Question 1

The primary influence of logistics activities on sales would be through the improvement of customer service.

Accepted Answer

Logistics activities, such as efficient product delivery, inventory management, and order processing, can enhance the customer experience and increase customer loyalty, which leads to higher sales. Therefore, the primary influence of logistics activities on sales is through customer service improvement.

Question 2

With respect to asset turnover,inventory is typically the most relevant logistics asset.

Accepted Answer

Inventory is typically the most relevant logistics asset when it comes to asset turnover because it represents a significant portion of a company's investment in its supply chain. Increasing inventory turnover, or the frequency at which inventory is sold and replaced, can lead to improved financial performance and efficiency in the supply chain.

Question 3

The cash-to-cash cycle looks at how long an organization's cash is tied up in receivables,payables,and inventory.

Accepted Answer

The cash-to-cash cycle measures the amount of time it takes for cash to be converted back into cash, taking into account the time it takes to collect receivables, pay payables, and sell inventory. Therefore, the statement is true.

Question 4

The Balanced Scorecard (BSC)provides the framework for conducting return on assets (ROA)analysis by incorporating revenues and expenses to generate net profit margin,as well as inclusion of assets to measure asset turnover.

Accepted Answer

The Balanced Scorecard (BSC) is a strategic planning and management system that organizations use to communicate what they are trying to accomplish, align the day-to-day work that everyone is doing with strategy, prioritize projects, products, and services, and measure and monitor progress towards strategic targets. It does not specifically provide a framework for conducting return on assets (ROA) analysis, as ROA analysis is a financial metric calculated separately and focuses specifically on assessing a company's efficiency in using its assets to generate profit.

Question 5

The Balanced Scorecard (BSC)is based on the belief that management should evaluate their business from five different perspectives.

Accepted Answer

The Balanced Scorecard (BSC) is based on evaluating the business from four perspectives: Financial, Customer, Internal Business Processes, and Learning and Growth.

Question 6

Asset turnover is calculated by dividing return on assets by total assets.

Accepted Answer

Asset turnover is calculated by dividing total revenue (or net sales) by total assets, not by dividing return on assets by total assets.

Question 7

According to the Balanced Scorecard (BSC)approach,the financial perspective is considered the best indicator of whether or not logistics strategy is being properly implemented and executed.

Accepted Answer

The Balanced Scorecard (BSC) approach considers multiple perspectives (financial, customer, internal business processes, and learning and growth) to evaluate performance, not just the financial perspective. It suggests that relying solely on financial indicators does not provide a comprehensive view of an organization's performance or the effectiveness of its strategy implementation.

Question 8

Return on assets (ROA)equals net profit margin times asset turnover.

Accepted Answer

This formula is used to calculate ROA and is expressed mathematically as ROA = Net Profit Margin x Asset Turnover. Therefore, it is true that ROA equals net profit margin times asset turnover.

Question 9

A reduction in inventory would increase inventory turnover,which means an increase in that organization's return on assets (ROA).

Accepted Answer

A reduction in inventory means that the organization is selling its inventory more quickly, which would increase its inventory turnover ratio. A higher inventory turnover ratio indicates that the organization is more efficient in managing its inventory and generating sales. This, in turn, would lead to an increase in the organization's return on assets (ROA).

Question 10

A decision to invest in an electronic data interchange system that would increase invoice accuracy should result in a lower amount of accounts receivable.

Accepted Answer

Electronic data interchange system improves the accuracy and efficiency of invoicing, resulting in faster and more accurate payments. This, in turn, would lead to a lower amount of accounts receivable.

Question 11

The measures associated with the Balanced Scorecard (BSC)can be at a strategic or tactical level.

Accepted Answer

This statement is true. The Balanced Scorecard (BSC) can be used for measuring strategic and tactical objectives. Strategic measures focus on long-term goals, while tactical measures focus on short-term goals.

Question 12

With respect to net profit margin,the most relevant categories for logistics managers to consider are sales,costs of goods sold,and asset turnover.

Accepted Answer

Net profit margin is primarily concerned with sales and costs of goods sold, but asset turnover is more relevant to efficiency and operational performance, not directly to net profit margin calculation.

Question 13

Operationally,net profit margin is net profit divided by cost of goods sold.

Accepted Answer

Net profit margin is calculated by dividing net profit by total revenue, not cost of goods sold.

Question 14

Best in Class companies tend to use transportation scorecards less frequently than other companies.

Accepted Answer

Best in Class companies tend to use transportation scorecards more frequently than other companies. They prioritize measuring and analyzing transportation performance to identify areas for improvement and cost savings.

Question 15

When applying performance measures to logistics activities,determination of the key measures should be tailored to the individual organization and level of decision making.

Accepted Answer

Performance measures should be tailored to the organization's specific needs and goals as well as the level of decision making. A one-size-fits-all approach is not effective in assessing and improving logistics performance.

Quiz 3: Strategic and Financial Logistics