chapter 10 logistics

Warehouses let you separate production from consumption, enabling you to take advantage of Production Economies of scale. TrueFalse

true

What does the Lean principle of 5S dictate? a. A safe and orderly work environment is also an efficient work environment b. Statistics drive improvement in warehouse operations c. Five phases of order fulfillment operations is most efficient d. Japanese ways of doing business are always more efficient than American methods e. Warehouses must have five degrees of redundancy in operations given uncertainty in satisfying customers

a. A safe and orderly work environment is also an efficient work environment

Which kind of warehouse arrangement is likely to have the greatest fixed cost for a company? a. Building a private automated warehouse b. Leasing a warehouse c. Long-term public warehousing d. Long-term contract warehousing e. Building a private warehouse to support manual operations

a. Building a private automated warehouse

For a consumer goods company seeking to reduce the distance to U.S. population from a single location using a center-of-gravity approach, which city would offer the best choice for this facility? a. Cincinnati, Ohio b. Topeka, Kansas c. Dallas, Texas d. Buffalo, New York e. Denver, Colorado

a. Cincinnati, Ohio

What inventory method rotates inventory in order to minimize your risk of owning out-of-fashion merchandise. a. First-in first-out (FIFO) b. Last-in first out (LIFO) c. Reverse-logistics d. Inside-out inventory e. Reverse-to-active (RTA) storage

a. First-in first-out (FIFO)

Which warehouse operation supports the mass customization of products in distribution centers once a customer order is placed? Customized packaging of water bottles with private labels is one example of this kind of operation. a. Form postponement b. Accumulating c. Containerization of freight d. Contract warehousing e. Materials handling

a. Form postponement

Which reason below justifies the use of contract warehousing? a. It allows the company a degree of control yet is less expensive than private warehousing. b. It requires more in-depth negotiations than public warehousing to secure. c. It provides the warehouse customer with greater control than private warehousing. d. It demonstrates a greater commitment to customers than buying a private warehouse. e. The risks of inventory loss and damage are minimal in contract warehousing.

a. It allows the company a degree of control yet is less expensive than private warehousing.

All of the following are good examples of visual managment except what? a. Watching customers complain about poor service b. Delineating where items should reside in the work environment when they are not in use c. Using kanban systems to signal inventory replenishment d. Presenting work steps through pictures e. Illustrating normal and abnormal outcomes to a work step

a. Watching customers complain about poor service

xWhich of the following companies launched Six Sigma? a. Motorola b. Panasonic c. Toyota d. Hewlett Packard e. Walmart

a. motorola

Why is the determination of the appropriate size of a private warehouse so important? a. It is impossible to change the capacity of a warehouse. b. It is a decision that you will probably live with for many years. c. Public warehouse space is almost impossible to find in most areas. d. You can never lease your excess capacity. e. Property taxes as a function of square footage are negligible (very low).

b. It is a decision that you will probably live with for many years.

Which order fulfillment performance metric examines the orders picked, packed, and shipped perfectly? a. On-time delivery b. Order accuracy c. Order cycle time d. Perfect order completion e. Order fill rate

b. Order accuracy

A visual signal that indicates an incorrect quantity of parts is about to be shipped to customers, allowing the operator to correct the problem before it is detected by a customer is an example of what? a. Kaizen b. Poka yoke c. Value stream remedy d. Heijunka e. Muda

b. Poka yoke

What form of warehousing is owned by the firm? a. Public b. Private c. Contract d. Multi-client e. Third-party

b. Private

Which of the following is a relatively new function performed in many warehouses? a. Receipt of goods b. Product processing for final assembly c. Transferring products to storage d. Order picking e. Order staging for shipment

b. Product processing for final assembly

What does the Square Root of N Rule show? a. 80% of sales comes from 20% of customers b. Safety stock rises as the number of stocking locations goes up c. Transportation costs increase when logistics is outsourced d. Customer loyalty increases with additional warehouse locations e. customer service levels increase with more inventory

b. Safety stock rises as the number of stocking locations goes up

When does public warehousing makes more sense than private warehousing? a. Volume is high and very predictable with little variation in demand b. Volume is low with high variability in demand and significant seasonality c. Customers are close to your facility and products are not seasonal d. Customer service requirements are low and market density is high e. Products are valuable and require high level of security

b. Volume is low with high variability in demand and significant seasonality

What is the name given to information applications that coordinate the activity within a warehouse facility? a. Online merchandising network b. Warehouse management system c. Ship-and-save system d. Quick response mechanism e. Enterprise resource plan

b. Warehouse management system

Which term refers to the volume of material or product that moves through a warehouse facility over a given time? a. Supply chain quantities b. Throughput c. Transit inventory d. Work-in-process e. Finished goods

b.Throughput

What do we call a warehouse that uses automated forklifts that move up and down each aisle putting pallets in assigned racks? a. A cross dock b. A customs warehouse c. An automated warehouse d. A warehouse management system e. A flexible warehouse

c. An automated warehouse

What is the tool called that is used to help identify the optimal location for a DC based on the locations and sales volumes of customers? a. Mix-and-match model b. Supply chain map c. Center-of-gravity model d. Diffusion model e. Centrifuge model

c. Center-of-gravity model

Which kind of warehouse allows a company to keep imported merchandise for a certain period of time without paying duties or tariffs? a. Distribution center b. Duty-free shop c. Customs warehouse d. Raw materials warehouse e. Consolidation warehouse

c. Customs warehouse

Which order fulfillment performance metric measures the time from order placement to customer receipt of delivery? a. On-time delivery b. Order accuracy c. Order cycle time d. Perfect order completion e. Order fill rate

c. Order cycle time

Which scenario below would suggest building your own private warehouse as opposed to using public warehouse space in a particular location? a. Space is required for product storage only and there are low customer service requirements b. There are low throughput volumes and low market density c. There are high customer service requirements and a need for a regional sales headquarters d. There is fluctuating demand and low market density e. Your products require no special materials handling and have low security needs

c. There are high customer service requirements and a need for a regional sales headquarters

Which alternative provides value-added warehousing and logistics services by a comprehensive third-party logistics (3PL) firm? a. New millennium warehousing b. Common warehousing c. Private warehousing d. Contract warehousing e. Substantiated warehousing

d. Contract warehousing

several costs factor into determining how many warehouses a firm needs to serve its customers. Which of the following is an opportunity cost associated with that decision? a. Warehouse costs b. Inventory costs c. Transportation costs d. Cost of lost sales e. Workers' compensation costs

d. Cost of lost sales

What kind of warehouse facility performs very differently from a conventional warehouse by receiving inventory and shipping it out in the same day? a. Rapid-flow warehouse b. Product mixing facility c. Mix-and-match warehouse d. Cross-dock e. High-rise warehouse

d. Cross-dock

Which order fulfillment performance metric measures the percentage of orders delivered without changes, damage, or invoice errors? a. On-time delivery b. Order accuracy c. Order cycle time d. Perfect order completion e. Customer satisfaction

d. Perfect order completion

Which of the following is the least productive use of warehouses? a. Supply mixing b. Product mixing c. Outbound consolidation d. Reduce investment in labor and equipment e. Inbound consolidation

d. Reduce investment in labor and equipment

What is the most common platform used in the shipping and handling of bundled products in a supply chain? a. Plastic pallets b. Plastic totes c. Metal racks d. Wooden pallets e. Steel bins

d. Wooden pallets

What type of warehouse serves as a regional distribution point, where truckloads ship freight inbound with the local deliveries via less-than-truckload transportation? a. Liquidation warehouse b. Distribution center c. Customs warehouse d. Raw materials warehouse e. Breakbulk warehouse

e. Breakbulk warehouse

Which factor below would suggest the construction of a smaller (rather than larger) warehouse? a. Many markets served b. Fewer stock keeping units (SKUs) carried c. The need for economies-of-scale in warehousing and materials handling d. Long production lead times e. Higher levels of customer service expected

e. Higher levels of customer service expected

Which of the following is a principle of efficient product placement in the warehouse? a. Products that are common to many orders should not be placed near one another b. Fast moving products should be placed in remote storage areas c. You should use zig-zag routing for order retrieval d. Be sure to stack high-value, fragile products e. Place fast-moving items in dedicated slots

e. Place fast-moving items in dedicated slots

Which of the following is not a good reason for warehousing? a. Allows economies-of-scale in transportation and production b. Enables smoother coordination of supply and demand c. Supports customer service requirements d. Allows firm to take advantage of quantity purchase discounts e. To keep inventories for the sake of obsolescence

e. To keep inventories for the sake of obsolescence

Breakbulk warehouses enable you to maximize the total ton-miles you ship by much less expensive LTL transportation. TrueFalse

false

Case-pick and pallet-pick warehouses will have the same layout and flow of inventory. TrueFalse

false

Cost is the only significant consideration that a company must factor into its decision to own and operate a warehouse, as opposed to hiring an outside firm. TrueFalse

false

Each of the different kind of fill rate metrics provides the same insight into your order fulfillment capabilities and performance. Therefore, it doesn't matter which fill-rate metric you use. TrueFalse

false

Just like in the movies, warehouses tend to be dark, dingy, and cavernous places to work. TrueFalse

false

The item fill rate for an item that is shipped complete 6 times out of 10 orders, and ships 55 units out of the 100 requested in the 10 orders, is 60 percent.

false

Warehousing is a niche logistics activity. That is, warehousing is NOT big business in industrialized countries. TrueFalse

false

A "smart" WMS won't let the picker move to the next item until picking mistakes have been corrected. TrueFalse

true

A Walmart flow-through DC is more than one million square feet in size (approximately 18 football fields under one roof) and uses 5-12 miles of conveyor belts to move hundreds of thousands of cases through the facility every day. TrueFalse

true