Question 1

A business marketer that provides erratic delivery service to industrial distributors:

Accepted Answer

Erratic delivery service can result in increased inventory carrying costs for the distributor as they may need to carry more safety stock to avoid stockouts. This can also result in stockouts at the distributor level, leading to lost sales and reduced customer satisfaction. Finally, inconsistent or poor service can damage channel relations, causing distributors to seek out more reliable suppliers.

Question 2

In contrast to "innovative" products,the supply chain for functional products is designed to:

Accepted Answer

The supply chain for functional products, as opposed to innovative products, tends to be more focused on minimizing logistics and inventory costs while assuring low-cost manufacturing. The reason for this is that functional products have a more established market with predictable demand patterns, which means that production capacity can be adjusted to meet these needs without the need for rapid changes or adaptations. Therefore, both options A and B are correct, while C is not necessarily the case for functional products. As a result, the best answer is E, which includes both options A and B but excludes option C.

Question 3

The use of faster modes of transportation within the logistical network results in:

Accepted Answer

Faster transportation generally leads to higher customer service levels due to quicker delivery times, but it often results in higher variable costs and lower investments in inventory, not higher.

Question 4

In applying the total cost approach to logistical management,management:

Accepted Answer

The total cost approach recognizes that a decision made for one logistical variable affects all or some of the other logistics variables. This means that the goal is not just to minimize the cost associated with each individual logistical activity, but to optimize the overall cost across all logistical activities. Therefore, attention is not solely centered on minimizing transportation or inventory costs, but on finding the best balance between all logistical variables. While minimizing fixed facility costs is important, it is just one aspect of the overall total cost approach.

Question 5

The supply chains for products that could be categorized as "innovative" (e.g.,high-tech products)differ from the supply chains for functional products because:

Accepted Answer

All of the above are reasons why the supply chains for innovative products differ from the supply chains for functional products.

Question 6

Concerning speed of service in the logistical system,which of the following is(are)accurate?

Accepted Answer

A is accurate because the longer the delivery time, the more inventory customers must maintain to service their needs while the shipment is in transit. This is because they need to have enough inventory to cover the longer delivery time, which increases their holding costs. B and C are not accurate because the slower modes of transportation may have lower variable costs and the faster modes may require lower investment in inventory depending on the specific situation.

Question 7

A firm that can respond to a customer's unique requirements for packaging and order size in a cost-effective manner is addressing which of the following supply chain goals?

Accepted Answer

The firm is addressing the goal of flexible response by being able to customize packaging and order size to meet a customer's unique requirements in a cost-effective manner.

Question 8

The most commonly reported benefits for firms that adopt supply chain management are:

Accepted Answer

The most commonly reported benefits for firms that adopt supply chain management are higher profit margins and enhanced cash flow. Higher order-to-delivery cycle time is not a benefit but a disadvantage. Therefore, the best choice is (a) and (b) only, which means higher profit margins and enhanced cash flow.

Question 9

A business marketer who shifts from rail to air in the logistical system would likely generate:

Accepted Answer

Shifting from rail to air transport typically results in higher variable costs due to the higher expense of air freight. However, it also often leads to a higher customer service level because air transport is faster, reducing lead times and potentially lowering customer investments in inventory due to quicker replenishment cycles.

Question 10

As a controllable element in the logistics system,____ triggers the logistics process and directs the activities necessary to deliver products to customers.

Accepted Answer

Order processing triggers the logistics process by receiving and processing customer orders, selecting and allocating inventory, and scheduling delivery or shipment. It is a key controllable element that directs the rest of the logistics activities necessary to get products to customers.

Question 11

The warehouse circumvents the need for premium transportation (for example,air freight)and costly order processing by keeping products readily available in local markets. Which type of warehousing involves no capital investment and offers the advantage of flexibility--the firm can increase or decrease its use of space in a given market?

Accepted Answer

The answer of The warehouse circumvents the need for premium...

Question 12

To integrate activities across the supply chain,supply chain management often:

Accepted Answer

Sharing sensitive and proprietary information is crucial for effective supply chain integration, enabling better coordination and efficiency across the supply chain.

Question 13

The "best" mode of transportation to use in moving industrial products to customers is:

Accepted Answer

The best mode of transportation for industrial products depends on various factors such as the cost, service, investment tradeoffs, distance, time, and type of product. Each mode of transportation has its advantages and disadvantages. Therefore, the best choice(s) can only be made after considering all the factors and making a cost-benefit analysis.

Question 14

In serving JIT customers,business marketers find that:

Accepted Answer

Business marketers serving JIT customers typically see a shrink in order size since these customers only order what they need at the moment. This, in turn, requires more frequent deliveries. Relationships with JIT customers are often longer-lasting and can be formalized with a written contract that may span several years. Therefore, all the options A, B, and C are true.

Question 15

In the management of logistical activities,the performance variable(s)of prime interest (is)are:

Accepted Answer

The level of logistical service provided to customers is a key performance variable as it directly impacts customer satisfaction and retention.

Question 16

Supply chain management seeks to achieve which of the following goals?

Accepted Answer

Supply chain management seeks to achieve all of the above goals, which include waste reduction, unit cost reduction, and flexible response. By achieving these goals, SCM can enhance the efficiency and effectiveness of the supply chain, increase customer satisfaction, and ultimately boost the profitability of the organization. Therefore, D is the best choice.

Question 17

Many U.S. manufacturers have adopted the just-in-time (JIT)purchasing principle. Concerning this trend,all of the following statements are accurate except:

Accepted Answer

This statement is actually inaccurate. JIT purchasing attempts to minimize order size and relate purchases to production requirements, which often results in smaller, more frequent orders. Therefore, the typical order size tends to decrease rather than increase. Choice C is accurate; JIT often leads to a reduction in the number of suppliers as it encourages closer relationships with a smaller number of reliable suppliers. Choice D is also accurate; suppliers tend to benefit from longer-lasting relationships with JIT customers as they receive more reliable and consistent orders. Therefore, the correct answer is B.

Question 18

The supply chain includes a variety of firms,ranging from those that process raw materials to make component parts to those engaged in wholesaling. Included also are organizations engaged in:

Accepted Answer

The supply chain includes all firms engaged in the production, processing, transportation, and distribution of goods, including those involved in warehousing, transportation, and materials handling. Therefore, all of the choices (a, b, and c) are included in the answer.

Question 19

_____ is typically the largest logistics expense.

Accepted Answer

Transportation is typically the largest logistics expense as it involves the movement of goods from one location to another, often over long distances and through multiple modes of transportation, which can result in high costs.

Question 20

In regard to logistical service,the business marketer should:

Accepted Answer

Different products and customers often have varying requirements for logistical service. Therefore, it is wise for a business marketer to adjust the level of logistical service based on segmentation, taking into account the needs of the product and the customer. Providing the same level of service to all customers may result in unnecessary costs or unsatisfied customers whose needs are not being met.

Quiz 11: Supply Chain Management