Question 1

General commodity carriers usually specialize in either truckload (TL) or less-than-truckload (LTL) operations. Truckload shipments are defined by the ICC as loads in excess of 10,000 pounds. Currently, there are more than 40,000 small truckload carriers. These companies have been typically _____________.

Accepted Answer

The passage mentions that small truckload carriers, of which there are over 40,000, are typically low-cost. Additionally, they are described as nonunion. Therefore, the best choice is B) low-cost and nonunion.

Question 2

_________ means that the title to the merchandise passes at the time and place of pick up.

Accepted Answer

F.O.B. origin means that the title to the merchandise passes from the seller to the buyer at the time and place of pick up, which is usually the seller's location. This means that the buyer bears the risk of loss or damage during transit and is responsible for all transportation costs. In contrast, F.O.B. destination means that the title to the merchandise does not pass until the goods are delivered to the buyer's location.

Question 3

eregulation has allowed the railroad carriers to integrate into ________________.

Accepted Answer

Eregulation has allowed the railroad carriers to integrate into other modes of transportation. This means that they can connect and coordinate with other forms of transportation, such as trucks or ships, to offer more comprehensive services for their customers.

Question 4

__________________ means that there is a shipper's prepayment portion of the freight and the consignee is responsible for the balance of the payment.

Accepted Answer

Prepaid/collect beyond means that the shipper has already prepaid a portion of the freight charges, but the consignee is responsible for paying the remainder of the charges upon delivery. This is also known as "collect on delivery beyond prepaid."

Question 5

ach of the (transportation) modes has specific operating and cost characteristics and the buying professional must weigh them in selecting the most appropriate transportation mode. The most basic selection decision is the trade-off between _______________.

Accepted Answer

The most basic selection decision in transportation involves a trade-off between cost, reliability, and speed, as these are the primary factors that influence the choice of transportation mode.

Question 6

____________ is often the most costly and time-consuming component of purchasing management.

Accepted Answer

Transportation often represents a significant portion of the costs and time involved in the management of purchasing, due to the complexities of shipping, handling, and logistics.

Question 7

Shipping documentation such as the ___________ must be prepared. This serves as the basic contract between the carrier and shipper and specifies the commodities and quantities shipped, routing, rates, and carrier liability.

Accepted Answer

The bill of lading serves as the basic contract between the carrier and shipper and specifies the commodities and quantities shipped, routing, rates, and carrier liability. A freight bill is a document sent by a carrier to a shipper, detailing the charges for transportation of goods, and an invoice is a bill for goods or services provided. A purchase order is a document issued by a buyer to a seller, indicating the types, quantities, and agreed prices for products or services. A bill of trucking is not a commonly used shipping document.

Question 8

_____________ the trucking industry has dramatically changed not only the outcome of the industry but also how it operates.

Accepted Answer

Federal deregulation of the trucking industry in 1980 drastically changed the industry by removing government control over routes, pricing, and entry into the industry. This led to increased competition, lower prices, and more efficient operations, ultimately transforming the entire industry.

Question 9

In many cases, most Fortune 500 firms use a variety of transportation modes depending on their aggregate transportation needs. The "model split" is usually determined by cost pressures, the packaging, the final shipment destination, and competitive trucking firms.

Accepted Answer

The answer of In many cases, most Fortune 500 firms...

Question 10

___________ convey the freight terms and act both as a contract for carriage and a receipt for delivery.

Accepted Answer

Bills of lading are legal documents that specify the terms and conditions of shipment, including the type and quantity of goods being shipped, the destination, and the freight charges. They act as a contract of carriage between the shipper and the carrier and serve as a receipt for the delivery of goods at the destination. A bill of lading is issued by the carrier or the carrier's agent and is usually required to be presented at the destination before the consignee can take delivery of the goods.

Question 11

s the size of a shipment increases, the transportation charge per unit of weight will fall. To take advantage of these rate economies, the carrier should attempt to consolidate shipments. Instead of shipping each day, the shipments are accumulated for several days and then shipped.

Accepted Answer

The answer of s the size of a shipment increases,...

Question 12

The initial (transportation) decision requires the ________ firm to select the appropriate shipment mode.

Accepted Answer

The answer of The initial (transportation) decision requires the ________...

Question 13

____________ establishes that neither the consignor nor the consignee owns the payment process function.

Accepted Answer

Third-party refers to a situation in which an independent entity other than the consignor or consignee manages the payment process. This ensures that there is no bias from either party and ensures fairness in the transaction.

Question 14

The legal payment function may or may not belong to the third party. The obligation is determined from the parties indicated on the __________. Unless the payment party is a party to the ______________, it has no responsibility for payment and no legal obligation.

Accepted Answer

The answer of The legal payment function may or may...

Question 15

___________ involves facilitating the movements of raw materials and component parts from suppliers through the firm's manufacturing process to the ultimate customers.

Accepted Answer

The term that best describes the process described in the question is "Transportation." This involves the movement of materials and parts from the suppliers to the manufacturer and then to the end customers. The other choices, such as production, processing, production management, and process management, have a different focus and do not encompass the entire logistics process.

Question 16

The ____________ is composed of a large number of for-hire and private carriers. The for-hire category includes both regulated carriers and non-regulated carriers.

Accepted Answer

The trucking industry is composed of a large number of for-hire carriers (regulated and non-regulated) as well as private carriers.

Question 17

Rail transportation is generally less expensive than air and truck modes. Rail cargo is usually shipped from terminal to terminal; therefore, flexibility is not an attribute.

Accepted Answer

Rail transportation is known for being a cost-effective shipping option. However, unlike truck or air transportation, rail cargo is not typically known for its flexibility because it is often shipped from terminal to terminal.

Question 18

nother special ICC category is the parcel delivery service and limited shipment size category. _________ is the largest carrier in this sector.

Accepted Answer

UPS is widely recognized as one of the largest carriers in the parcel delivery service sector globally.

Question 19

____________ means that the shipper advances the charges to the carrier and then bills the beneficiary an amount that approximates or equals the actual freight charges.

Accepted Answer

"Prepay and add" means that the shipper pre-pays the freight charges to the carrier and adds an estimated amount to the invoice. This approximate amount is later adjusted according to the actual charges incurred during transportation.

Question 20

___________ means that the title to the merchandise passes at the time and place of delivery.

Accepted Answer

F.O.B. destination means that title to the merchandise passes to the buyer when the goods are delivered to the buyer's location, whereas F.O.B. origin means that title passes to the buyer when the goods are loaded onto the carrier.

Quiz 15: Purchasing Transportation Services