LSCM 3960 Final

Private warehouses are generally advantageous when:

(A) demand does not fluctuate (B) greater control is necessary (C) throughput is low and sporadic (D) investment capital is scarce (E) promotional items need to be stored.

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:

3.95

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:

7.11

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

Each of following is an inventory holding cost EXCEPT:

Accounting cost.

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

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

Capability

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

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.

Reasons for engaging in forward buying include:

Delay the impact of rising costs and provides provides protection against future anticipated shortages

Which of the following does not belong in the list of the seven principles of supply chain management?

Develop an outsourcing strategy to maximize asset utilization

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

Examine off shore and e-procurement suppliers

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

False

Management will automatically achieve least total cost logistics by minimizing inventory carrying costs.

False

Most customers place more value on speed of delivery in filling orders than on order reliability and/or order consistency.

False

The grid technique determines the highest cost facility location in an area

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.

False

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

Finance

What vendor selection criteria are described by price and financial stability?

Financial

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

ISO 9000

The objective of inventory management is to:

Increase corporate profitability

All of the following are reasons for holding inventory EXCEPT:

Inventories eliminate the variation in supply and demand.

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

Inverse

Resource requirements planning (RRP)

Is a long-run, macro-level planning tool

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

JIT programs usually do not impact inventory turnover rates.

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

Which management area in an organization does not normally have transportation responsibility?

Manufacturing

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

Marketing

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.

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

Prevention of production shutdowns due to parts shortages.

Which of these is NOT a form of purchasing?

Process improvement. Are: Sourcing, process improvement, purchasing

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

Promotion costs

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 minus COGS

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.

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

Stores higher valued goods.

All the following are inventory risk costs EXCEPT:

Taxes

Please read the following statements:Statement I. All logistics budgets are dynamic.Statement II. Some logistics costs are static.

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

A push-based strategy works well for supply chains that focus on

The immediate delivery of off-the-shelf, low-cost, standardized goods

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 hold.

Pareto Analysis (also known as the 80/20 rule) may be used to classify parts, customers, or activities. Which is the BEST measurement to use when classifying customers with Pareto Analysis:

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.

What is often the largest component of logistics costs?

Transportation costs

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

True

EOQ models exist that include adjustments for volume transportation rates and for quantity discounts.

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

The "value-of-service" pricing approach establishes an upper limit of transportation prices or rates.

True

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

True

When a traffic manager increases the number of carriers used, market power is decreased.

True

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

True

The terms purchasing and procurement can often be used interchangeably, however procurement has a broader meaning, and includes purchasing, traffic, warehousing, and receiving inbound materials.

True.

On a "PER UNIT" basis:

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

Trade imbalances affect

Water Carriers

Which are the major modes of international transportation

Water and Air

A maquiladora plant is:

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

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

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

A demand-driven system is also known as:

a pull system

The distances in today's global supply chains produce

a. higher cost b. longer transit time c. more disruptions

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

accessibility

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:

all of these

Complexity in the supply chain is caused by

all of these answerers:transportation requirements.locations of customers and suppliers.the number of SKUs.

Effective order management can have an impact on

all of these answers, reducing supply chain costs, increasing revenues, improving ROA

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

Heuristic models

are able to accommodate broad problem definitions.

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

A closed loop system deals with

both forward and reverse flows

Activity Based Costing

can be combined with customer segmentation

There are several classifications of purchased items. Which of the following is NOT one of those?

cash cows. Are: criticals, commodity, generics

Vertical collaboration refers to

collaboration among buyers and sellers in the supply chain.

Collaboration occurs when

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

Challenges for the trucking industry include

competition.

Which is NOT part of dependability?

consistent pricing

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.

cost center

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?

customer service

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

customer service, order processing, transportation, warehousing, and storage

Many organizations are working more closely with

customers

If demand and lead time are constant, only___________ is necessary.

cycle stock

Which of these is NOT a production method?

delated 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

What vendor selection criteria are described by vendor attitude, cultural compatibility, training aids, packaging, and repair service?

desirable capabilites

The Supply Chain Concept

developed from the previous Physical Distribution concept.

Maquiladoras exist because:

differences in Mexican and US wages and pollution controls

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.

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

economies of scope

Air carriers were historically looked upon as

emergency only carriers.

Customs regulations raise revenue through the collection of import duties. Which is NOT a means of determining the duty owed?

exchange rates

The drawback of centralized inventory is:

extends lead times and results in higher transportation costs

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

extra shipping cost may be incurred

Which of the following would be considered a nontraditional service being offered by carriers?

facility location analysis

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

fixed, variable

Traditional customer profitability analyses would start with ______ less returns and allowances (net sales) and subtracts the cost of goods sold.

gross sales

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

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

Capital cost focuses on the cost of capital tied up in ________and the resulting lost opportunity from investing that capital elsewhere.

inventory

The internal balancing method deals with

inventory and production flexibility

For most firms, the MOST important measure of customer service is:

inventory availability within a specified order cycle time

Exponential smoothing

is one of the most commonly used techniques

The term functional silos refers to:

lack of coordination between departments

ALL of the following represent savings associated with volume buying EXCEPT

lower capital costs associated with the inventory investment

Performance measurement is important because

lower-level metrics in an organization must connect directly to the high-level performance to achieve goals

The Supply Chain should

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

Quick response (QR) systems are usually implemented between __________ and __________ in a typical channel of distribution.

manufacturer; retailer

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

manufacturing

Scorecard and key performance indicators (KPIs) refer to

metrics to manage logistics operations

Which of these is NOT a Distribution support function?

movement and storage

The logistics/supply chain network transformation team

must be aware of the firm's overall business and corporate strategies and the supply chain in which it participates

Outsourcing involves

obtaining materials, parts, and products from other companies

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 is

operational efficiency

Which of the following is NOT an element of Order Management?

optimizing mode mix

Oversupply is created by:

phantom demand

An outbound-to-customer logistics system is also referred to as

physical distribution

An inbound-to-operations logistics system is also referred to as

physical supply

The traditional role of customer service at the interface between marketing and logistics manifests itself through the ______ dimension of the marketing mix

place

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

place

Asset utilization is a very important aspect of

private distribution facilities.

The main strategy behind routing guides is to

promoting supply chain excellence

Lean production relies on

pull-based systems

What is the effect of tapering rates on facility location?

pulls the location toward the source or the market

Which of these is NOT a freight document?

routing guide

Globalization was initially driven by countries

seeking materials and goods not available in their own land.

What are the steps in the CRM process?

segment customer base, identify service/package, then measure service and improve

Strategic sourcing as a process is far more broad and comprehensive than procurement. Overall, the process starts with the formation of a

steering committee

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

stores goods regularly

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

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

The term replenishment cycle refers to

the acquisition of addition inventory

The order cycle time is the time that elapses between:

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

A major challenge is ___________ of total cost of the return flow processes

the estimation

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.

Capacity is

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

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

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

Most retailers are essentially supply chain companies since

they buy products produced by others

The transportation activity adds _______ utility to products.

time and place

Data synchronization focuses

timely and accurate updates

The classic objective of a network design model has been

to establish the number, location, and size of finished goods distribution centersand associated product flow

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

transactional procurement solutions

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

true

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