TRA4203

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Jim Bob Airlines has one 55 seat plan. On its last five flights it had 49 passengers from MSY to DFW, 48 passengers from DFW to OKL, 44 passengers from OKL to TUL, 36 passengers from TUL to FWB, and 33 passengers from FWB to MSY. For the last five flights, what was the load factor? (Make sure your answer is accurate to one decimal place)

(49+48+44+36+33)=210/55=3.182/5= .7636 [(49+48+44+36+33)/55]/5=76.4%

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?

(Q*/2) will decrease.

Assume that the cost of the most efficient logistics system for a 98% service goal is $3.1 million higher than the existing system's cost. If for each dollar of additional sales, the company incurs 76 cents in out-of-pocket costs, what incremental sales volume, in dollars, will the company need to recover the increase in logistics costs? Your answer must be accurate to the nearest dollar.

12,916,667 This is a simple break-even calculation. How much will you invest to achieve improvements? You must recover this cost. Determine how much profit you earn from each additional dollar of sales. Take the amount you have to recover and divide by the amount of profit for each additional dollar of sales. (3.1 million/.24)

Your firm has a ROS of 10.2 percent. The company's goal is to increase sales by $238,356 this year. How much, in dollars, would you have to reduce your logistics costs to provide the same marginal amount of profit?

238,356 x .102 = 24,312

Transportation may account for as much as ____ percent of the cost of reverse flow

25%

Retailers lose, on average _____ percent of sales due to returns

3-5%

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....Y...Tons Source A...9...7....600 Source B...7...3....400 Market X...1...7....200 Market Y...5...1....400 Market Z...9...1....300

3.95

The profit leverage provided by logistics can be significant. If a firm has a net profit of 10.3% on a sales volume of $1,858,112 and the company has instituted a logistics improvement program that results in savings of $493,519, what equivalent sales increase would be required to equal such a cost saving?

493,519/.103 = 4,791,447

The profit leverage provided by logistics can be significant. If a firm has a net profit of 7.1% on a sales volume of $5,645,401 and the company has instituted a logistics improvement program that results in savings of $607,335, what equivalent sales increase would be required to equal such a cost saving?

607,335/.071 = 8,554,014.08

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....Y...Tons Source A...9...7....600 Source B...7...3....400 Market X...1...7....200 Market Y...5...1....400 Market Z...9...1....300

7.11

Dynamic

A ______ analysis examines a logistics system over a long time period or range of output.

The global logistics channel intermediary that supervises the movement of goods through customs and ensures that the documentation accompanying a shipment is complete and accurate is known as

A customs house broker

Short-Run Analysis

A specific point in time or level of production is chosen and costs are developed for the various logistics cost centers described previously.

Inverse

A(n) _______ relationship exists between the cost of lost sales and inventory cost.

Managers have several options for software development and implementation. They include:

A. internal development B. third party logistics firms C. external software vendors. D. All of the above Answer is D

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 motor carriers or airlines D.ordering more frequently E. B., C. and D. Answer is E.

Each of the following is an inventory holding cost EXCEPT:

Accounting cost.

True

Acme Battery distributes its batteries to warehouses, where they are stored until ordered by a retailer. The warehouses are located close by the retail markets served. This is the logistics channel approach to logistics.

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

Adaptive Manufacturing

ALL of the following are advantages of electronic procurement.

Advantages: lowering of procurement operating costs; the reduction of paperwork and the associated cost of paper processing, filing, and storing is a major cost-saving area of e-commerce; reduced sourcing time means increased productivity because a procurement specialist spends less time per order and can place more orders in a given time period. Disadvantages: Most frequently voiced concern about using the internet for procurement is security. lack of face-to-face contact between the buyer and the seller.

Marketing

All four subdivisions of logistics have some common characteristics. Which of the below does not belong in the list

Companies do not know their true costs for all of the following reasons EXCEPT:

All of the above

Economies and companies could improve their "wealth" by

Allowing specialization of tasks

In his book The Wealth of Nations, Adam Smith stated that economies and companies could improve their wealth by

Allowing specialization of tasks.

True

An aircraft manufacturer is a good example of an organization with a heavy inbound flow and a simple outbound flow.

Reduction in packaging waste by using alternate materials

An important sustainability issue that has received much more scrutiny in recent years is the:

Sales Forecast

Analyses that attempt to predict the future sales of a product

Heuristic Models

Are able to accommodate broad problem definitions

Business Function

Are activities specific to that function area of operation. pg 2-figure 1-1

Recycling and environmental concerns

Are often related to regulatory policy at the local, state, and federal levels

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 ________?

Asia

In some instances, the seller does not have the inventory but knows when it will be produced internally or delivered from a supplier to the seller's distribution centers. In this case, the delivery date is based on the concept of:

Available to Promise

These are designated by the U.S. secretary of the treasury for the purpose of storing, repacking, sorting or cleaning imported merchandise entered for warehousing without paying import duties while the goods are in storage.

Bonded Warehouses

If there were long time intervals between orders, the members of the supply chain were faced with much uncertainty about the level and pattern of the demand, which usually resulted in higher inventory or stockout costs, a phenomenon called:

Bullwhip effect

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

Center of gravity

The macro approach that locates a warehouse or distribution center at a point that minimizes transportation costs for products moving between a manufacturing plant and the markets, and is relatively simplistic:

Center of gravity approach

An index

Combines two or more metrics into a single indicator

Transportation efficiency promotes __________ in the supply chain.

Competition

Facility Utilization and Equipment Utilization Strategies are

Complementary

Which is an advantage of the grid technique for facility location?

Computationally, it is relatively easy to use

Assume that a company has sales of $15.1 million (measured at cost, not sales price). Also assume that the firm's inventory turn is equal to 2 and the inventory carrying costs are equal to 25.6%. If inventory turns are increased from 2 to 6, this would result in decreasing inventory carrying costs by (your answer must be accurate to the nearest dollar):

Correct Answer: 1,288,533 (15,100,000/2) x .256= 1,932,800 (15,100,000/6) x .256= 644,266.667 1,932,800 - 644,266.667 = 1,288,533

Hasty Manufacturing orders 89,000 annually. They order 7 times a year. They hold 7,271 units in safety stock. The MAXIMUM number of units Hasty Manufacturing holds throughout the year is

Correct Answer: 19,985 (89,000/7)+7,271=19,985.2857

Given that inventory valued at full cost equals $18.2 million, variable cost of the inventory is 63.2% of the full cost, and the inventory carrying cost is 32.9%, then the cost of carrying the inventory investment for one year is (your answer must be accurate to the nearest dollar):

Correct Answer: 3,784,290 ± 1,000 Full Cost x variable%) and then multiply by the ICC. (18,200,000 x .632) x .329= 3,784,290

Hasty Manufacturing orders 57,000 annually. They order 9 times a year. They hold 8,191 units in safety stock. The MINIMUM number of units Hasty Manufacturing holds throughout the year is:

Correct Answer: 8,191 -exact number of safety stock

Possession Utility

Created through the basic marketing activities related to the promotion and sales of products and services.

Packaging is

Critical to logistics

DECREASING the number of warehouses will __________ the warehousing and inventory costs, but may __________ transportation costs.

Decrease, increase

Assuming the cost to place an order is constant, all other things remaining the same, INCREASING the order quantity (Q*) causes total ANNUAL ordering costs to

Decrease.

Quantity Utility

Delivering the proper quantities of an item to where it is demanded.

One of the four supply chain flows in Figure 1 - 8 that has received increased attention from supply chain managers due to the growth in technology is:

Demand flow

How do you calculate inventory turnover rate?

Divide COGS by inventory

True

During the 1990s and 2000s, logistics costs as a percentage of gross national product declined.

Seasonal stocks are NOT influenced by

EOQ

Seven Rs

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?

ERP

Enterprise Resource Planning Are core software programs used by companies to integrate and coordinate information in every area of the business. help organizations manage company-wide business process, using a common database and shared management reporting tools

Dynamic Analysis

Examines a logistics system over a long time period or range of output.

A financial based 3PL is a firm that takes a financial interest in an organization in order to underwrite the outsourcing of that firm's logistics

FALSE

A horizontal relationship refers to firms on the same level in the supply chain

FALSE

Drivers and facilitators are internal issues that an organization must address before seeking a 3PL

FALSE

Once a 3PL provider is chosen, it is not necessary for an organization to seek continuous improvements as the 3PL will handle that function

FALSE

The "IT gap" refers to the difference between the internal IT capabilities of 3PL users and the IT expertise of the 3PL providers

FALSE

The most frequently outsourced function is freight bill payment

FALSE

The range of relationships with 3PLs ranges from being a vendor to being a vertical supplier

FALSE

A Third Party Logistics firm is defined as a company that owns trucks and warehouses so as to offer integrated services

FLSE

The authors of your textbook would agree ______ would usually be the most optimal in terms of a domestic shipment for receiving inbound materials

FOB origin

As a firm spends more on transportation service, cost of lost sales increases.

False

Increasing inventory turns from 10 to 15 has a greater impact than increasing inventory turns from 1 to 2.

False

T/F: Both economic and safety regulation of the US transportation industry have been declining since the onset of deregulation in the late 1970s.

False

T/F: If a firm concentrates on reducing the individual costs of each separate logistics function or activity, overall logistics costs will ALWAYS be reduced

False

T/F: Increasing inventory turns from 10 to 15 has a greater impact than increasing inventory turns from 1 to 2.

False

T/F: Management will automatically achieve least total cost logistics by minimizing inventory carrying costs.

False

T/F: The manufacturer must lead the channel design process regardless of the relative market power and financial strength of the members of the supply chain.

False

The utility created through the basic marketing activities is known as place utility

False

In the short run, the firm's network is _________ while in the long run it is ________.

Fixed, Variable

"An operation's ability to respond efficiently to changes in products, processes and competitive environments" refers to ________

Flexibility

Which type of global logistics channel intermediary enables goods to move through customs more easily by consolidating small shipments into more economical sizes?

Foreign Freight Forwarder

In the Item Procurement Importance Matrix, what item is described as low risk, low value?

Generics

Customer

Getting the right product to the right customer, in the right quantity, in the right condition, at the right place, and the right time, at the right cost. (Called the seven R's of logistics)

Time Utility

Goods and services available where customers need them and at the point when customers demand them. The economic value added to a good or service by having it at a demand point at a specific time when it is needed.

HR

Human Resources Recruit, train, evaluate, and compensate employees HR uses sales forecasts developed by the individual departments to plan personnel needs

____________, is a set of international standards that establish the minimum requirements for all organization's quality system.

ISO 9000

False

In a logistics system, warehousing should be optimized at the expense of related logistics activities, such as transportation and procurement.

Application of the grid technique to the location of a city warehouse

Incorporates a blanket rate structure that applies the same rate from an origin to any point within the city or commercial zone

The objective of inventory management is to:

Increase corporate profitability.

As customer service levels approach higher levels required inventory levels begin to ______ at a ______ rate

Increase; Increasing

IS

Information systems Computers, people, procedures, and software that store, organize, and deliver information

All of the following are reasons for holding inventory EXCEPT:

Inventories eliminate the variation in supply and demand.

Business proccess

Is a collection of activities that takes one or more kinds of input and creates an output such as a report or forecast.

Finance

It can be argued that ? is the second language of logistics and supply chain management.

Which is true regarding the facility/supply chain network design decision?

It should be coordinated closely with the corporate and overall business strategies that may be in place

Which of the following statements about just-in-time (JIT) is FALSE?

JIT programs usually do not impact inventory turnover rates.

Quantity utility

Logistics creates which utility through production forecasting, production scheduling and inventory control?

General definition

Logistics is the process of anticipating customer needs and wants; acquiring the capital, materials, people, technologies, and information necessary to meet those needs and wants; optimizing the goods- or service-producing network to fulfill customer requests; and utilizing the network to fulfill customer requests in a timely manner. This is a

Functional Areas of Operations

M/S SCM A/S HR

A DRP system is usually coupled with a _______ system in an attempt to manage the flow and timing of both inbound materials and outbound finished goods.

MRP

One of the major challenges of supply chain management is

Maintaining the visibility of inventory.

Inventory

Management of materials in motion and at rest

Which of these does NOT belong in the recommendations of the Reserve Logistics Educational Council

Manufacturing

Customer service

Marketers have begun to recognize the strategic value of place in the marketing mix, as well as the benefits resulting from high-quality logistical services. As a result, which has been recognized as the interface activity between marketing and logistics?

M/S

Marketing and Sales Developing products Determining pricing Promoting products to customers Taking customers' orders Helping create a sales forecast

Short-distance movement

Materials handling is concerned with

Place Utility

Moving goods from production points to market points where demand exists.

Railroads fall into a group called

Natural Monopolies

Raw Data

Numbers collected from sales, manufacturing and other operations, without any manipulation, calculation, or arrangement for presentation

Which is true regarding optimization models?

Optimization models are based on precise mathematical procedures that are guaranteed to find the "best" solution for the problem under evaluation

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.

Ordering Cost.

Safety Stock

Overinvestment in inventory-extra raw material and packagining

The utility that is created by moving goods from production points to market points where demand exists is referred to as

Place

Which of the following is NOT a principle reason for holding finished goods inventory?

Prevention of production shutdowns due to parts shortages.

Utility/Value

Providing time and place utility or value of materials and products in support of organization objectives

JIT is a _______ system.

Pull

Lean production relies on

Pull-based systems

What is the effect of tapering rates on facility location?

Pulls the location toward the source or market

Which of the below is NOT part of the seven Rs of logistics?

Quality

What is the best financial metric to show the profit an organization generates in relationship to assets utilized?

ROA

Accounting and finance A/F

Recording raw data about transactions (including sales), raw material purchases, payroll, and receipt of cash from customers

Links

Represent the transportation network and connect the nodes in the logistics system. The networks can be composed of individual modes of transportation and of combinations and variations.

You have an annual demand of 269,000 units, inventory carrying costs of 26.5%, a unit cost of $52.34, and an ordering cost of $67.56. Calculate Q*.

SQRT[(2 x 269,000 x 67.56)/(.265 x 52.34)] =36,347,280/13.8701 =SQRT(36,347,280/13.8701) =1,618.8

The type of functional inventory that helps a firm from being out of stock due to unexpected increases in demand is:

Safety stock.

Gross Margin equals

Sales - COGS

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?

Seven Rs

Logisticians seek cost trade-offs. A "positive" cost trade-off is a situation where:

Some costs increase, some decrease, and the net effect is that total costs decrease.

Green procurement strategies usually require collaboration with _____________

Suppliers or vendors

SCM

Supply Chain Management Making the coffee (manufacturing/production) Buying raw materials (purchasing) Production plans used to develop requirements for raw materials and packaging

Component Support

Supply Management for the plant (inbound logistics) and distribution management for the firm's customers (outbound logistics)

Logistics Channel

Supply chain of network organizations engaged in transfer, storage, handling, communication, and other functions that contribute to the efficient flow of goods.

Integrated information systems

Systems in which functional areas share data

Collaboration is usually defined as a "business practice that encourages individual organizations to share information and resources for the benefit of all"

TRUE

Many organizations have directed significant attention toward working more closely with supply chain partners, including not only customers and suppliers but also various types of logistics suppliers

TRUE

Outsourcing and contract logistics are terms sometimes used to describe third-party logistics

TRUE

T/F: By using the latest information technology it is possible to substitute information for inventory and other logistics expenses.

TRUE

T/F: The "cost-of-service" pricing approach establishes a lower limit of transportation prices or rates

TRUE

T/F: When a traffic manager reduces the number of carriers used, market power is increased.

TRUE

The first stage in the process model for forming and sustaining supply chain relationships involves the process by which a manufacturer becomes fully aware of its logistics and supply chain needs

TRUE

All the following are inventory risk costs EXCEPT

Taxes

Council of Supply Chain Management Professionals

That part of the supply chain process that plans, implements, and control the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption in order to meet customer requirements.

Business Logistics

That part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, service, and related information from point of origin to point of consumption in order to meet customer requirements.

International Society of Logistics

The art and science of management, engineering, and technical activities concerned with requirements, design, and supplying and maintaining resources to support objectives, plans, and operations.

Dictionary

The branch of military science having to do with procuring, maintaining, and transporting material, personnel, and facilities.

Assemble-to-order production

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: T/F? Statement I. All logistics budgets are dynamic. Statement II. Some logistics costs are static.

The first statement is false, the second statement is true.

Customer Service

The interface activity between marketing and logistics and have aggressively and effectively promoted customer service as a key element of the marketing mix.

True

The inverse relationship that exists between the cost of lost sales and inventory costs is the inventory effect.

False

The mathematical calculation of the point of equality between systems under analysis is used for short-run/static analysis.

ALL of the following have affected international logistics EXCEPT:

The passage of the Sarbanes-Oxley Act by the United Nations.

Promotion costs

The product's dollar value typically affects the cost of logistics activities. Which is not one of these costs?

Order Cycle

The time that elapses from when a customer places an order until the order is received.

False

The utility created through the basic marketing activities is known as place utility.

Place

The utility that is created by moving goods from production points to market points where demand exists is referred to as

Form utility

The value that is added to goods through a manufacturing or assembly process is:

All of the following are criteria for an expert system EXCEPT:

There is no variability in people's ability to perform the task

Pareto Analysis may be used to classify parts, customers, or activities. When determining the Pareto segments to classify parts, you should

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.

Having the product available when the user wants it.

Time utility depends on

False

To hold down distribution cost, the lowest cost carrier should always be used

A private warehouse requires a high volume of warehouse throughput for efficient operation....

To spread out fixed cost over large output volumes

True

Transportation is the physical movement or flow of goods.

Piggyback is a form of intermodal transportation that primarily involves the following two transport modes:

Truck and rail

As the dollar value of product decreases, its inventory value decreases.

True

T/F: Cross-docking bypasses the storage activity by transferring items directly from the receiving dock to the shipping dock.

True

T/F: EOQ models exist that include adjustments for volume transportation rates and for quantity discounts.

True

T/F: The most vital ingredient or component of a decision support system (DSS) is the quality of the data used as input

True

Trasportation is the physical movement or flow of goods.

True

Excessive inventory levels will always lower corporate return on net worth by

Tying up cash that could be used for other investment opportunities and/or reducing debt.

Goods can be stored in a bonded warehouse for:

Up to 3 years

On a "PER UNIT" basis:

Variable costs are fixed with volume and fixed costs vary with volume

On a "PER UNIT" basis

Variable costs are fixed with volume and fixed costs vary with volume.

The _________ of demand, customer orders, delivery status, inventory stock levels, and production schedules provides managers with the knowledge needed to make effective situational assessments and develop appropriate responses.

Visibility

The key financial consideration in choosing between private and 3PL distribution options is

Volume of product being moved

This information technology is a shelf-level collaboration solution between consumer goods manufacturers and retailers, wherein the manufacturers pull in the point-of-sale (POS) data and other data that minimizes the bullwhip effect

Warehouse technology

Trade imbalances affect

Water Carriers

Heavy inbound

Water Cruisers is located in Jacksonville, Florida, and makes small yachts and luxury pontoon boats for customers on the East coast of the United States. Each boat requires thousands of parts purchased from over 1,000 vendors. A number of boats are in production at any one time, so a large number of parts constantly arrive and are stored. Once a boat is finished, it is sailed up the coast to a convenient port for customer delivery. Which type of logistics system does Water Cruisers use?

Which are the major modes of international transportation

Water and Air

Materials handling

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?

Nodes

What are fixed spatial points where goods stop for storage or processing?

Transportation costs

What is often the largest component of logistics costs?

Scanning of bar-coded RFID tags

What technology has helped make the physical inventory-taking process more efficient and effective?

Short run analysis

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

The breaking bulk and repackaging at a distribution center

Which of the answers below is an example of the creation of form utility by a logistics activity?

Which of the following is NOT among the underpinnings of the JIT approach

Zero inventories

Hasty Manufacturing orders 96,000 annually. They order 4 times a year. They hold 3,477 units in safety stock. The AVERAGE number of units Hasty Manufacturing holds throughout the year is:

[(96,000/4)/2]+3,477 = 15,477

A maquiladora plant is:

a U.S. plant performing manufacturing, processing, or assembly activity in Mexico.

A project layout is

a fixed location layout where the product remains in place for the duration of production

What advantage does the transit privilege give to shippers located at intermediate locations?

a lower, long-distance through rate charged for the shipment

An "executive dashboard" is

a small number (usually less than five) of KPIs.

Focused production is

a strategy in which a given plant produces one or two items of the company's total product line

The value that is added to goods through a manufacturing or assembly process is: a. Form utility b. Place utility c. Time utility d. Possession utility

a. Form utility

On-demand supply chain software that is not installed on a company computer is gaining in popularity. An issue to be addressed with this purchase option is

a. Functionality may not be as robust as traditional software b. Data control is an issue c. Total cost of ownership could exceed purchase cost over the long run d. All of these Answer is D.

As the dollar value of a product increases, packaging costs will: a. Increase b. Decrease c. Stay the same d. Can't be determined

a. Increase

As the weight density of a product decreases, transportation cost per pound will: a. Increase b. Decrease c. Stay the same d. Can't be determined

a. Increase

Traditionally, information has been viewed as flowing in the opposite direction of products, that is, from the market/customer back to the wholesalers, manufacturers, and vendors

a. This is still true and 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. Answer is D

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.

The distances in today's global supply chains produce

a. higher cost b. longer transit time c. more disruptions d. all of these Answer is D

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

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

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. Answer is D

Economic deregulation sparked competition among carriers in several areas. Which of these is not an area of competition?

accessibility

Distribution facilities can provide numerous services, depending on the requirements of the supply chain. Which of these is NOT a typical service?

activity

The textbook provides an example of how SanDisk improved forecast accuracy by 25%, and achieved higher inventory turns and a lower cost structure as a result of implementing

an advanced planning solution

A third-party logistics firm may be defined as

an external supplier that performs or manages all or part of a company's logistics functions

The decision to alter the supply chain process is essentially ______ issue.

an optimization

Total life cycle considerations (TLC)

are figuring more prominently into reverse logistics programs.

WIP inventories are

associated with manufacturing

The grid technique

assumes that the raw materials sources and finished goods markets are fixed

As a firm spends more on transportation service, cost of lost sales: a. Increase b. Decrease c. Stay the same d. Can't be determined

b. Decrease

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

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

Horizontal collaboration refers to a relationship that is ___________ and/or ____________. a. 3PLs to 3PLs and/or service provider to service provider b. buyer to buyer and/or seller to seller c. flat across the chain and/or involving partners equal in size d. collaboration with horizontal and/or vertical competitors

b. buyer to buyer and/or seller to seller

While available evidence supports the fact that the president or CEO and the finance executive are often involved with the identification of the need for logistic services, a. customers are demanding a change. b. executives from other areas in the company are also aware of such needs but to a lesser degree. c. a 4PL will suggest greater collaboration. d. off shore sourcing will point to greater need.

b. executives from other areas in the company are also aware of such needs but to a lesser degree.

What is often the largest component of logistics costs? a. inventory costs b. transportation costs c. shipper-related costs d. administrative costs

b. transportation costs

The roles of the distribution center include __________

balancing supply and demand, protecting against uncertainty, and promoting transportation economies.

Horizontal collaboration refers to a relationship that is ___________ and/

buyer to buyer and/or seller to seller

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

A(n) _______ relationship exists between the cost of lost sales and inventory cost. a. reverse b. proportional c. inverse d. non linea

c. inverse

What vendor selection criteria are described by production capability, labor relations, and operating controls?

capability

Desirability refers to

characteristics that influence modal selection

Vertical Collaboration refers to:

collaboration among buyers and sellers in the supply chain.

_ exist for basic raw materials such as grain, oil, and sugar

commodity markets

Collaboration occurs when

companies leverage each other on an operational basis so that together they perform better than they did separately

All of the following are advantages of containers in international distribution EXCEPT:

containers are available in only one size

Time-Reduction Logistics Initiatives

could change push to pull

Many organizations are working more closely with

customers

. 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

Marketers have begun to recognize the strategic value of place in the marketing mix, as well as the benefits resulting from high-quality logistical services. As a result, which has been recognized as the interface activity between marketing and logistics? a. product b. promotion c. price d. customer service

d. customer service

Many organizations are working more closely with a. customers. b. customers and suppliers. c. third-party logistics firms. d. customers, suppliers, and various types of logistics suppliers

d. customers, suppliers, and various types of logistics suppliers

Time utility depends on a. when the carrier picks up the shipment. b. transportation companies delivering on time. c. proper forecasting. d. having the product available when the user wants it

d. having the product available when the user wants it

Materials handling is concerned with a. inventory levels. b. breaking bulk. c. scheduling trade-offs. d. short-distance movement

d. short-distance movement

. The least-frequently used IT-based services by customers of 3PLs are: a. transportation management (execution) b. warehouse/distribution management c. global trade management and transport sourcing d. strategic and customer-related

d. strategic and customer-related

Which of the answers below is an example of the creation of form utility by a logisticsactivity? a. When lumber is cut and made into a chair b.When a firm's finance manager approves customer purchases on a credit basis c.When Dell combines components with software to produce a computer to a customer's specifications d.The breaking bulk and repackaging at a distribution center

d.The breaking bulk and repackaging at a distribution center

Supply chain software that provides a platform for manufacturers, distributors, and retailers to aggregate and organize item-related data such as item number, price, description, and weight is called

data synchronization tools

A metric requires

definition

Which is NOT a manufacturing method?

delayed differentiation

Which of these is NOT a production method

delayed differentiation

Batching economies or cycle stocks usually arise from three sources. Which of these is NOT a source?

demand

Dependent demand relates to

demand for another inventory item or product

The Supply Chain Concept

developed from the previous Physical Distribution concept.

Inventory and the GDP grew by ______ amounts between 1994 and 2010

different

Which of the following is the "marketing mix"?

distribution, price, product, promotion

Corporate Leaders

do not clearly understand the importance of supply chain excellence

Ordering cost refers to the expense of placing an order and

does not include the cost of the product.

A ______ analysis examines a logistics system over a long time period or range of output.

dynamic

Processes that can produce a range of products are said to have

economies of scope.

What is an amalgam of catalogs from vendors within a market that is available via the Internet called?

electronic marketplace

Air carriers were historically looked upon as

emergency only carriers

Explain the "Cost of Service" pricing model

establishes a lower limit of transportation prices or rates.

There are four steps in the Managing Sourcing and Procurement Processes. Which does not belong?

examine off shore and e-procurement suppliers

Which of the following is NOT one of the five drivers of sustainable supply chain management practice?

execution

In the event of a "stockout" at your location, one of the things that could happen is

extra shipping cost may be incurred

In a logistics system, warehousing should be optimized at the expense of related logistics activities such as transportation and procurement.

false

To hold down distribution cost, the lowest cost carrier should always be used.

false

Nodes

fixed spatial points where goods stop for storage or processing. Manufacturing or assembling facilities and warehouses where the organization stores materials for conversion into finished products or stores finished products for delivery to the customer.

Security legislation

has caused expense issues for carriers

ERP systems

have information elements needed by SCIS applications.

Each of the following functional areas would typically be included within logistics EXCEPT

human resources/personnel management

In the Assess Supply Market step, the firm

identifies all possible suppliers that might be able to satisfy the user's needs

INCREASING the number of warehouses will __________ the warehousing and inventory costs, but may __________ transportation costs

increase, decrease

Methods of decreasing inventory related costs include all of the following measures EXCEPT:

increasing the number of expedited orders

Channel structure management includes decisions regarding the use of outsourcing, channel inventories, ____________, and channel structure

information systems

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?

inventory carrying costs

the term functional silos refers to

lack of coordination between departments

Benefits to a carrier of improved routing and scheduling include all of the following EXCEPT

lessening of competition

The supply chain should

manage materials/products, information, financials, and demand.

Which of these does NOT belong in the recommendations of the Reverse Logistics Educational Council?

manufacturing

All four subdivisions of logistics have some common characteristics. Which of the below does not belong in the list

marketing

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?

materials handling

Scorecard and key performance indicators (KPIs) refer to

metrics to manage logistics operations

What are fixed established spatial points where goods stop for storage or processing?

nodes

Outsourcing involves

obtaining materials, parts, and products from other companies

The demographics of our society has changed because

of the increase in two-career families and single-parent households

The primary facility operations focus is

on the movement and storage of product.

In selecting a transport mode or carrier, the most important factor for most shippers would be:

on-time pickups and deliveries

The most compelling financial strategy

operational efficiency

The most compelling financial strategy is

operational efficiency

Which of the following is NOT an element of Order Management

optimizing mode mix

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.

participants

Asset utilization is a very important aspect of

private distribution facilities.

An organization selling its products FOB destination holds the title to the goods until:

products reach the customer's facility

The main strategy behind routing guides is to

promote supply chain excellence

The product's dollar value typically affects the cost of logistics activities. Which is NOT one of these costs?

promotion costs

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

quality

Logistics creates which utility through production forecasting, production scheduling and inventory control

quantity utility

Which of the following is NOT a reactive capability strategy?

resource requirements planning

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

responsiveness

Which of these is NOT a freight document?

routing guide

Which of the following is NOT a result (directly or indirectly) of the Motor Carrier Act of 1980?

service levels provided by carriers have declined

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

short run analysis

Stockout

shortfall of raw material or packaging

Which of the following is not part of the Supply Chain network?

stores

A warehouseperson may offer REDUCED rates to the user of a public warehouse if the user:

stores goods regularly

The least-frequently used IT-based services by customers of 3PLs are:

strategic and customer-related

Green procurement strategies usually require collaboration with ________

suppliers or vendors

Form utility drives the need for

supply chain capabilities, time utility, and place utility

Due to mergers and acquisitions in the software industry and ERP vendors moving into the supply chain applications market space, it is possible to purchase

supply chain software suites that combine planning, execution, event management, and related capabilities

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.

sustainability practices

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.

sustainability practices

Approximately two-thirds of 3PL customers think their providers supply

tactical or operational services.

When a firm "customizes" their supply chain, it is

tailoring the chain to be responsive to the needs of individual customer segments

A critical ingredient for the Third Era of globalization is:

technological advances, especially in information technology and communications.

If demand DECREASES by 13% and the value of each unit DECREASES by 13%, what will happen to the EOQ? (Assume that everything else remains the same).

the EOQ will remain the same

The order cycle time is the time that elapses between:

the customer's order placement and the time the customer receives the product

Promotion

the effort through direct and indirect contact with the customer to increase the desire to possess a good or to benefit from a service.

Capacity is

the maximum amount of work that an organization is capable of completing in a given period of time

The recent increased focus on reverse flows is attributable to

the significant increase in volume of reverse flows

The first facility consideration is to determine

the size of each operation within the network.

The transportation activity adds _______ utility to products.

time and place

Companies with 10,000 purchase transactions or more per year should consider

transactional procurement solutions

What is often the largest components of logistics costs?

transportation costs

Given the importance of global trade to the US, a delicate balance exists between security and the efficient flow of global commerce

true

The inverse relationship that exists between the cost of lost sales and inventory costs is the inventory effect.

true

Inventory is an ASSET on the balance sheet and a(n) __________ on the income statement.

variable expense

The product's dollar value typically affects the cost of logistics activities.

warehousing, transportation, packaging costs

Some individuals describe the current consumer as the "click here" generation because

we no longer wait for information to be "pushed out" to us.

Transportation terms of sale establish

when ownership and title of the goods passes from seller to buyer

Questions regarding financial vs. non-financial benefits of collaboration include

whether collaboration pays for itself

Which of the following is NOT a savings associated with volume buying?

• Lower per unit purchasing prices • Lower transportation costs • Lower warehouse handling costs • Lower order processing costs • Lower production lot quantity costs • Lower stock-out costs


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