Chapter 14

Question 1

Third-party logistics company (3PL)

Answer 1

company that manages all or part of of another company’s product delivery operations
Moving goods from one place to another
Warehouse management
Inventory control

Question 2

outsource

Answer 2

Understanding local markets/ emerging markets
Worldwide presence
Core competency
Better coordination of intermodal capabilities

Question 3

insource

Answer 3

Proprietary or security issues
Stable supply chain, able to effectively negotiate and control the related logistics
Industry alliances
Specific cost issues that are favorable to insourcing

Question 4

Transportation Modes

Answer 4

Highway (truck)
Water (ship)
Air
Rail (trains)
Pipelines
Hand Delivery

Question 5

components of warehouse Design

Answer 5

cross-docking

hub-and-spoke systems

Question 6

cross-docking

Answer 6

approached used in consolidation warehouses, where rather than making larger shipments, incoming shipments are broken down into small shipments for local delivery in an area

Question 7

Hub-and-spoke systems

Answer 7

systems that combine the idea of consolidation and that of cross-docking
Warehouse is referred to as a “hub”: sorts goods
Incoming goods are sorted immediately to consolidation areas→ each area is designated for shipment to a specific location

Question 8

Plant Location Methods

Answer 8

factor-rating system
transportation method of linear programming
centroid method

Question 9

factor-rating system

Answer 9

Most widely used of the general location techniques
Combines a diverse set of factors
Point of scales are developed for each criterion then each site is evaluated
Useful when nonquantitative factors are important

Question 10

Transportation method of linear programming

Answer 10

Special linear programming method useful for solving problems involving transporting products from several sources to several destinations

Question 11

centroid method

Answer 11

Technique for locating single facilities that considers the existing facilities, the distances between them, and the volumes of goods to be shipped
SEE PAGE 469

Question 12

Competitive clustering

Answer 12

Competitors in the same service industry locating close together
Synergistic effect attracts more customers
Facilitates comparison shopping
EX:
Urgent care/ doctor offices
Pharmacies
Supermarket clinics

Question 13

Saturation Marketing

Answer 13

Multiple facilities of the same company locating close together
Segments a high-density area into small, focused markets
Cannibalization offset by closer proximity to more customers
EX:
Large IDNs
Hospitals, surgery centers, physician offices, diagnostics