Deck 4: Distribution and Omni Channel Network Design

Question 1

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

Answer 1

False

Question 2

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

Answer 2

True

Question 3

Which major locational determinant considers locating near the competition?

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

Answer 3

C

Question 4

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

Question 5

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

Question 6

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

Question 7

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 answers

Question 8

As the number of stocking points (DCs) is decreased in a distribution network, fixed costs will _____ and variable costs will _____.

A) decrease; decrease
B) decrease; increase
C) increase; increase
D) increase; decrease

Question 9

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

Question 10

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) Integrated
E) None of these answers

Question 11

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

Question 12

The grid technique will evaluate all transportation rates equally.

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

As the length and complexity of a supply chain increases, a firm's inventory levels:

A) increase.
B) decrease.
C) stay the same.
D) can't be determined.

Question 15

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 16

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 17

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

Question 18

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 19

Facilities may sometimes be located where senior officers prefer.

Question 20

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.

Question 21

Demand for transportation at the microeconomic level is _____ while the demand for transportation at the macroeconomic level is _____.
a. elastic; elastic
b. elastic; inelastic
c. inelastic; inelastic
d. inelastic; elastic

Question 22

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.

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

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 25

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

Question 26

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

Question 27

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

Question 28

What are the current trends governing site selection?

Question 29

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 30

An advantage to dedicated fulfillment is:

A) no disruption to store operations.
B) need for separate facilities.
C) duplicate inventories.
D) high start-up costs.

Question 31

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 32

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

Question 33

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 34

The optimization model is based on:

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

Question 35

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 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 nonlinear transportation rates.

Question 37

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 38

List and discuss potential supply chain modeling pitfalls to avoid.