Logistics Exam 1

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Identify the proper sequence of the three "flows" in the supply chain. 1.product 2.cash 3.information

1,3,2 1. product 3. info 2. cash

Which of these is not a form of purchasing ? A. process improvement B.Procurement C. purchasing D. sourcing

A. process improvement

As the dollar value of a product decreases, its transportation cost

Decreases

Demand for transportation at the microeconomic level is ___ while the demand for transportation at the macroeconomic level is ___?

Elastic, inelastic

Companies now use strategies that are lean, flexible, or adaptive; they wait for customers to push products to the market.

False

Globalization has had little effect on consumers.

False

Honda and Toyota only manufacture automobiles in Japan.

False

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

False

Logistics facilities and their locations are relatively variable and easily modified in the short term

False

MFN stands for Many Foreign Nationals.

False

Strategies such as compression and lean supply chains take the same amount of work to achieve in the global environment as in the domestic environment.

False

Supply chain managers no longer need to worry about suboptimization in light of today's technology.

False

The Customs Trade Partnership Against Terrorism (C-TPAT) was put in place to assess the vulnerability of U.S. ports and to deny entry to ships from countries that do not meet U.S. security standards.

False

The materials requirement plan (MRP) is a long-range materials plan that converts information regarding end-items in the MPS into a set of time-phased component and part requirements.

False

The quality of life locational determinant is most important to companies that must attract and retain an unskilled, static work force .

False

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

False

A(n) _____ relationship exists between the cost of lost sales and inventory cost.a. reverseb. proportionalc. inversed. nonlinear

Inverse

A key element in Wal-Mart's ability to discount brand name products was an understanding of the criticality of efficiency in its logistics and supply chain system.

True

A logistics channel is a supply chain of network organizations engaged in transfer, storage, handling, communication, and other functions that contribute to the efficient flow of goods

True

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

True

Capacity requirements planning is used to check the feasibility of the materials requirement plan

True

From a customer service perspective, one of the four important characteristics for global market and strategy is technology companies counteract short product lifecycle with continual upgrades and new products.

True

In a commercial zone, the same transportation rate is applied from an origin to any point inthe zone.

True

It is predicted that social networks such as Facebook and Twitter will influence supply chains because of their impact on customer demand and the speed of information transfers.

True

Labor-intensive industries place significant emphasis on the availability and cost oflabor

True

Manufacturing and production operations create form utility.

True

Operating globally has become easier to accomplish for even individuals and small companies, because of the advances in information/communications technology.

True

Reduced order cycle time has become an important part of supply chain management since it can lead to lower inventory levels for customers, improved cash flow, lower current assets, and accounts receivable.

True

Tariffs and other trade barriers have been significantly reduced among many countries, allowing a much more competitive global economy.

True

The "bullwhip" effect occurs when forecast errors are magnified and demand variability increases as orders move upstream from retailers to distributors to producers.

True

The efficiency and effectiveness of a logistics/supply chain operation are constrained by the location of plants and warehouses in its overall network.

True

The first decade of the twenty-first century was a period of rapid change for organizations, especially businesses.

True

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

True

The scope and magnitude of trade flows between the United States and other countries have grown considerably in the last several decades.

True

While the total world population has been increasing on an absolute basis, the rate of increase has declined.

True

World-class organizations can improve performance along multiple dimensions without making extensive performance tradeoffs or sacrifices

True

facilities may sometimes be located where senior officers prefer

True

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 center of gravity

Where is a megacity most likely to develop? a. Asia b. Canada c. France d. England

a. Asia

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

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

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

What are fixed spatial points where goods stop for storage or processing? a. Nodes b. Links c. Cost centers d. Fulfillment centers

a. Nodes

Which of the following is not an external factor that is shaping the economic and political landscape? a. organizational division b. technology c. government policy and regulations d. globalization

a. Organizational division

Which approach represents a strategy in which the entire organization is focused on the examination of process variability and continuous improvement? a. Total Quality Management b. Six Sigma c. Lean Enterprise Management d. Theory of Constraints e. None of these answers

a. Total Quality Management

Commodities are items or services that are low in risk but high in value. a. True b. False.

a. True

The first step in managing sourcing and procurement is to determine the type of purchase. a. True b. False.

a. True

There are seven steps in the Strategic Sourcing Methodology. a. True b. False.

a. True

Vendors may offer varying levels of discounts from their published prices. a. True b. False.

a. True

e-Sourcing and e-procurement are the same. a. True b. False.

a. True

As suggested, the aging populations in more developed countries will result in _____ health care costs and/but _____ in the size of the working population or labor pool. a. increased; a reduction b. increased; stagnation c. steady; a decrease d. nominal raises in; an increase

a. increased; a reduction

An advantage to dedicated fulfillment is a. no disruption to store operations b. separate facilities might be needed c. duplicate inventories d. high start-up costs

a. no disruption to store operations

Strategic sourcing as a process is far broader and more comprehensive than procurement. Overall, the process starts with the formation of a: a. steering committee. b. list of vendors. c. decision as whether to make or buy. d. list of criticals.

a. steering committee.

Which of these is not a trend in today's logistic environment that may have significant effects on decisions involving logistics facility location?

addition of many wholesaler/distributor operations

Simulation models

allow the decision maker to test the effects of alternative locations.

Heuristic models

are able to accommodate broad problem definitions.

The grid technique

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

Distinctives are low-risk, high-value items that are fundamental to the company's finished product. a. True b. False

b. False

Some firms are moving towards increasing their number of suppliers in order to encourage competition and lower procurement costs. a. True b. False.

b. False.

Strategic sourcing is almost the same as procurement. a. True b. False.

b. False.

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

Adam Smith in his renowned treatise, THE WEALTH OF NATIONS, provided not only a rationale for a market economy based upon competition, but also advanced a rationale for trade among nations called the _____. a. Theory of Comparative Advantage b. Theory of Absolute Advantage c. Theory of Temporary Advantage d. Theory of Competitive Advantage

b. Theory of Absolute Advantage

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

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.

"Logistics, in its simplest form, a.is a military term, as it was developed originally to supply the battlefield. b.combines inbound logistics with the outbound logistics of physical distribution. c.is another term for transportation management. d.does not involve customer service or other related functions.

b.combines inbound logistics with the outbound logistics of physical distribution.

"One of the major challenges of supply chain management is a.forward buying. b.maintaining the visibility of inventory. c.building safety-stock inventory. d.Pushing inventory back to vendors.

b.maintaining the visibility of inventory.

"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 the increase in two-career families and single-parent households.

"Which of the following is not part of the Supply Chain network? a.plants b.stores c.terminals d.distribution centers

b.stores

The top ten countries account for almost "X"% of the total world population. a. 75% b. 55% c. 60% d. 45%

c. 60%

Which one of the countries below is not part of NAFTA? a. United States b. Canada c. Argentina d. Mexico

c. Argentina

_____, _____, and _____ are the top three recipients of exports from the United States, in that order. a. China; Mexico; Canada b. Canada; China; India c. Canada; Mexico; China d. Mexico; Canada; Australia

c. Canada; Mexico; China

Which of the following is not an important issue for economic development and vitality of the economy? a. Migration b. Urbanization c. Entrepreneurship d. None of these answers

c. Entrepreneurship

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

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 deployment c.inventory carrying costs d.technology

c. inventory carrying costs

"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.

Most retailers are essentially supply chain companies since a.they dominate the consumer market. b.own their warehouses and trucks. c.they buy products produced by others. d.engage in off-shore sourcing.

c.they buy products produced by others.

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

computationally, it is relatively easy to use

The Trade Act of 2002 requires exporters to electronically submit shipping documents to U.S. Customs _____ hours after delivery to a port. a. 5 b. 48 c. 12 d. 24 e. 36

d. 24

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

What vendor selection criteria are described by vendor attitude, cultural compatibility, training aids, packaging, and repair service? a. Quality b. Financial considerations c. Reliability d. Desirable capabilities

d. Desirable capabilities

In the Item Procurement Importance Matrix, what describes high risk, low value? a. Generics b. Commodities c. Criticals d. Distinctives

d. Distinctives

To help guide the strategic sourcing process, five core principles are recognized as key drivers to achieve the desired levels of value, which one is not one of those core principles? a. Access the total value b. Develop individual sourcing strategies c. Evaluate internal requirements d. Drive continuous savings

d. Drive continuous savings

There are four steps in the Managing Sourcing and Procurement Processes. Which of the following is not one of them? a. Determine the type of purchase b. Determine the necessary levels of investment c. Evaluate the effectiveness of the strategic sourcing process d. Examine off shore and e-procurement suppliers

d. Examine off shore and e-procurement suppliers

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

"The Supply Chain Concept a.is very new and considered cutting edge technology. b.is highly dependent of computerization. c.not always well understood by senior managers. d.developed from the previous Physical Distribution concept.

d. developed from the previous Physical Distribution Concept

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.

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.

"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.

"Which of these flows only one way as illustrated in the figure below?a.information b.products and services c.financials d.None of these answers

d.None of these answers

"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

d.None of these answers "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.

As the number of stocking points (DCs) is decreased in a distribution network, fixed costs will ____ and variable costs will ___.

decrease, decrease

Which of the following is not one of the essential factors for economic growth and increased development of global trade flows? a. Population growth and age distribution b. Urbanization c. Land and resources d. Knowledge dissemination e. Geo-political standing

e. Geo-political standing

The classic objective of a network design model has been to:

establish the number, location, and size of finished goods distribution centers and associated product flows.

Supply and demand has become less volatile as managers become more adept at controlling the elements.

false

The world economy still favors the United States and European countries, even though China and India can participate in the global economy much more readily.

false

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

fixed, variable

This type of fulfillment model has the manufacturer delivering its products directly to the retailers' stores.

none of the above

What is the effect of tapering rates on facility location?

pulls the location toward the source or the market

When a blanket rate structure is used, which factor is eliminated as a locational determinant?

transportation rate


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