Grading of Exam MPD March 14 2024.pdf Flashcards
What are two key provider selection criteria when buying third-party logistics (3PL) services? Why are they important?
- Reliability – Ensures goods are delivered on time and without damage.
- Cost-effectiveness – Helps control logistics expenses while maintaining service quality.
Example: A company shipping fragile medical supplies selects a 3PL provider with a proven track record to avoid delays and damages.
What are the pros of using contracts in distribution services?
- Stability and predictability in pricing and service levels.
- Legal protection in case of service failures.
What are the cons of using contracts in distribution services?
- Less flexibility in adapting to demand changes.
- Risk of being locked into unfavorable terms.
What factors influence the pricing of transport services?
- Fuel costs, labor costs, distance, and vehicle capacity.
- Competition and customer demand.
What challenges arise in setting the right price?
- Balancing cost recovery with competitive pricing.
- Managing price fluctuations due to economic changes.
What are the benefits of peak-load pricing in transport services?
- Encourages off-peak usage, reducing congestion.
- Improves resource utilization by spreading demand.
- Generates higher revenue during high-demand periods.
Example: A toll road charges higher fees during rush hours, encouraging drivers to travel at non-peak times.
Compare the situation where price equals marginal cost (MC) versus where a provider sets price and quantity based on MR=MC.
- At MC pricing: Consumer surplus is maximized, and services are affordable.
- At MR=MC pricing: Provider makes a profit, but consumer surplus is reduced.
Example: If train fares were set only at cost price, more passengers would travel. If a company sets higher prices based on demand, fewer passengers can afford it.
What are the advantages and disadvantages of off-peak deliveries for CARRIERS?
- Advantage: Less traffic congestion reduces fuel costs.
- Disadvantage: Extra labor costs for night-time operations.
What are the advantages and disadvantages of off-peak deliveries for municipalities?
- Advantage: Reduced daytime congestion.
- Disadvantage: Noise pollution at night.
Example: A supermarket receives deliveries at night, reducing road congestion but disturbing nearby residents.
Suggest two policies Gothenburg could implement to improve urban freight transport (excluding off-peak deliveries).
- Dedicated freight lanes – Reduces delivery delays.
- Consolidation centers – Combines shipments to reduce the number of delivery vehicles.
Example: A city logistics hub allows multiple suppliers to deliver to one location, then redistributes goods efficiently to stores.
How does lead time influence the design of a distribution structure?
- Shorter lead times require more decentralized warehouses.
- Longer lead times allow for fewer, larger distribution centers.
Example: An e-commerce company with a next-day delivery promise sets up warehouses closer to customers.
What are the benefits of horizontal collaboration in logistics?
- Shared transportation reduces costs.
- Optimized vehicle usage improves sustainability.
Example: Two competing beverage companies share delivery trucks to cut logistics costs.
What are the challenges of horizontal collaboration in logistics?
- Coordination difficulties among companies.
- Risk of losing competitive advantage.
How do transaction costs affect outsourcing decisions?
Higher transaction costs may make outsourcing less attractive.
Factors influencing transaction costs:
- Contract complexity.
- Need for supplier monitoring.
Example: A manufacturer hesitates to outsource warehousing due to high coordination costs.
What are the benefits of implementing a Transport Management System (TMS)?
- Improved route optimization reduces fuel costs.
- Real-time tracking enhances delivery accuracy.
- Automated reporting improves efficiency.
Example: A logistics company uses TMS to monitor shipments and dynamically reroute trucks based on traffic conditions.
What benefits do SHIPPERS get from Smart Transportation Management (STM)?
- Better visibility of shipments.
- Reduced costs through dynamic pricing.
What benefits do transport providers get from Smart Transportation Management (STM)?
- Higher fleet utilization.
- Reduced empty return trips.
Example: A trucking company uses AI-based scheduling to optimize routes and fill empty backhauls.
Why is real-time information important for disruption management?
- Helps reroute shipments in case of traffic or delays.
- Minimizes customer impact by providing updates.
Example: A shipping company monitors storms and redirects vessels accordingly.
Why is measuring and evaluating physical distribution systems important?
- Identifies inefficiencies.
- Helps optimize cost and service levels.
Example: A retailer tracks delivery times to improve its supply chain performance.
How can firms evaluate its load factor in a structured way?
- Use vehicle tracking to monitor capacity usage.
- Analyze shipment weight versus available space.
Challenges:
- Variability in shipment sizes.
- Need for accurate real-time data.
Example: A logistics firm assesses whether trucks are consistently operating at full capacity.
How does the MAMCA model help evaluate urban distribution systems?
- Considers multiple stakeholders’ perspectives.
- Helps balance trade-offs between cost, efficiency, and sustainability.
Example: A city uses MAMCA to evaluate the impact of new delivery regulations on both businesses and residents.
What are the challenges in evaluating total logistics costs?
- Difficult to track indirect costs (e.g., lost sales due to delays).
- Costs vary by location and time.
Example: A company struggles to estimate the cost impact of late deliveries on customer satisfaction.
