Deck 13: Physical Distribution

Question 1

A company ships dog houses fully assembled to luxury dog hotels. The average line- haul cost per shipment is $12.50 per mile and the truck carries 100 assembled large dog houses. The company decided to ship the houses unassembled and figures it can ship 500 in a truck. Calculate the line- haul cost per assembled and unassembled dog house. If the average trip is 300 miles, calculate the potential savings per dog house.

Answer 1

Line- haul cost assembled = $12.50/100 = $0.125 per dog house per mile Line- haul cost unassembled = $12.50/500 = $0.025 per dog house per mile
Savings per mile = $0.125 - 0.025 = $0.10
Trip savings = 300 * $0.10 = $30.00 per dog house

Question 2

Memphis is 360 miles from Chattanooga, TN. The product cost for an item is $10 per cwt., and the transportation cost per mile per cwt. if $0.20. What is the laid- down cost per cwt.?

Answer 2

LDC = $10 + $0.20 X 360) = $82 per cwt.

Question 3

A company normally ships to a customer by rail at a cost of $500 per load. The transit time is 14 days. The goods can be shipped by truck for $700 per load and a transit time of 4 days. If transit inventory cost is $35 per day, what does it cost to ship each way?

Answer 3

Rail $990; truck $840.

Question 4

For a particular commodity, the line- haul cost is $2.50 per mile. FOr a trip of 500 miles and a shipment of 600 cwt., what is the cost of shipping per cwt.? If the shipment is increased to 1,000 cwt., what is the savings in cost per cwt.?

Question 5

What is a channel of distribution?

Question 6

Discuss some of the variables that determine the specific way in which materials move.

Question 7

A company normally ships a product by trail. Transportation cost is $200 and the transit time is 10 days. However the goods can be moved by air at a cost of $1,000 and will take only one day to delivery. The cost of inventory in transit for a shipment is $100 per day. What are the costs involved in their decision.

Question 8

The more________ the item, the greater the weight that can be carried in a given vehicle.

A) perishable
B) dense
C) packaged
D) valuable

Question 9

Discuss the total- cost concept.

Question 10

As distribution centers are added:

A) the cost of truckload shipments increase
B) the cost of truckload shipments decrease
C) the total cost of transportation increases
D) the costs of LTL shipments to customers increase

Question 11

What are the advantages and disadvantages of air transport?

Question 12

________is the consolidation of several units into large units so there is less handling.

A) Utilization
B) Palletizing
C) Packaging
D) Centralization

Question 13

The ________warehouse has a dynamic purpose of movement and mixing.

A) finished goods
B) WIP
C) dynamic
D) general

Question 14

Operating costs ________as the number of distribution centers________ .

A) increase, increase
B) decrease, increase
C) increase, decrease
D) stay the same, increase

Question 15

Discuss the categories of reverse logistics and why these costs are increasing.

Question 16

An objective of material handling is:

A) to decrease cube utilization
B) increase cube utilization
C) not to consider the height of the building
D) increase the need for aisle space

Question 17

If shipments to customers are________ , the total transportation cost is________ by establishing a distribution center in the area.

A) TL, reduced
B) LTL, reduced
C) TL, increased
D) LTL, increased

Question 18

Shipping patterns depend on:

A) the customer order size
B) the number of customers
C) the geographic distribution of the customers
D) all of the above

Question 19

The package must:

A) identify the product and protect the product
B) identify and contribute to a product's physical distribution efficiency
C) protect and contain the product
D) all of the above

Question 20

________are devices that move material horizontally or vertically between two fixed points in a fixed route.

A) Industrial trucks
B) Cranes
C) Hoists
D) Conveyors

Question 21

Materials handling is the long- distance movement that takes place in or around a building such as a plant or distribution center DC).

Question 22

Cranes and hoists move materially horizontally but not vertically, to any point within their area of operation.

Question 23

The average inventory carried depends on the order quantity and the safety stock.

Question 24

While transportation consolidation is concerned with reduction of transportation costs, product mixing deals with the grouping of different items into an order and the economies that warehouses can provide in doing this.

Question 25

The variable costs associated with distribution centers are space and materials handling.

Question 26

The service levels decrease as the number of distribution centers increased.

Question 27

Distribution centers improve customer service by providing place utility.

Question 28

Materials handling costs depend upon the number of units handled.

Question 29

Packaging is a pure cost that must be offset by the increased physical distribution inefficiency that the package provides.

Question 30

Laid- down cost is the delivered cost of a product to a particular geographic point.