Deck 14: Transportation in a Supply Chain

Question 1

A distributor makes investment decisions regarding the transportation infrastructure and then makes operating decisions to try to maximize the return from these assets.

Answer 1

FALSE

Question 2

Transportation cost depends on the prices offered by different carriers and the extent to which the shipper uses inexpensive and slow, or expensive and fast, means of transportation.

Answer 2

TRUE

Question 3

A milk run is a route in which a truck either delivers product from a single supplier to multiple retailers or goes from multiple suppliers to a single retailer.

Answer 3

TRUE

Question 4

A carrier's decisions are affected by the prices that the market will bear, but not the responsiveness it seeks to provide its target segment.

Question 5

Transportation plays a key role in every supply chain because products are usually produced and consumed in the same location.

Question 6

The mode of transportation that results in the lowest transportation cost will lower total costs for a supply chain.

Question 7

Tailored transportation is the use of different transportation networks and modes based on customer and product characteristics.

Question 8

Transportation is a significant component of the costs incurred by most supply chains.

Question 9

The vehicle-related cost is incurred whether the vehicle is operating or not and is considered fixed for short-term operational decisions by the carrier.

Question 10

The most important operational decision related to transportation in a supply chain is the routing and scheduling of deliveries.

Question 11

A carrier uses transportation to minimize the total cost (transportation, inventory, information, and facility) while providing an appropriate level of responsiveness to the customer.

Question 12

The use of software to determine transportation routes has been the most common IT application in transportation.

Question 13

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

Question 14

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

Question 15

Quasi-market prices for transportation infrastructure result in higher prices at peak locations and times and lower prices otherwise.

Question 16

A firm can meet customer needs by using tailored transportation to provide the appropriate transportation choice based on customer and product characteristics, but at a higher cost.

Question 17

Milk runs reduce outbound transportation costs by consolidating large shipments.

Question 18

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.

Question 19

Rail is the dominant mode of freight transportation in the United States and accounts for over 75 percent of the nation's freight bill.

Question 20

A dabba uses the Mumbai railway system to carry about 40 lunches each day.

Question 21

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?

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

Question 22

Which mode of transportation is the most expensive?

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

Question 23

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

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

Question 24

________ are the preferred mode of transport for online businesses such as Amazon.com and Dell, as well as for companies such as W.W. Grainger and McMaster-Carr that send small packages to customers.

A) Air
B) Package carriers
C) Rail
D) Water

Question 25

Which mode of transportation is the least expensive?

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

Question 26

The ________ is the party that requires the movement of the product between two points in the supply chain.

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

Question 27

Which of the following is the fastest delivery method of transportation?

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

Question 28

In almost all countries, roads, seaports, airports, rail and canals have this in common.

A) They were built and/or managed by the government.
B) They are located near the water.
C) They are the source of most of the tax revenue for municipalities.
D) They are staffed by foreign nationals.

Question 29

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

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

Question 30

Transportation plays a key role in every supply chain because

A) products are normally produced and consumed in the same location.
B) products are rarely produced and consumed in the same location.
C) the cost of transportation is inconsequential.
D) transportation is not a factor in determining profitability.

Question 31

The key players in any transportation that takes place within a supply chain are

A) the shipper and the receiver.
B) the shipper and the supplier.
C) the shipper and the manufacturer.
D) the shipper and the carrier.

Question 32

Which mode of transportation is used primarily for petroleum and natural gas?

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

Question 33

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 average cost per motorist?

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

Question 34

Investment decisions regarding the transportation infrastructure (rails, locomotives, trucks, airplanes, etc.) are the primary concern of

A) the shipper.
B) the supplier.
C) the manufacturer.
D) the carrier.

Question 35

________ carriers offer a very fast and fairly expensive mode of transportation for cargo.

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

Question 36

Which of the following uses transportation to minimize the total cost (transportation, inventory, information, and facility) while providing an appropriate level of responsiveness to the customer?

A) The shipper
B) The supplier
C) The manufacturer
D) The carrier

Question 37

The movement of product from one location to another as it makes its way from the beginning of a supply chain to the customer's hands is referred to as

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

Question 38

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. What is the average cost per motorist?

A) 2.5
B) 5
C) 5t
D) 2.5t

Question 39

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. What is the marginal cost?

A) 5
B) 5t
C) 10
D) 10t

Question 40

________ typically move commodities over large distances at lower costs per unit shipped.

A) Air
B) Truck
C) Rail
D) Package carriers

Question 41

Which of these statements about use fees for a highway is best?

A) A flat rate results in lower use by most individuals.
B) A flat rate results in higher use by most individuals.
C) A flat rate has no impact on use by most individuals.
D) A fee based on congestion results in higher use by most individuals.

Question 42

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

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

Question 43

The Mumbai dabbawalas perform

A) a forward logistics function.
B) a reverse logistics function.
C) both a forward and a reverse logistics function.
D) neither a forward nor a reverse logistics function.

Question 44

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

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 45

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

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 46

The total amount paid to various carriers for transporting products to customers is

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

Question 47

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

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 48

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

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 49

The cost of holding inventory incurred by the shipper's supply chain network is

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

Question 50

Temporal aggregation

A) is the process of combining orders across time.
B) increases a firm's responsiveness.
C) decreases transportation costs because of economies of scale.
D) all of the above

Question 51

The most important operational decision related to transportation in a supply chain is

A) minimizing cost of transportation.
B) maximizing profitability of the supply chain.
C) reducing the level of cycle inventory.
D) the routing and scheduling of deliveries.

Question 52

Cheaper modes of transport typically have

A) shorter lead times and smaller minimum shipment quantities.
B) shorter lead times and larger minimum shipment quantities.
C) longer lead times and smaller minimum shipment quantities.
D) longer lead times and larger minimum shipment quantities.

Question 53

It is best to disaggregate all inventories and use an inexpensive mode of transportation for replenishment when you have a

A) high-value product and high demand.
B) high-value product and low demand.
C) low-value product and high demand.
D) low-value product and low demand.

Question 54

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

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.

Question 55

Which transportation network design option has the elimination of intermediate warehouses and its simplicity of operation and coordination as its major advantage?

A) Direct shipping network
B) Direct shipping with milk runs
C) All shipments via central DC
D) Shipping via DC using milk runs

Question 56

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

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

Question 57

Which transportation network design option establishes an extra layer between suppliers and retailers to store inventory and to serve as a transfer location?

A) Direct shipping network
B) Direct shipping with milk runs
C) All shipments via central DC
D) Shipping via DC using milk runs

Question 58

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

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

Question 59

Which transportation network design option uses a combination of other options to reduce the cost and improve responsiveness of the supply chain?

A) Direct shipping network
B) Direct shipping with milk runs
C) Shipping via DC using milk runs
D) Tailored network

Question 60

The cost of various facilities in the shipper's supply chain network is

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

Question 61

Discuss the two key players involved in any transportation in the supply chain.

Question 62

Explain why transportation systems should be tailored.

Question 63

Discuss the importance of designing flexibility into the transportation network.

Question 64

Ignoring uncertainty in demand encourages a greater use of

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 65

A shrewd supply chain manager would aggregate only safety inventory and use an inexpensive mode of transportation for replenishing cycle inventory if she is dealing with a

A) high-value product and high demand.
B) high-value product and low demand.
C) low-value product and high demand.
D) low-value product and low demand.

Question 66

The most common problems in the use of IT in transportation relate to

A) cross-enterprise collaboration.
B) network security.
C) vibration-resistant hardware.
D) maintaining an Internet connection while in motion.

Question 67

The skillful supply chain manager declared she would not only disaggregate cycle inventory, but she would also aggregate safety inventory and use an inexpensive mode of transportation for replenishing cycle inventory and fast mode when using safety inventory for her product that had

A) high value and high demand.
B) high value and low demand.
C) low value and high demand.
D) low value and low demand.

Question 68

Discuss the relationship between transportation strategy and competitive strategy.

Question 69

The complexity and scale of transportation makes it an excellent area within the supply chain for the use of

A) a dedicated logistics manager.
B) a fleet of vehicles.
C) information technology systems.
D) a common unit of money.

Question 70

Real time location tracking of vehicles relies on

A) citizen band radios.
B) vehicles.
C) teamsters.
D) global positioning systems.

Question 71

The most common use of information technology in transportation is to

A) determine transportation routes using software.
B) calculate shipping rates.
C) connect buyers and sellers.
D) place person to person calls using cellular technology.

Question 72

Managers should ensure that a firm's transportation strategy

A) involves cost minimization.
B) involves profit maximization.
C) supports its competitive strategy.
D) is separate from competitive strategy.

Question 73

Inexpensive and inflexible transportation modes tend to

A) perform poorly.
B) perform very poorly when plans change.
C) perform well when everything goes as planned.
D) all of the above

Question 74

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

Question 75

The competent supply chain manager decided to aggregate all inventories and as required, use fast mode of transportation for filling customer orders of his

A) high-value and high-demand product.
B) high-value and low-demand product.
C) low-value and high-demand product.
D) low-value and low-demand product.