Chapter 8

The landlord's favorite place to buy shrimp in New Orleans was the Cajun Seafood market on Claiborne and he did not hesitate to stock up on shrimp when he dropped by the shotgun double house he bought as an investment a few years ago. Sadly, it was 685 miles one way to visit the property and even though gas was available at $1.88 per gallon and the car achieved 25 miles per gallon, it was an expensive trip. He packed a cooler with $12 worth of ice regardless of the quantity of shrimp he bought to bring home. The shrimp were a bargain at $7.99 per pound for jumbos and he always tried to fit 35 pounds of the crustaceans in the cooler. What is the landed cost of a pound of shrimp? A) $11.28 B) $9.80 C) $9.42 D) $8.78

A) $11.28

Last year the Monroe Logistics Company reported 4,000 damaged deliveries, 1,000 deliveries to the wrong address, 500 late deliveries, and 200 deliveries billed incorrectly. Assuming no delivery had more than one error, how many deliveries were properly handled if their percent perfect order is 87%? A) 38,145 B) 40,622 C) 43,845 D) 47,561

A) 38,145

This transportation mode is often the most expensive on a per pound basis. A) air B) rail C) water D) highway

A) air

A firm that is interested in consistent on-time delivery would probably design their transportation and warehousing system to include: A) air transportation with a spot stock warehouse. B) rail transportation with a consolidation warehouse. C) water transportation with a hub and spoke warehouse. D) pipeline transportation with a postponement warehouse.

A) air transportation with a spot stock warehouse

What percent of North American gross domestic product is accounted for by logistics? A) almost 8 percent B) almost 12 percent C) almost 16 percent D) almost 20 percent

A) almost 8 percent

Cargo is loaded and unloaded only once with: A) direct truck shipment. B) less-than-truckload shipment. C) multimodal solutions. D) None of these modes always has only one loading and unloading.

A) direct truck shipment.

The assignment model assumes that: A) there are no economies of scale in shipping from one point to another. B) the total amount shipped must exceed plant capacity. C) the total amount shipped must not exceed demand at each location. D) negative shipment quantities are acceptable as long as they are balanced by a positive shipment elsewhere.

A) there are no economies of scale in shipping from one point to another.

The landlord's favorite place to buy shrimp in New Orleans was the Cajun Seafood market on Claiborne and he did not hesitate to stock up on shrimp when he dropped by the shotgun double house he bought as an investment a few years ago. Sadly, it was 685 miles one way to visit the property and even though gas was available at $1.88 per gallon and the car achieved 25 miles per gallon, it was an expensive and lengthy trip. The cheapest plane tickets that were routinely available cost $199 round trip, but occasionally there was a super sale where the price dropped lower than that. He always packed a cooler with $12 worth of ice regardless of how much shrimp he actually bought. The shrimp were a bargain at $7.99 per pound for jumbos and he always tried to fit 35 pounds of the crustaceans in the cooler. What is the price of round trip airfare that would make the landed cost of a pound of shrimp the same for both driving and flying? A) $112.85 B) $168.87 C) $103.02 D) $147.26

C) $103.02

Last year the Perfection Logistics Company delivered 3.1 million packages and damaged 45,000 deliveries, sent 28,000 to the wrong address, and was late 20,000 times. Assuming no package had more than one error, Perfection's percent perfect order is: A) 93000 B) 3007000 C) 97% D) 93.7%

C) 97%

Hub and spoke systems are characterized by: A) "spokes" that are represented by the sites that receive the goods. B) "hubs" that hold inventory until the appropriate season or upswing in demand. C) inventory locations that are close to producers, not customers. D) warehouses that are used as sorting facilities.

D) warehouses that are used as sorting facilities.

Assortment warehousing is a form of warehousing that combines classic operations with light manufacturing and packaging duties in order to assure short customer lead times. T/F

F

Between any two locations, a less-than-truckload shipment probably experiences fewer stops and handling than a direct truck shipment. T/F

F

In order for the assignment problem method to yield an optimal solution all of the transportation costs in the area must be identical. T/F

F

Inventory pooling occurs when a warehouse operator fails to complete shipments and is left with inventory that should be elsewhere. T/F

F

The net result of the renaissance in logistics is that logistics costs are expected to decline. T/F

F

The landed cost is the sum of all of the logistics activities from packaging at the producer's site through transportation, handling, customs, and any other logistics fees to the point of sale. T/F

False

The goods entered doors on one side of the massive building and crossed the floor to the other side, where they were loaded on delivery trucks headed out on their delivery routes. The screams of the workers were drowned out by the constant traffic from the nearby airport and rail yard, making this an ideal ________ for the retail giant.

Hub and spoke system

Which of these statements about reverse logistics is BEST? A) Reverse logistics systems are usually less cost-efficient than forward-based systems. B) Reverse logistics systems are usually designed to be less flexible than forward-based systems. C) Reverse logistics systems usually play no role in customer satisfaction. D) Reverse logistics systems usually use the same processes and players that comprise the forward-based system.

Reverse logistics systems are usually less cost-efficient than forward-based systems.

A material handling system includes equipment and procedures that are needed to move items within a facility, between a facility and a transportation mode, and between different transportation modes. T/F

T

Cross-docking is essentially the reverse flow from consolidation warehousing. T/F

T

In order for the weighted center of gravity method to yield an optimal solution all of the transportation costs in the area must be identical. T/F

T

In the United States, the value of goods transported via highway is greater than the value of goods transported by all other transportation modes. T/F

T

Packaging is a logistics activity. T/F

T

Roadrailers are considered a multimodal solution when all of their capabilities are utilized. T/F

T

The most detailed level of a logistics information system is the execution system. T/F

T

The solution obtained from an assignment problem is an optimal answer to the problem of shipping goods from multiple sources to multiple destinations. T/F

T

A company interested in consistently achieving a high level of on-time delivery would be best served by the highway or air modalities of transportation. T/F

TRUE

A reverse logistics system handles repairs, recycling, returns and remanufacturing. T/F

TRUE

The difference between a contract carrier and a common carrier is that the common carrier handles shipments on a case-by-case basis while the contract carrier handles shipments based on long-term contracts. T/F

TRUE

The perfect order measures how effectively logistics serves the customer while the landed cost measures how efficiently logistics provides that service. T/F

TRUE

A location model that looks at the problem of serving various demand points from multiple supply points at the lowest cost is the ________.

assignment problem

A(n) ________ can handle shipments on an as-needed basis with no long-term contract required.

common carrier

It looked like a scene right out of the Transformers series, albeit in a far more functional format. With the push of a button the rail car's wheels folded up into the body of the car and wheels suitable for highway transportation appeared out of nowhere. The whole process took only a minute or so and the ________ was ready to deliver steaming burritos to the growing crowd at the center of town.

roadrailer

Seasonal goods such as holiday decorations and recreational equipment may be placed in a(n) ________ close to the marketplace.

spot stock warehouse

The landlord's favorite place to buy shrimp in New Orleans was the Cajun Seafood market on Claiborne and he did not hesitate to stock up on shrimp when he dropped by the shotgun double house he bought as an investment a few years ago. Sadly, it was 685 miles one way to visit the property and even though gas was available at $1.88 per gallon and the car achieved 25 miles per gallon, it was an expensive and lengthy trip. Therefore he bought the cheapest plane tickets he could muster at $299 round trip and packed a cooler with $12 worth of ice. The shrimp were a bargain at $7.99 per pound for jumbos and he always tried to fit 35 pounds of the crustaceans in the cooler. What is the landed cost of a pound of shrimp? A) $11.28 B) $16.88 C) $9.80 D) $14.78

B) $16.88

Which of the following is a type of material handling equipment? A) 3PL B) ASRS C) LTL D) RFID

B) ASRS

A logistics manager uses this type of logistics information system to select a carrier for an outgoing shipment or to develop a weekly schedule of deliveries. A) decision support B) planning C) execution D) operating

B) planning

The mode of transportation that is highly cost effective for bulky items but has relatively poor delivery speed is: A) highway. B) water. C) rail. D) air.

B) water.

Which of the following is an example of consolidation warehousing? A) Large shipments from multiple suppliers are re-sorted into customized shipments to individual stores. B) A single manufacturer takes output directly from a single manufacturing plant and sends it directly to a single customer. C) A single manufacturer takes output from several of its manufacturing plants and combines them into one shipment to a major customer. D) A single manufacturer holds a wide array of goods close to the source of demand.

C) A single manufacturer takes output from several of its manufacturing plants and combines them into one shipment to a major customer.

15) Universal Exports has several crates it needs to send from the United Kingdom to North Korea. They have located a firm that specializes in transferring cargo to the actual carrier that will bring the crates into North Korea. This firm could be described as: A) an interlocuter. B) a customs broker. C) a freight forwarder. D) a mercenary.

C) a freight forwarder

The transportation mode with the highest dollar value of freight in the United States is: A) water. B) rail. C) highway. D) pipeline.

C) highway

One form of warehousing that features light manufacturing and packaging duties and allows firms to put off final assembly or packaging until the last possible moment is: A) assortment warehousing. B) spot stock warehousing. C) postponement warehousing. D) pac-man warehousing.

C) postponement warehousing.

The transportation mode other than highway with the highest annual tonnage in the United States is: A) air. B) water. C) rail. D) pipeline.

C) rail.

The fireworks that were produced year-round in South Africa were sent to warehouses around the United States during the months of May and June in anticipation of large demand for the July 4th holiday. The warehousing system that is BEST suited to handle this situation is the: A) assortment warehouse. B) postponement warehouse. C) spot stock warehouse. D) break-bulk warehouse.

C) spot stock warehouse.

A service firm that takes care of all of the logistics requirements for other companies is a: A) common carrier. B) contract carrier. C) third party logistics provider. D) freight forwarder.

C) third party logistics provider.

________ is a form of warehousing in which smaller outgoing shipments are created from large incoming shipments.

Cross-docking

The drought of 2011 devastated hay crops in the plains states and horse owners ranged far and wide to purchase hay for their horses when winter arrived. Hay can be purchased "up north" for $4 a bale and a few entrepreneurs with large trailers were more than willing to pick up a few hundred bales and haul them south where demand was high. The transportation cost was $6 per bale and a packing and loading cost of $1 was typical. The landed cost of a bale of hay this winter was: A) $4. B) $6. C) $10. D) $11.

D) $11.

Last year the Monroe Logistics Company reported 40,000 damaged deliveries, 18,000 deliveries to the wrong address, 15,000 late deliveries, 1,200 deliveries billed incorrectly, and 127,000 deliveries handled properly. Assuming no delivery had more than one error, Monroe's percent perfect order is: A) 37% B) 42% C) 58% D) 63%

D) 63%

Which of these statements about inventory management is BEST? A) Spot stock warehouses are more useful with less inventory in the system. B) A system using air transportation experiences higher costs due to higher levels of inventory. C) Cross-docking facilities don't need to match incoming and outgoing demand since they typically retain much of their inventory for a week or longer. D) A system using water and rail transportation tends to have higher levels of inventory.

D) A system using water and rail transportation tends to have higher levels of inventory.

The most detailed level of logistics information systems is the: A) decision support system. B) planning system. C) material handling system. D) execution system.

D) execution system.

Which of these is NOT a logistics activity? A) material handling B) inventory management C) warehousing D) inspection

D) inspection

Your new Garden Weasel fails to "completely satisfy" you so you decide to return it for a full refund. What is the name for the system that will carry your weasel back to the manufacturer? A) upstream logistics B) reverse ordering C) upstream ordering D) reverse logistics

D) reverse logistics

The online tracking systems offered by overnight carriers are examples of logistics information systems known as ________.

execution systems

A(n) ________ uses more than one transportation mode through physical, information, and monetary flows that are as seamless as possible.

multimodal solution

The complicated gift basket was delivered exactly as it was designed and in plenty of time to be enjoyed during seasonal celebrations. From a logistics performance standpoint, the product could be considered a(n) ________.

perfect order

The printer manufacturer shipped all finished goods to a centrally located warehouse just down the street from an international airport. When orders came in from one country, workers at the warehouse added instruction manuals in that language and included a power supply that fit the appropriate electrical distribution system. This is an example of ________.

postponement warehousing