Deck 4: Designing Distribution Networks and Applications to E-Business

Question 1

Outbound transportation costs per unit tend to be lower than inbound costs,because inbound lot sizes are typically larger.

Answer 1

False

Question 2

Transportation costs are high with drop-shipping because the average outbound distance to the end consumer is large and package carriers are used to shipping the product.

Answer 2

True

Question 3

A well-structured omni-channel supply chain can be both cost effective and responsive to customer needs.

Answer 3

True

Question 4

Companies in the same industry often select very different distribution networks,because the choice of the distribution network can be used to achieve a variety of supply chain objectives ranging from low cost to high responsiveness.

Question 5

The main advantage of a distribution network with local storage is that it can lower the delivery cost and provide a faster response than other networks.

Question 6

A distribution network designer needs to consider product characteristics as well as network requirements when deciding on the appropriate delivery network.

Question 7

Omni-channel retailing refers to an interaction between a customer and a retailer in terms of three flows -information,product and funds.

Question 8

The main advantage of in-transit merge over drop-shipping is the somewhat lower transportation cost and improved customer experience.

Question 9

A customer does not necessarily want the highest level of performance along all dimensions of customer service,including response time,product variety,product availability,customer experience,order visibility,and returnability.

Question 10

It is more common for a manufacturer to not own the distribution network.

Question 11

As long as inbound transportation economies of scale are maintained,increasing the number of facilities decreases total transportation cost.

Question 12

Distributors add value to a supply chain between a supply stage and a customer stage if there are many small players at the customer stage,each requiring a small amount of the product at a time.

Question 13

A decrease in the response time customers desire increases the number of facilities required in the network.

Question 14

It is much easier to return a product to an online retailer than to a traditional bricks and mortar seller.

Question 15

For physical products,i.e. ,products that cannot be downloaded,customer requests take longer to fulfill through online sales than in a retail store setting.

Question 16

Only niche companies will end up using a single distribution network.

Question 17

The major disadvantage of a distribution network with local storage is the increased inventory and facility costs.

Question 18

Customers always want the highest level of performance along all the dimensions response time,product variety and returnability.

Question 19

Compared to a business with many retail outlets,an online seller with aggregated inventories tends to have lower per unit transportation costs across the entire supply chain.

Question 20

Distribution occurs between every pair of stages in the supply chain.

Question 21

The amount of time it takes for a customer to receive their order is

A)order visibility.
B)time to market
C)product returnability.
D)response time.

Question 22

The ease with which a supplier can take delivery of product a customer is dissatisfied with is

A)order visibility.
B)time to market.
C)product returnability.
D)response time.

Question 23

As the response time desired by the customer decreases,the required number of facilities in the distribution network

A)decreases.
B)remains the same.
C)increases.
D)increases and then decreases.

Question 24

Consumers prefer purchasing commoditized products at a one-stop shop.

Question 25

Which of the following would not be the result of a poor/inappropriate distribution network?

A)High profitability
B)Low level of customer service
C)High cost
D)Poor profitability

Question 26

The costs incurred in sending material out of a facility are

A)sourcing transportation costs.
B)outbound transportation costs.
C)crossbound transportation costs.
D)inbound transportation costs.

Question 27

Companies in the same industry often select very different distribution networks because

A)some companies are poorly run.
B)different companies try to avoid using the same approach.
C)different companies have different objectives for their supply chain.
D)all of the above

Question 28

Distribution is a key driver of the overall profitability of a firm because

A)the addition of distributors only adds cost to the supply chain.
B)it directly impacts both the supply chain cost and the customer experience.
C)it slows down the responsiveness of the supply chain.
D)it cannot be developed as a part of supply chain strategy.

Question 29

The steps taken to move and store a product from the supplier stage to a customer stage in the supply chain are referred to as

A)transportation.
B)retailing.
C)wholesaling.
D)distribution.

Question 30

As the number of facilities in a supply chain increases

A)the inventory and resulting inventory costs also increase.
B)the inventory and resulting inventory costs decrease.
C)the inventory increases and resulting inventory costs decrease.
D)the inventory decreases and resulting inventory costs increase.

Question 31

Where does distribution occur in the supply chain?

A)Between every pair of stages
B)Everywhere downstream from production
C)Between production and the retailer
D)Between suppliers and retailers

Question 32

The probability of having a product in stock when a customer order arrives is

A)response time.
B)product variety.
C)product availability.
D)customer experience.

Question 33

The ease with which the customer can place and receive their order as well as other aspects of value that the sales staff provides is

A)customer experience.
B)order visibility.
C)product availability.
D)response time.

Question 34

To extract the maximum benefit from the online channel for physical goods,firms should keep it separate from their existing supply chain networks.

Question 35

The ability of the customer to track their order from placement to delivery is

A)customer experience.
B)order visibility.
C)product availability.
D)response time.

Question 36

Outbound transportation costs per unit tend to be

A)about the same as inbound costs.
B)higher than inbound costs.
C)lower than inbound costs.
D)neither higher or lower than inbound costs.

Question 37

The amount of time it takes to develop a product and have it available for sale is

A)order visibility.
B)time to market.
C)product returnability.
D)response time.

Question 38

The costs incurred in bringing material into a facility are

A)sourcing transportation costs.
B)outbound transportation costs.
C)crossbound transportation costs.
D)inbound transportation costs.

Question 39

As the number of facilities in a supply chain increases,total facility costs

A)decrease.
B)increase.
C)increase to a point and then decrease.
D)decrease to a point and then increase.

Question 40

The number of different products/configurations that a customer desires from the distribution network is

A)response time.
B)product variety.
C)product availability.
D)customer experience.

Question 41

In which distribution network design is product shipped directly from the manufacturer to the end customer,bypassing the retailer (who takes the order and initiates the delivery request)?

A)Manufacturer storage with direct shipping
B)Manufacturer storage with direct shipping and in-transit merge
C)Distributor storage with package carrier delivery
D)Distributor storage with last mile delivery

Question 42

Which distribution network design is being used when the distributor/retailer delivers the product to the customer's home instead of using a package carrier?

A)Manufacturer storage with direct shipping
B)Manufacturer/distributor storage with customer pickup
C)Distributor storage with package carrier delivery
D)Distributor storage with last mile delivery

Question 43

Which of the following is a disadvantage of distributor storage with carrier delivery?

A)Information infrastructure is simpler than manufacturer storage.
B)Response time is faster than with manufacturer storage.
C)Returnability is easier than with manufacturer storage.
D)Product variety is lower than with manufacturer storage.

Question 44

Which of the following would be a disadvantage of manufacturer storage with direct shipping?

A)The ability to reduce cost of inventory by centralizing inventories at the manufacturer.
B)The manufacturer has to postpone customization until after the customer order has been placed.
C)Supply chains have to eliminate other warehousing space to save on the fixed cost of facilities.
D)Response times tend to be large because the order has to be transmitted from the retailer to the manufacturer and shipping distances are on average longer from the manufacturer's centralized site.

Question 45

Which of the following is an advantage of distributor storage with last mile delivery?

A)It is more expensive to provide product availability than any other option except retail stores.
B)Inventory cost is higher than distributor storage with package carrier delivery.
C)Response time is very quick ranging from same day to next day delivery.
D)Transportation cost is higher than any other distribution option.

Question 46

Total logistics costs for a supply chain network are a sum of

A)inventory and facility costs.
B)inventory,facility,and distributor costs.
C)facility,transportation,and distributor costs.
D)inventory,transportation,and facility costs.

Question 47

A retailer delivers products all the way to the customer's home without using a package carrier.This type of service is named

A)full service delivery.
B)turnkey shopping.
C)last mile delivery.
D)disintermediation.

Question 48

Which distribution network is also referred to as drop-shipping with product delivered directly from the manufacturer to the customer location?

A)Manufacturer storage with direct shipping
B)Manufacturer storage with direct shipping and in-transit merge
C)Distributor storage with package carrier delivery
D)Distributor storage with last mile delivery

Question 49

Which of the following is a disadvantage of distributor storage with last mile delivery?

A)Transportation cost is higher than any other distribution option.
B)Information cost is similar to distributor storage with package carrier delivery.
C)Customer experience is very good,particularly for bulky items.
D)Returnability is easier to implement than other options.

Question 50

Which distribution network design is being used when inventory is stored at the manufacturer or distributor warehouse but customers place their orders online or on the phone and then come to designated pickup points to collect their orders?

A)Manufacturer storage with direct shipping
B)Manufacturer/distributor storage with customer pickup
C)Distributor storage with package carrier delivery
D)Distributor storage with last mile delivery

Question 51

The main advantage of in-transit merge over drop-shipping is

A)the ability to reduce cost of inventory by centralizing inventories at the manufacturer.
B)supply chains save on the fixed cost of facilities,because the need for other warehousing space in the supply chain has been eliminated.
C)somewhat lower transportation cost and improved customer experience.
D)order tracking is easy to implement because of the complete integration of information systems at both the retailer and the manufacturer.

Question 52

Which of the following is a disadvantage of manufacturer/distributor storage with customer pickup?

A)Customer experience is lower than other options because of the lack of home delivery.
B)Response time is similar to package carrier delivery with manufacturer or distributor storage.
C)Returnability is somewhat easier given that pickup location can handle returns.
D)Product availability is similar to other manufacturer or distributor storage options.

Question 53

What type of distribution network is shown in this diagram?

A)Distributor storage with carrier delivery
B)Manufacturer/distributor storage with customer pickup
C)Distributor storage with last-mile delivery
D)Manufacturer storage with direct shipping

Question 54

The major disadvantage of in-transit merge compared to drop-shipping is

A)transportation costs are high because the average outbound distance to the end consumer is large and package carriers are used to shipping the product.
B)response times tend to be large because the order has to be transmitted from the retailer to the manufacturer and shipping distances are on average longer from the manufacturer's centralized site.
C)order tracking becomes harder to implement because it requires complete integration of information systems at both the retailer and the manufacturer.
D)the additional effort during the merge itself.

Question 55

Which of the following is an advantage of manufacturer storage with direct shipping?

A)Transportation costs are low because the average outbound distance to the end consumer is small and package carriers are used to shipping the product.
B)Supply chains save on the fixed cost of facilities,because the need for other warehousing space in the supply chain has been eliminated.
C)Response times tend to be small because the order has to be transmitted from the retailer to the manufacturer.
D)Order tracking is easy to implement because of the complete integration of information systems at both the retailer and the manufacturer.

Question 56

What type of distribution network is shown in this diagram?

A)Distributor storage with carrier delivery
B)Manufacturer/distributor storage with customer pickup
C)Distributor storage with last-mile delivery
D)Manufacturer storage with direct shipping and in-transit merge

Question 57

Which of the following is an advantage of manufacturer/distributor storage with customer pickup?

A)Facility costs can be very high if new facilities have to be built.
B)Transportation cost is lower than the use of package carriers,especially if using an existing delivery network.
C)Order visibility is difficult but essential.
D)Product variety is similar to other manufacturer or distributor storage options.

Question 58

Which distribution network design is similar to pure drop-shipping,except that pieces of the order coming from different locations are combined so that the customer gets a single delivery?

A)Manufacturer storage with direct shipping
B)Manufacturer storage with direct shipping and in-transit merge
C)Distributor storage with package carrier delivery
D)Distributor storage with manufacturer pickup

Question 59

Which of the following is an advantage of distributor storage with carrier delivery?

A)Inventory cost is higher than with manufacturer storage.
B)Product variety is lower than with manufacturer storage.
C)Order visibility for the customer is easier than with manufacturer storage.
D)Higher cost to provide the same level of product availability as manufacturer storage.

Question 60

Which distribution network design is being used when inventory is not held by manufacturers at the factories,but is held by distributors/retailers in intermediate warehouses and package carriers are used to transport products from the intermediate location to the final customer?

A)Manufacturer storage with direct shipping
B)Manufacturer storage with direct shipping and in-transit merge
C)Distributor storage with package carrier delivery
D)Distributor storage with manufacturer pickup

Question 61

________ is a service factor performance characteristic of Manufacturer or Distributor Storage with Customer Pickup that is lower than other options because of the lack of home delivery.Experience is very sensitive to capability of pickup location.

A)Response time
B)Product variety
C)Customer experience
D)Time to market

Question 62

Which distribution network design is being used when inventory is stored locally at retail stores and customers walk into the retail store or place an order online or on the phone and pick it up at the retail store?

A)Manufacturer storage with direct shipping
B)Distributor storage with package carrier delivery
C)Distributor storage with last mile delivery
D)Retail storage with customer pickup

Question 63

Which of the following is an advantage of retail storage with customer pickup?

A)Inventory cost is higher than all other options.
B)Transportation cost is lower than all other options.
C)Facilities and handling costs are higher than other options.
D)Product variety is lower than all other options.

Question 64

Figure 1: Consider the four quadrant depiction of the alternatives in omni-channel retail.

In Figure 1,what type of shopping experience is found in Quadrant C?

A)Most furniture stores
B)Amazon.com
C)Traditional retail
D)Grocery industry in the U.K.and Walmart in the U.S.

Question 65

________ is a cost factor performance characteristic of Retail Storage at Consumer Pickup Sites that is higher than all other options.

A)Transportation
B)Inventory
C)Information
D)Facilities and Handling

Question 66

Improvement in supply chain performance as a result of distributors occurs for which of the following reasons?

A)Reduction in transportation cost because of LTL shipments from manufacturers to distributor.
B)Reduction in outbound transportation cost because the distributor combines products from many customers into a single outbound shipment.
C)Reduction in inventory costs because distributor disaggregates safety inventory rather than aggregating at each retailer.
D)A more stable order stream from distributor to manufacturer (compared to erratic orders from each retailer)allows manufacturers to lower cost by planning production more effectively.

Question 67

Figure 1: Consider the four quadrant depiction of the alternatives in omni-channel retail.

In Figure 1,what type of shopping experience is found in Quadrant A?

A)Most furniture stores
B)Amazon.com
C)Traditional retail
D)Grocery industry in the U.K.and Walmart in the U.S.

Question 68

Distributors add value to a supply chain between a supply stage and a customer stage

A)if there is a small number of customers requiring a large amount of product.
B)if there is a large number of customers requiring a large amount of product.
C)if there are many small players at the customer stage,each requiring a small amount of the product at a time.
D)if there are a few large players at the customer stage,each requiring a large amount of the product at a time.

Question 69

________ is a cost factor performance characteristic of Manufacturer or Distributor Storage with Customer Pickup that is lower than the use of package carriers,especially if using an existing delivery network.

A)Transportation
B)Inventory
C)Information
D)Facilities and Handling

Question 70

Which of these combinations provides an omni-channel experience for customers?

A)McDonald's hamburgers and McDonnell Douglas aviation
B)DirecTV sending hundreds of different television channels to your home TV
C)Netflix movie streaming and Redbox new movie availability
D)A K-12 public school system with separate campuses for grades K-5,6-8 and 9-12

Question 71

What type of distribution network is shown in this diagram?

A)Distributor storage with carrier delivery
B)Manufacturer/distributor storage with customer pickup
C)Distributor storage with last-mile delivery
D)Manufacturer storage with direct shipping

Question 72

The interaction between a customer and a retailer is primarily in terms of three flows.Which of these items is NOT one of the flows?

A)Information
B)Product
C)Funds
D)Contracts

Question 73

In general,traditional brick and mortar retail sales outperform online sales along the dimension of

A)product variety.
B)request fulfillment.
C)time to market for a new product.
D)order status tracking.

Question 74

Figure 1: Consider the four quadrant depiction of the alternatives in omni-channel retail.

In Figure 1,what type of shopping experience is found in Quadrant B?

A)Most furniture stores
B)Amazon.com
C)Traditional retail
D)Grocery industry in the U.K.and Walmart in the U.S.

Question 75

Which of the following is a disadvantage of retail storage with customer pickup?

A)Returnability is easier than other options given that pickup location can handle returns.
B)Inventory cost is higher than all other options.
C)Transportation cost is lower than all other options.
D)Facilities and handling costs are lower than other options.

Question 76

Which of these statements about channel activity is best?

A)Product is usually exchanged via the same channel as funds.
B)Funds are usually exchanged via the same channel as information.
C)Information is usually exchanged via the same channel as product.
D)The three flows usually occur in three different channels during the same transaction.

Question 77

Which of these statements about channel activity is best?

A)Product is usually exchanged via the same channel as funds.
B)A combination of multiple channels is often more effective than any single channel at serving a variety of customer needs.
C)Information is usually exchanged via the same channel as product.
D)The three flows usually occur in three different channels during the same transaction.

Question 78

Among all distribution networks,transportation costs are highest for

A)direct shipping and in-transit merge.
B)manufacturer storage with direct shipping.
C)last mile delivery.
D)distribution centers.

Question 79

In general,traditional brick and mortar retail sales outperform online sales along the dimension of

A)product variety.
B)efficient funds transfer.
C)product returns.
D)order status tracking.

Question 80

________ is a service factor performance characteristic of Retail Storage at Consumer Pickup Sites that is lower than all other options.

A)Response time
B)Product variety
C)Product availability
D)Time to market