MKTG 372 Ch 14

What trade-offs do managers need to consider when making transportation decisions? A) Transportation cost versus inventory cost B) Transportation cost versus customer responsiveness C) Inventory cost versus customer responsiveness D) A and B only

A and B only

Which of the following are computational procedures that can be used to make decisions regarding the routing and scheduling of deliveries? A) the savings matrix method B) the generalized assignment method C) the loss prevention method D) A and B only

A and B only

Which mode of transportation is the most expensive? A) Air B) Truck C) Rail D) Water

Air

Which of the following is the fastest delivery method of transportation? A) Rail B) Truck C) Air D) Intermodal

Air

________ carriers offer a very fast and fairly expensive mode of transportation for cargo. A) Air B) Truck C) Rail D) Water

Air

Which transportation network design option establishes an extra layer between suppliers and retailers to store inventory and to serve as a transfer location? A) Direct shipping network B) Direct shipping with milk runs C) All shipments via central DC D) Shipping via DC using milk runs

All shipments via central DC

Which transportation network design option has the elimination of intermediate warehouses and its simplicity of operation and coordination as its major advantage? A) Direct shipping network B) Direct shipping with milk runs C) All shipments via central DC D) Shipping via DC using milk runs

Direct shipping network

The text states that the effectiveness of carriers is influenced by infrastructure. Which of the following would not fall into this category? A) Ports B) Effective management C) Roads D) Airports

Effective management

A carrier uses transportation to minimize the total cost (transportation, inventory, information, and facility) while providing an appropriate level of responsiveness to the customer.

FALSE

A carrier's decisions are affected by the prices that the market will bear, but not the responsiveness it seeks to provide its target segment.

FALSE

A distributor makes investment decisions regarding the transportation infrastructure and then makes operating decisions to try to maximize the return from these assets.

FALSE

A firm can meet customer needs by using tailored transportation to provide the appropriate transportation choice based on customer and product characteristics, but at a higher cost.

FALSE

Firms can significantly reduce the safety inventory they require by physically aggregating inventories in one location, which will also decrease transportation cost.

FALSE

Milk runs reduce outbound transportation costs by consolidating large shipments.

FALSE

Rail is the dominant mode of freight transportation in the United States and accounts for over 75 percent of the nation's freight bill.

FALSE

The mode of transportation that results in the lowest transportation cost will lower total costs for a supply chain.

FALSE

Transportation plays a key role in every supply chain because products are usually produced and consumed in the same location.

FALSE

________ are the preferred mode of transport for online businesses such as Amazon.com and Dell, as well as for companies such as W.W. Grainger and McMaster-Carr that send small packages to customers. A) Air B) Package carriers C) Rail D) Water

Package carriers

Which mode of transportation is used primarily for petroleum and natural gas? A) Air B) Truck C) Water D) Pipeline

Pipeline

A shipper uses transportation to minimize the total cost while providing an appropriate level of responsiveness to the customer. Which of the following is not considered to be a major part of the total cost? A) Sourcing B) Inventory C) Information D) Production

Production

Which of the following is not a cost the shipper needs to consider when making transportation decisions? A) Transportation cost B) Inventory cost C) Facility cost D) Quantity-related cost

Quantity-related cost

________ typically move commodities over large distances at lower costs per unit shipped. A) Air B) Truck C) Rail D) Package carriers

Rail

There are three basic questions to be considered when designing a transportation network between two stages of a supply chain. Which of the following is not a question to be considered? A) Should transportation be direct or through an intermediate site? B) Should intermediate site stock product or only serve as a cross-docking location? C) Should each delivery route supply a single destination or multiple destinations (milk run)? D) Should transportation costs be minimized?

Should transportation costs be minimized?

A milk run is a route in which a truck either delivers product from a single supplier to multiple retailers or goes from multiple suppliers to a single retailer.

TRUE

Ignoring inventory costs when making transportation decisions can result in choices that worsen the performance of a supply chain.

TRUE

Tailored transportation is the use of different transportation networks and modes based on customer and product characteristics.

TRUE

Temporal aggregation decreases a firm's responsiveness because of shipping delay but also decreases transportation costs because of economies of scale that result from larger shipments.

TRUE

The most important operational decision related to transportation in a supply chain is the routing and scheduling of deliveries.

TRUE

The vehicle-related cost is incurred whether the vehicle is operating or not and is considered fixed for short-term operational decisions by the carrier.

TRUE

Transportation cost depends on the prices offered by different carriers and the extent to which the shipper uses inexpensive and slow, or expensive and fast, means of transportation.

TRUE

Transportation is a significant component of the costs incurred by most supply chains

TRUE

Which transportation network design option uses a combination of other options to reduce the cost and improve responsiveness of the supply chain? A) Direct shipping network B) Direct shipping with milk runs C) Shipping via DC using milk runs D) Tailored network

Tailored network

Which of the following uses transportation to minimize the total cost (transportation, inventory, information, and facility) while providing an appropriate level of responsiveness to the customer? A) The shipper B) The supplier C) The manufacturer D) The carrier

The shipper

Which of the following is not a factor that affects carrier decisions? A) Vehicle-related cost B) Fixed operating cost C) Quantity-related cost D) Transportation cost

Transportation cost

Which mode of transportation is the dominant form of freight transportation? A) Air B) Truck C) Rail D) Water E) Pipeline

Truck

Which mode of transportation is the least expensive? A) Air B) Truck C) Rail D) Water

Water

Major infrastructure elements for transportation systems would not include A) air. B) rail. C) canals. D) seaports.

air

Tailored transportation is the use of different transportation networks and modes based on A) customer density. B) customer distance from warehouse. C) customer size and location. D) all of the above

all of the above

The fundamental supply chain decision(s) involving the trade-off between transportation and inventory costs is (are) A) choice of transportation mode. B) inventory aggregation. C) level of customer responsiveness. D) both A and B

both A and B

The ________ is the party that moves or transports the product. A) carrier B) producer C) shipper D) consumer

carrier

The cost of various facilities in the shipper's supply chain network is A) transportation cost. B) inventory cost. C) facility cost. D) processing cost.

facility cost.

Ignoring uncertainty in demand encourages a greater use of A) expensive but flexible transportation modes. B) inexpensive and inflexible transportation modes. C) inexpensive and flexible transportation modes. D) expensive and inflexible transportation modes.

inexpensive and inflexible transportation modes.

The cost of holding inventory incurred by the shipper's supply chain network is A) transportation cost. B) inventory cost. C) facility cost. D) processing cost.

inventory cost.

Temporal aggregation A) is the process of combining orders across time. B) increases a firm's responsiveness. C) decreases transportation costs because of economies of scale. D) all of the above

is the process of combining orders across time.

Cheaper modes of transport typically have A) shorter lead times and smaller minimum shipment quantities. B) shorter lead times and larger minimum shipment quantities. C) longer lead times and smaller minimum shipment quantities. D) longer lead times and larger minimum shipment quantities.

longer lead times and larger minimum shipment quantities.

Inexpensive and inflexible transportation modes tend to A) perform poorly. B) perform very poorly when plans change. C) perform well when everything goes as planned. D) all of the above

perform well when everything goes as planned.

The cost of loading/unloading orders, as well as other processing costs associated with transportation, is considered A) transportation cost. B) inventory cost. C) facility cost. D) processing cost.

processing cost.

Transportation plays a key role in every supply chain because A) products are normally produced and consumed in the same location. B) products are rarely produced and consumed in the same location. C) the cost of transportation is inconsequential. D) transportation is not a factor in determining profitability.

products are rarely produced and consumed in the same location.

The ________ is the party that requires the movement of the product between two points in the supply chain. A) carrier B) producer C) shipper D) consumer

shipper

Managers should ensure that a firm's transportation strategy A) involves cost minimization. B) involves profit maximization. C) supports its competitive strategy. D) is separate from competitive strategy.

supports its competitive strategy.

Investment decisions regarding the transportation infrastructure (rails, locomotives, trucks, airplanes, etc.) are the primary concern of A) the shipper. B) the supplier. C) the manufacturer. D) the carrier.

the carrier.

The most important operational decision related to transportation in a supply chain is A) minimizing cost of transportation. B) maximizing profitability of the supply chain. C) reducing the level of cycle inventory. D) the routing and scheduling of deliveries.

the routing and scheduling of deliveries.

The key players in any transportation that takes place within a supply chain are A) the shipper and the receiver. B) the shipper and the supplier. C) the shipper and the manufacturer. D) the shipper and the carrier.

the shipper and the carrier.

The total amount paid to various carriers for transporting products to customers is A) transportation cost. B) inventory cost. C) facility cost. D) processing cost.

transportation cost.

The movement of product from one location to another as it makes its way from the beginning of a supply chain to the customer's hands is referred to as A) transportation. B) retailing. C) distribution. D) manufacturing.

transportation.