Deck 15: Logistics, Distribution, and Transportation

Question 1

Facility location analysis considers the competitive imperative of locating near the appropriate labor pool to take advantage of low wage costs and/or skill levels.

Answer 1

True

Question 2

In facility location decision making, the educational and skill levels of the labor pool must match the company's needs.

Answer 2

True

Question 3

An example of a positive business climate that might influence a facility location decision is increasing governmental costs and increasing property taxes.

Answer 3

False

Question 4

A free trade zone is typically a closed facility into which foreign goods can be brought without being subject to the usual customs requirements.

Question 5

A favorable business climate in facility location decision making might include local government providing basic skill training for prospective members of the workforce.

Question 6

In facility location decision making, the factor-rating system is based on linear programming.

Question 7

Because the world is becoming more highly interconnected, the proximity of an important supplier's plants is not crucial in supporting lean production methods.

Question 8

Facility location analysis considers the competitive imperative of lowest total cost.

Question 9

A favorable business climate in facility location decision making might include government legislation of tax abatements.

Question 10

A free trade zone operates under different rules and laws than a foreign trade zone.

Question 11

Issues of product mix and capacity are strongly interconnected to the facility location decision.

Question 12

Quality of life in a host community is not a major factor in making the facility location decision.

Question 13

Facility location analysis considers proximity to customers important to timeliness of deliveries.

Question 14

A favorable business climate in facility location decision making might include local government intervention to facilitate businesses locating in an area via subsidies.

Question 15

Governmental barriers to enter and locate in many countries are increasing through restrictive protectionist legislation.

Question 16

In facility location decision making, the factor-rating system is one of the least used general location techniques.

Question 17

In facility location decision making, matching the educational and skill levels of the labor pool to a company's needs is even more important than the labor pool's willingness and ability to learn.

Question 18

The objective of facility location analysis is to select the site with the lowest total cost.

Question 19

Facility location analysis considers the competitive imperative of locating near the appropriate labor pool to take advantage of high technical skills.

Question 20

Facility location analysis considers the competitive imperative of a favorable business climate as indicated by the presence of other companies in the same industry.

Question 21

Facility location decisions are made using analytical techniques that are able to weigh a large number of different variables equally.

Question 22

Large areas of the world are not directly accessible with this mode.

A) Highway (truck)
B) Water (ship)
C) Air
D) Rail (trains)
E) Pipelines

Question 23

Size of the product, weight, and liquid or bulk can all be accommodated with this mode.

A) Highway (truck)
B) Water (ship)
C) Air
D) Rail (trains)
E) Pipelines

Question 24

Logistics is a fairly small part of the U.S. gross domestic product. In 2017, it accounted for only 2 percent of GDP.

Question 25

Which of the following is not a criterion that influences manufacturing plant or warehouse facility location decisions?

A) Proximity to customers
B) Historical cost
C) Infrastructure of a country
D) Quality of labor
E) Business climate

Question 26

No packaging is needed and the costs per mile are low with this mode.

A) Highway (truck)
B) Water (ship)
C) Air
D) Rail (trains)
E) Pipelines

Question 27

Environmental regulations are about the same regardless of the location chosen.

Question 28

In a hub-and-spoke system, each warehouse in the system acts as a spoke.

Question 29

DHL and United Parcel Service are transportation companies that are prohibited from functioning as third-party logistics companies the way Federal Express does.

Question 30

Logistics is the process of coordinating and moving material and other resources from one country to another.

Question 31

Which of the following is not a criterion that influences manufacturing plant or warehouse facility location decisions?

A) Suppliers
B) Free trade zones
C) Political risk
D) Gross national product
E) Total costs

Question 32

Which of the following is not a criterion that influences manufacturing plant or warehouse facility location decisions?

A) Government barriers
B) Trading blocs
C) Environmental regulation
D) Immigration rules
E) Quality of labor

Question 33

A major problem in a plant location decision based on the factor-rating system is that simple point-rating schemes do not account for the wide variance of costs that may occur within each factor used in the analysis.

Question 34

A third-party logistics company is a firm that manages all or part of another company's product delivery operations.

Question 35

Small, light, expensive items are most appropriate for this mode of transportation.

A) Highway (truck)
B) Water (ship)
C) Air
D) Rail (trains)
E) Pipelines

Question 36

Cross-docking is a practice used in the international shipping industry that facilitates port utilization.

Question 37

Services typically have multiple site locations to maintain close contact with customers.

Question 38

Hub-and-spoke systems combine the idea of consolidation and that of cross-docking.

Question 39

This is a fairly low-cost alternative, but transit times can be long and may be subject to variability.

A) Highway (truck)
B) Water (ship)
C) Air
D) Rail (trains)
E) Pipelines

Question 40

Cross-docking is an approach used in consolidation warehouses, where large shipments are broken down into small shipments for local delivery in an area.

Question 41

Which of the following is not an infrastructure criteria used in facility location analysis?

A) Adequate school system
B) Adequate health care
C) Adequate transportation
D) Adequate low-cost labor
E) Adequate public utility systems

Question 42

The centroid method for plant location uses which of the following data?

A) Volume of goods to be shipped between existing points
B) Inbound transportation costs
C) Transport times between facilities
D) Correlation matrix of existing facilities
E) Probabilities and payoffs

Question 43

One of the objectives of facility location analysis is to select a site with the lowest total cost. Which of the following costs should not be included in the analysis?

A) Outbound distribution costs
B) Incidental costs
C) Energy costs
D) Hidden costs
E) Taxes

Question 44

Plant A is located at the (X, Y) coordinates of (100, 200) and has a volume of shipping of 500 units a day. Plant B is located at the (X, Y) coordinates of (150, 400) and has a volume of shipping of 200 units a day. Using the centroid method, which of the following is the X coordinate for the new plant location?

A) About 100
B) About 114
C) About 130
D) About 150
E) X coordinate cannot be computed from the data given.

Question 45

One of the objectives of facility location analysis is to select a site with the lowest total cost. Which of the following costs should be excluded from the analysis?

A) Historical costs
B) Inbound distribution costs
C) Land
D) Construction
E) Regional costs

Question 46

Using the transportation method for solving the optimal shipping of a product from factories to warehouses, you should use

A) "≤" for constraints regarding factory capacity and "=" for constraints regarding demand at warehouses.
B) "≥" for constraints regarding factory capacity and "≤" for constraints regarding demand at warehouses.
C) "=" for constraints regarding factory capacity and "≥" for constraints regarding demand at warehouses.
D) "≥" for constraints regarding factory capacity and "=" for constraints regarding demand at warehouses.
E) None of these choices are correct.

Question 47

Suppose that using the centroid method you found the best location for a communications tower. The location happens to be in the middle of a pond. Then, you should locate the tower

A) at that location using water proof concrete and precast poles.
B) at the closest point outside the pond.
C) using some other method.
D) after considering qualitative factors such as geography, roads and utilities to help find the exact location.
E) None of these choices are correct.

Question 48

In which of the following situations should we not use the transportation method of linear programming?

A) To find a new site location for a plant
B) To minimize costs of shipping n units to m destinations
C) To maximize profits of shipping n units to m destinations
D) To determine which corner of a street intersection to locate a retail service facility
E) To locate a finished goods distribution warehouse

Question 49

In the logistics-systems design matrix, volume, cost and speed of delivery are three variables (assume three levels: low, moderate or high) used to describe attributes of transportation modes. Rail is associated with

A) moderate volume, moderate speed and high cost.
B) moderate volume, high speed and high cost.
C) high volume, moderate speed and low cost.
D) low volume, high cost and low speed.
E) high volume, high speed and high cost.

Question 50

Which of the following is a plant location methodology good for locating a single facility within a set of existing facilities based in distances and volumes of goods shipped?

A) Factor-rating systems
B) Centroid method
C) Decision trees
D) Linear programming
E) Regression analysis

Question 51

One of the objectives in facility location analysis is to select a site with the lowest total cost. Which of the following costs are hidden costs that should be included in the analysis?

A) Infrastructure costs
B) Movement of preproduction material between locations
C) Taxes
D) Construction costs
E) Bribery costs

Question 52

Which of the following is a criterion that influences manufacturing plant or warehouse facility location decisions?

A) Proximity to customers
B) Corporate policy
C) Competitor's locations
D) Competitive advantage
E) Host-community politics

Question 53

One of the objectives of facility location analysis is to select a site with the lowest total cost. Which of the following are hidden costs that should be included in the analysis?

A) Becoming less responsive to the customer
B) Supplier costs
C) Taxes
D) Construction costs
E) Product life cycle costs

Question 54

An important issue in facility location analysis is business climate. An unfavorable business climate could be indicated by which of the following?

A) Similar-sized businesses nearby
B) The willingness of local politicians to provide favorable treatment for a consideration
C) The presence of other foreign companies in the case of international locations
D) The local presence of companies in the same industry
E) An established educational institution nearby

Question 55

What transportation mode has very high initial investment costs but gives a very low cost per mile for products that are highly specialized and require no packaging?

A) Highway
B) Rail
C) Water
D) Pipeline
E) Air

Question 56

How many free trade zones are there in the United States?

A) Between 0 and 100
B) Between 101 and 200
C) Between 201 and 300
D) Between 301 and 400
E) More than 400

Question 57

A company wants to determine where it should locate a new warehouse. It has two existing production plants and will have a volume of shipping of 150 units a day. Using the centroid method, which of the following are the X and Y coordinates for the new plant location?

A) (81, 117)
B) (88, 138)
C) (117, 102)
D) (76, 123)
E) X and Y coordinates cannot be computed from the data given.

Question 58

An example of a trading bloc is which of the following?

A) European Free Trade Association
B) Free trade zones
C) ISO-9000 companies
D) American Production and Inventory Control Society
E) Walmart and its suppliers

Question 59

Plant A is located at the (X, Y) coordinates of (200, 500) and has a volume of shipping of 400 units a day. Plant B is located at the (X, Y) coordinates of (300, 100) and has a volume of shipping of 300 units a day. Using the centroid method, which of the following is the X coordinate for the new plant location?

A) About 208
B) About 227
C) About 243
D) About 389
E) X coordinate cannot be computed from the data given.

Question 60

Very few products are moved without at least part of their journey being by which mode of transportation?

A) Highway
B) Rail
C) Water
D) Pipeline
E) Air

Question 61

In the logistics-systems design matrix, volume, cost and speed of delivery are three variables (assume three levels: low, moderate or high) used to describe attributes of transportation modes. Air is associated with

A) moderate volume, moderate speed and high cost.
B) low volume, high speed and high cost.
C) high volume, moderate speed and low cost.
D) low volume, high cost and low speed.
E) high volume, high speed and high cost.