Question 1

Outbound transportation costs per unit tend to be lower than inbound costs,because inbound lot sizes are typically larger.

Accepted Answer

Outbound transportation costs per unit tend to be higher than inbound costs because outbound shipments are usually smaller and more fragmented, leading to less efficient transportation compared to the larger, more consolidated inbound shipments.

Question 2

Transportation costs are high with drop-shipping because the average outbound distance to the end consumer is large and package carriers are used to shipping the product.

Accepted Answer

Drop-shipping typically involves shipping products directly to the end consumer, which can result in high transportation costs due to the large distance needed to be covered by package carriers. This is particularly true for e-commerce businesses that source products from international manufacturers or suppliers.

Question 3

A well-structured omni-channel supply chain can be both cost effective and responsive to customer needs.

Accepted Answer

A well-structured omni-channel supply chain allows for seamless integration of various channels and provides real-time visibility, which can improve inventory management and reduce inventory costs. Additionally, it enables quick response to customer demands and reduces lead times, ultimately leading to improved customer satisfaction.

Question 4

Companies in the same industry often select very different distribution networks,because the choice of the distribution network can be used to achieve a variety of supply chain objectives ranging from low cost to high responsiveness.

Accepted Answer

This statement is true. Companies consider various factors such as customer needs, product characteristics, competitive environment, and cost considerations while developing their distribution networks. The distribution strategy is directly linked to the company's overall supply chain objectives and can vary significantly between similar companies in the same industry.

Question 5

The main advantage of a distribution network with local storage is that it can lower the delivery cost and provide a faster response than other networks.

Accepted Answer

By having local storage, the distribution network can reduce the need for frequent and long-distance deliveries, which can lower costs and improve response times.

Question 6

A distribution network designer needs to consider product characteristics as well as network requirements when deciding on the appropriate delivery network.

Accepted Answer

It is important for a distribution network designer to consider both product characteristics and network requirements when deciding on the appropriate delivery network. This includes factors such as the size, weight, and fragility of the product, as well as delivery speed, cost, and geographic reach of the network. Failing to consider either of these factors can result in inefficient or ineffective delivery solutions.

Question 7

Omni-channel retailing refers to an interaction between a customer and a retailer in terms of three flows -information,product and funds.

Accepted Answer

The answer of Omni-channel retailing refers to an interaction between...

Question 8

The main advantage of in-transit merge over drop-shipping is the somewhat lower transportation cost and improved customer experience.

Accepted Answer

In-transit merge involves consolidating multiple orders from different suppliers into one shipment, which can result in lower transportation costs compared to drop-shipping where each order is shipped separately from the supplier. In-transit merge also provides a better customer experience as customers receive a single package with all their items rather than multiple deliveries from different suppliers.

Question 9

A customer does not necessarily want the highest level of performance along all dimensions of customer service,including response time,product variety,product availability,customer experience,order visibility,and returnability.

Accepted Answer

Customers have different needs and expectations, and may prioritize certain dimensions over others. Therefore, a customer may not necessarily want the highest level of performance in all dimensions of customer service.

Question 10

It is more common for a manufacturer to not own the distribution network.

Accepted Answer

It is more common for a manufacturer to focus on producing the product and leave the distribution to specialized companies such as wholesalers and retailers. This allows the manufacturer to focus on their strengths and expertise in production while also benefiting from the specialized knowledge and networks of distribution companies. However, there are also cases where manufacturers do choose to own their distribution network, especially in industries where tight control over distribution channels is necessary.

Question 11

As long as inbound transportation economies of scale are maintained,increasing the number of facilities decreases total transportation cost.

Accepted Answer

When inbound transportation economies of scale are maintained, adding more facilities decreases the distance that products need to travel between facilities, reducing total transportation cost. This is because a larger number of facilities allows for a more localized distribution network, which can take advantage of smaller, more frequent shipments to each facility rather than relying on larger, less frequent shipments to a smaller number of facilities.

Question 12

Distributors add value to a supply chain between a supply stage and a customer stage if there are many small players at the customer stage,each requiring a small amount of the product at a time.

Accepted Answer

Distributors add value by consolidating orders from multiple small customers, reducing transportation costs and increasing efficiency in the supply chain. This is particularly beneficial when there are many small players at the customer stage, each requiring a small amount of the product at a time.

Question 13

A decrease in the response time customers desire increases the number of facilities required in the network.

Accepted Answer

When customers desire a shorter response time, facilities need to be placed closer to them in order to meet their needs in a timely manner, leading to an increase in the number of facilities required in the network.

Question 14

It is much easier to return a product to an online retailer than to a traditional bricks and mortar seller.

Accepted Answer

Returning a product to an online retailer often involves shipping the item back, which can be inconvenient and sometimes costly for the consumer. In contrast, returning a product to a traditional brick-and-mortar retailer usually just requires a trip to the store.

Question 15

For physical products,i.e. ,products that cannot be downloaded,customer requests take longer to fulfill through online sales than in a retail store setting.

Accepted Answer

This is because physical products need to be shipped to the customer, which can take time depending on various factors such as location, shipping method, and availability of the product. In a retail store, the customer can immediately take the product with them after purchase.

Question 16

Only niche companies will end up using a single distribution network.

Accepted Answer

Niche companies often have specific target markets and specialized products, which may require a tailored distribution network to reach their customers effectively.

Question 17

The major disadvantage of a distribution network with local storage is the increased inventory and facility costs.

Accepted Answer

Local storage requires additional inventory to be held at multiple locations, which can lead to increased facility costs due to the need for additional warehouses or storage facilities.

Question 18

Customers always want the highest level of performance along all the dimensions response time,product variety and returnability.

Accepted Answer

Customers have diverse preferences and priorities; some may prioritize product variety over response time, others may value returnability more, and not all customers will demand the highest level of performance in all dimensions simultaneously.

Question 19

Compared to a business with many retail outlets,an online seller with aggregated inventories tends to have lower per unit transportation costs across the entire supply chain.

Accepted Answer

The answer of Compared to a business with many retail...

Question 20

Distribution occurs between every pair of stages in the supply chain.

Accepted Answer

Distribution is a key component in the supply chain that occurs between every pair of stages, from production to consumption.

Quiz 4: Designing Distribution Networks and Applications to E-Business