Exam 11: Distribution Customer Service and Logistics

When a supplier's computer automatically processes an online order from a customer, schedules production activities for the order, and then sets up delivery of the finished product to the customer, what approach is being used?

At least 75 percent of all U.S. freight moves, at least part of the way, by trucks.

Better information flows make it easier to coordinate activities, improve efficiency, and add value for the customer.

Regarding transportation modes, which of the following statements is NOT true?

Sysco is a good example of a company that uses technology to make its distribution centers more efficient.

The "supply chain" concept refers to the idea that distribution can usually be reduced if the firm that is the "weakest link" in the channel of distribution is eliminated.

Considering weight, the most expensive transporting mode is:

The slowest transportation is typically by

When both regrouping and storing are needed, a firm should add a distribution center.

What is the best way to ship Spring tulips from Amsterdam, Netherlands, to Rome, Italy?

About what percentage of GDP do the developed economies in the U.S. and Europe spend on logistics-related costs?

In the U.S., trucks carry more freight over more miles than any other mode of transportation.

Which of the following questions is likely to be MOST important to a customer concerning a company's physical distribution practices?

Heavy, bulky goods requiring long distance movement are usually carried by railroads.

Storing:

Which of the following statements about transporting by rail is True?

Air express companies place many small packages into specially designed cylinders that conform to the interior dimensions of a cargo airplane. This practice protects the smaller packages and helps to reduce distribution costs. The air express companies are practicing:

Storing makes goods available where they're needed.

Terry Harter is marketing manager for United Tools and Mike O'Reilly is the firm's logistics manager. They work together to make decisions about how to get United's hand and power tools to its customers-a mix of manufacturing plants and final consumers (who buy United tools at a hardware store). United Tools does not own its own transport facilities and it works with wholesalers to reach its business customers. Together, Harter and O'Reilly try to coordinate transporting, storing, and product handling activities to minimize cost while still achieving the customer service level their customers and intermediaries want. This usually requires that United keep an inventory of most of its products on hand, but demand for its products is fairly consistent over time so inventory is easy to manage. Harter has identified four options for physical distribution systems she could use to reach two of her key wholesalers, Ralston Supply and Ricotta Tool Co. The total cost for each option-and the distribution service levels that can be achieved-are as follows: Ralston Supply expects a very high level (90 percent) of distribution customer service. Ricotta Tool Co. is willing to settle for a 70 percent customer service level, even if that means some products will occasionally be out of stock, if it gets products at a lower price. For its large retail hardware customers (like Home Depot), United regularly ships smaller orders directly to individual stores or in some cases to the retail chain's warehouses. Cross-country shipments usually go by rail while regional shipments usually go by truck. As marketing manager, United's Terry Harter should realize that:

A marketing manager who wants to ship small quantities (1,500 pounds) of relatively high-value products short distances at an economical cost should use: