SCMN 3720 Test 1
How have transport routes affected population distribution?
-Cities formed along major transportation routes -cars allow people to live in locations far from where they work (growth of suburban areas)
What are ELDs and how are they used in trucking?
-Electronic logging devices -they electronically record a driver's Record of Duty Status. It is intended to create a safer work environment for drivers, and make it faster to accurately track, manage, and share records of duty status. This ensures drivers don't exceed the legal limits for driving to reduce fatigue and crashes.
What conditions exist in pure competition?
-a large number of sellers -all sellers and buyers are of such a small size that no one can influence prices or supply -there is a homogeneous product or service -there is unrestricted entry
What are some examples of the historical significance of transport
-ancient Egypt used water at a foundation for its society (transport goods, communicate, means for defense) -US left Britain because they were alienated from their government (slow transport between the two means that Britain is not within the bounds of the US transport network) -Erie Canal and early rail system led to US economic and social growth -highway system increased defense, economy, and social benefits
What is the difference between a headhaul and a backhaul?
-headhaul: the demand that initiated the original movement of the carrier's equipment and the shipper's goods (A -> B) -backhaul: the required return of equipment from B -> A
What are some examples of sustainability initiatives?
-improving fuel economy for trucking (low rolling tires, improved aerodynamics, better engines) -airline turbofans are bigger (lower fuel consumption) -railroad added 50 sensors to improve efficiency -ocean shipping switching to liquid natural gas
What is the difference between a rate and a price and how has economic deregulation impacted the use of these terms?
-rate (before deregulation): predetermined -price (after deregulation): carriers choose what to charge (market driven pricing)
What are the 4 steps in the risk management process
1) risk identification 2) risk assessment 3) risk management strategy development 4) risk review and monitoring
What are the 3 main phases in the evolution of the SC concept?
1960s: physical distribution management 1980s: business logistics / integrated logistics management 1990s: supply chain management
Explain the bullwhip effect
A distribution channel phenomenon in which forecsts yield supply chain inefficiencies (SCM goal is to mitigate bullwhip effect by reducing level of uncertainty) Uncertainty increases as you get further from the end of the supply chain (reduce by increasing info flow backwords)
What is truck platooning?
A group of vehicles that communicate via a wireless connection that helps them time their movements. The lead driver takes over steering with the other trucks "following the leader"
Define demand elasticity
A measure of consumers' sensitivity to a change in price. If they are sensitive then a price reduction increases demand. If they aren't sensitive then we say the demand is price inelastic
What type of transportation demand is inelastic and which type is elastic?
Aggregate demand is inelastic (all types of transport combined) Demand for specific modes or specific carriers is elastic (choosing which airline to fly with)
Define transportation disruption
Any significant delay, interruption, or stoppage in the flow of trade caused by a natural disaster, heightened threat level, an act of terrorism, or any transportation security incident.
Which countries were the top 5 exporters in 2015?
China, US, Germany, Japan, Netherlands
What do reverse logistics systems do?
Create a network for returning products that were unacceptable to the buyer for some reason (damage, obsolescence, etc)
What are some important milestones in US transport
Erie canal, transcontinental railroad, airplanes.
Give an example of how Blockchain is expected to be used in transportation?
IBM and Maersk use blockchains to exchange event data and handle document workflows. Integrates shipping processes and partners, and establishing evaluation frameworks through increased transparency and trusted access
If everything else is the same, why is the price to ship a full truckload quantity less than the sum of the prices for LTL quantities that fill up the same truck?
LTLs require several handlings, each one requiring dock personnel, materials-handling equipment, terminal investment, and additional communications and tracking effort
Whats the current state of self driving trucks?
Mercedes has its "Future Truck 2025" already on highways. They have a driver on board to handle complex tasks like parking or driving city streets
Explain place, time, and quantity utility.
Right place, right time, and right quantity inventory allows the inventory to be useful for us -must be on schedule for just in time. -EX. Ponchos at a rainy football game.
Define capability
The ability of the carrier to provide special service requirements such as controlled temps, communications systems, or cubic capacity -refrigerated trucks
Explain economies of scale and how this relates to the impact of lowering transport costs
There is a proportionate savings in costs gained by an increased level of production. It provides a wider choice of products for consumers at a lower cost (1 factory vs 100 factories producing product means less transport)
What was the justification used to pass legislation to build the US interstate highway system
These superhighways would connect states and major centers which would enhance our ability to defend against enemy attack (after WWII)
How does transport affect the environment?
Transport affects air quality, noise, and water quality. Sustainability is now emphasized
How are land values affected by transport routes?
Transport improvements can increase the value of the land because the land becomes more accessible. Noise and air pollution from these improvements can decrease land value though
What countries were the top 5 importers in 2015?
US, China, Germany, Japan, France
Explain Lardner's Law
When transportation cost is reduced, the area where the producer can compete is increased in a directly proportional basis. -cutting transport costs in half means making the market area 4x as large (300% increase)
Define transportation risk
a future freight movement event with a probability of occurrence and the potential for impacting supply chain performance
Explain the concepts of absolute advantage and competitive advantage, how they are different, and why they are relevant to transportation
absolute advantage: make a product at a higher quality and faster rate for a greater profit than another business / country competitive advantage: based on opportunity cost involved by choosing to manufacture goods with limited resources they are relevant to transportation because they determine what goods a business or country will import/export
What is value-of-service pricing based on?
how much people are willing to pay (demand). "charging what the traffic will bear"
Define transportation risk management
identifying risk, cause and effect, etc. to increase overall understanding in order to manage, reduce, transfer, and ultimately eliminate threats to the supply chain the identification, analysis, assessment, control, and avoidance, minimization, elimination of unacceptable risks
What were the $ level of imports, exports, and the difference for the US in 2015?
imports: $2.3 trillion exports: $1.5 trillion difference: .75 trillion
Define "landed cost" and explain why this concept is important in transportation
it's the total price of a product including the price of the product and transport fees. Landed cost determines the size of the market (area where a plant can distribute its product to consumers). Good transport lowers landed cost. Includes production costs of overseas supplier overseas warehouse and transport costs export tariffs international freight transport costs import duties buyer warehouse and transport costs
Rank the modes of transportation in descending order of passenger miles
light duty vehicles air bus rail
What two types of costs can be used to base prices upon in Cost-of-Service pricing?
marginal or average cost
Describe monopolies and oligopolies.
monopoly: only one seller, no close competition or substitute, restricted entry, seller sets price oligopoly: few large sellers, relatively homogeneous products, substitutability, mutual interdependence
What are the transport measurement units for passengers and freight?
passenger: passenger-mile freight: ton-mile
What are some major contributing factors that influence global flows and trade?
population growth age distribution urbanization land and resources tech and info globalization
What classification factors are used to determine the rating of a specific commodity?
product density stowability and handling liability
What are the 3 flows in the supply chain concept, and where does demand fit in?
products / services information financials The supply chain fulfills the demand that marketing tells them exists (vacuum effect)
What are the benefits of TMS?
reduced order cost load consolidation carrier and mode selection identify invoice discrepancies track carrier performance more accurate "available to promise" contract savings effective asset utilization lower administrative costs *6-10% in savings by implementing TMS!!*
What are the 4 categories of risk management strategies?
risk avoidance risk reduction risk transfer risk retention
What are the key planning support capabilities of a TMS?
routing, scheduling, mode and carrier selection, document creation, monitor performance.
Draw and label a risk assessment matrix
see notes
Define business continuity planning
task of identifying, developing, acquiring, documenting, and testing procedures and resources that will ensure continuity of a firm's key operations in the event of an accident, disaster, emergency, and/or threat.
Define accessibility
the ability of the transportation provider to move freight between a specific origin and destination. Motor carriers have an advantage in accessibility
Define reliability
the consistency of transit times
Define derived demand
the demand to transport a product to a given location depends on the existence of demand for that product in that location.
Define security
the safety of the goods in transit
What is different about monopolistic competition from above?
there are many small sellers but there is some DIFFERENTIATION of products. Enough sellers so that the largest seller is still small enough not to control a significant portion of the market. Any seller can lower prices to increase sales volume without eliciting a retaliatory action from competitors
Define transit time
time to go from point A to point B
What percentage of average household expenditures in the US goes to transport and how does it compare?
transport: 17% housing: 33% food: 13% insurance: 11% healthcare: 8%
What percentage of US GDP does transport account for and how does it compare?
transport: 9% housing: 19% healthcare: 16% food: 10%
What is the glue that holds the supply chain together?
transportation
Rank the modes of transportation in descending order of ton-miles
truck rail pipeline water air
What three basic criteria are typically most important in determining how much to charge or pay for a shipment?
weight zip to zip route (A -> B different than B -> A) what kind of commodity it is (product density, stowability, and liability)
What are the 6 primary categories of risk?
•Product Loss •Contamination •Product Damage •Delivery Delay •Security Breach •Supply Chain Interruption
