Question 1

Long-term assets have a useful life of more than two years.

Accepted Answer

The answer of Long-term assets have a useful life of...

Question 2

A reduction in inventory would increase inventory turnover, which means an increase in that organization's return on assets (ROA).

Accepted Answer

A higher inventory turnover ratio indicates that the inventory is being sold and replaced more frequently. This can lead to a better utilization of assets and higher returns, resulting in an increase in ROA.

Question 3

A common measure of organizational financial success is return on investment.

Accepted Answer

Return on investment (ROI) is a widely used metric to evaluate the financial performance and efficiency of an investment, reflecting the profitability relative to its cost.

Question 4

Marketing goals in areas such as product availability, desired customer service levels, and packaging design have limited influence on logistics decisions.

Accepted Answer

Marketing goals in areas such as product availability, desired customer service levels, and packaging design have a significant influence on logistics decisions. Logistics decisions need to align with marketing goals to ensure that products are available to customers, customer service levels are met, and packaging design meets customer preferences.

Question 5

The balance sheet reflects the assets, liabilities, and costs of goods sold at a given point in time.

Accepted Answer

The balance sheet reflects the assets, liabilities, and equity of a company at a given point in time, not the costs of goods sold.

Question 6

An understanding of financial terminology can help logisticians to manage logistical activities to improve their company's financial performance.

Accepted Answer

Understanding financial terminology can help logisticians to make informed decisions regarding cost management, budgeting, pricing strategies, and forecasting. This can ultimately lead to improved financial performance for their company.

Question 7

The primary influence of logistics activities on sales would be through the improvement of customer service.

Accepted Answer

Logistics activities, such as efficient transportation and timely delivery, can enhance customer satisfaction and loyalty, leading to increased sales and revenue. Additionally, effective logistics management can help to ensure that inventory levels are optimized, minimizing stock-outs and ensuring that products are available when and where customers need them.

Question 8

A process strategy refers to management of logistics activities across business units with a focus on reducing complexity for customers.

Accepted Answer

A process strategy refers to an organization's approach to transforming resources into goods and services. It involves the choice of technology, the flow of materials, and the use of resources to achieve the organization's objectives, rather than specifically focusing on logistics activities or reducing complexity for customers.

Question 9

With respect to net profit margin, the most relevant categories for logistics managers to consider are sales, costs of goods sold, and asset turnover.

Accepted Answer

Net profit margin is primarily concerned with sales and costs of goods sold, but asset turnover is more relevant to efficiency and operational performance, not directly to net profit margin calculation.

Question 10

Return on assets equals net profit margin times asset turnover.

Accepted Answer

Return on assets (ROA) is calculated by multiplying net profit margin by asset turnover, as it measures how efficiently a company uses its assets to generate profit.

Question 11

In general, the income statement measures the profitability of the products and/or service provided by a company.

Accepted Answer

The income statement shows the revenue generated by a company and deducts all expenses to arrive at the net income or loss. This reflects the profitability of the company's products or services.

Question 12

Asset turnover is computed by dividing return on assets by total assets.

Accepted Answer

Asset turnover is calculated by dividing sales or revenue by total assets, not return on assets.

Question 13

With respect to asset turnover, inventory is typically the most relevant logistics asset.

Accepted Answer

Inventory is a critical logistics asset that can significantly impact asset turnover as it represents a significant investment for many companies. Effective inventory management can help improve asset turnover and other key performance indicators such as profitability and cash flow.

Question 14

The balanced scorecard provides the framework for conducting return on assets analysis by incorporating revenues and expenses to generate net profit margin, as well as inclusion of assets to measure asset turnover.

Accepted Answer

The balanced scorecard is a strategic management tool that focuses on performance metrics across four perspectives: financial, customer, internal processes, and learning and growth, rather than specifically conducting return on assets analysis.

Question 15

The current ratio is calculated by dividing total current liabilities by total current assets.

Accepted Answer

The current ratio is calculated by dividing total current assets by total current liabilities.

Question 16

Operationally, net profit margin is net profit divided by cost of goods sold.

Accepted Answer

Net profit margin is calculated by dividing net profit by total revenue, not cost of goods sold.

Question 17

The income statement is the same thing as the balance sheet.

Accepted Answer

The income statement and the balance sheet are two separate financial statements that report different aspects of a company's financial performance. The income statement shows a company's revenue, expenses, and net income over a specific period of time, while the balance sheet shows a company's assets, liabilities, and shareholders' equity at a specific point in time.

Question 18

Superior logistics service can have a positive influence on an organization's financial performance.

Accepted Answer

Superior logistics service can help an organization reduce costs, improve customer satisfaction, and increase productivity, all of which can have a positive impact on financial performance.

Question 19

Research indicates a positive benefit to aligning functional strategies such as marketing or logistics with the overall corporate strategy.

Accepted Answer

Aligning functional strategies with the overall corporate strategy can lead to better coordination, improved performance, and increased profitability. It ensures that all departments are working towards the same goals and objectives, which ultimately benefits the organization as a whole. Research has consistently shown the positive impact of strategy alignment on business success.

Question 20

Owners' equity is the difference between what a company owns and what it owes at any particular point in time.

Accepted Answer

Owners' equity represents the residual interest in the assets of the company after deducting liabilities. It is calculated as the difference between total assets and total liabilities.

Quiz 3: Strategic and Financial Logistics