Managing Operations Across the Supply Chain 4th Edition By Morgan Swink – Test Bank

Chapter 11 Logistics Management

1) Which of the following is NOT a role of logistics management?
A) Planning the forward flow of materials.
B) Controlling the storage of goods.
C) Designing the reverse flow of goods.
D) Selecting suppliers for parts and components.

Answer: D
Explanation: Supplier selection for parts and materials is a role of supply management, not logistics management.
Difficulty: 1 Easy
Topic: The Role of Logistics in Supply Chain Management
Learning Objective: 11-01 Describe logistics and the six major activities of integrated logistics management.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation; Screen Reader Compatible

2) Which of the following is NOT an activity of integrated logistics management?
A) Transportation management.
B) Selecting raw material suppliers.
C) Order processing.
D) Determining the number and locations of warehouses.

Answer: B
Explanation: Selection of suppliers for raw materials is a role of supply management, not logistics management.
Difficulty: 1 Easy
Topic: The Role of Logistics in Supply Chain Management
Learning Objective: 11-01 Describe logistics and the six major activities of integrated logistics management.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation; Screen Reader Compatible

3) Logistics is responsible for all of the following EXCEPT:
A) Determining how much inventory to hold.
B) Setting product quality standards.
C) Determining where to hold inventory in the supply chain.
D) Selecting the mode of transportation used to ship products.

Answer: B
Explanation: Product quality standards are set by engineers, not logistics managers.
Difficulty: 1 Easy
Topic: The Role of Logistics in Supply Chain Management
Learning Objective: 11-01 Describe logistics and the six major activities of integrated logistics management.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation; Screen Reader Compatible

4) Logistics management is important to an organization because:
A) Typically, 50 percent to 75 percent of an organization’s costs are attributed to logistics.
B) Logistics affects customer service.
C) Offshoring of services is increasing.
D) Its primary role is managing inbound logistics.

Answer: B
Explanation: Logistics management affects customer service.
Difficulty: 2 Medium
Topic: The Role of Logistics in Supply Chain Management
Learning Objective: 11-01 Describe logistics and the six major activities of integrated logistics management.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation; Screen Reader Compatible

5) All of the following can improve order processing EXCEPT:
A) Increasing the number of orders entered manually.
B) Redesigning the website so it is easier for customers to use.
C) Integrating internal information systems.
D) Automating order entry using robotic process automation.

Answer: A
Difficulty: 1 Easy
Topic: Order Processing
Learning Objective: 11-01 Describe logistics and the six major activities of integrated logistics management.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation; Screen Reader Compatible

6) Jones Company decided to limit deliveries to selected areas to specific days of the week to save money on transportation. This is an example of:
A) Market consolidation.
B) Pooled delivery consolidation.
C) Scheduled delivery consolidation.
D) Transportation consolidation.

Answer: C
Explanation: This is the definition of scheduled delivery consolidation.
Difficulty: 2 Medium
Topic: Transportation Management
Learning Objective: 11-02 Estimate cost savings from transportation consolidation.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation; Screen Reader Compatible

7) Smith Company learned that several other shippers in its hometown had customers located in the same markets that it serves. With this information, Jones should investigate the possibility of:
A) Market area consolidation.
B) Scheduled delivery consolidation.
C) Pooled delivery consolidation.
D) Traffic consolidation.

Answer: C
Explanation: Because other shippers are involved in this question, pooled delivery consolidation is the most appropriate answer.
Difficulty: 2 Medium
Topic: Transportation Management
Learning Objective: 11-02 Estimate cost savings from transportation consolidation.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation; Screen Reader Compatible

8) Zanda Corp. can make three individual deliveries to three different customers at a cost of $500 each or can consolidate them into one shipment with a cost of $1,300 and a stop-off charge of $100 per stop. Should Zanda do this?
A) Yes, it will save $100.
B) Yes, it is simpler to do.
C) No, it will increase cost by $100.
D) It doesn’t matter based on cost.

Answer: C
Explanation: $1,300 + 3($100) = $1,600, an increase in cost of $100.
Difficulty: 3 Hard
Topic: Transportation Management
Learning Objective: 11-02 Estimate cost savings from transportation consolidation.
Bloom’s: Analyze
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation; Screen Reader Compatible

9) Miller Corp. can make three individual deliveries to three different customers at a transportation cost of $600 each or can consolidate them into one shipment with a transportation cost of $1,200 and a stop-off charge of $100 per stop. Should Miller Corp. consolidate the shipments?
A) Yes, it will save $100.
B) Yes, it will save $300.
C) No, it will increase cost by $100.
D) It doesn’t matter based on cost.

Answer: B
Explanation: Nonconsolidated cost = $600(3) = $1,800.

Consolidated cost = $1,200 + $100(3) = $1,500. Consolidation saves $300.
Difficulty: 3 Hard
Topic: Transportation Management
Learning Objective: 11-02 Estimate cost savings from transportation consolidation.
Bloom’s: Analyze
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation; Screen Reader Compatible

10) Suppose you are shipping 1,000 pounds of product to a customer location that is 500 miles away from you. The customer calls you and increases the order size to 10,000 pounds. In this case:
A) The cost per pound of transportation for the order will decrease.
B) The total cost of transportation for the order will decrease.
C) The cost per distance traveled will decrease.
D) The fixed cost will be spread over more miles.

Answer: A
Explanation: This consolidation is likely to both decrease the cost per pound of transportation and increase the total cost.
Difficulty: 2 Medium
Topic: Transportation Management
Learning Objective: 11-02 Estimate cost savings from transportation consolidation.
Bloom’s: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation; Screen Reader Compatible