of each operation within the network c. how close to the customer it should be d. where competitors are located
b. the size of each operation within the network
As the number of warehouses DECREASES a. transport costs will decrease; inventory costs and costs of lost sales will increase b. transport costs and cost of lost sales will increase; inventory costs will decrease c. transport costs and inventory costs will decrease; cost of lost sales will increase d. transport costs and cost of lost sales will decrease; inventory costs will increase e. transport cost, inventory, and cost of lost sales will all decrease
b. transport costs and cost of lost sales will increase; inventory costs will decrease
On a "PER UNIT" basis: a. variable costs vary with volume and fixed costs remain constant b. variable costs are fixed with volume and fixed costs vary with volume c. both variable costs and fixed costs vary with volume d. both variable costs and fixed costs remain constant
b. variable costs are fixed with volume and fixed costs vary with volume
Which is NOT a mode of transportation? a. truck b. air c. 3PL d. pipeline
c. 3PL
The biggest and best known example of a regional trade agreement (RTA): a. World Trade Organization (WTO) b. General Agreement on Tariffs and Trade (GATT) c. European Union (EU) d. Customs Trade Partnership Against Terrorism (C-TPAT)
c. European Union (EU)
______________ is a set of international standards that establish the minimum requirements for all organization's quality system. a. Deming award b. Malcom Baldrige National Quality Award c. ISO 9000 d. ISO 14000 e. Supplier Certification Award Program
c. ISO 9000
The global logistics channel intermediary that supervises the movement of goods through outcomes and ensures that the documentation accompanying a shipment is complete and accurate is known as a. a foreign freight forwarder b. an export packer c. a customs house broker d. a foreign trade specialist
c. a customs house broker
One type of demand fluctuation is caused by random variation. What is random variation? a. errors in inventory management b. errors not caught by using exponential smoothing c. a development that cannot normally be anticipated d. failure to properly execute the SO&P process plan
c. a development that cannot normally be anticipated
Full collaboration is the dynamic combination of a. buyers, sellers, retailers, and 3PLs b. buyers, sellers, retailers, 3PLs, and appropriate government agencies c. both vertical and horizontal collaboration d. buyers and sellers only
c. both vertical and horizontal collaboration
Horizontal collaboration refers to a relationship that is ___________ and/or ____________. a. 3PLs to 3PLs and/or service provider to service provider b. collaboration with horizontal and/or vertical competitors c. buyer to buyer and/or seller to seller d. flat across the chain and/or involving partners equal in size
c. buyer to buyer and/or seller to seller
Desirability refers to a. performance reporting and scorecarding b. attractive packaging choices c. characteristics that influence modal selection d. ride quality
c. characteristics that influence modal selection
Another driving influence for supply chain reexamination has been the desire of organizations to change their supply chain focus from a ________________ to an "investment" center. a. warehouse system b. logistics-oriented system c. cost center d. value neutral
c. cost center
The essence of demand management is to estimate and manage ____________ and use this information to make operating decisions a. channel orders b. vendors and suppliers c. customer demand d. SOP processes
c. customer demand
Which of the following is NOT part of how world class collaboration skills are developed a. define the benefits of collaboration b. make the investment c. determine how the benefits will be shared d. dedicate "A" players
c. determine how the benefits will be shared
Which of the following does NOT belong in the list of the seven principles of supply chain management? a. segment customers based on service needs b. differentiate products closer to the customer c. develop an outsourcing strategy to maximize asset utilization d. adopt channel-spanning performance measures
c. develop an outsourcing strategy to maximize asset utilization
Ordering cost refers to the expense of placing an order and a. includes the cost of capital b. relates to the material management concept c. does not include the cost of the product d. not receiving it
c. does not include the cost of the product
Which is NOT a major challenge for many established manufacturers? a. competition b. customer demand c. expanding product life cycles d. pressure for efficiency
c. expanding product life cycles
Which of the following would be considered a nontraditional service being offered by carriers? a. claim handling b. contract carriage c. facility location analysis d. pickup and delivery e. rating (pricing)
c. facility location analysis
It can be argued that ___________ is the second language of logistics and supply chain management. a. quality b. manufacturing c. finance d. sales
c. finance
Information and ____________ are important dimensions in reverse logistics and closed loop supply chains. a. transportation b. flow c. financials d. direction
c. financials
Green laws have a. started reverse flows b. only recently ben enacted c. had a major impact on firms d. are still being evaluated
c. had a major impact on firms
Security legislation a. has not had much impact on transportation carriers b. has caused some firms to stop offshore sourcing c. has caused expense issues for carriers d. has created unnecessary restrictions of legitimate trade
c. has caused expense issues for carriers
In the Assess Supply Market step, the firm a. determines which are the least cost vendors b. decides which vendors are located closest to the firm's plant to insure timely delivery c. identifies all possible suppliers that might be able to satisfy the user's needs d. defines the parameters of the sourcing strategy process
c. identifies all possible suppliers that might be able to satisfy the user's needs
The challenge to develop and sustain an efficient and effective supply chain(s) requires organizations to address a number of issues. Which is NOT included? a. complexity b. inventory development c. inventory carrying costs d. technology
c. inventory carrying costs
A(n) ____________ relationship generally exists between the cost of lost sales and inventory cost. a. reverse b. proportional c. inverse d. non linear
c. inverse
Benefits to a carrier of improved routing and scheduling include all of the following EXCEPT: a. greater vehicle utilization b. higher levels of customer service c. lessening of competition d. lower transportation costs e. reduced capital investment is equipment
c. lessening of competition
ALL of the following represent savings associated with volume buying EXCEPT a. reduction in purchase price b. reduction in administrative costs c. lower capital costs associated with the inventory investment d. supports JIT purchasing e. 3 and 4
c. lower capital costs associated with the inventory investment
Outsourcing involves a. moving company facilitates away from the home offices b. hiring foreign nationals to manage parts of the business c. obtaining materials, parts, and products from other companies d. building a factory in another country
c. obtaining materials, parts, and products from other companies
If you were to "manage" Wilson's EOQ as a means of reducing your company inventories, which variable of Wilson's EOQ would make the most sense to change a. inventory carrying cost b. unit price c. ordering cost d. annual demand
c. ordering cost
The main strategy behind routing guides is to a. maintain exact control b. comply with or enforce FOB terms c. promote supply chain excellence d. select between modes
c. promote supply chain excellence
The product's dollar value typically affects the cost of logistics activities. Which is NOT one of these costs? a. warehousing costs b. transportation costs c. promotion costs d. packaging costs
c. promotion costs
What is the effect of tapering rates on facility location? a. pushes the raw materials sources toward the location b. pulls the facility toward the location c. pulls the location toward the source or the market d. makes the optimum location at the midpoint between raw material sources and the marketplace
c. pulls the location toward the source or the market
Which of the following is NOT a reactive capability strategy? a. machine flexibility b. routing flexibility c. resource requirements planning d. offshoring
c. resource requirements planning
Globalization was initially driven by countries a. seeking new territories b. outside the US seeking to establish plants in the US c. seeking materials and goods not available in their own land d. sponsoring trading missions
c. seeking materials and goods not available in their own land
Which of the following is NOT a result (directly or indirectly) of the Motor Carrier Act of 1980? a. increasing competition b. overall number of TL motor carriers has increased c. service levels provided by carriers have declined d. the number of negotiated shipper-carrier agreements has increased e. the influence of rate bureaus on carrier pricing has declined
c. service levels provided by carriers have declined
From a business and supply chain perspective, ______________ are usually based upon a recognition that industrial systems need to be in harmony with nature by not depleting resources beyond their replacement or regeneration rate. a. life cycle practices b. ecological practices c. sustainability practices d. reverse logistics practices
c. sustainability practices`
The term replenishment cycle refers to a. orders for raw material b. material management c. the acquisition of additional inventory d. inventory and material management
c. the acquisition of additional inventory
Assemble-to-order production a. customer orders are filled from finished goods inventories, and production orders are used to replenish finished goods inventories b. the finished product is a combination of standard and custom-designed components that meet unique needs of a specific customer c. the finished product is generally a combination of common components and a limited number of options or accessories made available to the customer d. highly tailored products are created whose specifications require unique engineering design or significant customization
c. the finished product is generally a combination of common components and a limited number of options or accessories made available to the customer
Please read the following statements: Statement I. All logistics budgets are dynamic. Statement II. Some logistics costs are static. a. both statements are true b. the first statement is true, the second is false c. the first statement is false, the second statement is true d. both statements are false
c. the first statement is false, the second statement is true
Cost/Value refers to a. getting the best value for the money spent b. U.S. firms competing in the global arena c. the importance of cost and value at the very end of the supply chain d. product variety
c. the importance of cost and value at the very end of the supply chain
Those customers who are in the "Danger Zone" segment are a. likely to switch to a competitor b. have been a customer for less than a year c. the least profitable d. are using ABC to drive down the price
c. the least profitable
The recent increased focus on reverse flows is attributable to a. pressure from environmental groups b. increases in the price of oil c. the significant increase in volume of reverse flows d. new environmental legislation
c. the significant increase in volume of reverse flows
Most retailers are essentially supply chain companies since a. they dominate the consumer market b. own their warehouses & trucks c. they buy products produced by others d. engage in off-shore sourcing
c. they buy products produced by others
Piggyback is a form of intermodal transportation that primarily involves the following two transport modes: a. air and rail b. water and pipeline c. truck and rail d. air and water
c. truck and rail
EXCESSIVE inventory levels will always lower corporate return on net worth by: a. increasing out-of-pocket costs associated with research and design activities b. increasing asset turnover c. tying up cash that could be used for other investment opportunities and/or reducing debt d. increasing sales
c. tying up cash that could be used for other investment opportunities and/or reducing debt
Excessive inventory levels will always lower corporate return on net worth by: a. increasing out-of-pocket costs associated with research and design activities b. increasing asset turnover c. tying up cash that could be used for other investment opportunities and/or reducing debt d. increasing sales
c. tying up cash that could be used for other investment opportunities and/or reducing debt
While interest has traditionally focused more on the overall length of the OTC cycle, recent attention has been centered on a. the use of the SCOR process b. the use of the ABC process c. variability or consistency within this process d. customer segmentation
c. variability or consistency within this process
The key financial consideration in choosing between private and 3PL distribution options is a. warehouse location(s) b. competency of in-house staff c. volume of product being moved d. type of product being handled
c. volume of product being moved
Which of the following is NOT a source of price? a. price lists b. price quotation c. wholesale price index d. negotiation
c. wholesale price index
The grid technique is used to determine a fixed facility location that represents the least-cost center for moving incoming materials and outbound product within a geographic grid. This least cost center is also referred to as a. a zero point b. source point c. a breakeven point d. a center of gravity
d. a center of gravity
The weighted moving average method assigns a. a value in each period being averaged b. a weight greater than 1 c. information based on a simple average d. a weight to each previous period
d. a weight to each previous period
Distribution facilities can provide numerous services, depending on the requirements of the supply chain. Which of these is NOT a logical service? a. assortment b. accumulation c. allocation d. activity
d. activity
The distance in today's global supply chains produce a. higher cost b. longer transit time c. more disruption d. all of these
d. all of these
What type of change may suggest a need to reevaluate and/or redesign a firm's logistics network? a. change in customer service requirements b. change in corporate ownership c. shifting locations of customer and/or supply markets d. all of these
d. all of these
Complexity in the supply chain is caused by a. the number of SKUs b. locations of customers and suppliers c. transportation requirements d. all of these answers
d. all of these answers
A third-party logistics firm may be defined as a. an outsource service b. a firm that owns trucks and warehouses c. a firm that owns trucks and warehouses and provides computer support d. an external supplier that performs or manages all or part of a company's logistics functions
d. an external supplier that performs or manages all or part of a company's logistics functions
Total life cycle considerations (TLC) a. mean the analysis of a waste stream b. are being considered by manufacturing c. can be critical to product differential d. are figuring more prominently into reverse logistics programs
d. are figuring more prominently into reverse logistics programs
The roles of the distribution center include ____________ a. balancing supply and demand b. protecting against uncertainty and promoting transportation economies c. promoting transportation economies d. balancing supply and demand, protecting against uncertainty, and promoting transportation economies
d. balancing supply and demand, protecting against uncertainty, and promoting transportation economies
Logistics, in its simplest form, a. is a military term, as it was developed originally to supply the battlefield b. is another term for transportation management c. does not involve customer service or other related functions d. combines inbound logistics with the outbound logistics of physical distribution
d. combines inbound logistics with the outbound logistics of physical distribution
Transportation efficiency promotes _____________ in the supply chain. a. intermodal demand b. KPIs c. capacity d. competition
d. competition
Which is NOT part of dependability? a. cycle time b. safe delivery c correct orders d. consistent pricing
d. consistent pricing
All of the following are advantages of containers in international distribution EXCEPT: a. costs due to loss or damage are reduced b. labor costs in freight handling are reduced c. containers are more easily stored and transported than other types of shipments d. containers are available in only one size e. containers are able to serve as temporary storage facilities at ports and terminals
d. containers are available in only one size
Batching economies or cycle stocks usually arise from three sources. Which of these is NOT a source? a. procurement b. transportation c. production d. demand
d. demand
One of the four supply chain flows in Figure 1-7 that has received increased attention from supply chain managers due to the growth in technology is: a. product flow b. information flow c. cash flow d. demand flow
d. demand flow
In the event of a "stockout" at your location, one of the things that could happen is a. the vendor's plant shuts down b. the cost of capital is increased c. the SCOR process would come into play d. extra shipping cost may be incurred
d. extra shipping cost may be incurred
Which type of global logistics channel intermediary enables goods to move through customs more easily by consolidating small shipments into more economical sizes? a. customs house brokers b. NVOCC c. export trader d. foreign freight forwarder
d. foreign freight forwarder
ALL of the following are advantages of electronic procurement EXCEPT: a. focus on long-term strategic issues b. lower operating costs c. reduced procurement prices d. lack of face-to-face contact e. improved procurement efficiency
d. lack of face-to-face contact
Performance measurement is important because a. it allows firms to rate competitors b. without it, managers would not know how the global economy is doing c. companies presently operating in the European Economic Community need to understand how its competitors are doing d. lower-level metrics in an organization must connect directly to the high-level performance to achieve goals
d. lower-level metrics in an organization must connect directly to the high-level performance to achieve goals
The Supply Chain should a. manage all aspects of transportation, selecting the least cost when possible b. seek to maximize profits c. use the same techniques internationally that it uses domestically d. manage materials/products, information, financials, and demand
d. manage materials/products, information, financials, and demand
Which of these is NOT a distribution support function? a. inventory control b. safety, maintenance, and sanitation c. information technology d. movement and storage
d. movement and storage
Traditionally, information has been viewed as flowing in the opposite direction of products, that is, from the market/customer back to the wholesalers, manufacturers, & vendors. a. this is still true & has not changed b. computerization has greatly increased the flow of information from the source c. the "big box" stores have developed their own sources d. none of these answers
d. none of these answers
An outbound-to-customer logistics system is also referred to as a. integrated fulfillment b. dedicated fulfillment c. store fulfillment d. physical distribution
d. physical distribution
Asset utilization is a very important aspect of a. KPIs b. 3PL distribution facilities c. commercial distribution facilites d. private distribution facilities
d. private distribution facilities
JIT is a _________________ system a. push b. Pareto's Law c. MRP d. pull
d. pull
There are four major categories with examples that provide a useful way for examining logistics and supply chain performance: They are time, _____________, cost, and supporting metrics. a. delivery b. KPIs c. competition d. quality
d. quality
What technology has helped make the physical inventory-taking process more efficient and effective? a. advances in forecasting b. transportation management systems c. just-in-time inventory d. scanning of bar-coded RFID tags
d. scanning of bar-coded RFID tags
What are the steps in the CRM process? a. segment customer base, then measure service and improve b. segment customer base, then identify service/package c. measure service, then improve d. segment customer base, then identify service/package, then measure service and improve
d. segment customer base, then identify service/package, then measure service and improve
Form utility drives the need for a. supply chain capabilities only b. time utility and place utility c. place utility d. supply chain capabilities, time utility, and place utility
d. supply chain capabilities, time utility, and place utility
The drawback of centralized inventory is: a. that it undercuts the consolidated distribution concept b. that it increases the amount of inventory required c. that it is more difficult to manage d. that it extends lead times and results in higher transportation costs
d. that it extends lead times and results in higher transportation costs
A push-based strategy works well for supply chains that focus on a. lean production b. the anticipation of demand or without knowledge of customer orders c. work centers and offshore sourcing d. the immediate delivery of off-the-shelf, low-cost, standardized goods
d. the immediate delivery of off-the-shelf, low-cost, standardized goods
Capacity is a. determined by lead manufacturing b. the maximum amount of square footage available for inventory storage in a facility c. determined by raw materials flows d. the maximum amount of work that an organization is capable of completing in a given period of time
d. the maximum amount of work that an organization is capable of completing in a given period of time
ALL of the following have affected international logistics EXCEPT: a. currency fluctuations b. deregulation of the US ocean linear industry c. trade policies d. the passage of the Sarbanes-Oxley Act by the United Nations e. intermodation
d. the passage of the Sarbanes-Oxley Act by the United Nations
The critical outcome of the supply chain is to deliver a. on management's expectations b. profits c. cost/value d. the right product to the right place
d. the right product to the right place
Pareto Analysis may be used to classify parts, customers, or activities. When determining the Pareto segments to classify parts, you should: a. identify 80% of the total value of all the parts as these will represent exactly 20% of the part numbers b. identify 20% of the inventory value as this will represent exactly 80% of the past numbers c. identify 80% of the number of parts as these will represent exactly 20% of the inventory value d. there will rarely be a clean break at the 80% (or 20%) point so your cut-off is subjective; however the general 80-20 relationship still holds e. identify 20% of the part numbers as these will represent exactly 80% of the inventory value
d. there will rarely be a clean break at the 80% (or 20%) point so your cut-off is subjective; however the general 80-20 relationship still holds
The transportation activity adds __________ utility to products. a. form and place b. possession c. time d. time and place e. all of the above utilities would be added by transportation
d. time and place
The concept that represents the sum of all costs associated with making and delivering products to the point where they are needed is called a. purchase/acquisition cost b. strategic sourcing costs c. life cycle costs d. total landed cost
d. total landed cost
As the number of warehouses INCREASES: a. transport costs will decrease; inventory costs and costs of lost sales will increase b. transport costs and cost of lost sales will increase; inventory costs will decrease c. transport costs and inventory costs will decrease; cost of lost sales will increase d. transport costs and cost of lost sales will decrease; inventory costs will increase e. transport cost, inventory costs, and cost of lost sales will all decrease
d. transport costs and cost of lost sales will decrease; inventory costs will increase
Inventory is an ASSET on the balance sheet and a(n) ____________ on the income statement a. liability b. footnote c. statement d. variable expense
d. variable expense
Other things being equal, HIGH inventory carrying costs will tend to lead to: a. use of a slower mode of transportation, such as railroads b. reducing customer service levels by lowering safety stock c. use of a more expensive mode of transportation such as a motor carriers or airlines d. ordering more frequently e. B, C, and D
e. B, C, and D
Which of the following statements about just-in-time (JIT) is FALSE? a. JIT helps to reduce manufacturing cycle time b. JIT has been defined as a philosophy that centers on the elimination of waste in the manufacturing process c. JIT seeks to eliminate non-value-added activities d. JIT helps a firm to reduce its overall material costs e. JIT programs usually do not inventory turnover rates
e. JIT programs usually do not inventory turnover rates
Companies do not know their true costs for all of the following reasons EXCEPT: a. in standard cost systems, fixed costs are often treated the same as variable costs b. accounting costs are computed to provide historical records c. allocation of business costs common to multiple segments tend to be subjective and arbitrary d. accounting systems tend to report in aggregate e. all of the above are valid reasons
e. all of the above are valid reasons
The objective of inventory management is to: a. stockpile all types of inventory b. minimize all types of inventory c. eliminate all overage inventory d. maximize all types of inventory e. increase corporate profitability
e. increase corporate profitability
Which of the following is NOT a principle reason for holding finished goods inventory? a. production economies of scale b. speculative investments in perishable raw materials c. improvement of customer service d. transportation economies e. prevention of production shutdowns due to parts shortage
e. prevention of production shutdowns due to parts shortages
If demand INCREASES by 13% and the value of each unit INCREASES by 13%, what will happen to EOQ? (Assume that everything else remains the same). a. the EOQ will increase by 13% b. the EOQ will increase by 26% c. the EOQ will decrease by 13% d. the EOQ will decrease by 26% e. the EOQ will remain the same
e. the EOQ will remain the same
Your firm has a ROS of 11.2%. The company's goal is to increase sales by $264,546 this year. How much, in dollars, would you have to reduce your logistics costs to provide the same marginal amount of profit?
sales increase x ROS%= logistics cost savings x 100% $264,546 x 11.2%= 29,629.152 x 100%= 29,629