Supply Chain Chapter 14
21) Which of these statements about use fees for a highway is best? A) A flat rate results in lower use by most individuals. B) A flat rate results in higher use by most individuals. C) A flat rate has no impact on use by most individuals. D) A fee based on congestion results in higher use by most individuals.
A flat rate results in higher use by most individuals.
47) The most common problems in the use of IT in transportation relate to A) cross-enterprise collaboration. B) network security. C) vibration-resistant hardware. D) maintaining an Internet connection while in motion.
A) cross-enterprise collaboration
12) Which mode of transportation is the most expensive? A) Air B) Truck C) Rail D) Water
Air
49) 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.
B) inexpensive and inflexible transportation modes.
50) 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
C) perform well when everything goes as planned.
23) 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
25) 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
16) In almost all countries, roads, seaports, airports, rail and canals have this in common. A) They were built and/or managed by the government. B) They are located near the water. C) They are the source of most of the tax revenue for municipalities. D) They are staffed by foreign nationals.
They were built and/or managed by the government.
13) Which mode of transportation is the least expensive? A) Air B) Truck C) Rail D) Water
Water
35) Serving a high density of customers at a long distance is best done using A) an LTL carrier. B) a cross dock distribution center with milk runs. C) a package carrier. D) a private fleet with milk runs.
a cross dock distribution center with milk runs
29) At a train station where lines intersect, the Mumbai dabbawalas perform A) a forward logistics function. B) a reverse logistics function. C) a milk run. D) a cross-dock function.
a cross-dock function
36) Serving a low density of customers at a long distance is best done using A) an LTL carrier. B) a cross dock distribution center with milk runs. C) a package carrier. D) a private fleet with milk runs.
a package carrier
37) Serving a high density of customers at a short distance is best done using A) an LTL carrier. B) a cross dock distribution center with milk runs. C) a package carrier. D) a private fleet with milk runs.
a private fleet with milk runs
8) Which of the following is the fastest delivery method of transportation? A) Rail B) Truck C) Air D) Intermodal
air
9) ________ carriers offer a very fast and fairly expensive mode of transportation for cargo. A) Air B) Truck C) Rail D) Water
air
24) 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
38) Serving a medium density of customers at a medium distance is best done using A) an LTL carrier. B) a cross dock distribution center with milk runs. C) a package carrier. D) a private fleet with milk runs.
an LTL carrier
28) The Mumbai dabbawalas perform A) a forward logistics function. B) a reverse logistics function. C) both a forward and a reverse logistics function. D) neither a forward nor a reverse logistics function.
both a forward and a reverse logistics function.
7) The ________ is the party that moves or transports the product. A) carrier B) producer C) shipper D) consumer
carrier
44) The most common use of information technology in transportation is to A) determine transportation routes using software. B) calculate shipping rates. C) connect buyers and sellers. D) place person to person calls using cellular technology.
determine transportation routes using software
32) 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
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 dabba uses the Mumbai railway system to carry about 40 lunches each day.
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
46) Real time location tracking of vehicles relies on A) citizen band radios. B) vehicles. C) teamsters. D) global positioning systems.
global positioning systems
42) 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 replenishing cycle inventory and fast mode when using safety inventory for her product that had A) high value and high demand. B) high value and low demand. C) low value and high demand. D) low value and low demand.
high value and high demand.
43) The competent supply chain manager decided to aggregate all inventories and as required, use fast mode of transportation for filling customer orders of his A) high-value and high-demand product. B) high-value and low-demand product. C) low-value and high-demand product. D) low-value and low-demand product.
high-value and low-demand product
45) The complexity and scale of transportation makes it an excellent area within the supply chain for the use of A) a dedicated logistics manager. B) a fleet of vehicles. C) information technology systems. D) a common unit of money.
information technology systems
31) 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
34) 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
26) 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.
40) It is best to disaggregate all inventories and use an inexpensive mode of transportation for replenishment when you have a A) high-value product and high demand. B) high-value product and low demand. C) low-value product and high demand. D) low-value product and low demand.
low-value product and high demand.
41) A shrewd supply chain manager would aggregate only safety inventory and use an inexpensive mode of transportation for replenishing cycle inventory if she is dealing with a A) high-value product and high demand. B) high-value product and low demand. C) low-value product and high demand. D) low-value product and low demand.
low-value product and low demand.
11) ________ 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
15) Which mode of transportation is used primarily for petroleum and natural gas? A) Air B) Truck C) Water D) Pipeline
pipeline
33) 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
2) 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.
10) ________ typically move commodities over large distances at lower costs per unit shipped. A) Air B) Truck C) Rail D) Package carriers
rail
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
48) 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
22) When infrastructure is publicly owned, it is important to price usage to reflect A) the cost of rebuild the infrastructure once it is fully depreciated. B) the incremental profit from the use of the infrastructure. C) the marginal impact on the cost to society. D) the market clearing price.
the marginal impact on the cost to society.
27) 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.
5) 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
3) 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.
39) Serving a medium density of customers at a short distance is best done using A) an LTL carrier. B) third party milk runs. C) a package carrier. D) a private fleet with milk runs.
third party milk runs
30) 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
1) 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.
14) Which mode of transportation is the dominant form of freight transportation? A) Air B) Truck C) Rail D) Water
truck
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
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 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 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 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
18) 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 cost of 5t2. What is the marginal cost? A) 5 B) 5t C) 10 D) 10t
10t
20) 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 cost of 5t2 + 7t. What is the marginal cost? A) 12 B) 5t + 7 C) 10 D) 10t + 7
10t+7
17) 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 cost of 5t2. What is the average cost per motorist? A) 2.5 B) 5 C) 5t D) 2.5t
5t
19) 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 cost of 5t2 + 7t. What is the average cost per motorist? A) 12 B) 5t + 7 C) 10 D) 10t + 7
5t+7
