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CHAPTER 1 TEST QUESTIONS Multiple Choice 13.

Most retailers are essentially supply chain companies since A. they dominate the consumer market. b.

own their warehouses and trucks.

c.

they buy products produced by others.

d.

engage in off-shore sourcing.

ANSWER: c, Page 6 14.

Which of the below is not one of the external forces driving the rate of change and shaping our economic and political landscape? a.

Government policy

b.

Technology

c.

Environmental concerns

d.

Globalization

ANSWER: c, Page 7 15.

Outsourcing involves a.

moving company facilities away from the home office.

b.

hiring foreign nationals to manage parts of the business.

c.

obtaining materials, parts, and products from other companies.

d.

building a factory in another country.

ANSWER: c, Page 9 16.

Some individuals describe the current consumer as the “click here” generation because a. we all have Internet access. b. we no longer wait for information to be “pushed out” to us. c. we buy so much merchandise on line. d. we take little time to make purchasing decisions.

ANSWER: b, Page 10 17.

The demographics of our society has changed because a. the “Baby Boom” generation is now turning 60. b. of the increase in two-career families and single-parent households. c. of immigration. d. birth rates have changed.

ANSWER: b, Page 12 18.

The Supply Chain Concept a. is very new and considered cutting edge technology. b. is highly dependent of computerization.

c. is not always well understood by senior managers. d. developed from the previous Physical Distribution concept. ANSWER: d, Page 15 19.

Logistics, in its simplest form, a. is a military term, as it was developed originally to supply the battlefield. b. combines inbound logistics with the outbound logistics of physical distribution. c. is another term for transportation management.

d. does not involve customer service or other related functions. ANSWER: b, Page 16 20.

One of the major challenges of supply chain management is a. forward buying. b. maintaining the visibility of inventory. c. building safety-stock inventory. d. Pushing inventory back to vendors.

ANSWER: b, Page18 21. Which of these flows only one way as illustrated in Figure 1-4? a. information b. products and services c. financials d. None of these answers ANSWER: d, Page 18 22. Traditionally, information has been viewed as flowing in the opposite direction of products, that is, from the market/customer back to the wholesalers, manufacturers, and vendors. a. This is still true and has not changed. b. Computerization has greatly increased the flow of information from the source. c. The “Big Box” stores have developed their own sources. d. None of these answers ANSWER: d, Page 21 23.

One of the four supply chain flows in Figure 1 – 8 that has received increased attention from supply chain managers due to the growth in technology is: a. Product flow b. Information flow c. Cash flow d. Demand flow

ANSWER: d, page 23

24. The challenge to develop and sustain an efficient and effective supply chain(s) requires organizations to address a number of issues. Which is not included? a. complexity b. inventory deployment c. inventory carrying costs d. technology ANSWER: c, Page 25 25.

Which of the following is not part of the Supply Chain network? a. plants b. stores c. terminals d. distribution centers

ANSWER: b, Page 24 26.

Complexity in the supply chain is caused by a.

the number of SKUs.

b.

locations of customers and suppliers.

c.

transportation requirements.

d.

All of these answers.

ANSWER: d, Page 24 27.

Cost/Value refers to a.

getting the best value for the money spent.

b.

U.S. firms competing in the global arena.

c.

the importance of cost and value at the very end of the supply chain.

d.

product variety.

ANSWER: c, Page 25 28.

Performance measurement is important because a. it allows firms to rate competitors. b. without it, managers would not know how the global economy is doing. c. companies presently operating in the European Economic Community need to understand how its competitors are doing. d. lower-level metrics in an organization must connect directly to the high-level performance to achieve goals.

ANSWER: d, Page 27 29.

A critical outcome of the supply chain is to deliver a.

profits.

b.

the right product to the right place.

c.

cost/value.

d.

on management’s expectations.

ANSWER: b, Page 27

CHAPTER 2 TEST QUESTIONS Multiple-Choice 10. Ensuring the availability of the right product, in the right quantity, and the right condition, at the right place, at the right time, for the right customer at the right cost, is which definition of logistics? a. Seven Rs b. Council of Logistics Management c. Society of Logistic Engineers d. supply chain logistics ANSWER: a, Page 37 inside Table 2.1 11. Logistics is the process of anticipating customer needs and wants; acquiring the capital, materials, people, technologies, and information necessary to meet those needs and wants; optimizing the goods- or service-producing network to fulfill customer requests; and utilizing the network to fulfill customer requests in a timely manner. This is a a. definition from an inventory perspective. b. general definition. c. definition offered by the Society of Logistics Engineers. d. a definition provided by the Council of Logistics Management. ANSWER: b, Pages 38-39 12. All four subdivisions of logistics have some common characteristics. Which of the below does not belong in the list: a. transportation b. marketing c. scheduling d. forecasting ANSWER: b, Page 38 13. The value that is added to goods through a manufacturing or assembly process is: a. form utility b. place utility c. time utility d. possession utility

ANSWER: a, Page 39 14. Which of the answers below is an example of the creation of form utility by a logistics activity? a. when lumber is cut and made into a chair b. when a firm's finance manager approves customer purchases on a credit basis c. when Dell combines components with software to produce a computer to a customer’s specifications d. the breaking bulk and repackaging at a distribution center ANSWER: d, Page 39 15. The utility that is created by moving goods from production points to market points where demand exists is referred to as: a. form b. place c. time d. possession ANSWER: b, Page 40 16. Logistics creates which utility through production forecasting, production scheduling and inventory control? a. form utility b. quantity utility c. time utility d. possession utility ANSWER: b, Page 40

17. Time utility depends on a. when the carrier picks up the shipment. b. transportation companies delivering on time. c. proper forecasting. d. having the product available when the user wants it. ANSWER: d, Page 40

18. What is often the largest component of logistics costs? a. inventory costs b. transportation costs c. shipper-related costs d. administrative costs ANSWER: b, Page 42

19. Materials handling is concerned with a. inventory levels.

b. breaking bulk. c.

scheduling trade-offs.

d. short-distance movement. ANSWER: d, Page 43 20. Marketers have begun to recognize the strategic value of place in the marketing

mix, as well as the benefits resulting from high-quality logistical services. As a result, which has been recognized as the interface activity between marketing and logistics? a. product b. promotion c. price d. customer service ANSWER: d, Page 52

21. It can be argued that ? is the second language of logistics and supply chain management. a. quality b. manufacturing c. finance d. sales ANSWER: c, Page 53

22. What activity is described as the movement of goods into a warehouse, the placement of goods in a warehouse, and the movement of goods from storage to order picking areas and eventually to dock areas for transportation out of the warehouse? a. materials handling b. physical distribution c. business logistics d. order fulfillment ANSWER: a, Page 43

23.

A(n) _______ relationship exists between the cost of lost sales and inventory cost. a. reverse b. proportional c. inverse d. non linear

ANSWER: c, Page 55

24. Water Cruisers is located in Jacksonville, Florida, and makes small yachts and luxury pontoon boats for customers on the East coast of the United States. Each boat requires thousands of parts purchased from over 1,000 vendors. A number of boats are in production at any one time, so a large number of parts constantly arrive and are stored. Once a boat is finished, it is sailed up the coast to a convenient port for customer delivery. Which type of logistics system does Water Cruisers use? a. balanced system b. heavy inbound c. heavy outbound d. reverse system ANSWER: b, Page 63

25. The product’s dollar value typically affects the cost of logistics activities. Which is not one of these costs? a. warehousing costs b. transportation costs c. promotion costs d. packaging costs ANSWER: c, Page 56

26. When a specific point in time, or level of production, is chosen and costs are developed for the various logistics cost centers, it is called a. least cost analysis. b. short run analysis. c. cost center analysis. d. link node analysis. ANSWER: b, Page 60 27. A ______ analysis examines a logistics system over a long time period or range of output. a. cost center analysis b. dynamic c. link node analysis d. least cost analysis ANSWER: b, Pages 61-62 28. What are fixed spatial points where goods stop for storage or processing?

a. nodes b. links c. cost centers

d. fulfillment centers ANSWER: a, Page 65 29. An important sustainability issue that has received much more scrutiny in recent years is the:

a. focus on adequate inventory levels b. reduction in packaging waste by using alternate materials c. effort to move warehouse storage closer to consumers d. emphasis on materials handling and warehouse design ANSWER: b, Page 43 30. What technology has helped make the physical inventory-taking process more efficient and effective?

a. advances in forecasting b. transportation management systems c. just-in-time inventory d. scanning of bar-coded RFID tags ANSWER: d, Page 44

CHAPTER 3 TEST QUESTIONS Multiple-Choice 15. Globalization was initially driven by countries

16.

17.

a.

seeking new territories.

b.

outside the U.S. seeking to establish plants in the U.S.

c.

seeking materials and goods not available in their own land.

d.

sponsoring trading missions.

A critical ingredient for the Third Era of globalization is: a.

the global emphasis on tailoring products and marketing strategies to meet perceived local needs

b.

technological advances, especially technology and communications

c.

the global emphasis on profits and efficiency

d.

the global emphasis on the marketing mix and marketing functions

The Supply Chain should

in

information

a. manage all aspects of transportation, selecting the least cost when possible. b.

seek to maximize profits.

c. use the same techniques internationally that it uses domestically. d. manage materials and products, information, financials, and demand.

18. In his book “The Wealth of Nations”, Adam Smith stated that economies and companies could improve their wealth by a.

allowing specialization of tasks.

b. ensuring that logistics is used to gain advantage in the marketplace. c.

becoming multi-national.

d.

moving production off shore.

ANSWER: a, Page 81 19.

A demand-driven system is also known as a.

a supply chain.

b.

a pull system.

c.

a marketing system.

d.

a multi-echelon system.

ANSWER: b, Page 87

20.

A maquiladora plant is a.

a new type of flower.

b.

an entity created under NAFTA

c. a U.S. plant assembly activity in Mexico. d.

performing

manufacturing,

processing,

a factory owned by the Maquiladora Corporation.

ANSWER: c, Pages 91-92 21.

Focused production is a.

a strategic decision to make only what the market desires.

or

b.

used by those firms not sure of the market demands.

c. a strategy in which a given plant produces one or two items of the company’s total product line. d.`

a trend in the electronics industry with manufacturing in China.

ANSWER: c, Page 93 22.

Which are the major modes of international transportation? a.

water and air

b.

water and rail

c.

rail and motor

d.

rail and air

ANSWER: a, Page 93 23.

Which is a major category of ocean shipping? a.

passenger travel

b.

common carriers

c.

exempt carriers

d.

charter vessels

ANSWER: d, Page 94 24.

Which category of ocean shipping offers set schedules over specified sea routes? a.

liner service

b.

charter vessels

c.

private vessels

d.

demise charter vessels

ANSWER: a, Page 94

25.

Which is the main advantage of international air transport? a.

freight rates

b.

flexibility

c.

transit times

d.

accessibility

ANSWER: c, Page 95 26.

Which condition must be present before motor carriers and rail carriers can be used for international shipments? a.

shipments must be in volume and in bulk

b.

the shipment must be between adjacent countries

c.

no customs barriers can be imposed

d

the shipment cannot pass through adjacent countries

ANSWER: b, Page 96 27.

These are designated by the U.S. secretary of the treasury for the purpose of storing, repacking, sorting or cleaning imported merchandise entered for warehousing without paying import duties while the goods are in storage. a.

Bonded warehouses

b.

Hold-on-dock storage

c.

In-transit storage areas

d.

Transit sheds

ANSWER: a, Page 99 28.

Gemini products wishes to enter foreign markets but lacks the resources to do so. They evaluate their alternatives and approach Overseas Traders, LLC, a company that specializes in the foreign distribution of products of the type which Gemini manufacturers. Overseas purchases $50,000 of Gemini's products for sale on the international market. Overseas is which type of global logistics channel intermediary? a.

NVOCC

b.

export packer

c.

export trading company

d.

customs house broker

ANSWER: c, Page 98 29. The global logistics channel intermediary that supervises the movement of goods through customs and ensures that the documentation accompanying a shipment is complete and accurate is known as

a.

a foreign freight forwarder.

b.

an export packer.

c.

a customs house broker.

d.

a foreign trade specialist.

ANSWER: c, Page 98 30.

Which type of global logistics channel intermediary enables goods to move through customs more easily by consolidating small shipments into more economical sizes? a.

customs house broker

b.

NVOCC

c.

export trader

d.

foreign freight forwarder

ANSWER: d, Page 97 31.

Goods can be stored in a bonded warehouse a.

for up to 3 years.

b.

until next year.

c.

Indefinitely.

d.

until the next shipment of the same product arrives.

ANSWER: a., Page 99 32.

The biggest and best known example of a regional trade agreement (RTA) is the: a.

World Trade Organization (WTO)

b.

General Agreement on Tariffs and Trade (GATT)

c.

European Union (EU)

d.

Customs Trade Partnership Against Terrorism (C-TPAT)

ANSWER: c, Page 79 33.

America’s ports are a key component of its global commerce. U.S. ports also play a vital role for the cruise industry. Which of these is not one of the top three departure ports for the cruise industry? a.

Port Canaveral, Florida

b.

Cape Liberty, New Jersey

c.

Miami, Florida

d.

Ft. Lauderdale, Florida

ANSWER: b, Page 89 34.

As market forces continue to exert pressure on companies to improve profitability, the quest for lower-cost manufacturing has been a factor in the relocation of manufacturing from Mexico to ________ ?

a.

South America

b.

Asia

c.

Russia

d.

Canada

ANSWER: b, Page 92 CHAPTER QUESTIONS

4

TEST

Multiple-Choice 9. Many organizations are working more closely with a. customers. b. customers and suppliers. c. third-party logistics firms. d. customers, suppliers, and various types of logistics suppliers. ANSWER: d, Page 108 14. Whether the relationship may or may not be with a provider of logistics services, today’s supply chain relationships are most effective when collaboration occurs among the ____________ who are involved. a. participants b. third party logistics providers c. customers d. suppliers ANSWER: 115

a,

Page

15. Vertical collaboration refers to a. collaboration among buyers and sellers in the supply chain. b. collaboration among carriers and shippers. c. collaboration that moves up the supply chain. d. collaboration with competitors. ANSWER: a., Page 116 16. Horizontal collaboration refers to a relationship that is ___________ and/or ____________. a. 3PLs to 3PLs and/or service provider to service provider b. buyer to buyer and/or seller to seller c. flat across the chain and/or involving partners equal in size d. collaboration with horizontal and/or vertical competitors

ANSWER: b, Page 117 17. Full collaboration is the dynamic combination of a. buyers, sellers, retailers, and 3PLs. b. buyers, sellers, retailers, 3PLs, and appropriate government agencies. c. both vertical and horizontal collaboration. d. buyers and sellers only. ANSWER: c, Page 117 18. A third-party logistics firm may be defined as a. an out...