Question 1

A shipper should negotiate a contract with every carrier it uses even if it is considered a small or infrequent shipper.

Accepted Answer

The answer of A shipper should negotiate a contract with...

Question 2

A major outcome from transportation economic deregulation has been the shift of pricing information garnered from public tariffs and rate bureaus to the negotiating table.

Accepted Answer

With the deregulation of transportation economics, the old system of public tariffs and rate bureaus has been replaced with negotiation between parties. Therefore, pricing information is no longer obtained from publicly available sources like tariffs and rate bureaus.

Question 3

Private carriers are never used to make "milk runs."

Accepted Answer

Private carriers can be used to make milk runs, which are frequent trips to collect and deliver small amounts of goods. However, it is more common for milk runs to be made by public carriers, such as the postal service or public transportation systems.

Question 4

A PBL agreement and a SLA are similar concepts.

Accepted Answer

Both PBL agreements and SLAs are agreements or contracts between two parties that define the expectations, responsibilities, and obligations of each party related to the project or service. Therefore, they are similar concepts.

Question 5

A performance-based logistics system seeks to drive the logistics service provider's performance by clearly delineating the buyer's preferred outcomes,not by transaction,but in terms of provider value-added and overall systems costs.

Accepted Answer

A performance-based logistics system focuses on outcomes and incentivizes the logistics service provider to improve their performance in terms of value-added and systems costs. It is not solely transaction-based.

Question 6

If indirect spend is to be leveraged,supply management must have a clear understanding of exactly what indirect goods and services are being purchased by individual SBUs.

Accepted Answer

To leverage indirect spend, supply management needs to have a clear understanding of the goods and services being purchased by each SBU, as indirect spend categories can vary widely across different business units.

Question 7

Because of the huge quantities involved,deciding on the use of a pipeline is rarely something a buyer needs to consider.

Accepted Answer

The passage states that "deciding on the use of a pipeline is rarely something a buyer needs to consider" because of the huge quantities involved.

Question 8

Exempt carriers are highly regulated economically by the Surface Transportation Board.

Accepted Answer

Exempt carriers are not regulated by the Surface Transportation Board economically. They are exempt from certain regulations and requirements, which allows them more flexibility in their operations.

Question 9

Oftentimes,a single mode of transportation may prove inadequate for a specific shipment.

Accepted Answer

Sometimes, a combination of multiple modes of transportation, such as trucks, trains, ships, and planes, may be required to transport a shipment efficiently, effectively, and quickly. This is called intermodal transportation.

Question 10

Shipping a high-priced component via air is never a cost-effective option.

Accepted Answer

This statement is not always true as there may be situations where shipping a high-priced component via air may be necessary, such as in urgent situations or for international shipments. In these cases, the higher cost of shipping via air may be justified to ensure timely delivery and avoid potential damages or losses during transportation.

Question 11

Performance-based logistics has been widely adopted by the private sector.

Accepted Answer

The answer of Performance-based logistics has been widely adopted by...

Question 12

Inland water carriers typically transport finished or semifinished products because of the lengthy in-transit time.

Accepted Answer

Inland water carriers are more commonly used for transporting bulk commodities or raw materials, such as coal, grain, and petroleum, due to their cost-effectiveness for heavy or bulky items, not typically for finished or semifinished products.

Question 13

Although mode selection is usually not an issue for international ocean shipments,as in all strategic supplier selection decisions,carrier selection is still paramount.

Accepted Answer

Although mode selection may be straightforward for international ocean shipments, selecting the right carrier is crucial for ensuring smooth operations and timely delivery.

Question 14

The use of 3PLs is increasingly becoming a viable option for smaller shippers and infrequent shipments.

Accepted Answer

This statement is true. With advancements in technology and the growth of the logistics industry, 3PLs are becoming more accessible and affordable for smaller businesses and those with infrequent shipments. Many 3PLs offer flexible options and customized solutions to meet the unique needs of these shippers.

Question 15

Full-service carriers,in addition to picking up and delivering goods,may consolidate shipments,provide simplified billing,ship just-in-time from local storage points,handle complex overseas shipments,coordinate shipments with other carriers or modes,or configure final products for direct shipment to end customers.

Accepted Answer

Full-service carriers can offer a range of additional services beyond just pick-up and delivery, such as consolidation, billing, JIT shipping, complex international shipments, coordination with other carriers/modes, and product configuration.

Question 16

Use of a pipeline is usually part of the decision tradeoff between transportation modes.

Accepted Answer

The answer of Use of a pipeline is usually part...

Question 17

Growth in international trade has increased the amount of freight moving on oceangoing vessels.

Accepted Answer

Growth in international trade has led to an increase in the amount of cargo transported on oceangoing vessels.

Question 18

The importance of effectively managing an organization's indirect spend is decreasing.

Accepted Answer

Indirect spend, which includes expenses like office supplies, travel, and IT services, can still represent a significant portion of an organization's overall spend. Additionally, effectively managing indirect spend can result in cost savings and improved operational efficiency. Therefore, the importance of managing indirect spend remains high for many organizations.

Question 19

Higher cost per pound is the primary disadvantage to the increased use of air transportation.

Accepted Answer

Air transportation typically has higher operational costs than other modes of transportation, and these costs are often passed on to consumers in the form of higher prices per pound of cargo.

Question 20

An increasing trend is that many carriers now market themselves simply as providers of physical transportation services.

Accepted Answer

Many carriers are expanding their services beyond just physical transportation to include logistics, supply chain management, and digital solutions to meet broader customer needs.

Quiz 17: Purchasing Services