LSCM 3960 - Farris

Heuristic models may, but generally do not provide an optimum solution. are able to accommodate broad problem definitions. have fallen from use because of SAILS. are unable to incorporate certain rules into the decision-making process.

are unable to incorporate certain rules into the decision-making process

WIP inventories are NOT included on the balance sheet associated with manufacturing the same as VMI inventories NOT impacted by EOQ

associated with manufacturing

The grid technique is a variation of SAILS assumes that the raw materials sources and finished goods markets are fixed assumes that the raw materials sources and finished goods markets are variable. assumes non-linear transportation rates

assumes that the raw materials sources and finished goods markets are fixed

Order management system represents the principal means by which price and lead time add value buyers and sellers communicate information relating to individual orders of product orders are handled inside the company customers are segmented by profitability

buyers and sellers communicate information relating to individual orders of product

Batching economies or cycle stocks usually arise from three sources. Which of these is NOT a source? procurement transportation production demand

demand

Inventory and the GDP grew by ______ amounts between 1994 and 2010. the same different inversely proportional exponential

different

Ordering cost refers to the expense of placing an order and includes the cost of capital. relates to the material management concept. does not include the cost of the product. not receiving it.

does not include the cost of the product.

Air carriers were historically looked upon as emergency only carriers having equipment shortages a fringe participant insignificant

emergency only carriers

In the event of a "stockout" at your location, one of the things that could happen is the vendor's plant shuts down the cost of capital is increased the SCOR process would come into play extra shipping cost may be incurred

extra shipping cost may be incurred

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

fixed, variable

Which type of global logistics channel intermediary enables goods to move through customs more easily by consolidating small shipments into more economical sizes? customs house brokers NVOCC export trader foreign freight forwarder

foreign freight forwarder

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

gross sales

Security legislation has not had much impact on transportation carriers has caused some firms to stop offshore sourcing has caused expense issues for carriers has created unnecessary restrictions of legitimate trade

has caused expense issues for carriers

Applying Internet technology to the order management process has allowed organizations to not only take time out of the process but also to increase the velocity of cash back to the selling organization attract new customers develop "Clicks" and "Bricks" firms manage inventory more effectively

increase the velocity of cash back to the selling organization

Capital cost focuses on the cost of capital tied up in ________and the resulting lost opportunity from investing that capital elsewhere. plants inventory distribution centers WIP

inventory

For most firms, the MOST important measure of customer service is: profitability of the particular channel of distribution inventory availability within a specified order cycle time the length of the order cycle the number of decentralized transactions within a business cycle the ability to backorder

inventory availability within a specified order cycle time

The challenge to develop and sustain an efficient and effective supply chain(s) requires organizations to address a number of issues. Which is NOT included? complexity inventory deployment inventory carrying costs technology

inventory carrying costs

Exponential smoothing is one of the most commonly used techniques. uses primarily weighted averages to compensate for errors. is used to determine random variations. is used to reduce channel fluctuations

is one of the most commonly used techniques.

Which is true regarding the facility/supply chain network design decision? the facility's impact on other functional areas should be considered, but it is not as important it should be coordinated closely with the corporate and overall business strategies that may be in place global locations should not be considered generally, qualitative criteria are considered first

it should be coordinated closely with the corporate and overall business strategies that may be in place

Which of the following would NOT be a typical transportation management function? selecting the best modes of transportation keeping track of inventory in the warehouse(s) auditing freight bills negotiating rates with carriers choosing specific carriers

keeping track of inventory in the warehouse(s)

Benefits to a carrier of improved routing and scheduling include all of the following EXCEPT: greater vehicle utilization higher levels of customer service lessening of competition lower transportation costs reduced capital investment in equipment

lessening of competition

Which management area in an organization does not normally have transportation responsibility? marketing! manufacturing procurement logistics

manufacturing

What activity is described as the movement of goods into a warehouse, the placement of goods in a warehouse, and the movement of goods from storage to order picking areas and eventually to dock areas for transportation out of the warehouse? materials handling physical distribution business logistics order fulfillment

materials handling

What are fixed established spatial points where goods stop for storage or processing? nodes links cost centers fulfillment centers

nodes

Outsourcing involves moving company facilities away from the home office. hiring foreign nationals to manage parts of the business. obtaining materials, parts, and products from other companies. building a factory in another country.

obtaining materials, parts, and products from other companies.

The demographics of our society has changed because the "Baby Boom" generation is now turning 60. of the increase in two-career families and single-parent households. of immigration. birth rates have changed.

of the increase in two-career families and single-parent households.

In selecting a transport mode or carrier, the most important factor for most shippers would be: on-time pickups and deliveries carrier reputation quality of carrier sales force lowest freight rate satisfactory insurance coverage

on-time pickups and deliveries

An outbound-to-customer logistics system is also referred to as integrated fulfillment. dedicated fulfillment. store fulfillment. physical distribution.

physical distribution

An inbound-to-operations logistics system is also referred to as physical supply. physical distribution. dedicated fulfillment. demand management.

physical supply.

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

place

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

promotion costs

JIT is a _______ system. push Pareto's Law MRP pull

pull

issue that has received much more scrutiny in recent years is the: focus on adequate inventory levels reduction in packaging waste by using alternate materials effort to move warehouse storage closer to consumers emphasis on materials handling and warehouse design

reduction in packaging waste by using alternate materials

Which of the following is NOT a result (directly or indirectly) of the Motor Carrier Act of 1980? increasing competition overall number of TL motor carriers has increased service levels provided by carriers have declined the number of negotiated shipper-carrier agreements has increased the influence of rate bureaus on carrier pricing has declined

service levels provided by carriers have declined

All the following are inventory risk costs EXCEPT: obsolescence taxes damage shrinkage relocation costs

taxes

If demand INCREASES by 13% and the value of each unit INCREASES by 13%, what will happen to the EOQ? (Assume that everything else remains the same). the EOQ will increase by 13%. the EOQ will increase by 26%. the EOQ will decrease by 13%. the EOQ will decrease by 26%. the EOQ will remain the same.

the EOQ will remain the same

Cost/Value refers to getting the best value for the money spent. U.S. firms competing in the global arena. the importance of cost and value at the very end of the supply chain. product variety.

the importance of cost and value at the very end of the supply chain.

Those customers who are in the "Danger Zone" segment are likely to switch to a competitor have been a customer for less than a year the least profitable. are using ABC to drive down the price

the least profitable.

Which is correct regarding tapering rates? the principle is based on the carrier's ability to spread certain fixed shipment costs over a greater number of miles transportation rates increase with distance directly in proportion to the distance in a one-source, one-market situation, the impact of the tapering rate will be to pull the location toward a point midway between the source and the market uses transportation simplifications to recommend facility locations

the principle is based on the carrier's ability to spread certain fixed shipment costs over a greater number of miles

The classic objective of a network design model has been to establish the number, location, and size of finished goods distribution centers and associated product flows. to find the best location for a forward facing warehouse. to examine the finished goods flow from the warehouse to the customer. to measure and control site locations.

to establish the number, location, and size of finished goods distribution centers and associated product flows.

What is often the largest component of logistics costs? inventory costs transportation costs shipper-related costs administrative costs

transportation costs

Piggyback is a form of intermodal transportation that primarily involves the following two transport modes: air and rail water and pipeline truck and rail air and water

truck and rail

Assume that a company has sales of $17.9 million (measured at cost, not sales price). Also assume that the firm's inventory turn is equal to 3 and the inventory carrying costs are equal to 30.7%. If inventory turns are increased from 3 to 7, this would result in decreasing inventory carrying costs by (your answer must be accurate to the nearest dollar):

1,046,724.0

Hasty Manufacturing orders 25,000 annually. They order 10 times a year. They hold 9038 units in safety stock. The AVERAGE number of units Hasty Manufacturing holds throughout the year is:

10,288.0

Hasty Manufacturing orders 34,000 annually. They order 8 times a year. They hold 8521 units in safety stock. The MAXIMUM number of units Hasty Manufacturing holds throughout the year is:

12,771.0

Given that inventory valued at full cost equals $14.1 million, variable cost of the inventory is 61.9% of the full cost, and the inventory carrying cost is 26.3%, then the cost of carrying the inventory investment for one year is (your answer must be accurate to the nearest dollar): Correct!

2,295,438.0

Hasty Manufacturing orders 50,000 annually. They order 6 times a year. They hold 3126 units in safety stock. The MINIMUM number of units Hasty Manufacturing holds throughout the year is:

3126.0

Assume that the cost of the most efficient logistics system for a 97.4% service goal is $4.7 million higher than the existing system's cost. If for each dollar of additional sales, the company incurs 87 cents in out-of-pocket costs, what incremental sales volume, in dollars, will the company need to recover the increase in logistics costs? Your answer must be accurate to the nearest dollar.

36,153,846.0

Which is NOT a mode of transportation? truck air 3PL pipeline

3PL

Jim Bob Airlines has one 68 seat plane. On its last five flights it had 32 passengers from MSY to DFW, 34 passengers from DFW to OKL, 31 passengers from OKL to TUL, 38 passengers from TUL to FWB, and 48 passengers from FWB to MSY. For the last five flights, what was the load factor? (Make sure your answer is accurate to one decimal place)

53.8

Your firm has a ROS of 14.3 percent. The company's goal is to increase sales by $417963 this year. How much, in dollars, would you have to reduce your logistics costs to provide the same marginal amount of profit?

59,769.0

Jim Bob Airlines has one 58 seat plane. On its last five flights it had 33 passengers from MSY to DFW, 41 passengers from DFW to OKL, 32 passengers from OKL to TUL, 34 passengers from TUL to FWB, and 40 passengers from FWB to MSY. For the last five flights, what was the load factor? (Make sure your answer is accurate to one decimal place)

62.1

Which of the following is NOT part of the Supply Chain network? plants stores terminals distribution centers

ALL are part of the Supply Chain Network

Each of following is an inventory holding cost EXCEPT: Warehouse cost. Accounting cost. Obsolescence. Interest opportunity cost. Inventory shrinkage.

Accounting cost.

Demand management includes Flows of products. Flows of services. Information about capital. All of these answers.

All of these answers

Other things being equal, HIGH inventory carrying costs will tend to lead to: use of a slower mode of transportation, such as railroads reducing customer service levels by lowering safety stock use of a more expensive mode of transportation such as motor carriers or airlines ordering more frequently. B., C. and D.

B., C. and D.

The objective of inventory management is to: Stockpile all types of inventory. Minimize all types of inventory. Eliminate all overage inventory. Maximize all types of inventory. Increase corporate profitability.

Increase corporate profitability.

Assuming the cost to place an order is constant, all other things remaining the same, DECREASING the order quantity (Q*) causes total ANNUAL ordering costs to: Decrease. Increase. Remain the same. Cannot be determined.

Increase.

All of the following are reasons for holding inventory EXCEPT: Inventories enable specialization in manufacturing. Inventories eliminate the variation in supply and demand. Inventories enable the firm to achieve economies of scale. Inventories provide protection from uncertainties in demand in the order cycle. Inventories act as a buffer between critical interfaces within the channel of distribution.

Inventories eliminate the variation in supply and demand.

The type of functional inventory that helps a firm from being out of stock due to unexpected increases in demand is: Cycle stock. Safety stock. Promotional stock. Speculative stock. Transit stock.

Safety stock.

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 JIT Kan Ban VMI/ Consignment

MRP

One of the major challenges of supply chain management is Maintaining the visibility of inventory. Forward buying. Building safety-stock inventory. Pushing inventory back to vendors.

Maintaining the visibility of inventory.

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 will not consider the potential involvement of third-party logistics suppliers as part of their responsibilities includes workers from divisional levels only should not include outside consultants

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

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

place

Customer relationship management is the art and science of demand management. positioning customers to improve the profitability of the organization management discipline. customer profitability.

positioning customers to improve the profitability of the organization

The main strategy behind routing guides is to maintain exact control comply with or enforce FOB terms! promote supply chain excellence select between modes

promote supply chain excellence

Some individuals describe the current consumer as the "click here" generation because we all have Internet access we no longer wait for information to be "pushed out" to us. we buy so much merchandise on line. we take little time to make purchasing decisions.

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 what must be shown on the bill of lading. which transportation mode must be used who handles freight claims

when ownership and title of the goods passes from seller to buyer

The weighted moving average method assigns a value in each period being averaged. a weight greater than 1. information based on a simple average a weight to each previous period.

a weight to each previous period.

Many industry initiatives have attempted to create efficiency and effectiveness through the integration of supply chain activities and processes. Among the various initiatives is/are quick response (QR) vendor-managed i inventory (VMI) efficient consumer response (ECR) all of these answers

all of these answers

Simulation models are designed to guarantee optimum solutions. generate SAILS reports search directly for the best warehouse configuration allow the decision maker to test the effects of alternative locations

allow the decision maker to test the effects of alternative locations

Which of the following statements about just-in-time (JIT) is FALSE? JIT helps to reduce manufacturing cycle times. JIT has been defined as a philosophy that centers on the elimination of waste in the manufacturing process. JIT seeks to eliminate non-value-added activities. JIT helps a firm to reduce its overall material costs JIT programs usually do not impact inventory turnover rates.

JIT programs usually do not impact inventory turnover rates.

Which of the following is the "marketing mix"? distribution, price, product, promotion price, finance, management, customer service product, engineering, research, and design profit, accounting, distribution, retailing promotion, wholesaling, warehousing, purchasing

distribution, price, product, promotion

A(n) _______ relationship generally exists between the cost of lost sales and inventory cost. reverse proportional inverse non linear

inverse

Transportation efficiency promotes __________ in the supply chain. intermodal demand KPIs capacity competition

competition

Challenges for the trucking industry include lack of flexibility limited equipment options oversupply of qualified drivers competition.

competition.

Which is an advantage of the grid technique for facility location? it establishes the final determination of the best site computationally, it is relatively easy to use it is a dynamic approach with solutions remaining optimum over many time periods it considers topographic conditions in choosing the optimum location

computationally, it is relatively easy to use

Each of the following functional areas would typically be included within logistics: customer service, order processing, transportation, warehousing and storage human resources/personnel management, finance, accounting, engineering order processing, retailing, wholesaling, manufacturing transportation, purchasing, research and design warehousing and storage, wholesaling, returns, accounting

customer service, order processing, transportation, warehousing and storage

If demand and lead time are constant, only___________ is necessary. associated stock cycle stock safety stock speculative stock seasonal stock

cycle stock

Decreasing inventory turnover may lead to increased profitability. True. False.

True

When a traffic manager increases the number of carriers used, market power is increased. True. False.

False

Using Wilson's EOQ formula, what will happen to the average inventory level (Q*/2) if unit cost is DECREASED by 4.1% and annual demand is INCREASED by 4.1% at the same time? Correct! (Q*/2) will increase. (Q*/2) will decrease. (Q*/2) will remain the same.

(Q*/2) will increase.

Seasonal stocks are NOT influenced by EOQ weather transportation holidays

EOQ

Which of the below is not one of the external forces driving the rate of change and shaping our economic and political landscape? Government policy Technology Environmental concerns Globalization

Environmental concerns

Increasing inventory turns from 10 to 15 has a greater impact than increasing inventory turns from 1 to 2. True False

False

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

False

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

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. True False

False

Pareto Analysis may be used to classify parts, customers, or activities. When determining the Pareto segments to classify parts, you should: Identify 80% of the total value of all the parts as these will represent exactly 20% of the part numbers. Identify 20% of the inventory value as this will represent exactly 80% of the part numbers. Identify 80% of the number of parts as these will represent exactly 20% of the inventory value. 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. Identify 20% of the part numbers as these will represent exactly 80% of the inventory value.

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.

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

True

If a firm concentrates on reducing the individual costs of each separate logistics function or activity, overall logistics costs may NOT reduce. True False

True

The "cost-of-service" pricing approach establishes a lower limit of transportation prices or rates. True. False.

True

Activity Based Costing is useful for distributions centers but not customers. can be combined with customer segmentation is too sophisticated for many applications. is a very new management science.

can be combined with customer segmentation.

Desirability refers to performance reporting and scorecarding attractive packaging choice characteristics that influence modal selection ride quality

characteristics that influence modal selection