Deck 1: Certification in Logistics, Transportation and Distribution

Question 1

A third-party logistics (3PL) provider is seeking to market its value-added warehousing services to international shippers. These services refer to activities such as:

A) selecting the best location in the warehouse for storage and retrieval.
B) total warehousing cost minimization on equipment, maintenance, and labor.
C) customization services like packaging, labeling, kitting, and setting up displays.
D) improving overall quality measured by ad-hoc metrics according to international standards.

Answer 1

C

Question 2

When importing goods such as fruit and produce into the United States (U.S.), which government agency is responsible for protecting agriculture from harmful pests and diseases?

A) Food Safety and Inspection Service (FSIS)
B) Food and Drug and Administration (FDA)
C) U.S. Customs and Border Protection (CBP)
D) Farm Service Agency (FSA)

Answer 2

C

Question 3

Which of the following categories is a weakness of the rail systems?

A) Safety records
B) Inflexible infrastructures
C) Effects of the weather
D) Routes from city centers

Answer 3

D

Question 4

In addition to declaring the origin of goods, a certificate of origin is used to determine the:

A) export declaration
B) cost of transportation
C) standard cost
D) applied tariff

Question 5

An operations manager in concerned that the order-to-cash cycle for their largest customer is too long. The manager is referring to the time that elapses from when the company receives an order from the customer until the:

A) customer processes payment.
B) warehouse in notified to ship the goods.
C) customer receives that order in inventory.
D) company receives payment.

Question 6

Climate-controlled warehouses are typically used:

A) to assure operators can work in the best conditions.
B) for storage of food items such as pasta and sugar.
C) for storage of raw material used in aerospace industry.
D) for storage of certain agricultural and medical products.

Question 7

Which of the following factors would be considered of strategic importance to a firm's logistics function?

A) A firm operates in a competitive oligopoly
B) Total cost of production
C) Production lead time
D) Order cycle time

Question 8

A carrier's casts are driven by equipment movement rather than shipment weight. Which of the following rates would be most appropriate for the carrier to utilize in charging its customers?

A) Incentive rates
B) Any-quantity rates
C) Freight all kind (FAK) rates
D) Per-car and per-truckload rates

Question 9

When determining the optimal logistics terminal location, one of the primary goals is to minimize:

A) peddle time
B) stem miles
C) the number of pick-up locations
D) the size of customer shipments

Question 10

A pharmaceutical company makes drugs that control the spread of the influenza virus after outbreaks occur. Deployment to outbreak areas requires a transportation mode that is fast and provides door-to-door connectivity. Which of the following modes of transportation should the company choose?

A) Intermodal
B) Truck
C) Drone
D) Air

Question 11

Which of the following shipment modes in the most prone to packaging and product damage?

A) Air
B) Truck
C) Water
D) Rail

Question 12

A company setting up a warehouse wants to maintain a first in, first out (FIFO) stock rotation. Which of the following storage systems should they utilize?

A) Pallet racking
B) Block stacking
C) Flow racking
D) Push-back racking

Question 13

A firm offers their customers shorter order cycle times and increased product variety. Generally, this action would have which of the following impacts on total logistics costs?

A) Increases total logistics costs
B) Reduces total logistics costs
C) Has no impact on total logistics costs
D) Only affects service levels, not costs

Question 14

Which of the following inventory ordering techniques would a company's corporate warehouse utilize if it is interested in meeting both the quantity and timing requirements of demand from its regional warehouses?

A) Distribution requirements planning (DRP)
B) Fixed order quantity/variable cycle
C) Periodic review
D) Kanban

Question 15

Consignment inventory requires that manufacturers:

A) deliver their products to the consumer and payment from consumers is based on supply.
B) stock their products on retail stores shelves and payment from consumers is based on forecast.
C) deliver their products to the consumer and wait for payment until consumers requires to refill stock level.
D) stock their products on retail stores shelves and wait for payment until consumers purchase the product.

Question 16

Under what circumstances should management generally consider utilizing qualitative forecasting techniques?

A) When real-time data flow is available
B) When historic data is both clear and relatively stable
C) When developing strategic-level forecasts
D) When demand is dependent on bill of material (BOM) calculations

Question 17

Which of the following statements represents the primary function of inventory?

A) Make products available while minimizing total carrying cost
B) Realize economies of scale while minimizing total carrying cost
C) Reduce ordering cost while minimizing total carrying cost
D) Buffer against delivery time while minimizing total carrying cost

Question 18

A customer is looking to purchase product from a company. Which of the following outputs of outbound order management would the customer consider primary?

A) Order cycle time
B) Logistics operations responsiveness
C) Postsale logistics support
D) Product availability

Question 19

Which of the following lean tools would a warehouse team use to document, analyze, and improve the flow of information and materials to customers?

A) Lean six sigma
B) Kaizen
C) Value stream mapping
D) Five S methodology

Question 20

From a health and safety perspective, which of the following sets of parameters must be taken into account when considering manual material handling?

A) Task, working environment, equipment, and individual capacity
B) Task, load, layout, and equipment
C) Layout, load, working environment, and individual capacity
D) Task, load, working environment, and individual capacity

Question 21

A supply chain manager is revising their organization's supply chain strategy with a greater emphasis on collaborative supply chain relationships. Which of the following barriers poses the greatest impediment to implementing their new strategy?

A) Internal operational silos
B) Vendor language and time zone differences
C) Transportation carrier's system limitations
D) Enterprise resource planning (ERP) complexity

Question 22

In a retail firm's implementation of vendor-managed inventory (VMI), what trading partners are responsible for setting target inventory levels and making restocking decisions?

A) Retail consumers and vendors
B) Retailer and its suppliers
C) Retailer and its buyers
D) Retail consumers and retailers

Question 23

An organization concentrating its efforts on meeting the internal performance standards related to availability, operational performance, and reliability has focused on which of the following aspects of the customer relationship?

A) Customer service
B) Customer satisfaction
C) Customer loyalty
D) Customer success

Question 24

In the economic utility function of logistics, logistics adds:

A) form and time utilities to products, while other activities add place and possession utilities.
B) possession and place utilities to products, while other activities add form and possession utilities.
C) place and time utilities to products, while other activities add form and possession utilities.
D) possession and form utilities to products, while other activities add time and place utilities.

Question 25

Given the data below, calculate the reorder point (ROP). Average daily demand = 30 units/day Lead time = 4 days Safety stock = 20

A) 30 units
B) 8 units
C) 120 units
D) 140 units

Question 26

A carrier receives damaged goods. What actions best describes what the carrier should do so that it is not liable for the damages?

A) Rewrite the bill of lading (B\L).
B) Make exception note on B\L from clean to uniform.
C) Make an exception note on B\L from clean to soiled.
D) Reject the B\L.

Question 27

An ocean carrier's goal of maximizing total revenue of the entire ship by offering very competitive rates that cover their variable costs and then increasing rates according to what the traffic will bear is referred to as:

A) any-quantity service rate
B) value of service rate
C) limited service rate
D) incentive rate

Question 28

Random stocking can be greatly improved through the use of a(n):

A) advanced planning system (APS).
B) inventory management system (IMS)
C) transportation management system (TMS).
D) warehouse management system (WMS).

Question 29

A corporation is projecting annual sales at $35 million, cost of goods sold (COGS) at $25 million, and administrative expenses at $3 million. In order to meet its corporate inventory turns goal of 5.0, their inventory level must average:

A) $4.4 million
B) $5 million
C) $7 million
D) $7.6 million.

Question 30

A corporation is redesigning its warehouse and has decided to use a rack system that allows each level to be accesses individually by placing pallets on wheeled frames. The rack system that best meets this criteria is:

A) flow-through
B) push-back
C) drive-in
D) double-deep

Question 31

A non-profit transportation membership cooperative that arranges for the domestic or international shipment of member's cargo over any mode of transportation is known as a(n):

A) freight bureau.
B) freight broker association.
C) shipper's association.
D) integrated service provider.

Question 32

A tracking company picks up a shipment and takes it to a terminal where it is consolidated with over shipments going to the same city. This trucking company is most likely a:

A) truckload (TL) carrier
B) milk run provider
C) less-than-truckload (LTL) carrier
D) private fleet carrier

Question 33

When a company decides not to purchase insurance to cover a risk, it is pursuing what type of risk strategy?

A) Retention
B) Transfer
C) Mixed
D) Mitigation

Question 34

Which of the following statements best reflects the intent of a shipper and a carrier who are negotiating a contract utilizing the integrative bargaining technique?

A) The shipper is integrating its shipping needs and the carrier is integrating its market power to achieve better contract terms individually.
B) The shipper and the carrier are attempting to understand each other's needs to create mutually beneficial contract terms.
C) The shipper and the carrier are making an integrated effort to make extreme demands followed up by small, slow concessions.
D) The shipper and the carrier are in direct conflict with each other's goals and are attempting to take advantage of each other.

Question 35

Selecting a third-party logistics (3PL) or fourth-party logistics (4PL) provider is an example of a(n):

A) strategic alliance
B) joint venture
C) acquisition
D) internal function

Question 36

Which of the following costs are the most intangible and subjective of all the carrying cost elements?

A) Risk cost
B) Storage cost
C) Service cost
D) Capital cost

Question 37

A manufacturer must consider the long-term effects of its products' impact on the environment. A key product design consideration is:

A) routing and scheduling
B) material handling
C) facility planning
D) packaging options

Question 38

Which of the following prerequisites is essential in order to establish an effective order management system?

A) An ability to reserve inventory and determine a delivery date
B) An ability to understand customer needs
C) An ability to plan and build loads
D) An ability to receive, enter, and validate an orders

Question 39

According to the Theory of Comparative Advantage, which of the following reasons justifies a country to export a product?

A) The exporting country produces the product utilizing less labor than other countries.
B) The exporting country's wage rate in producing the good is lower than in other countries.
C) The exporting country's productivity is higher in producing the good than the productivity of other countries.
D) The exporting country's cost of producing the good, relative to other goods, is at least as low as in other countries.

Question 40

A company's distribution center receives material from a number of sources and combines them into exact quantities for a specific destination. Which of the following functions is the distribution center providing?

A) Cross-docking
B) Consolidation
C) Break-bulk
D) Integration

Question 41

Which of the following measures would a company use in attempting to improve its customer service dimension of dependability?

A) Order cycle time
B) Inquiry response time
C) On-time delivery
D) Order agility

Question 42

A developing country would like to improve its trade relations with Europe by updating its port infrastructure. Which international organization would help fund the project?

A) the bank for International Settlements
B) The World bank
C) The Central bank
D) The International Monetary Fund

Question 43

The international commercial document that serves as a quote to obtain a letter of credit or an import license is called a(n):

A) commercial invoice
B) pro forma invoice
C) export license
D) consular invoice

Question 44

Which of the following outcomes of warehouse operations is the most critical in designing a warehouse?

A) Optimizing product flow
B) Minimizing warehousing cost
C) Increasing inventory counting
D) Maximizing automation

Question 45

A document that serves as a contract, a receipt, and a certificate of title in an international transaction is known as a:

A) certificate of origin
B) manifest
C) packing list
D) bill of lading (B\L)

Question 46

A vessel operating under the threat of piracy or hostile military action is protected by the:

A) United Nations (UN) military forces.
B) country closest to the vessel at the time of attack.
C) shipping company registry.
D) naval forces of the flag of registry.

Question 47

A logistic team has developed new packaging for their best-selling product that reduces the packaging costs by 60% and the overall package size by 25%. The material can no longer be stacked on pallets and must be shipped and stored in non-stackable, returnable plastic bins. Which of the following statements bests represents the potential trade-offs of implementing this change?

A) Higher labor costs, improved customer service, and no change in warehouse costs
B) Higher labor costs, increase in warehouse costs, and an increase in transportation costs
C) Improved customer service, increase in warehouse storage costs, and a decrease in transportation costs
D) Decrease in warehouse costs, increase in transportation costs, and no change in customer service

Question 48

Excluding cost, which of the following sets of criteria describes the primary drivers for transportation mode selection?

A) Capacity, transit time, reliability, safety, and supply chain security participation
B) Accessibility, capacity, transit time, reliability, and financial stability
C) Accessibility, capacity, transit time, reliability, and safety
D) Capacity, transit time, safety, supply chain security participation, and availability

Question 49

Which of the following activities best describes the functionality of decoupling stock within firms' inventory systems?

A) Separation of the manufacturing process from order processing
B) Separation of the manufacturing process from the selling process.
C) Maintaining inventory to accommodate uncertainty in demand at different geographical positions.
D) Maintaining inventory at a central location for all stages of the value-creation process.

Question 50

A supply chain manager would like to guard against potential shortage in their company's manufacturing capacity. Which of the following areas of supply chain risk should the manager pay most attention to?

A) Technical
B) Demand
C) Process
D) Financial

Question 51

Higher throughput operations enable private warehouses to:

A) spread out variable costs over large output volumes
B) spread out fixed costs over large output volumes.
C) allocate total unit costs on the basis of traffic volume.
D) accomplish better facility utilization with declining overheads.

Question 52

What is the primary value-added service that a company would receive from using land-bridge services?

A) Reduced risk
B) Reduced transit time
C) Increased reliability
D) Increased capacity

Question 53

A company has prioritized A, B, and C, filling orders in that sequence. What are the impact to customer service levels for customers B and C?

A) 100% service levels for B and C
B) Customer B has higher service level
C) Customer C has higher service level
D) Customer B and C have the same service level

Question 54

Which of the following modes of transportation is characterized as having the highest fixed cost and lowest variable cost?

A) Air
B) Water
C) Rail
D) Pipeline

Question 55

Which of the following terms of payment should an international purchasing manager use to guarantee that the shipment is made and the shipper gets paid for their product?

A) Letter of credit
B) Open account
C) Sight draft
D) Cash in advance

Question 56

Which of the following forms of supply chain risk is considered the most disruptive?

A) Supply
B) Process
C) Finance
D) Environment

Question 57

A company would like to encourage shippers to partner on sustainability initiatives. Which of the following rates would best meet this objective?

A) Density
B) Incentive
C) Differential
D) Blanket

Question 58

A planning process specifically designed to balance demand and supply within an organization and arrive at a consensus forecast is known as:

A) advanced planning and scheduling (APS).
B) collaborative planning, forecasting, and replenishment (CPFR).
C) sales and operations planning (S&OP).
D) distribution requirements planning (DRP).

Question 59

Procurement professional are focused on the total cost of ownership (TCO) in their vendor selection strategies. This implies that:

A) procurement is now increasingly charged with pushing back inventory to vendors.
B) there is increased consideration of trade-offs among purchase price, quality, and vendor capability.
C) procurement is decreasing its emphasis on the importance of vendor certification and audit programs.
D) there is increased emphasis on procuring at the lowest purchase price possible.

Question 60

A company would like to implement a strategic initiative of enhancing its reverse logistics process. Which of the following statements best describes the profitability impact of such a strategy?

A) More profits due to higher return rate of customers
B) More profits due to larger volume of returned products
C) Less profits due to increase in investment costs
D) Less profits due to negative impact on brand image

Question 61

Which of the following groups was formed for the purpose of eliminating the trade barriers among its members?

A) United nations (UN)
B) European Union (EU)
C) Organization of Petroleum Exporting Countries (OPEC)
D) North Atlantic Treaty Organization (NATO)

Question 62

Which of the following terms refer to the contract leasing of an airplane where only the equipment, maintenance, and insurance are include?

A) Wet lease
B) Dry lease
C) Damp lease
D) ACMI lease

Question 63

A company is considering implementing collaborative planning, forecasting, and replenishment (CPFR). Which of the following statements best reflects one of the objectives of CPFR?

A) It represents a sequence of business processes between consumers and retailers.
B) It replaces traditional forecasting methods with a shared single forecast among trading partners.
C) It represents a sequence of business processes within the manufacturing environment.
D) It replaces traditional inventory management procedures with a vendor-managed (VMI) system.

Question 64

A company wishes to ship large quantities via ocean freight, utilizing the entire vessel capacity. The most appropriate contract of carriage to use a:

A) bill of loading (B/L).
B) wet lease.
C) charter party.
D) letter of credit.

Question 65

A company has a line haul cost between Point A and Point B of $5 per mile. The distance between the two points is 750 miles. What is the cost per hundredweight (cwt) for a shipment weighing 45,000 pounds?

A) $0.12
B) $5.00
C) $8.33
D) $9.00

Question 66

A company would like to eliminate unnecessary returns and/or minimize handling. It designs a process to check and screen merchandise at the entry point into the organization. This is an example of:

A) defect reduction
B) avoidance
C) gatekeeping
D) asset recovery

Question 67

A logistics manager is developing a supply chain risk management plan incorporating contingency plans for alternatives to transport failures. Which of the following factors best represents this approach?

A) Avoidance
B) Acceptance
C) Mitigation
D) Redundancy

Question 68

The allocation of revenues and costs to customer segments or individual customers in order to estimate segment value is known as:

A) customer relationship management (CRM).
B) customer profitability analysis.
C) customer service analysis.
D) customer standardization analysis.

Question 69

The scope of logistics includes transportation:

A) order processing, inventory carrying costs, and production output.
B) inventory carrying costs, warehousing, and cost management.
C) manufacturing, customer accommodation, and purchasing.
D) inventory carrying costs, order processing, and warehousing.

Question 70

Net advantages gained by the sharing of common locations by similar enterprises is based on which of the following terms?

A) Agglomeration
B) Lowest cost
C) Differentiation
D) Free market

Question 71

A transportation manager is interested in selecting the optimal mode of transportation based on 3 key criteria: speed, availability, and dependability. Which of the following modes best meets the criteria?

A) Truck and rail
B) truck and air
C) Air and rail
D) Air and ocean

Question 72

A company is sending a shipment to its customer in Italy. It elects to pay the freight and be responsible for any liability and damage claims. Which of the following free on board (FOB) terms is the company using?

A) FOB destination, freight collect
B) FOB destination, freight prepaid
C) FOB origin, freight prepaid
D) FOB origin, freight collect

Question 73

A major retailer has informed a product manufacturer that they must take back all of their dunnage. The manufacturer's major decision in implementing reverse logistics will most likely be to:

A) manage the process internally or outsource to a third party.
B) take back the dunnage or tell the retailer to destroy it all.
C) reduce packaging materials to save money but risk more damage.
D) increase the selling price to the retailer to cover increased costs.

Question 74

Which of the following factors would be the greatest challenge for a firm planning to ship goods internationally by truck?

A) Variable cost of fuel
B) Unpredictable weather and climate
C) Variations in road conditions
D) Complex rules and regulations

Question 75

The surcharge applied by shipping lines to sea freight to offset adverse variation in fuel cost is called:

A) repositioning charge
B) peak season surcharge
C) currency adjustment factor
D) bunker adjustment factor

Question 76

Compared to a centralized distribution network strategy, an organization using a decentralized distribution network strategy can usually expect:

A) lower cost of lost sales and higher inventory cost
B) higher cost of lost sales and higher inventory cost.
C) lower cost of transportation and lower warehousing cost.
D) higher cost of transportation and lower warehousing cost.

Question 77

According to the SCOR model, the five major categories of metrics that should be used to measure the performance of Process D1: Deliver Stocked Product include assets, costs, flexibility:

A) reliability, and responsiveness
B) capability, and responsiveness
C) reliability, and capability
D) reliability, and availability

Question 78

A company receives automobile parts from global manufactures into its distribution center before redeploying the parts to local retail outlets. Which of the following documents can be used to proactively plan for the redeployment of the parts?

A) Bill of lading (B\L)
B) Advance ship notice (ASN)
C) Routing guide
D) Shipment manifest

Question 79

A company finds itself constantly expending its customer's retail store deliveries in order to prevent stock-outs. The best solution to this problem is to:

A) carry additional inventory to satisfy customer's demand.
B) balance the supply of inventory with the demand.
C) minimize the inventory risk of product obsolescence.
D) increase inventory turns to the highest possible value.

Question 80

Which of the following is normally within the logistics function of a manufacturing organization?

A) Production management
B) Financial management
C) Warehouse management
D) Marketing management