Deck 12: Supply Chain Network Analysis and Design

Question 1

What type of change may suggest a need to reevaluate and/or redesign a firm's logistics network?

A) change in customer service requirements
B) change in corporate ownership
C) shifting locations of customer and/or supply markets
D) all of these

Answer 1

D

Question 2

Facilities may sometimes be located where senior officers prefer.

Answer 2

True

Question 3

The grid technique will evaluate all transportation rates equally.

Answer 3

False

Question 4

In a commercial zone, the same transportation rate is applied from an origin to any point in the zone.

Question 5

Which major locational determinant considers locating near the competition?

A) labor climate
B) quality of life
C) company preference
D) supplier networks

Question 6

One impact that the transit privilege has on facility location is that intermediate locations can be optimum.

Question 7

Labor-intensive industries place significant emphasis on the availability and cost of labor.

Question 8

The efficiency and effectiveness of a logistics/supply chain operation are constrained by the location of plants and warehouses in its overall network.

Question 9

The quality of life locational determinant is most important to companies that must attract and retain an unskilled, static work force.

Question 10

In the short run, the firm's network is _________ while in the long run it is ________.

A) fixed, variable
B) adoptable, reversible
C) variable, reversible
D) reversible, fixed

Question 11

The optimization model is based on

A) precise mathematical procedures.
B) sampling experiments.
C) broad problem definitions.
D) rule of thumb approaches.

Question 12

Which is NOT true regarding logistics network design?

A) the logistics/supply chain network transformation team is responsible for all elements of the logistics network design process.
B) the logistics audit provides members of the transformation team with a comprehensive perspective on the firm's logistics process.
C) "what-if" types of analysis can be conducted later, after the final network design has been established.
D) the implementation plan serves as a useful road map for moving from the current logistics network to the desired one.

Question 13

Which is true regarding the facility/supply chain network design decision?

A) the facility's impact on other functional areas should be considered, but it is not as important
B) it should be coordinated closely with the corporate and overall business strategies that may be in place
C) global locations should not be considered
D) generally, qualitative criteria are considered first

Question 14

The grid technique determines the highest cost facility location in an area.

Question 15

The logistics/supply chain network transformation team

A) must be aware of the firm's overall business and corporate strategies and the supply chain in which it participates.
B) will not consider the potential involvement of third-party logistics suppliers as part of their responsibilities.
C) includes workers from divisional levels only.
D) should not include outside consultants.

Question 16

Which is true regarding optimization models?

A) Optimization models are based on precise mathematical procedures that are guaranteed to find the "best" solution for the problem under evaluation.
B) Optimization models are able to accommodate broad problem definitions, rather than provide an optimum solution.
C) The Grid Technique is a powerful optimization model.
D) Optimization models will guarantee increased profits.

Question 17

Corporate reengineering is often a reason for examining the firm's current logistics/supply chain network.

Question 18

Which of these is NOT a trend in today's logistics environment that may have significant effects on decisions involving logistics facility location?

A) strategically located cross-docking facilities
B) use of third-party logistics services
C) customer-direct delivery
D) addition of many wholesaler/distributor operations

Question 19

The grid technique is used to determine a fixed facility location that represents the least-cost center for moving incoming materials and outbound product within a geographic grid. This least cost center is also referred to as

A) a zero point.
B) a source point.
C) a breakeven point.
D) a center of gravity.

Question 20

Logistics facilities and their locations are relatively variable and easily modified in the short term.

Question 21

Simulation models

A) guarantee optimum solutions.
B) generate SAILS reports.
C) search directly for the best warehouse configuration
D) allow the decision maker to test the effects of alternative locations.

Question 22

Which is correct regarding tapering rates?

A) the principle is based on the carrier's ability to spread certain fixed shipment costs over a greater number of miles
B) transportation rates increase with distance directly in proportion to the distance
C) in a one-source, one-market situation, the impact of the tapering rate will be to pull the location toward a point midway between the source and the market
D) uses transportation simplifications to recommend facility locations

Question 23

The classic objective of a network design model has been

A) to establish the number, location, and size of finished goods distribution centers and associated product flows.
B) to find the best location for a forward facing warehouse.
C) to examine the finished goods flow from the warehouse to the customer.
D) to measure and control site locations.

Question 24

Which is an advantage of the grid technique for facility location?

A) it establishes the final determination of the best site
B) computationally, it is relatively easy to use
C) it is a dynamic approach with solutions remaining optimum over many time periods
D) it considers topographic conditions in choosing the optimum location

Question 25

Briefly describe the six major steps that are recommended for a logistics network design process.

Question 26

Define the principles of tapering rates, blanket rates, and commercial zones and the implication of each on location selection.

Question 27

When a blanket rate structure is used, which factor is eliminated as a locational determinant?

A) labor rate
B) transportation rate
C) raw material sources
D) market sources

Question 28

Distinguish between the locational determinants of labor climate, and quality of life.

Question 29

Heuristic models

A) provide an optimum solution.
B) are able to accommodate broad problem definitions.
C) have fallen from use because of SAILS.
D) are typically "seat of the pants" solutions.

Question 30

Which is correct regarding the transit privilege?

A) it results in only an end point, either an origin or destination, being the optimum location
B) it magnifies those geographic disadvantages that companies associate with a producer's location
C) it permits the shipper to stop the shipment in transit and physically change the product's characteristic
D) it is normally available for any location and commodity

Question 31

Application of the grid technique to the location of a city warehouse

A) is no different from applying it in any other situation.
B) incorporates a blanket rate structure that applies the same rate from an origin to any point within the city or commercial zone.
C) considers the costs of moving raw materials into the facility, and moving finished goods to the customers.
D) accounts for information like highway access and facility availability within the grid coordinates.

Question 32

What are simulation models and how are they used to assist with determination of facility locations?

Question 33

Define and discuss the Grid Technique, including its advantages and disadvantages.

Question 34

What advantage does the transit privilege give to shippers located at intermediate locations?

A) a lower, long-distance through rate charged for the shipment
B) allows importers to enter a product and hold it without paying duties
C) avoidance of terminal charges for each intermediate stop
D) the right to change consignees during shipment

Question 35

What is the effect of tapering rates on facility location?

A) pushes the raw materials sources toward the location
B) pulls the facility toward the location
C) pulls the location toward the source or the market
D) makes the optimum location at the midpoint between raw material sources and the marketplace

Question 36

The grid technique

A) is a variation of SAILS.
B) assumes that the raw materials sources and finished goods markets are fixed.
C) assumes that the raw materials sources and finished goods markets are variable.
D) assumes non-linear transportation rates.

Question 37

List and discuss potential supply chain modeling pitfalls to avoid.

Question 38

What are the current trends governing site selection?