Deck 9: Customer Service Management

Question 1

With respect to the following operating service characteristics of the modes of transportation,which combination is CORRECTLY specified?

A)Speed: air is best; pipeline is worst.
B)Availability: air is best; pipeline is worst.
C)Capability: rail is best; air is worst.
D)Dependability: pipeline is best; truck is worst.

Answer 1

Speed: air is best; pipeline is worst.

Question 2

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 2

Setting product quality standards.

Question 3

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 3

Selecting suppliers for parts and components.

Question 4

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.

Question 5

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.

Question 6

The Williams Co.combines all of its orders going to Tokyo,Japan,during the month into a single shipment.This is an example of:

A)Market area consolidation.
B)Pooled delivery consolidation.
C)Economies of distance.
D)Scheduled delivery consolidation.

Question 7

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.

Question 8

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.

Question 9

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.

Question 10

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.

Question 11

All of the following are safety and security regulations EXCEPT:

A)C-TPAT.
B)Restrictions on truck driver hours.
C)Restrictions on who can form a logistics company.
D)Controls on hazardous materials transportation.

Question 12

Bowling Green Manufacturing Co.has three orders to be shipped to different customers located in Seattle,Washington.The weights of the respective orders are 13,000 pounds,9,000 pounds,and 10,000 pounds.The cost to ship each order individually is $17 per 100 pounds.The shipments can be consolidated into a single order for a cost of $14 per 100 pounds with an additional charge of $250 per stop.Should the shipments be consolidated?

A)It does not matter; the cost is the same.
B)No,the cost is $210 higher with consolidation.
C)Yes,the cost is $210 lower with consolidation.
D)Yes,the cost is $750 lower with consolidation.

Question 13

Generally,the most expensive transportation mode (from among the following choices)is:

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

Question 14

With respect to the following operating service characteristics of the modes of transportation,which combination is INCORRECTLY specified?

A)Speed: air is best; pipeline is worst.
B)Availability: truck is best; pipeline is worst.
C)Capability: pipeline is best; water is worst.
D)Dependability: pipeline is best; air is worst.

Question 15

Falcon Enterprises has four orders to be shipped to different customers located in Houston,Texas.The weights of the respective orders are 4,000 pounds,5,000 pounds,8,000 pounds,and 6,000 pounds.The cost to ship each order individually is $12 per 100 pounds.The shipments can be consolidated into a single order for a cost of $10 per 100 pounds with an additional charge of $200 per stop.Should the shipments be consolidated?

A)It does not matter; the cost is the same.
B)No,the cost is $340 higher with consolidation.
C)Yes,the cost is $700 lower with consolidation.
D)No,the cost is $700 higher with consolidation.

Question 16

Economic deregulation of transportation can:

A)Reduce service innovation.
B)Increase safety.
C)Increase efficiency.
D)Reduce security.

Question 17

With respect to transportation regulation today in the United States:

A)There is no economic regulation of transportation.
B)There is more economic regulation than ever before.
C)There is very little safety/social regulation.
D)There is more safety/social regulation than ever before.

Question 18

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.

Question 19

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.

Question 20

Which of the following is an example of economic regulation?

A)Restrictions on shipping hazardous materials.
B)C-TPAT.
C)Restrictions on truck driver hours.
D)Restrictions on the type of logistics services a provider can offer.

Question 21

The process of removing products from storage and assembling them into appropriate quantities and assortments to fill customer orders is:

A)Consolidation.
B)Order picking.
C)In-storage handling.
D)Staging.

Question 22

Inventory levels:

A)Are not affected by the choice of transportation mode.
B)Are higher when rail rather than truck transportation is used.
C)Increase when air rather than truck transportation is used.
D)Are not affected by the number of warehouses used.

Question 23

Your company needs to ship a large piece of construction equipment that costs about $500,000 to a customer across the country.Shipping by rail costs $3,000 and will take eight days.Your company uses 20 percent to determine the annual inventory carrying cost.What are the approximate total costs of shipping and in-transit inventory? (Use 365 days as the number of days in a year.)

A)$3,000.
B)$2,192.
C)$5,192.
D)$10,000.

Question 24

Your company needs to ship 10 heart pacemakers that cost $10,000 each from Indianapolis,Indiana,to Miami,Florida.Which transportation mode should you use?

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

Question 25

One function of distribution centers (DC)is "consolidation." This means that the warehouse/distribution center is used to:

A)Group small inbound loads into larger outbound loads.
B)Collect products/packaging materials that are sent back for disassembly,reclamation,or disposal.
C)Hold inventory to buffer the system from variability in either supply or demand.
D)Hold inventory needed because of seasonal requirements.

Question 26

The Smith Company has decided to change its shipping mode from truck to rail.Its inventory levels will:

A)Increase.
B)Decrease.
C)Not change.
D)More information is needed to determine the change in inventory levels.

Question 27

The increasing size of container ships is being driven by:

A)Economies of scale.
B)Total cost of ownership.
C)Market consolidation.
D)Economies of distance.

Question 28

Your company needs to ship two large machines that cost about $75,000 each to a customer across the country.The machines will be shipped by rail at a cost of $2,000.Shipping will take 14 days.Your company uses 15 percent to determine the annual inventory carrying cost.What are the approximate total costs of shipping and in-transit inventory? (Use 365 days as the number of days in a year.)

A)$2,000.
B)$863.
C)$2,863.
D)$2,026.

Question 29

Which of the following transportation modes has relatively low fixed costs but high variable costs?

A)Pipeline.
B)Air.
C)Rail.
D)Truck.

Question 30

Bill's glass store needs to ship an order of 10 chandeliers to a builder about 1,000 miles away.The chandeliers cost about $10,000 each,and Bill will be paid upon delivery.Bill plans to ship the order by truck at a cost of $1,000.The delivery will take 10 days.Bill uses a 30 percent annual inventory carrying cost.What will be the approximate total shipping and transit inventory carrying cost of the shipment? Assume 365 days per year.

A)$633.33
B)$821.92
C)$1,000.00
D)$1,821.92

Question 31

Cross-docking:

A)Sorts items for production support.
B)Stores inventory to support seasonal demand.
C)Combines break-bulk and consolidation activities.
D)Supports reverse logistics.

Question 32

You are shipping 200 diamonds to one customer located 2,000 miles away.The value of a diamond is $1,500.You can ship via air for $500 and the diamonds will arrive in two days,or you can ship via a specialty ground carrier for $250 and the diamonds will arrive in four days.You figure your inventory carrying cost is 25 percent.Your customer will immediately transfer funds to your bank account on receipt of the shipment.Using the air carrier would save approximately how much money in total cost? Use 365 days as the number of days in a year.

A)Nothing,it would actually cost more.
B)$150.00
C)$247.95
D)$160.96

Question 33

Intermodal transportation:

A)Is only used for international shipments.
B)Achieves economies of distance.
C)Achieves economies of scale and service availability.
D)Always combines transportation by truck and rail.

Question 34

Returned products are generally handled at a warehouse that provides:

A)Stockpiling.
B)Cross-docking.
C)Production support.
D)Reverse logistics support.

Question 35

In the United States,most freight is shipped by:

A)Pipeline.
B)Air.
C)Rail.
D)Truck.

Question 36

Splitting shipments into individual orders and arranging them for local delivery to customers is:

A)Stockpiling.
B)Cross-docking.
C)Break-bulk.
D)Reverse logistics.

Question 37

Computer-controlled systems that use robots for materials handling activities are:

A)RFID.
B)AS/RS.
C)Unitization.
D)Value-added systems.

Question 38

Which transportation mode has the highest level of greenhouse gas emissions per ton?

A)Air.
B)Rail.
C)Long-haul truck.
D)Light duty delivery truck.

Question 39

Products are received,sorted,sequenced,and selected into loads at a:

A)Stockpiling center.
B)Product support warehouse.
C)Transshipment point.
D)Reverse logistics center.

Question 40

As the shipping distance increases:

A)Variable costs are spread over more miles.
B)The shipping costs per pound increase.
C)Economies of scale are achieved.
D)The cost per unit of distance decreases.

Question 41

The center-of-gravity method of determining a facility location:

A)Requires that demand be estimated in terms of the dollar sales revenue in each market.
B)Requires that cost be measured in dollars of transportation cost.
C)Does not require that qualitative factors be considered in location decisions.
D)Evaluates all production and logistics costs,and other costs such as taxes.

Question 42

A company finds the following information about its customers and their locations: The center of gravity is:

A)X^* = 52.5; Y^* = 57.5.
B)X^* = 58.33; Y^* = 65.
C)X^* = 56.66; Y^* = 61.66.
D)Cannot be determined.

Question 43

Zanda Corp.had established a production plant in Thailand.Recently it decided to close the plant and move production to Mexico.This decision was likely made after Zanda:

A)Conducted a spend analysis.
B)Conducted a make-or-buy analysis.
C)Examined total landed cost.
D)Evaluated consolidation strategies.

Question 44

What is the center of gravity according to the following information?

A)X = 21.7,Y = 50.
B)X = 15,Y= 65.6.
C)X = 65,Y = 150.
D)X = 6.9,Y = 3.

Question 45

A company has determined the ideal number of locations by looking at the trade-offs described in the text.It decides to open more distribution centers than this "ideal." This decision would most likely result in ___________ and __________.

A)Poorer service to customers and higher cost
B)Better service to customers and lower cost
C)Better service to customers and higher cost
D)Poorer service to customers and lower cost

Question 46

3PLs:

A)Typically only operate fulfillment centers.
B)Consolidate storage and shipments across customers.
C)Increase supply chain risk.
D)Have minimal investment in information systems.

Question 47

The sum of all product- and logistics-related costs is:

A)Total landed costs.
B)Total cost of ownership.
C)Cost-to-cost trade-offs.
D)Cost-to-service trade-offs.

Question 48

A company decides to reduce its number of distribution centers (logistically postpone).This decision would result in ___________ or __________.

A)Poorer service to customers or higher transportation cost
B)Better service to customers or less transportation cost
C)Better service to customers or higher transportation cost
D)Confusion for customers or for the company

Question 49

Which of the following best describes the concept of total landed cost?

A)The sum of all logistics costs related to a product.
B)The lowest logistics cost for a product.
C)The sum of all product-related and logistics-related costs.
D)The difference between product-related and logistics-related costs.

Question 50

Zanda Corp.decided to use a more expensive mode of transportation to deliver orders to customers.This decision was likely made after an examination of:

A)Cost-to-cost trade-offs.
B)Consolidation strategies.
C)Product availability problems.
D)Cost-to-service trade-offs.

Question 51

Zanda Corporation's CEO watched in amazement and frustration as workers handled and loaded individual products onto trucks.She felt handling the individual items was very cumbersome.She should investigate the possibility of:

A)Using RFID.
B)Containerization.
C)AS/RS.
D)Private transportation.

Question 52

In determining the number of facility locations,the lowest total cost is typically:

A)Not the lowest cost of either transportation or inventory.
B)The lowest cost of either transportation or inventory.
C)Not related to transportation or inventory.
D)Difficult to generalize.

Question 53

What is the center of gravity according to the following information?

A)X = 55,Y = 29.1.
B)X = 14.4,Y = 28.8.
C)X = 53.3,Y = 26.7.
D)X = 160,Y = 80.

Question 54

Stockouts are very costly for a medical device company.The logistics manager has decided to hold more inventory to reduce stockouts.This is an example of:

A)Cost-to-cost trade-offs.
B)Market consolidation strategy.
C)Value density.
D)Cost-to-service trade-offs.

Question 55

Companies that provide a bundle of logistical services to their customers are called:

A)AS/RS providers.
B)Common carriers.
C)3PLs.
D)Contract logistics companies.

Question 56

All of the following are considered when determining total landed costs EXCEPT:

A)Fuel costs.
B)Product liability costs.
C)Insurance.
D)Supply chain risk.

Question 57

The benefits of automated storage and retrieval systems (AS/RS)include all of the following EXCEPT:

A)Fewer errors in order picking.
B)Increased facility utilization.
C)Lower direct labor costs.
D)Lower fixed costs.

Question 58

Which of the following is LEAST likely to be considered when determining total landed costs?

A)Raw material costs.
B)Currency exchange rates.
C)The cost of inventory held as safety stock.
D)Product warranty costs.

Question 59

Packaging paper towels with six rolls in a package:

A)Is an example of the use of RFID.
B)Increases material handling costs.
C)Is an example of unitization.
D)Increases the complexity of materials handling.