Question 1

Ignoring inventory costs when making transportation decisions can result in choices that worsen the performance of a supply chain.

Accepted Answer

A) True 
 B)False  True

Question 2

Scenario 14.2
SoxyBack,a manufacturer of fancy men's socks worn by fashionable gentlemen everywhere,is located in Oshkosh,Wisconsin.The socks are sold directly to fashion-conscious men all over North America.SoxyBack currently divides the United States into ten territories,each with its own sales force.All product inventories are maintained locally in each territory and replenished from Oshkosh every five weeks using UPS.The average replenishment lead time using UPS is one week.UPS charges at a rate of $0.75 + 0.33x where x is the quantity shipped in pounds.The products sold fall into two categories-Dandy and Popinjay.Dandy products weigh 0.2 pounds and cost $350 each.Popinjay products weigh 0.10 pounds and cost $35 each.
Weekly demand for Dandy products in each territory is normally distributed,with a mean of mH = 3 and a standard deviation of sH = 6.Weekly demand for Popinjay products in each territory is normally distributed,with a mean of mL = 25 and a standard deviation of sL = 6.
SoxyBack maintains sufficient safety inventories in each territory to provide a CSL of 0.975 for each product.Annual holding cost at SoxyBack is 30 percent.In addition to the current approach,the management team at SoxyBack is considering two other options:
Option A: Keep the current structure but replenish inventory once a week rather than once every five weeks.
Option B: Eliminate inventories in the territories,aggregate all inventories in a finished goods warehouse at Oshkosh,and replenish the warehouse once a week.
If inventories are aggregated at Oshkosh,orders will be shipped using FedEx,which charges $7.25 + 0.77x per shipment,where x is the quantity shipped in pounds.The factory requires a one-week lead time to replenish finished-goods inventories at the Oshkosh warehouse.An average customer order is for 1 unit of Dandy and 10 units of Popinjay.
-In Scenario 14.2,which option has the lowest annual inventory cost?

Accepted Answer

A) Current system 
B) Option A 
C) Option B 
D) Option A and Option B have identical annual inventory costs. 
A) Current system 
B) Option A 
C) Option B 
D) Option A and Option B have identical annual inventory costs. C

Question 3

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

Accepted Answer

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. 
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. C

Question 4

The combination of a high density of customers and short logistical distance is best served by a private fleet making milk runs.

Accepted Answer

A) True 
 B)False

Question 5

Which mode of transportation is the most expensive?

Accepted Answer

A) Air 
B) Truck 
C) Rail 
D) Water 
A) Air 
B) Truck 
C) Rail 
D) Water

Question 6

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

Accepted Answer

A) an LTL carrier. 
B) third party milk runs. 
C) a package carrier. 
D) a private fleet with milk runs. 
A) an LTL carrier. 
B) third party milk runs. 
C) a package carrier. 
D) a private fleet with milk runs.

Question 7

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

Accepted Answer

A) a forward logistics function. 
B) a reverse logistics function. 
C) a milk run. 
D) a cross-dock function. 
A) a forward logistics function. 
B) a reverse logistics function. 
C) a milk run. 
D) a cross-dock function.

Question 8

The ________ is the party that moves or transports the product.

Accepted Answer

A) carrier 
B) producer 
C) shipper 
D) consumer 
A) carrier 
B) producer 
C) shipper 
D) consumer

Question 9

Scenario 14.1 - Vidalia Onions
When Vidalia onions are ready,the entire 13 county (plus parts of seven other counties)area in Georgia where they are grown is devoted to the harvest,packaging and shipping of this delicacy.The Onion Shack currently purchases 120,000 bags of onions each year at a price of $100 per bag (a bag is ten pounds).Onion Shack has historically purchased in lots of 3000 bags.Transit time and capacity vary as indicated in the table.The safety inventory that Onion Shack requires is 30% of lead time demand and the holding cost for a bag is 15% of cost.
 $$\begin{array} { | l | c | c | c | c | } 
\hline \text { Carrier } & \begin{array} { c } 
\text { Quantity } \
\text { Shipped (cwt) }
\end{array} & \begin{array} { c } 
\text { Quantity shipped } \
\text { (bags) }
\end{array} & \begin{array} { c } 
\text { Shipping cost } \
\text { (\$/cwt) }
\end{array} & \begin{array} { c } 
\text { Transit time } \
\text { (days) }
\end{array} \
\hline \text { Mashburn Rail } & 200 + & 2000 + & \$ 2.10 & 5 \
\hline \text { Sylvia Express } & 100 + & 1000 + & \$ 2.35 & 3 \
\hline \text { Anita Enterprises } & 250 + & 2500 + & \$ 1.35 & 3 \
\hline \text { Smith Trucking } & 250 + & 2500 + & \$ 1.00 & 3 \
\hline
\end{array}$$
-Use Scenario 14.1 to determine the least expensive transportation option if the Onion Shack purchases 240,000 bags of Vidalia onions each year.

Accepted Answer

A) Mashburn Rail 
B) Sylvia Express 
C) Anita Enterprises 
D) Smith Trucking 
A) Mashburn Rail 
B) Sylvia Express 
C) Anita Enterprises 
D) Smith Trucking

Question 10

Ignoring uncertainty in demand encourages a greater use of

Accepted Answer

A) expensive but flexible transportation modes. 
B) inexpensive and inflexible transportation modes. 
C) inexpensive and flexible transportation modes. 
D) expensive and inflexible transportation modes. 
A) expensive but flexible transportation modes. 
B) inexpensive and inflexible transportation modes. 
C) inexpensive and flexible transportation modes. 
D) expensive and inflexible transportation modes.

Question 11

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

Accepted Answer

A) transportation cost. 
B) inventory cost. 
C) facility cost. 
D) processing cost. 
A) transportation cost. 
B) inventory cost. 
C) facility cost. 
D) processing cost.

Question 12

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

Accepted Answer

A) Air 
B) Truck 
C) Rail 
D) Water 
A) Air 
B) Truck 
C) Rail 
D) Water

Question 13

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.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

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) an LTL carrier. 
B) a cross dock distribution center with milk runs. 
C) a package carrier. 
D) a private fleet with milk runs.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Scenario 14.1 - Vidalia Onions
When Vidalia onions are ready,the entire 13 county (plus parts of seven other counties)area in Georgia where they are grown is devoted to the harvest,packaging and shipping of this delicacy.The Onion Shack currently purchases 120,000 bags of onions each year at a price of $100 per bag (a bag is ten pounds).Onion Shack has historically purchased in lots of 3000 bags.Transit time and capacity vary as indicated in the table.The safety inventory that Onion Shack requires is 30% of lead time demand and the holding cost for a bag is 15% of cost.
 $$\begin{array} { | l | c | c | c | c | } 
\hline \text { Carrier } & \begin{array} { c } 
\text { Quantity } \
\text { Shipped (cwt) }
\end{array} & \begin{array} { c } 
\text { Quantity shipped } \
\text { (bags) }
\end{array} & \begin{array} { c } 
\text { Shipping cost } \
\text { (\$/cwt) }
\end{array} & \begin{array} { c } 
\text { Transit time } \
\text { (days) }
\end{array} \
\hline \text { Mashburn Rail } & 200 + & 2000 + & \$ 2.10 & 5 \
\hline \text { Sylvia Express } & 100 + & 1000 + & \$ 2.35 & 3 \
\hline \text { Anita Enterprises } & 250 + & 2500 + & \$ 1.35 & 3 \
\hline \text { Smith Trucking } & 250 + & 2500 + & \$ 1.00 & 3 \
\hline
\end{array}$$
-Use Scenario 14.1 to determine the least expensive transportation option if the Onion Shack purchases 480,000 bags of Vidalia onions each year.

Accepted Answer

A) Mashburn Rail 
B) Sylvia Express 
C) Anita Enterprises 
D) Smith Trucking 
A) Mashburn Rail 
B) Sylvia Express 
C) Anita Enterprises 
D) Smith Trucking

Question 17

Scenario 14.2
SoxyBack,a manufacturer of fancy men's socks worn by fashionable gentlemen everywhere,is located in Oshkosh,Wisconsin.The socks are sold directly to fashion-conscious men all over North America.SoxyBack currently divides the United States into ten territories,each with its own sales force.All product inventories are maintained locally in each territory and replenished from Oshkosh every five weeks using UPS.The average replenishment lead time using UPS is one week.UPS charges at a rate of $0.75 + 0.33x where x is the quantity shipped in pounds.The products sold fall into two categories-Dandy and Popinjay.Dandy products weigh 0.2 pounds and cost $350 each.Popinjay products weigh 0.10 pounds and cost $35 each.
Weekly demand for Dandy products in each territory is normally distributed,with a mean of mH = 3 and a standard deviation of sH = 6.Weekly demand for Popinjay products in each territory is normally distributed,with a mean of mL = 25 and a standard deviation of sL = 6.
SoxyBack maintains sufficient safety inventories in each territory to provide a CSL of 0.975 for each product.Annual holding cost at SoxyBack is 30 percent.In addition to the current approach,the management team at SoxyBack is considering two other options:
Option A: Keep the current structure but replenish inventory once a week rather than once every five weeks.
Option B: Eliminate inventories in the territories,aggregate all inventories in a finished goods warehouse at Oshkosh,and replenish the warehouse once a week.
If inventories are aggregated at Oshkosh,orders will be shipped using FedEx,which charges $7.25 + 0.77x per shipment,where x is the quantity shipped in pounds.The factory requires a one-week lead time to replenish finished-goods inventories at the Oshkosh warehouse.An average customer order is for 1 unit of Dandy and 10 units of Popinjay.
-Use Scenario 14.2 to determine the total annual cost of SoxyBack's current system.

Accepted Answer

A) $90,459 
B) $75,994 
C) $47,335 
D) $42,598 
A) $90,459 
B) $75,994 
C) $47,335 
D) $42,598

Question 18

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

Accepted Answer

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) an LTL carrier. 
B) a cross dock distribution center with milk runs. 
C) a package carrier. 
D) a private fleet with milk runs.

Question 19

What trade-offs do managers need to consider when making transportation decisions?

Accepted Answer

The cost of coordinating operations is g

Question 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?

Accepted Answer

A) 12 
B) 5t + 7 
C) 10 
D) 10t + 7 
A) 12 
B) 5t + 7 
C) 10 
D) 10t + 7

Ignoring inventory costs when making transportation decisions can result in choices that worsen the performance of a supply chain.

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

The combination of a high density of customers and short logistical distance is best served by a private fleet making milk runs.

Which mode of transportation is the most expensive?

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

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

The ________ is the party that moves or transports the product.

Ignoring uncertainty in demand encourages a greater use of

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

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

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.

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

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

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

What trade-offs do managers need to consider when making transportation decisions?

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?

Understanding the Supply Chain

Achieving Strategic Fit in a Supply Chain

Supply Chain Drivers and Metrics

Designing Distribution Networks and Applications to E-Business

Network Design in the Supply Chain

Designing Global Supply Chain Networks

Demand Forecasting in a Supply Chain

Aggregate Planning in a Supply Chain

Sales and Operations Planning: Planning Supply and Demand

Coordination in a Supply Chain

Managing Economies of Scale in a Supply Chain: Cycle Inventory

Managing Uncertainty in a Supply Chain: Safety Inventory

Linking Product Availability to Profits

Sourcing Decisions in a Supply Chain

Pricing and Revenue Management in a Supply Chain

Sustainability and the Supply Chain

Filters

Exam 14: Transportation in a Supply Chain

Ignoring inventory costs when making transportation decisions can result in choices that worsen the performance of a supply chain.

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

The combination of a high density of customers and short logistical distance is best served by a private fleet making milk runs.

Which mode of transportation is the most expensive?

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

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

The ________ is the party that moves or transports the product.

Ignoring uncertainty in demand encourages a greater use of

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

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

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.

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

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

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

What trade-offs do managers need to consider when making transportation decisions?

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?

Understanding the Supply Chain

Achieving Strategic Fit in a Supply Chain

Supply Chain Drivers and Metrics

Designing Distribution Networks and Applications to E-Business

Network Design in the Supply Chain

Designing Global Supply Chain Networks

Demand Forecasting in a Supply Chain

Aggregate Planning in a Supply Chain

Sales and Operations Planning: Planning Supply and Demand

Coordination in a Supply Chain

Managing Economies of Scale in a Supply Chain: Cycle Inventory

Managing Uncertainty in a Supply Chain: Safety Inventory

Linking Product Availability to Profits

Sourcing Decisions in a Supply Chain

Pricing and Revenue Management in a Supply Chain

Sustainability and the Supply Chain

Filters