Chapter 14 - Transportation in a Supply Chain

Suppose the highway is governed by a use fee charged to motorists that is based on congestion, operation, and maintenance. The total traffic t is used to determine the cost of 5t^2. What is the marginal cost?

10t

Suppose that a highway is governed by a use fee charged to motorists that is based on congestion, operation, and maintenance. Te total traffic t is used to determine the cost of 5t^2 + 7t. What is the marginal cost?

10t + 7

Suppose that a highway is governed by a use fee charged to motorists that is based on congestion, operation, and maintenance. The total traffic t is used to determine the cosy of 5t^2. What is the average cost per motorist?

5t

Suppose that a highway is governed by a use fee charged to motorists that is based on congestion, operation, and maintenance. Te total traffic t is used to determine the cost of 5t^2 + 7t. What is the average cost per motorist?

5t + 7

Which one of these statements about use fees for a highway is best?

A flat rate results in higher use by most individuals

----- carriers offer a very fast and fairly expensive mode of transportation for cargo

Air

Which mode of transportation is the most expensive?

Air

Which of the following is the fastest method of transportation?

Air

Which transportation network design option establishes an extra layer between suppliers and retailers to store inventory and to serve as a transfer location?

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 advantages?

Direct shipping network

A dabba uses the Mumbai railway system to carry about 40 lunches each day

FALSE

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

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

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 - Shipper

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

FALSE - are rarely

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 - both of them

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

FALSE - not by aggregating and will not reduce transportation cost

Milk runs reduce outbound transportation costs by consolidating large shipments

FALSE - small shipments not enough to fill trucks all together

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

FALSE - the carrier

------ are the preferred mode of transport for online businesses such as amazon.com and dell, as well as for companies such w.w grainger and mcmaster that send small packages to customers.

Package carriers

Which mode of transportation is used primarily for petroleum and natural gas?

Pipeline

------ typically move commodities over large distances at lower costs per unit shipped

Rail

A milk route 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

Quasi-market prices for transportation infrastructure result in higher prices at peak locations and times and lower prices otherwise

TRUE

Tailored transportation is the use of different transportation networks and modes based on customer and products 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 use of software to determine transportation routes has been the most common IT application in transportation

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 extend 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?

Tailored network

Which of the following uses transportation to minimize the total cost (transportation, inventory, information, and facility)?

The shipper

In almost all countries, roads, seaports, airport, rail and canals have this in common

They were built or managed by the government

The total amount paid to various carriers for transporting products to customers is

Transportation cost

Which mode of transportation is the dominant form of freight transportation?

Truck

Which mode of transportation is the least expensive?

Water

Serving a medium density of customers at a medium distance is best done using

a LTL carrier

Serving a high density of customers at a long is best done using

a cross dock distribution center with milk runs.

At a train station where lines intersect, the Mumbai dabbawalas perform

a cross-docking function

Serving a low density of customers at a long distance is best done using

a package carrier

Serving a high density of customers at a short distance is best done using a private fleet

a private fleet with milk runs

The Mumbai dabbawalas perform

both a forward and reverse logistics function

The ------ is the party that moves or transports the product

carrier

The most common in the use of IT in transportation relate to

cross-enterprise collaboration

The most common use of information technology in transportation is to

determine transportation routes using software

The cost of various facilities in the shipper's supply chain network is

facility cost

Real time location tracking of vehicles relies on

global positioning systems

The skillful supply chain manager declared she would not only disaggregate cycle inventory, but she would also aggregate safety inventory and use an inexpensive mode of transportation for replenishment cycle inventory and fast mode when using safety inventory for her product that had

high value and high demand

The competent supply chain manager decided to aggregate all inventories and as required, use fast mode of transportation for filling customer order of his

high-value and low-demand product

Ignoring uncertainty in demand encourages a greater use of

inexpensive and inflexible transportation modes

The complexity and scale of transportation makes it an excellent area within the supply chain for the use of

information technology systems

The cost of holding inventory incurred by the shipper's supply chain network is

inventory cost

Temporal aggregation

is the process of combining orders time.

Cheaper modes of transport typically have

longer lead times and larger minimum shipment quantities

It is best to disaggregate all inventories and use an inexpensive mode of transportation for replenishment when you have a

low-value product and high demand

A shrewd supply chain manager would aggregate only safety inventory and use an inexpensive mode of transportation for replenishment cycle inventory if she is dealing with a

low-value product and low demand.

Inexpensive and inflexible transportation modes tend to

perform well when everything goes as planned

The cost of loading/unloading orders, as well as, other processing costs associated with transportation, is considered

processing cost

Transportation plays a key role in every supply chain because

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

shipper

Managers should ensure that a firm's transportation strategy

supports its competitive strategy

Investment decisions regarding the transportation infrastructure (rails, locomotives, trucks, airplanes, etc.) are the primary concern of

the carrier

When infrastructure is publicly owned, it is important to price usage to reflect

the marginal impact on the cost to society

The most important operational decision related to transportation in a supply chain is

the routing and scheduling of deliveries

The key players in any transportation that takes place within a supply chain are

the shipper and the carrier

Serving a medium density of customers at a short distance is best done using

third party milk runs

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

transportation