Question 1

In a logistics system, warehousing should be optimized at the expense of related logistics activities, such as transportation and procurement.

Accepted Answer

In a logistics system, all related activities, such as transportation, procurement, and warehousing, should be optimized and integrated to achieve maximum efficiency and cost-effectiveness. No single activity should be optimized at the expense of others.

Question 2

All four subdivisions of logistics have some common characteristics. Which of the below does not belong in the list:

Accepted Answer

The four subdivisions of logistics are transportation, warehousing, inventory management, and scheduling. Marketing is not a subdivision of logistics, as it is a separate function within a company.

Question 3

To hold down distribution cost, the lowest cost carrier should always be used.

Accepted Answer

Selecting the lowest cost carrier does not always guarantee the best value or service for distribution. Factors such as reliability, speed, geographic coverage, and the nature of the goods being shipped are also important to consider.

Question 4

The inverse relationship that exists between the cost of lost sales and inventory costs is the inventory effect.

Accepted Answer

The statement is true. The inventory effect refers to the trade-off between inventory costs and the cost of lost sales. A lower level of inventory can lead to a higher risk of stock-outs and lost sales, while a higher level of inventory increases inventory costs but reduces the risk of lost sales. Finding the optimal level of inventory that minimizes the total cost of lost sales and inventory costs is an important challenge for supply chain management.

Question 5

Which of the answers below is an example of the creation of form utility by a logistics activity?

Accepted Answer

Form utility is created by altering the form or appearance of a product to make it more useful or appealing. In logistics, breaking bulk and repackaging at a distribution center changes the form of the product to better meet customer needs, thus creating form utility.

Question 6

Materials handling is concerned with

Accepted Answer

Materials handling deals with the movement of goods from one place to another, usually within a short distance, such as within a warehouse or manufacturing facility. Therefore, option D, short-distance movement, is the best choice.

Question 7

Transportation is the physical movement or flow of goods.

Accepted Answer

Transportation refers to the movement or flow of goods, people, or animals from one place to another through various modes such as roads, railways, airways, waterways, or pipelines.

Question 8

The utility created through the basic marketing activities is known as place utility.

Accepted Answer

The utility created through the basic marketing activities includes form utility, time utility, place utility, and possession utility, not just place utility. Place utility refers specifically to making products available where they are needed.

Question 9

During the 1990s and 2000s, logistics costs as a percentage of gross national product declined.

Accepted Answer

According to research by the Council of Supply Chain Management Professionals, logistics costs as a percentage of gross domestic product (GDP) declined from 16.1% in 1990 to 8.5% in 2016.

Question 10

The value that is added to goods through a manufacturing or assembly process is:

Accepted Answer

Form utility is the value that is added to goods through a manufacturing or assembly process. This includes transforming raw materials into finished products with specific features and functions that satisfy customer needs and wants. Place utility refers to the value created by making products available in convenient locations for customers to purchase. Time utility refers to the value created by making products available at the right time when customers need them. Possession utility refers to the value created by providing customers with ownership of products and the ability to use them as they see fit. While all of these utilities may be important, the process of manufacturing or assembling goods involves creating form utility.

Question 11

Ensuring the availability of the right product, in the right quantity, and the right condition, at the right place, at the right time, for the right customer at the right cost, is which definition of logistics?

Accepted Answer

The definition of logistics that includes the "Seven Rs" - right product, right quantity, right condition, right place, right time, right customer, right cost - is the most comprehensive and inclusive definition of logistics. The other options are either specific organizations (Council of Logistics Management, Society of Logistic Engineers) or focused on a specific aspect of logistics (supply chain logistics).

Question 12

The mathematical calculation of the point of equality between systems under analysis is used for short-run/static analysis.

Accepted Answer

The answer of The mathematical calculation of the point of...

Question 13

An aircraft manufacturer is a good example of an organization with a heavy inbound flow and a simple outbound flow.

Accepted Answer

Aircraft manufacturers require a large number of complex components and materials from various suppliers (heavy inbound flow) to build aircraft, but once assembled, the finished aircraft is delivered to a relatively small number of customers (simple outbound flow).

Question 14

Logistics is the process of anticipating customer needs and wants; acquiring the capital, materials, people, technologies, and information necessary to meet those needs and wants; optimizing the goods- or service-producing network to fulfill customer requests; and utilizing the network to fulfill customer requests in a timely manner. This is a

Accepted Answer

This is a general definition of logistics, encompassing various aspects of the logistics process without being specific to any particular organization's definition.

Question 15

Acme Battery distributes its batteries to warehouses, where they are stored until ordered by a retailer. The warehouses are located close by the retail markets served. This is the logistics channel approach to logistics.

Accepted Answer

The statement correctly describes the logistics channel approach to logistics, where products are kept in strategically located warehouses in order to facilitate quick delivery to retailers in nearby markets.

Question 16

Time utility depends on

Accepted Answer

Time utility refers to having the product available when the user wants it. Therefore, the best choice is D. The other options may play a role in overall logistics and supply chain management, but they do not directly impact time utility.

Question 17

Marketers have begun to recognize the strategic value of place in the marketing mix, as well as the benefits resulting from high-quality logistical services. As a result, which has been recognized as the interface activity between marketing and logistics?

Accepted Answer

Customer service has been recognized as the interface activity between marketing and logistics, as it involves providing support to customers throughout the supply chain and can significantly impact customer satisfaction and loyalty.

Question 18

What is often the largest component of logistics costs?

Accepted Answer

Transportation costs are often the largest component of logistics costs, due to the expenses associated with moving goods from one location to another. Other logistics costs, such as inventory costs and administrative costs, may also be significant but are usually subordinate to transportation costs. Shipper-related costs can also be a factor, but they are not usually as substantial as transportation costs.

Question 19

Logistics creates which utility through production forecasting, production scheduling and inventory control?

Accepted Answer

The answer of Logistics creates which utility through production forecasting,...

Question 20

The utility that is created by moving goods from production points to market points where demand exists is referred to as:

Accepted Answer

The utility created by moving goods to market points where demand exists is referred to as place utility. This includes all activities involved in getting products to the right location, such as transportation, warehousing, and distribution.

Quiz 2: Role of Logistics in Supply Chains