Deck 4: Supply Chain and Omni Channel Network Design

Question 1

Which major locational determinant considers locating near the competition?

A) Labor climate
B) Quality of life
C) Company preference
D) Supplier networks

Answer 1

C

Question 2

Henderson Air used to source all of their supplies from three suppliers. However, to remain competitive in recent years, Henderson has started to source supplies from more suppliers in order to obtain the best prices. Some of these suppliers are overseas. As a result, the firm's inventory levels:

A) have increased.
B) have decreased.
C) have stayed the same.
D) can't be determined.

Answer 2

A

Question 3

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) source point.
C) break-even point.
D) center of gravity.

Answer 3

D

Question 4

Which of the following 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 5

Kelly's firm processes and packages organic nuts and nut butters. Last year, the firm started selling its products to Costco, the discount retailer, in addition to traditional retail chains. This new opportunity is wonderful for Kelly's firm, but the Costco-bound products require different packaging, and the volume and frequency of the Costco orders have placed a strain on the firm's resources. Kelly may need to re-evaluate the firm's supply chain network design due to which significant trend?

A) Changes in customer service requirements
B) Changes in corporate ownership
C) Shifting locations of customer and/or supply markets
D) Cost pressures

Question 6

This type of fulfillment model has the manufacturer delivering its products directly to the retailers' stores.

A) Outsourced
B) Store-fulfillment
C) Flow-through
D) None of these answers

Question 7

The grid technique will evaluate all transportation rates equally.

Question 8

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 9

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 10

Staples frequently sells its office supplies direct to other businesses (B2B) through its online ordering and delivery services, and it typically sells office supplies direct to consumers (B2C) through its stores. This is what's known as "multi-channel" capabilities.

Question 11

An organization's omni-channel strategy must align with its "go to market" strategy, which dictates how consumers will be able to gain access to the firm's products or services.

Question 12

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

Question 13

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

Question 14

Kelly's firm processes and packages organic nuts and nut butters, and it has just landed a new contract with Costco, the discount retailer. As wonderful as this new opportunity is, the Costco-bound nut butters demand a change in the supply chain network. These products require larger containers (24 oz. containers instead of the usual 16 oz. jars), which in turn require larger shipping cartons. Kelly is currently testing the various containers available from a range of suppliers to determine which are most compatible with the firm's production line. Which step in the supply chain network redesign process is Kelly performing?

A) Defining the supply chain network design process
B) Performing a supply chain audit
C) Examining the supply chain network alternatives
D) Conducting a facility location analysis

Question 15

The first step in the supply chain network design process is to perform a supply chain audit.

Question 16

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

Question 17

A channel of distribution is controlled by the marketing department, which selects the physical structures and intermediaries through which the product(s) flow.

Question 18

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

Question 19

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

Question 20

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

Question 21

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

Question 22

List and discuss potential supply chain modeling pitfalls to avoid.

Question 23

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 24

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 25

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 26

When Zappos, a leading online shoe retailer, receives an online order through its website, the order is sent directly to the most appropriate distribution center for fulfillment. This is an example of:

A) a logistics channel function.
B) a marketing channel function.
C) the intersection of logistics and marketing channels.
D) None of these answers.

Question 27

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 28

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

Question 29

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 30

The classic objective of a network design model has been to:

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

Question 31

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

Question 32

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 nonlinear transportation rates.

Question 33

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

Question 34

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 35

The optimization model is based on:

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

Question 36

Southwest Auto Parts already had a massive distribution center in Utah serving its 147 stores scattered across seven U.S. states when it decided to start selling auto parts online. The firm's management wanted to minimize startup costs by consolidating order fulfillment under the same roof, so which model of order fulfillment did the firm's managers decide to use?

A) Pool
B) Dedicated
C) Integrated
D) Direct

Question 37

What are the current trends governing site selection?

Question 38

What is the effect of tapering rates on facility location?

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