Question 1

As the number of warehouses used by a company in a market area increases, the system is said to become

Accepted Answer

As the number of warehouses increases, the system becomes more decentralized. This is because there are now multiple locations where goods can be stored and distributed, instead of all operations being centralized in one or a few locations.

Question 2

The relationship between the number of warehouses, system inventories, and customer service is referred to as _______.

Accepted Answer

The relationship between the number of warehouses, system inventories, and customer service is referred to as risk pooling. This concept involves consolidating inventory across multiple locations to reduce the impact of demand variability and minimize stockouts. This allows companies to offer better customer service by ensuring that products are available when customers need them.

Question 3

Increasing the number of warehouses should, according to the square root rule, have what effect on the total inventory in the system?

Accepted Answer

According to the square root rule, increasing the number of warehouses leads to an increase in total inventory in the system.

Question 4

Containerships that allow vehicles to drive directly on and off the ship are referred to as _______.

Accepted Answer

Containerships that allow vehicles to drive directly on and off the ship are referred to as Roll-On/Roll-Off (RORO) vessels. Therefore, option A is the correct answer. Option B, RRs, and option D, RORRs, do not exist as valid terms in the shipping industry. Option C, ROOs, is not a commonly used term and is not specific to the type of vessel described in the question.

Question 5

Piggyback service is also referred to as _______.

Accepted Answer

COFC stands for Container on Flat Car service, which is a form of intermodal transportation where freight containers are transported via rail on flat cars.

Question 6

The safeguarding of transportation systems is referred to by the term _______.

Accepted Answer

The term used for the protection of transportation systems is transportation security.

Question 7

A company currently maintains 12 warehouses with a stock of 6,000 units per warehouse. If the company centralizes their warehouses and uses 8 warehouses, what is the estimated stock in the proposed system?

Accepted Answer

The total stock in the current system is 12 * 6,000 = 72,000 units. If the company centralizes their warehouses and uses 8 warehouses, the estimated stock in the proposed system would be 72,000 / 8 = 9,000 units per warehouse. Therefore, the estimated total stock in the proposed system would be 9,000 * 8 = 72,000 units.

Question 8

A typical container is how long?

Accepted Answer

A typical container is commonly known as a Twenty-foot Equivalent Unit (TEU), which is typically 20 feet long.

Question 9

A for-profit organization might run what kind of warehouse to provide services to other companies?

Accepted Answer

A public warehouse is operated as an independent business offering storage and related services to multiple clients, typically on a short-term basis.

Question 10

Which of the following items/products would most likely be transported by pipeline?

Accepted Answer

Oil is commonly transported by pipelines as it is the safest and most efficient method of transportation for this particular product. Component parts and containers are typically transported by trucks, trains, or cargo ships while grain is commonly transported by trucks or trains.

Question 11

A public warehouse may provide the following services EXCEPT this:

Accepted Answer

Public warehouses typically do not offer returns refurbishment services as this would involve repairing or modifying a specific product, which is typically not within the scope of their operations. The other options listed are all common services provided by public warehouses.

Question 12

The receipt of bulk shipments which are then broken down and repackaged into outgoing orders in a warehouse is referred to as _______.

Accepted Answer

Crossdocking involves receiving bulk shipments and then immediately sorting and transferring the products to outgoing shipments without the need for long-term storage or repackaging. This helps to increase efficiency and reduce handling costs.

Question 13

Valuable documents are most likely to be shipped by which transportation mode?

Accepted Answer

Air transportation mode is typically the safest and quickest option for shipping valuable documents due to its speed and security measures in place, such as x-raying and metal detectors.

Question 14

Reducing the number of warehouses should, according to the square root rule, have what effect on the total inventory in the system?

Accepted Answer

According to the square root rule, reducing the number of warehouses should result in a decrease in the total inventory in the system. This is because as the number of warehouses decreases, the safety stock required also decreases, leading to a decrease in total inventory levels.

Question 15

The rule to estimate the effect of risk pooling is referred to as the _______.

Accepted Answer

The rule to estimate the effect of risk pooling is referred to as the square root rule. This rule states that the standard deviation of the total losses decreases as the number of individuals or risks in the pool increases, and it decreases at a rate proportionate to the square root of the number of risks.

Question 16

Bulk goods (grain, etc.) would most likely to be shipped by which transportation mode?

Accepted Answer

Rail transport is the most efficient mode of transportation for bulk goods such as grain due to its high carrying capacity and lower cost per ton. It also has the advantage of being able to transport goods over long distances. Pipeline transport is mostly used for liquids or gases, while air and motor carrier transport are generally more expensive and less efficient for shipping bulk goods.

Question 17

A typical capacity for an oil supertanker would be approximately?

Accepted Answer

A typical capacity for an oil supertanker is around 2,000,000 barrels. Option A and B have lower capacities and option D is an extremely high capacity which is not realistic for most supertankers.

Question 18

A company currently maintains 10 warehouses with a stock of 1,000 units per warehouse. If the company centralizes their warehouses and uses 5 warehouses, what is the estimated stock in the proposed system?

Accepted Answer

The total stock in the current system is 10 warehouses x 1,000 units per warehouse = 10,000 units.
If the company centralizes their warehouses and uses only 5 warehouses, the estimated stock would be 5 warehouses x 1,414 units per warehouse (the square root of 10,000 divided by 5) = 7,072 units. Therefore, the answer is B.

Question 19

Decentralized warehousing systems result in all of the following EXCEPT this:

Accepted Answer

Decentralized warehousing systems typically lead to increased inventory costs due to the need to hold stock in multiple locations, rather than decreasing them.

Question 20

Warehouses are typically used for all of the following activities EXCEPT this:

Accepted Answer

Warehouses are used for storing and managing inventory, performing breakbulk activities (dividing large shipments into smaller ones), performing assembly activities, and temporarily storing products before they are shipped to customers. While some warehouses may process raw materials, this is not a typical function of warehouses. Raw material processing is usually done in factories or manufacturing plants.

Quiz 15: Location, Logistics, and Product Returns