Question 1

Which of the following is NOT true?&#10;A) Logistics is about transport, physical distribution is about materials handling.&#10;B) Logistics is about moving goods smoothly through the supply chain, physical distribution is about transportation.&#10;C) Logistics takes a holistic view, physical distribution is concerned with tactical matters.

Accepted Answer

Option A is not true because logistics encompasses more than just transport; it involves the overall management of the way resources are acquired, stored, and moved to the locations where they are required. Physical distribution is a part of logistics that focuses on the transportation and handling of goods.

Question 2

Which of the following is NOT a controllable element in logistics?&#10;A) Customer service.&#10;B) Warehousing.&#10;C) Legislation

Accepted Answer

Legislation is not a controllable element in logistics because it is established by governments and regulatory bodies, and companies must comply with these laws and regulations rather than control them.

Question 3

What is the main problem in determining total distribution costs?&#10;A) Unpredictability of the environment.&#10;B) Different firms are involved in physical distribution.&#10;C) Service levels are difficult to determine.

Accepted Answer

Different firms are involved in physical distribution, making it challenging to coordinate and calculate total distribution costs accurately.

Question 4

What is meant by service level?&#10;A) The reliability of the service.&#10;B) The cost of the service.&#10;C) The proportion of service relative to physical product.

Accepted Answer

Service level refers to the reliability of the service, indicating how consistently a service meets the customer's expectations or the agreed-upon standards of performance.

Question 5

Which of the following is NOT a reason for effective supply-chain management?&#10;A) It reduces costs.&#10;B) It improves asset utilisation.&#10;C) It improves relationships between firms.

Accepted Answer

Effective supply-chain management is aimed at reducing costs and improving asset utilization, but improving relationships between firms is not a primary reason for its implementation.

Question 6

What is meant by the commitment-trust theory?&#10;A) Networks characterised by commitment and trust engender co-operation.&#10;B) Commitment leads to trust, which improves the relationship.&#10;C) Commitment by suppliers and trust on the part of buyers means that the relationship is well-established.

Accepted Answer

Commitment-trust theory suggests that networks characterized by commitment and trust foster cooperation, leading to successful relationships.

Question 7

What is a letter of credit?&#10;A) A letter which agrees to provide credit for the purchaser.&#10;B) A letter issued by the importer's bank, guaranteeing payment.&#10;C) A list of the particulars of the shipment and the payment to be made.

Accepted Answer

A letter of credit is a letter issued by the importer's bank that guarantees payment to the exporter, ensuring that the exporter will receive payment as long as the terms and conditions stated in the letter of credit are met.

Question 8

Which of the following statements is true?&#10;A) Airfreight is always cheaper than sea freight.&#10;B) Air freight is always faster than sea freight.&#10;C) Air freight is always more expensive than sea freight.

Accepted Answer

Air freight is generally faster than sea freight because airplanes can cover the distance between destinations much quicker than ships.

Question 9

Which of the following is NOT true?&#10;A) A bill of lading is proof of ownership.&#10;B) A bill of lading is a promissory note.&#10;C) A bill of lading is a document of possessory title.

Accepted Answer

A bill of lading is not a promissory note. A bill of lading is a document issued by a carrier to acknowledge receipt of cargo for shipment, serving as proof of ownership and a document of title, but it does not promise payment like a promissory note does.

Question 10

What is a tramp steamer?&#10;A) A ship which does not follow a set route.&#10;B) A ship which is old and poorly-maintained.&#10;C) A ship which has a different national registry from the nationality of its owners.

Accepted Answer

A tramp steamer is a ship that does not have a fixed schedule or published ports of call, as opposed to a liner, which follows a regular route and schedule.

Deck 11: Supply Chain Management