Chapter 5 Quiz

Question 1

T or F: The advantage of cross-docks over distribution centers is their ability to mix products at reduced storage and handling costs.

Answer 1

True

Question 1

How can a company “customize the logistics network to the service requirements and profitability of key customer segments”?
a. design a network based on average customer requirements
b. design a network that leverages resources of 3rd parties and industry partners
c. design a network based on the most demanding customer in mind
d. design a network that creates redundancies and inventory protection

Answer 1

b. design a network that leverages resources of 3rd parties and industry partners

Question 2

What is the primary benefit of a direct shipping strategy?
a. reduces transportation costs
b. improves mixing opportunities
c. increases product variety
d. reduces delivery time

Answer 2

d. reduces delivery time

Question 3

As the number of distribution facilities in your network increases and becomes highly decentralized, what happens to your costs (select all that apply)?
a. cost of lost sales go down but inventory costs go up
b. inventory costs and and transportation costs both go up.
c. transportation costs go down and warehousing costs go up.
d. inventory costs go down but total costs go up.

Answer 3

a. cost of lost sales go down but inventory costs go up
AND
c. transportation costs go down and warehousing costs go up.

Question 4

What is the financial goal of a strategic network design project?
a. maximize transportation cost
b. maximize cost of lost sales
c. minimize warehousing cost
d. minimize total supply chain cost

Answer 4

d. minimize total supply chain cost

Question 5

Which global supply chain channel focuses on the selection of modes, carriers, and routes?
a. visibility channel
b. transaction channel
c. distribution channel
d. communication channel

Answer 5

c. distribution channel

Question 6

T or F: When sourcing goods globally, organizations must evaluate more than just a potential supplier’s ability to reduce material and labor costs.

Answer 6

True

Question 7

In global sourcing, you need to understand and balance a variety of costs. Which of the following is NOT one of these costs?
a. labor costs
b. inventory carrying costs
c. promotional costs
d. transportation costs

Answer 7

c. promotional costs

Question 8

When negotiating with potential global suppliers, a company must consider each of the following issues EXCEPT:
a. business culture
b. schedules and capacity
c. product quality
d. financial bribes

Answer 8

d. financial bribes

Question 9

Why would a company manufacture goods globally?
a. to reduce capacity
b. to increase transaction costs
c. to increase market access
d. to increase complexity

Answer 9

c. to increase market access

Question 10

Supply chain ______ continues to be a dominant factor in global sourcing strategies and is thus the primary consideration when gauging the need for change.
a. service quality
b. risk
c. security
d. cost

Answer 10

b. risk