SCM M1-M6 [PRELIMS] (complete)) Flashcards
____ is a set of processes used to effectively and efficiently integrate suppliers, manufacturers, distribution centers, distributors, and retailers so that products are produced and distributed in the right quantities, to the right locations, and at the right time in order to minimize system-wide costs while achieving the consumer’s desired value proposition.
Supply Chain Management
____ is a way to link major business processes within and across companies into a high-
performance business model that drives competitive
advantage. It also integrates supply and demand
management within and between companies.
Supply Chain Management
_____ integrates supply and demand management within and between companies.
Supply Chain Management
(Can be more than 1 answer)
Which of the following defines supply chain management:
A.) Provides combination of product, service, or solution to end-consumer.
B.) Considers end-to-end activities across the supply chain.
C.) Requires the performance of many physical and service
processes.
D.) Integration within the firm and across supply chain
partners.
E.) Requires execution of sequence of functions.
All of the above
(Can be more than 1 answer)
In context of SCM, designing, planning, executing, or measuring activities can be related to which of the following:
- Sourcing.
- Procurement.
- Manufacturing.
- Integrated operations planning.
- Event planning.
- Public relations.
- Transportation.
- Inventory management.
- Software development.
- Market research.
- Warehousing.
- Customer service.
- Returns and repairs.
all except (not included sa ppt):
* Event planning.
* Public relations.
* Software development.
* Market research.
“What type of ‘Integrative Management Value Proposition’ describes the following, and what strategy is needed to achieve it?”
- Lowest total cost
- Economy-of-scale
efficiency - Product/service
creation
Integrative Management Value Proposition:
—- Economic Value
Strategy:
—- Procurement or Manufacturing Strategy
“What type of ‘Integrative Management Value Proposition’ describes the following, and what strategy is needed to achieve it?”
- Attractive assortment
- Economy-of-scale
efficiency - Product/service
presentation
Integrative Management Value Proposition:
—- Market Value
Strategy:
—- Market or Distribution Strategy
“What type of ‘Integrative Management Value Proposition’ describes the following, and what strategy is needed to achieve it?”
- Customization
- Segmental diversity
- Product/service/solution positioning
Integrative Management Value Proposition:
—- Relevancy Value
Strategy:
—- Supply Chain Strategy
(Can be more than 1 answer)
Supply Chain Value Adds which of the following:
Reduced operating cost.
Increased revenue
Employee Satisfaction
Asset Utilization
Reduced operating cost.
Increased revenue
Asset Utilization
This is the primary focus of many supply chain
classes and texts
Product
______ represents the products that are moved through the supply chain with the value-added process being training and education.
Talent
True or False
A recovery supply chain is useful following military, construction, mining, or drilling
operations
True
True or False
If the farmer is too near from the buyer, they will have no market for their products.
False; if too FAR
True or False
Clinical trials are not too demanding due to the need for
precise controls of dosages, ingredient combinations, and drug combinations.
False. Very demanding
Which of the Eight Supply Chain Integrative Processes?
It is the assessment of demand and strategic design to achieve maximum responsiveness to customer requirements.
Demand Planning
Responsiveness
Which of the Eight Supply Chain Integrative Processes?
It is the Development and administration of relationships with customers to facilitate strategic information sharing, joint planning, and integrated operations.
Customer Relationship
Collaboration
Which of the Eight Supply Chain Integrative Processes?
Ability to execute superior and sustainable order-to-delivery performance and related essential services.
Order Fulfillment &
Service Delivery
Which of the Eight Supply Chain Integrative Processes?
Participation in product/service development and lean launch
Product/Service
Development Launch
Which of the Eight Supply Chain Integrative Processes?
Support of manufacturing strategy and facilitation of postponement throughout
the supply chain.Which of the Eight Supply Chain Integrative Processes?
Manufacturing Customization
Which of the Eight Supply Chain Integrative Processes?
Development and administration of relationships with suppliers to facilitate strategic information sharing, joint planning, and integrated operations.
Supplier Relationship
Collaboration
Which of the Eight Supply Chain Integrative Processes?
Repair and support of products during their life cycle. Includes warranty, maintenance, and repair
Life Cycle Support
Which of the Eight Supply Chain Integrative Processes?
Return and disposition of inventories in a cost effective, secure, and responsible
manner.
Reverse Logistics
Which Enterprise Extension Paradigms
Belief that achieving a high degree of cooperative behavior
requires that supply chain participants voluntarily share
operating information and jointly plan strategies.
Information sharing paradigm.
Which Enterprise Extension Paradigms
Commitment to focusing collaborative arrangements on
planning joint operations, with a goal of eliminating nonproductive or non-value-added redundancy by firms in
a supply chain.
Process specialization paradigm.
Enumerate three Integrated Service Providers
–Transportation specialists.
– Warehousing specialists
– SP or third-party – fourth party service provider
(Can be more than 1 answer)
Which of the following is/are Green Supply Chain Management Practice/s
- Environmentally friendly raw materials.
- Substitution of environmentally questionable materials.
- Maximizing profit through adhesives
- Taking environmental criteria into consideration.
- Environmental design considerations.
- Optimization of processes to reduce solid waste and
emissions. - Utilizing single-use materials
- Use of cleaner technology processes to achieve savings in
energy, water and waste. - Internal recycling of materials within the production phase.
- Focusing solely on cost reduction
- Incorporating environmental total quality management
principles, such as worker empowerment.
All except:
– Utilizing single-use materials
– Maximizing profit through adhesives
– Focusing solely on cost reduction
(Can be more than 1 answer)
Which of the following makes a world class supply chain?
- Cycle time compression – 5x.
- Point-in-time performance.
- Integrated OTD execution.
- Inconsistent data across relevant channel participants.
- One Informed Voice (SPOC – single point of contact).
All except:
* Cycle time compression – 5x. (must be 10x)
* Inconsistent data across. (must be CONSISTENT)
True or False
Single Company Integrated Value Chain Management provides firms with the next transformational opportunity for value creation.
False. must be End-to-End Integrated Value Chain Management
(Anticipatory or Responsive?) Business Model
- Pushed based on forecast.
- Essential work is completed prior to experiencing demand.
- Higher risk in that inventory may be pushed to the wrong
site.
Anticipatory Business Model
(Anticipatory or Responsive?) Business Model
- Seeks to reduce or eliminate reliance on forecast.
- Employs joint planning with supply chain partners.
- Applies time-based competition by using technology to
share knowledge regarding demand. - Uses build-to-order model.
- Demand Driven
Responsive Business Model
True or False
one of the barriers to implementing responsive systems is the need to establish and sustain collaborative relationships.
True
True or False
Implementing Responsive
Systems do not require for publicly held firms to deliver quarterly profits, which motivates them to push product to customers.
False. They do require
____ reduce anticipatory risk of supply chain management. It requires most inventory to be produced to final product
state and deployed based on forecasts or planned
requirements
Postponement
True or False:
One of the types of postponement is Geographic Postponement, describing customization at the end of the manufacturing process until the customer commitment is received
False. Should be Manufacturing/Form Postponement
True or False:
One of the types of postponement is Manufacturing or Form Postponement, describing companies building stock of full-line inventory at limited strategic locations
False. Should be Geographic Postponement
Enumerate 5 dimensions of Supply Chain Risk
– Compliance (e.g. Supplier Code of Conduct, Certifications, Restricted materials)
– Performance (e.g. Quality-wise, Audit results, Delivery-wise)
– Environmental Events (e.g. Pandemics, Terrorism)
– Financial (e.g. Bankrupcy)
– Market Segment
True or False
Local Supply exceeds Demand
False. The other way around
True or False
90% of Global Demand is not fully satisfied by local supply
True
______ is the process of identifying and matching the
sources of raw materials and
components to manufacturers
and distributors.
Strategic Sourcing
_____ is the process of moving manufacturing and
distribution operations to
countries with favorable labor
costs and tax laws.
Offshoring
Enumerate 4 significant differences for global logistics
– Distance (… of Typical order-to-delivery)
– Documentation (… requirements for business transactions)
– Diversity (… in work practices and local operating environments)
– Demand (…must accommodate cultural variations)
4 Ds
True or False
Logistics has been performed since the beginnnig of civilization
True
_____ is the process and activities that create value focused on the design and administration of a system to control the timing and geographical positioning of raw materials, work-in-process, and finished inventories at the lowest total cost.
Logistics management
True or False
Creating logistics value is
costly
True
True or False
Logistics should be managed as a integrated effort to achieve customer satisfaction at the highest total cost
False. Lowest instead of Highest
Enumerate three logistics value proposition
– Service Benefits
– Cost benefits
– Value Generation
The more significant the service failure impact upon a customer’s business, the lesser priority placed on
error-free logistical performance.
False. “…the “GREATER” Priority”
Enumerate 3 fundamental Elements of Service Benefits (or Customer Service):
– Availability
– Operational Performance
– Service Reliability
Which of the 3 Elements of Service Benefits?
_____ describes having inventory meet customer requirement / The Capacity to Have Inventory when Desired by a Customer
Availability
Which of the 3 Elements of Service Benefits?
____ describes the time required to deliver an order
Operational Performance
Which of the 3 Elements of Service Benefits?
_____ describes the quality of performance and how consistent / A Firm’s Ability to
Perform All Order-related Activities
Service Reliability
____ is the tradeoff between individual cost elements to achieve lowest total system cost
Cost Minimization
True or False
Value generation includes the Elimination of silo approach to cost management, establishment of cost-to-cost tradeoffs and activity-
based costing capabilities.
False. Cost Benefits instead of Value Generation
Enumerate the 5 work of Logistics
– Order Processing
– Inventory
– Transportation
– Warehousing, Materials Handling, and Packaging
– Facility Network Design
Multiple Choice:
“Which of the following “Work of logistics” do these activities?”
– Emphasis on Accuracy
– Work Balancing
– Forecasting and Communication
A.) Order Processing
B.) Inventory
C.) Transportation
D.) Warehousing, Materials Handling, and Packaging
E.) Facility Network Design.
A.) Order Processing
Regarding Transportation:
_______ describes the variations in time required to perform a specific movement over number of shipments
Transportation Consistency
Regarding Transportation:
______ describes the time required to complete specific movements
Speed of Transportation
Regarding Transportation:
_____ is the payment for shipment between locations and expenses related to maintaining in-transit inventory. Minimize total system cost
Cost of Transportation
Multiple Choice:
“Which of the following “Work of logistics” do these activities (or have these requirements)?”
* Integrated nature, integral part of other areas.
* Forward facing logistics.
* Reverse logistics.
A.) Order Processing
B.) Inventory
C.) Transportation
D.) Warehousing, Materials Handling, and Packaging
E.) Facility Network Design.
D.) Warehousing, Materials Handling, and Packaging
Multiple Choice:
“Which of the following “Work of logistics” do these activities (or have these requirements)?”
* Core customer segmentation -
* Product profitability.
* Transportation integration.
* Time-based performance.
* Competitor performance.
A.) Order Processing
B.) Inventory
C.) Transportation
D.) Warehousing, Materials Handling, and Packaging
E.) Facility Network Design.
B.) Inventory
______ is concerned with determining the:
* Number of facilities.
* Location
* Ownership arrangement.
Facility Network Design
What type of Logistical Operations?
_____ describes that the operational management of logistics is concerned with
movement and storage of INVENTORY in the form of
materials, work-in-process, and finished products
Inventory Flow
What type of Logistical Operations?
_____ describes that the specific locations within a logistics system produce, send, and receive information, thus enabling the integration of
this INFORMATION across all operating areas.
Information Flow
True or False
The primary objective of inventory flow is to reconcile and streamline information connectivity to improve overall supply chain performance.
False; Information flow instead of inventory flow
True or False:
The process of information flow refines Information from and about customers into
specific manufacturing, merchandising, and purchasing
plans.
True
True or False
Information does not occur in parallel to Physical product flow
False
True or False:
Activities related to Procurement includes the following:
Requires performing order receipt and processing, deploying inventories, storage and handling, and outbound transportation within a supply
chain. Includes the responsibility to coordinate with marketing planning in such areas as pricing, promotional support, customer service levels, credit delivery standards, reverse logistics, and life cycle support.
False; Customer accomodation instead of Procurement
Activities related to Procurement includes the following:
Requires master schedule planning and performing work-in-process storage, handling, transportation, and sortation.
kilting, sequencing, and time phasing of components. Includes the responsibility for storage of inventory at manufacturing sites and maximum flexibility in the coordination of geographic and assembly postponement between manufacturing and customer relationship management.
False; Manufacturing Production instead of Procurement
Activities related to Procurement includes the following:
Requires performing
resource planning, supply sourcing, negotiation, order placement, inbound transportation, receiving and
inspection, storage and handling, and quality assurance. Includes the responsibility to coordinate with suppliers in such areas as scheduling, supply continuity, hedging, and speculation, as well as research leading to new sources or programs.
True
True or False:
The primary procurement objective is to assist in revenue generation by providing strategically desired customer service delivery levels at the lowest total cost.
False; market distribution instead of Procurement
True or False:
The primary market distribution objective is to support manufacturing or resale organizations by timely purchasing at the lowest total cost.
False; Procurement instead of market distribution
(Can be more than 1 answer)
Which among the following Facility Network Design Considers:
- Flow of components and product from the raw material
provider to the consumer. - Aesthetic Design of Retail Spaces
- Number of stages or echelons in the supply chain to provide appropriate economies of scale.
- Number and location of warehouses (distribution centers) to meet consumer delivery requirements while controlling total cost.
- Brand Marketing Strategies
- Requirements for network design changes based on changes in transportation rates & inventory carrying cost.
- Employee Training programs for logistics staffs
- Flow of returnables from consumer to recycler.
All except (wala sa ppt):
– Aesthetic design of retail spaces
– Brand marketing strategies
– Employee training programs for logistics staff
True or False:
Variance Reduction describes the shift from forecasting future requirements towards accommodating customers on a rapid order-to-shipment basis.
False; Responsiveness instead of Variance Reduction
One of the Logistical Integration Objectives:
_____ is the firm’s ability to satisfy customer requirements in a timely manner.
Responsiveness
Enumerate:
To achieve logistical integration within a supply chain context, six operational objectives must be simultaneously achieved, which are:
– Responsiveness
– Variance Reduction
– Inventory Reduction
– Shipment Consolidation
– Quality
– Life Cycle Support
RVI SQL
(Can be more than 1 answer)
Transportation cost is directly related to:
A.) Product type,
B.) Size of shipment,
C.) Seasonal Demand Fluctuations,
D.) Distance traveled,
E.) Packaging Design,
All except C and E
True or False
All operations areas of a logistical system are susceptible to variance, which is an advantage.
FALSE; it is a disadvantage. Which is why one of the logistical integration objectives is to reduce variance as much as possible
True or False:
Inventory cost is the most significant logistical expenditure.
False; Transportation cost instead of Inventory Cost.
One of the Logistical Integration Objectives where,
_____ describes the control of asset commitment and turnover. It also has a goal to reduce overall assets committed to support a customer and/or integrated operations.
Inventory Reduction
True or False:
Common solutions to safeguard against variance include additional inventory and/or expedited transportation.
True
True or false:
Information technology prevents variance.
False; Information technology is a CATALYST to address variance.
True or False:
Minimizing Variance will harm Logistical Productivity
False; because it will improve Log. Productivity.
A type of Logistical Operating Arrangements that serves as a Preplanned contingency strategies to prevent logistical failures, typically based on the importance of meeting the needs of a specific customer
Flexible
One of the Logistical Integration Objectives where,
____ describes that the system object is to achieve consolidation, where possible, to reduce the transportation cost of each individual shipment.
Shipment Consolidation
One of the Logistical Integration Objectives where,
_____ has an Emphasis on zero-defect order-to-delivery performance.
Quality
True or False
Few products are sold without some guarantee the product will perform as advertised.
True
True or False
Reverse logistics capabilities, both government required (recycling)
and disaster recovery (product recalls) are critical to ensure Life Cycle Support.
Trur
True or False
Cost recovery occurs through reverse flow and secondary markets.
true
A type of Logistical Operating Arrangements where systems designed to ship product direct to the customer’s destination from one or a limited number of centrally located inventories.
Direct
It is an Ideal logistical arrangement, wherein the inherent benefits of echelon and direct logistics structures are combined.
…….. combined ……..
_____ is the Multi-firm operational integration across a supply chain, which seeks to coordinate flow of materials, products, and information between supply chain partners to reduce duplication and redundancy
Supply Chain Synchronization
(Can be more than 1 answer)
Which of the following are the common characteristics of logistical arrangements
All logistical arrangements have two common characteristics.
A.) Focused on marketing strategies
B.) Designed to manage inventory positioning.
C.) Range of alternatives limited by information technology.
D.) Independent of supply chain collaboration
B.) Designed to manage inventory positioning.
C.) Range of alternatives limited by information technology.
A type of Logistical Operating Arrangements where flow of products typically proceeding through an established arrangement of firms as it moves from ORIGIN to
FINAL destination.
Echelon
A type of Logistical Operating Arrangements that uses expedited or Premium transportation
Direct
______ leveraged operations requiring join planning concerning the logistics work that each participating firm in a supply chain will perform and be held accountable for
Supply Chain Synchronization
____ is a Multi-firm operational integration across a supply chain, that seeks to coordinate flow of materials, products, and
information between supply chain partners to reduce
duplication and redundancy.
Supply Chain Synchronization
_____ Represents the elements of work necessary to complete
the logistics related to customer accommodation, manufacturing, or procurement
Logistics Performance Cycle Structure
It is the Basic unit of supply chain design and operational control, that serves as a Framework for implementation of integrated logistics across the supply chain.
Logistics Performance Cycle Structure
True or False
A major objective of logistics in all operating areas is to
reduce performance cycle uncertainty.
true
“Customer” from perspective of _________:
- End user of product in consumer market.
- Customer company in business market.
Total Supply Chain
“Customer” from perspective of _________:
— Intermediate customer organizations exist between the
firm and end users.
Specific Firm within a supply chain
“Customer” from perspective of _________:
Any delivery location – for example, consumer homes,
retail or wholesale businesses, receiving docks of manufacturing plants, warehouses, etcetera.
Logistics Manager
True or False
Products and services are more basic than Customer needs and requirements
False; the other way around
True or False
Different customers have same needs and requirements.
False; Different needs.
true or false
Products and services become meaningful only when available and positioned from the customer’s perspective
True
True or False
Profit is more important than sales volume.
true
_____ is a traditional strategy with a focus on creating
successful individual
transactions between the
company and its customers.
transactional marketing
_____ is a a new strategy with a
focus on the development of long- term relations with key
supply chain participants in an effort to develop and retain
long-term preference
and loyalty.
Relational Marketing
______ recognizes that each individual customer may indeed have unique requirements.
Micromarketing or one-to-one marketing
(Can be more than 1 answer)
One-to-one relationships can:
A.) Significantly reduce transaction costs.
B.) Better accommodate customer requirements.
C.) Move individual customer transactions into a matter of
routine.
D.) Increase the complexity of inventory management
A, B, C
Enumerate three to Overcome to Enable Exchange of Goods and Services
– Discrepancy in Space
– Discrepancy in Time
– Discrepancy in Quantity and Assortment
Discrepancy in _____ refers to the fact that the location of
production activities and location of consumption are seldom the same.
Space
Discrepancy in _____ refers to the difference in timing
between production and consumption.
time
Discrepancy in ______ refers to the mismatch between customer demand and manufacturing supply.
Quantity and Assortment
True or False
Firms seek small quantities and wide assortment.
False; Customers instead of Firm
True or False
Customers specialize in large quantities of a limited assortment.
False; Firms instead of Customers
Enumerate 4 Generic Supply Chain Service Outputs Eliminate Discrepancies
– Spatial Convenience
– Lot size
– Waiting Time
– Product Variety and Assortment
____ is the amount of shopping time and effort that will be required on the part of the customer.
Spatial Convenience
_____ is the number of units to be purchased in each
transaction.
Lot size
_____ is the amount of time the customer must wait between ordering and receiving products.
Waiting Time
_____ Describes an approach by which a firm markets to customers through a variety of channels. It considers that different channels offer different mixes of the generic supply chain service outputs.
Omnichannel Marketing
Enumerate three levels of Customer Accomodation
– Customer service
– Customer satisfaction
– Customer success
Customer Service Provides Customers…
* With the right ____.
* Of the right ____.
* At the right ____.
* At the right ___.
* In the right ____.
* At the right ____.
* With the right ____.
- With the right amount.
- Of the right product.
- At the right time.
- At the right place.
- In the right condition.
- At the right price.
- With the right information.
Under Availability
____ measures the magnitude or impact of stockouts
over time.
Fill rate
Under Availability
____ occurs when a firm has no product available to
fulfill customer demand.
Stockouts
Under Availability
______ requires shipping everything that a customer orders to count as a complete shipment.
Orders shipped complete
Under Operational Performance
____ of the performance cycle is the elapsed time from when a customer established a need to order until the product is delivered.
speed
Under Operational Performance
____ of the order cycle is measured by the number of times that actual cycles meet the time planned for completion
Consistency
Under Operational Performance
_____ is a firm’s ability to accommodate special
situations and unusual or unexpected customer requests.
Flexibility
Under Operational Performance
____ is a firm’s ability to quickly
implement contingency plans when a failure occurs in the supply chain.
Malfunction recovery
Under Service reliability:
____ measures how many shipments arrive without damaged products
Damage Free
Under Service reliability:
_____ measures what percentage of invoices contain no errors
Error Free Invoices
Under Service reliability:
___ measures how many shipments
contain the exact amount of product ordered.
Shipment matches order
Under Service reliability:
____ measures how many shipments are made to the customer’s selected location.
Shipped to correct location
The _______ is an order that is:
* Delivered complete.
* Delivered on time.
* Delivered at the right location.
* Delivered in perfect condition.
* Delivered with complete and accurate documentation
Perfect Order
Enumerate 2 factors firms use to establish their Basic Service Platforms
– Competitor or industry acceptable practice.
– Firm’s overall marketing strategy.
True or False
Low service levels are more common when competing on the basis
of PRICE
True
True or False
Low service levels are needed to compete on the basis of LOGISTICS COMPETENCY.
False; should be High Service Levels
Enumerate what are the 3 BASIC ELEMENT to perform in the Basic Service Platform
— Service Reliability Level
— Availability Level
— Operational Performance Level
True or False
If Perceived Performance < Expectations, then Satisfaction
False. Should be Disatisfaction
_____ states that if a customer’s expectations of a supplier’s performance are met or exceeded, the customer will be satisfied.
Expectancy disconfirmation
(Can be more than one answer)
Which of the following are customer expectations for logistics performance?
- Reliability.
- Responsiveness.
- Access.
- Communication.
- Credibility.
- Security.
- Courtesy.
- Competency.
- Tangibles.
- Knowing the customer.
All of the above
What are the 6 Gaps managers must fill to satisfy customers
1.) Knowledge (Understanding of Customers)
2.) Standards (Standards do not reflect Customer Expectations)
3.) Performance (Difference of Actual and Standard Performance)
4.) Communications (Overcommitment or Promise)
5.) Perceptions (Perceived performance vs Actual)
6.) Satisfaction/Quality (One or more gap exists)
True or False:
Performance that meets customer expectations one year may result in extreme dissatisfaction next year.
True because Competition in an industry will often raise the minimum standards that customers expect
True or False
Customer satisfaction focuses on expectations, not a customer’s real requirements.
True
True or False
“Satisfied” customers guarantee zero defects.
False; it is still likely to defect.
_________ refer to unique or specific activities that firms can jointly develop to enhance their efficiency, effectiveness, and relevancy
Value-added services
In Developing a Customer Accommodation Strategy; Companies need:
- A framework for choosing the appropriate customer-specific strategies.
- Programs for customer relationship management.
______ is a process for improving the overall performance of a business by better understanding and anticipating the wants and needs of customers.
Customer relationship management (CRM)
What are the 8 Dimensions of Product Quality?
– Performance (How well)
– Reliability (How consistent)
– Durability (Life expectancy of product)
– Conformance (How much the product meets its design specifications)
– Features (What functions)
– Aesthetics (How visually pleasing)
– Serviceability (How repairable)
– Perceived Quality (Based on Customer before, during, and after XP)
PPFS CARD
____ is a philosophy focused on meeting customer expectations with respect to ALL NEEDS, across ALL COMPANY FUNCTIONS, and RECOGNIZING ALL CUSTOMERS, both internal and external.
Total Quality Management
(Can be more than 1 answer)
Which of the follow are the TQM’s basic Conceptual Elements
- Top management commitment and support.
- Emphasizing short-term profits over long-term quality.
- Maintaining a customer focus in product, service, and process performance.
*Prioritizing individual performance. - Integrating operations within and between organizations.
- Commitment to continuous improvement.
– Top management commitment and support.
– Maintaining a customer focus in product, service, and process performance.
– Integrating operations within and between organizations.
– Commitment to continuous improvement.
(can be more than 1)
Which of the following elevated the importance of procurement to the firm
- Purchased goods and services are among the largest cost elements for most firms.
- The growing emphasis on outsourcing has expanded the supply base of organizations.
- Procurement decisions are made solely by individual departments without organizational input.
- Purchased goods and services are among the largest cost elements for most firms.
- The growing emphasis on outsourcing has expanded the supply base of organizations.
_______ is an organizational capability that ensures the firm is positioned to implement its strategies with support from its supply base.
Procurement
(Can be more than 1)
Which of the following are true about Procurement
– Procurement looks up and down the entire supply chain for impacts and opportunities.
– Procurement strategies remain constant regardless of market conditions.
– Procurement is primarily concerned with price negotiation, rather than total cost of ownership.
– Focus is on building relationships with suppliers and downstream customers.
– Involvement with outsourcing includes more than just purchasing raw materials and parts.
– The success of procurement is measured solely by the speed of transactions.
– Procurement functions independently of other departments within the organization.
– Procurement looks up and down the entire supply chain for impacts and opportunities.
– Focus is on building relationships with suppliers and downstream customers.
– Involvement with outsourcing includes more than just purchasing raw materials and parts.
Enumerate 5 Procurement Objectives – Focus on Several Issues Related to Firm’s Supply Base
- Ensuring continuous supply.
- Rationalized inventory investment.
- Quality improvement of supply.
- Technology and innovation.
- Lowest total cost of ownership (TCO).
Enumerate the 3 Major Categories for components of total cost of ownership (TCO).
— Pre-transaction Components (Identify needs, investigate and qualify sources, adding supplier to internal systems, educating firm to supplier’s operations and supplier to firm’s operations)
— Transaction Components (Price, order placement, delivery, duties, payments, inspection, Return of parts, Correction)
— Post-transaction Components (Line fallout, Defective FG, and Reject before sale, Field Failures, repair/replacement in field, Customer goodwill/reputation of firm, Cost of repair parts, cost of maintenance and repairs)
Which of the alternative Procurement strategies includes the following activities?
– Volume Consodation
– Reducing total number of suppliers while minimizing risk.
User buy
Which of the alternative Procurement strategies includes the following activities?
- Building partnerships.
- Sharing information and knowledge.
- Identifying linked processes and share opportunities for improvement.
Supplier operational integration.
Which of the alternative Procurement strategies includes the following activities?
- Involving the supplier early in product design.
- Reducing complexity.
- Value engineering
Value management extending beyond buyer
True or False
Insourcing: Make Decisions
while
Outsourcing: Buy decisions
True
Cost savings are estimated between ___% and ___% of purchases.
5 to 15 %
Potential savings is $____ million annually for a company with revenues of $100 million.
5.5
Primary objective of ________ is to cut waste, reduce cost, and develop a relationship that allows both buyer and seller to achieve mutual improvements.
Supplier Operational Integration
(Can be more than 1 answer)
Supplier Operational Integration can take many forms, which are?
- Collaboration between buyers and suppliers is primarily driven by regulatory requirements.
- Buyer providing detailed sales information to supplier
- Buyers and suppliers working together to redesign linked
processes - Buyer and supplier eliminate duplicated activities
- Suppliers independently manage inventory without any input from buyers.
- Buyer providing detailed sales information to supplier
- Buyers and suppliers working together to redesign linked
processes - Buyer and supplier eliminate duplicated activities
True or False
Supplier Operational Integration can provide incremental savings of 10% to 20% over the benefits of volume consolidation.
false; 5 to 25%
True or False
In context of Early Supplier Involvement during Product Design, Cost of Design Decreases from Concept Development, Design, and Prototype
False. It increases.
It is low during Idea generation and Assessment
True or False
In context of Early Supplier Involvement during Product Design, Flexibility in Design decreases from Assessment, Concept Development, Design, and Prototype
True; It is only high during idea generation, then decreases exponentially during assessment
Enumerate what are the 4 Procurement Strategy Portfolio
– Routine Purchases
– Bottleneck Purchases
– Leverage Purchases
– Critical Purhases
Which has High Supply Risk Level and High Value to Firm
– Routine Purchases
– Bottleneck Purchases
– Leverage Purchases
– Critical Purhases
– Critical Purchases
For Reference: Procurement Strategy Matrix (Supply Risk Level: Value to Firm)
– Bottleneck Purchases (H: L)
– Routine Purchases (L:L)
– Critical Purhases (H:H)
– Leverage Purchases (L:H)
Which has Low Supply Risk Level and High Value to Firm
– Routine Purchases
– Bottleneck Purchases
– Leverage Purchases
– Critical Purhases
– Leverage Purchases
For Reference: Procurement Strategy Matrix (Supply Risk Level: Value to Firm)
– Bottleneck Purchases (H: L)
– Routine Purchases (L:L)
– Critical Purhases (H:H)
– Leverage Purchases (L:H)
Which has High Supply Risk Level and Low Value to Firm
– Routine Purchases
– Bottleneck Purchases
– Leverage Purchases
– Critical Purhases
– Bottleneck Purchases
For Reference: Procurement Strategy Matrix (Supply Risk Level: Value to Firm)
– Bottleneck Purchases (H: L)
– Routine Purchases (L:L)
– Critical Purhases (H:H)
– Leverage Purchases (L:H)
Which has Low Supply Risk Level and Low Value to Firm
– Routine Purchases
– Bottleneck Purchases
– Leverage Purchases
– Critical Purhases
– Routine Purchases
For Reference: Procurement Strategy Matrix (Supply Risk Level: Value to Firm)
– Bottleneck Purchases (H: L)
– Routine Purchases (L:L)
– Critical Purhases (H:H)
– Leverage Purchases (L:H)
Which Objective for Globalization has a Rationale…
* Open up more markets.
* Expand beyond competitors.
* Obtain accessibility to markets that limit access without
local operations.
Answer: Increase Revenue
For Reference: 7 Objective/Rationale for Globalization
– Increase Revenue
– Achieve Economies of Sale
– Reduce Direct Cost
– Advance Technology
– Reduce Global Tax Liability
– Reduce Market Access Uncertainty
– Enhance sustainability
Which Objective for Globalization has a Rationale…
* To Take advantage of production capacity
Answer: Achieve Economies for Sale
For Reference: 7 Objective/Rationale for Globalization
– Increase Revenue
– Achieve Economies of Sale
– Reduce Direct Cost
– Advance Technology
– Reduce Global Tax Liability
– Reduce Market Access Uncertainty
– Enhance sustainability
Which Objective for Globalization has a Rationale…
* To take advantage of lower labor rates or real estate
expense
– Reduce Direct Cost
For Reference: 7 Objective/Rationale for Globalization
– Increase Revenue
– Achieve Economies of Sale
– Reduce Direct Cost
– Advance Technology
– Reduce Global Tax Liability
– Reduce Market Access Uncertainty
– Enhance sustainability
Which Objective for Globalization has a Rationale…
* Reduce energy requirements by reducing distance or
changing transportation mode.
* Take advantage of differences in production requirements.
* Obtain access to advanced technology that may not be
available from current locations due to historical
investments.
* Obtain access to specialized expertise or language skills.
-Answer: Advance technology
For Reference: 7 Objective/Rationale for Globalization
– Increase Revenue
– Achieve Economies of Sale
– Reduce Direct Cost
– Advance Technology
– Reduce Global Tax Liability
– Reduce Market Access Uncertainty
– Enhance sustainability
Which Objective for Globalization has a Rationale…
* Obtain local or regional tax benefits related to property, inventory, or income.
* Obtain reductions in value-added taxes due to localized production or other value-added services. (example, packaging, inventory management, customization).
Answer: Reduce Global Tax Liability
For Reference: 7 Objective/Rationale for Globalization
– Increase Revenue
– Achieve Economies of Sale
– Reduce Direct Cost
– Advance Technology
– Reduce Global Tax Liability
– Reduce Market Access Uncertainty
– Enhance sustainability
Which Objective for Globalization has a Rationale…
* Source product from location involving less transportation uncertainty.
* Source product from location that involves fewer security constraints.
Answer: Reduce Market Access Uncertainty
For Reference: 7 Objective/Rationale for Globalization
– Increase Revenue
– Achieve Economies of Sale
– Reduce Direct Cost
– Advance Technology
– Reduce Global Tax Liability
– Reduce Market Access Uncertainty
– Enhance sustainability
Which Objective for Globalization has a Rationale…
Source products or other resources (including human resources) from locations that have ongoing availability of materials and expertise such as energy or trained workers.
Answer: Enhance Sustainability
For Reference: 7 Objective/Rationale for Globalization
– Increase Revenue
– Achieve Economies of Sale
– Reduce Direct Cost
– Advance Technology
– Reduce Global Tax Liability
– Reduce Market Access Uncertainty
– Enhance sustainability
Read only
Domestic Sourcing:
Product life cycle length: Short
Product variations in size, color, or style: Many
Labor content: Low
Intellectual property content: High
Transport cost: High
Product value: High
Security or import constraints: High
Transport uncertainty: High
Low-Cost Country Sourcing:
Product life cycle length: Long
Product variations in size, color, or style: Few
Labor content: High
Intellectual property content: Low
Transport cost: Low
Product value: Low
Security or import constraints: Low
Transport uncertainty: Low
_____ considers the following:
* More frequent delivery of smaller quantities
* Close cooperation and communication
JIT Delivery
Enumerate 4 basic Manufacturing Processes
– Job Shop
– Batch Process
– Line Flow Process
– Continous Process
One of the 4 basic manuf processes that creates a custom product for each customer
Job Shop
for reference, 4 basic Manufacturing Processes
– Job Shop
– Batch Process
– Line Flow Process
– Continuous Process
One of the 4 basic manuf processes that manufactures a small quantity of an item
in a single production run
Batch Process
for reference, 4 basic Manufacturing Processes
– Job Shop
– Batch Process
– Line Flow Process
– Continuous Process
One of the 4 basic manuf processes that has standard products with a limited number of variations moving on an assembly line through stages of production.
Line Flow Process
for reference, 4 basic Manufacturing Processes
– Job Shop
– Batch Process
– Line Flow Process
– Continuous Process
One of the 4 basic manuf processes that is used to manufacture such items as gasoline, laundry detergent, and chemicals.
COntinous Process
for reference, 4 basic Manufacturing Processes
– Job Shop
– Batch Process
– Line Flow Process
– Continuous Process
___ produces a unique product quickly
and at a low cost using a high-volume production process.
Mass Customization
Enumerate 4 Manufacturing Strategies Match Market Requirement
– Engineer-to-order (ETO)
– Make-to-order (MTO)
– Assemble-to-order (ATO)
– Make-to-stock (MTS)
One of the Manufacturing Strategies Match Market Requirements:
_____ is used when products are unique and extensively customized for the specific needs of individual customers.
Engineer-to-order (ETO)
For reference: 4 Manufacturing Strategies Match Market Requirement:
– Engineer-to-order (ETO)
– Make-to-order (MTO)
– Assemble-to-order (ATO)
– Make-to-stock (MTS)
One of the Manufacturing Strategies Match Market Requirements:
____ relies on relatively small quantities, but more complexity.
* Requires much interaction with customer to work out design and specifications
* Usually shipped direct to customer
– Make-to-order (MTO)
For reference: 4 Manufacturing Strategies Match Market Requirement:
– Engineer-to-order (ETO)
– Make-to-order (MTO)
– Assemble-to-order (ATO)
– Make-to-stock (MTS)
One of the Manufacturing Strategies Match Market Requirements:
___ is when base components are made and stocked to forecast, but products are not assembled until a customer order is received.
* (Manufacturing postponement is practiced here.)
Assemble-to-order (ATO)
For reference: 4 Manufacturing Strategies Match Market Requirement:
– Engineer-to-order (ETO)
– Make-to-order (MTO)
– Assemble-to-order (ATO)
– Make-to-stock (MTS)
One of the Manufacturing Strategies Match Market Requirements:
____ features economies of scale, large volumes, long production runs, low variety, and distribution channels
– Make-to-stock (MTS)
For reference: 4 Manufacturing Strategies Match Market Requirement:
– Engineer-to-order (ETO)
– Make-to-order (MTO)
– Assemble-to-order (ATO)
– Make-to-stock (MTS)
Match the choice of strategy that during the performance cycles a customer experience
During Product Design: ____
During Procurement Cycle: ____
During Manufacturing Cycle: ____
During Customer Delivery Cycle: ____
Choices:
MTO, ATO, MTP, ETO
During Product Design: MTP Strategy
During Procurement Cycle: ATO Strategy
During Manufacturing Cycle: MTO Strategy
During Customer Delivery Cycle: ETO Strategy
Manufacturing Process Characteristics
What Strategy/ies used during JOB Shop
ETO / MTO
Manufacturing Process Characteristics
What Strategy/ies used during Batch Process
ETO/MTO/ATO
Manufacturing Process Characteristics
What Strategy/ies used during Line Flow
ATO/MTP
Manufacturing Process Characteristics
What Strategy/ies used during Continous Flow
MTP
Read only
Market Characteristics of Mass Customization:
- Sufficiently large customer segment that values “translatable variety”.
- Turbulent, dynamic market.
- Unpredictable demand, but not entirely unpredictable!.
- Little impact of regulation or other constraints (designer drugs?).
Product/Process Characteristics of Mass Customization
- Modular or adjustable product building blocks.
- Predictable components/functional interactions.
- Standardized process/skill building blocks.
- Reasonable lead times, steps, work content.
______ Produce:
* Only the goods/services that customers want.
* As quickly as customers want.
* With only the features customers want.
* With perfect quality.
* With the minimum possible lead time.
* Without waste.
* With occupational development of workers.
Lean Systems
True or False
Three Sigma quality is the result of a well-defined and
structured process
False; Six Sigma instead
True or False
All processes inherently move over time.
True
_____: quality improvement through elimination of defects and variation.
Six Sigma
True or False
Design for logistics includes the requirements and framework
for logistical support in the early phases of product development.
True
which Considers:
* What are we going to make?
* How are we going to make it?
* What logistics capabilities do we need?
* How are we going to integrate our suppliers into the process?
* Will there be any subassembly manufacture by suppliers?
* Will we need to outsource some parts or assemblies?
______ and supportive information seek to integrate information and coordinate overall logistics and supply
chain decisions while recognizing the dynamics between other firm functions and processes
Supply Chain Planning
Enumerate the 3 drivers for Supply Chain Planning
– Supply Chain Visibility
– Simultaneous Resource Consideration
– Resource Utilization
What is one of the drivers for Supply Chain Planning that describes the following:
- Visibility regarding location and status of inventory.
- Information
- Identify inventory status exceptions.
- Reduce risk and uncertainty.
Supply Chain Visibility
For reference:
3 drivers for Supply Chain Planning
– Supply Chain Visibility
– Simultaneous Resource Consideration
– Resource Utilization
What are 2 Simultaneous Resource Considerations
– Jointly balance supply chain. (Demand, Capacity, Material requirements, Constraints.)
– Jointly balance supply chain assets. (constraints) (Raw materials, Production, Storage, Transportation.)
( Can be more than 1)
Which of the following are considered objectives in Supply Chain Planning
- Developing a consistent forecast within the firm.
- Prioritizing the reduction of production costs above all other factors.
- Balancing supply and demand within the firm.
- Exchanging demand and inventory availability information with supply chain partners.
- Developing consistent inventory availability plans throughout the supply chain.
- Establishing rigid inventory levels that do not adapt to changing market conditions.
- Developing a consistent forecast within the firm.
- Balancing supply and demand within the firm.
- Exchanging demand and inventory availability information with supply chain partners.
- Developing consistent inventory availability plans throughout the supply chain.
One of the Supply Chain Planning Applications known as ____, which is the forecasting of unit sales by geography and product.
Demand Planning
For reference: Types of Supply Chain Planning
– Demand Planning
– Production Planning
– Logistics Planning
– Inventory Deployment
One of the Supply Chain Planning Applications known as ____ , which is the development of a manufacturing plan considering resource availability.
– Production planning
For reference: Types of Supply Chain Planning
– Demand Planning
– Production Planning
– Logistics Planning
– Inventory Deployment
One of the Supply Chain Planning Applications known as ____ , which is the coordinating overall movement demand,
vehicle availability, and transportation expense.
– Logistics Planning
For reference: Types of Supply Chain Planning
– Demand Planning
– Production Planning
– Logistics Planning
– Inventory Deployment
One of the Supply Chain Planning Applications known as ____ , which is coordinating product demand with the ability to produce and ship product to the consumer.
Inventory deployment
____ is an internal-to-firm demand collaboration process where individuals from operations-focused and customer-facing processes collaborate to develop a coordinated plan for responding to customer requirements within the resource constraints of the enterprise.
Sales & Operations Planning (S&OP)
_____ Collaboratively establishes a coordinated plan for responding to customer requirements within the resource constraints of the enterprise
S&OP Process
(Can be more than 1)
Which of the following are considerations and activities included in Resource Utilization
- Plant and equipment resources.
- Production run lengths.
- Set-ups.
- Complete trade-off assessment.
All of the above
(Can be more than 1)
Which of the following are considerations in S&OP Process?
- Focus solely on historical sales data
- Consider marketing and sales plans (including innovation and pricing plans).
- Consider materials availability.
- Eliminate risk evaluation in favor of maintaining a steady production schedule.
- Prioritize plans and choices.
- Evaluate and prioritize risks.
- Set risk tolerances.
- Disregard collaboration between different departments.
- Manage, monitor, and control demand and supply plan performance and variances.
- Consider marketing and sales plans (including innovation and pricing plans).
- Consider materials availability.
- Prioritize plans and choices.
- Evaluate and prioritize risks.
- Set risk tolerances.
- Manage, monitor, and control demand and supply plan performance and variances.
(can be more than 1)
Measurements and functional goals on the operations- focused and customer-facing “side,” include which of the following?
- short-term sales metrics
- Profitable customers.
- Emphasizing production efficiency at the expense of customer feedback.
- Product mix priorities.
- Profitable customers.
- Product mix priorities.
External trends and their impact on strategic plans includes which of the following?
- Trends in customer demand.
- Changes in technology.
- Changes in competitive environment.
- Changes in resource availability.
ALl of the above
Read only:
S&OP Process
* Develop functional input (marketing, sales, finance, and operations).
* Collaborate to develop common demand forecast.
* Collaborate to determine resource availability (supplies, raw materials, and capacities.
* Identify alternatives and assess trade-offs.
* Review financial implications.
* Review with executives to agree on common plan.
* Execute plan.
* Review results of plan
Noted
True or False:
Making S&OP Work includes executing the process every year
False; should be as frequent as every month
Which of the following are benefits from S&OP?
- Improves customer service and perfect order percentage.
- Guarantees 100% accuracy in demand forecasting.
- Reduces cash-to-case cycle time.
- Enhances gross profit margin.
- Improves capacity utilization.
- Eliminates all supply chain risks.
All except:
* Guarantees 100% accuracy in demand forecasting. (It only increases accuracy but never guarantees a 100% accuracy)
* Eliminates all supply chain risks
(Can be more than 1)
Which of the following are barriers to effective S&OP?
- Disconnect between S&OP and corporate strategy (example, transaction versus business focus).
- Overemphasis on data analysis at the expense of intuitive decision-making.
- Lack of senior management support/decision.
- Having too many stakeholders involved in the decision-making process.
- Unrealistic “single-number”.
- Lack of commitment to regular meetings.
- Short-term planning horizon/focus.
- Biased “leader”.
- Failure to consider product life cycle issues and external business trends.
- Failure to prioritize.
- Lack of proper and consistent measures.
- Excessive communication between departments.
All Except:
– Overemphasis on data analysis at the expense of intuitive decision-making.
– Excessive communication between departments.
(Excessive communication can actually enhance collaboration and S&OP effectiveness.)
– Having too many stakeholders involved in the decision-making process.
(Involving multiple stakeholders typically enhances perspective and accountability in S&OP.)
_______ Focuses on component or item, considers network of plants, distribution centers, and customers, and requires links for lead times
Advanced Planning and Scheduling (APS)
What are the 4 APS System Components?
Demand management.
Resource management.
Resource optimization.
Resource allocation.
Is it “Operations-Focused” or “Customer-Facing”?
– Emphasis on Effectiveness
– Cost to Serve
Customer-Facing
Is it “Operations-Focused” or “Customer-Facing”?
– Emphasis on Efficiency
– Cost to Provide
Operations-Focused”
Is it “Operations-Focused” or “Customer-Facing”?
Maximize service options
Customer-Facing
Is it “Operations-Focused” or “Customer-Facing”?
Sales forecasts/sales targets
Customer-Facing
Is it “Operations-Focused” or “Customer-Facing”?
Tailored service and product offerings – flexibility
Customer-Facing
Is it “Operations-Focused” or “Customer-Facing”?
Predictable demand patterns is
assumed/desired
Operations-Focused
Is it “Operations-Focused” or “Customer-Facing”?
Cost reduction/containment
Operations-Focused
Is it “Operations-Focused” or “Customer-Facing”?
Operational plans/order forecasts
Operations-Focused
Read only:
What are the steps for Collaborative Planning, Forecasting, and Replenishment
Steps:
1. Create a joint business plan where a customer and supplier share, discuss, coordinate, and rationalize their own individual strategies to create a joint plan.
2. Create a joint calendar for planning activities.
3. Create a common sales forecast.
4. Develop production, replenishment, and shipment plans
(Can be more than 1)
Which of the following is/are NOT included in the Rationale for Supplier Integration
* Identifying how suppliers can enhance customer value.
* Facilitating customer segmentation with key customers.
* Facilitating joint product innovation and development.
* Enhancing the relationship between firm and supplier.
– Facilitating customer segmentation with key customers.
Because it is for Customer Integration not Supplier Integration
(Can be more than 1)
Which of the following is/are NOT included in the Rationale for Customer Integration
* Identifying how suppliers can enhance customer value.
* Facilitating customer segmentation with key customers.
* Facilitating joint product innovation and development.
* Allowing firms to customize products and delivery capabilities with key customers.
- Identifying how suppliers can enhance customer value.
- Facilitating joint product innovation and development.
Because both are for Supplier integration and not Customer integration
____ is the specific definition of what is projected to be sold, when, and where.
Forecast
True or False
Forecasting achieves enhanced
service or increased inventory
False; reduced inventory instead of increase
Enumerate the 3 forecasting requirements
- Collaborative planning.
- Requirements planning.
- Resource management.
Enumerate the 6 Forecast Components
- Base.
- Seasonal.
- Trend.
- Cyclical.
- Promotional.
- Irregular.
(can be more than 1)
Which of the following is/are considered major Factor/s Influencing Forecasts
- Promotions.
- Internal employee morale.
- Price changes.
- Financial requirements.
- Random fluctuations in stock market performance.
- Product substitution.
- New product introductions.
- Competitive actions.
All except:
* Random fluctuations in stock market performance.
* Internal employee morale.
What forcasting technique:
Description
Unweighted average of the PREVIOUS periods sales
Application
Useful when there are only base and irregular demand components
Limitation
Not useful when there is significant seasonality or trend
Moving Average
What forcasting technique:
Description
Exponentially weighted moving
average using smoothing constants to
place greater weights on more recent demands
Application
Useful when necessary to maintain data and generate forecasts for many items which incorporate individual trend and SEASONALITY components
Limitation
Not as useful when there are other factors influencing demand, such as promotions, price changes, or competitive actions not regularly scheduled
Exponential Smoothing
What forcasting technique:
Description
Uses time period as the independent variable to predict future demand patterns
Application
Useful when demand patterns REPEAT with
some cyclic, seasonal, or trend components
Limitation
Not particularly responsive to change as it takes numerous periods for the model to
identify changes in patterns and for the
forecast to respond to the pattern changes; also requires judgment regarding
selecting variables that should be included
Time Series
What forcasting technique:
Description
Uses other INDEPENDENT VARIABLES, such as price, promotion plans, or related product volumes to predict sales
Application
Useful when there’s a strong linear or non-linear relationship between independent variables and demand
Limitation
Not particularly responsive to change, as it takes numerous periods for the model to identify changes in patterns and for forecasts to respond to the pattern changes; also requires judgment with selecting which variables to included
Regression
What forcasting technique:
Description
Uses more complex statistical techniques to identify complex demand history relationships, such as spectral analysis, Fourier analysis, transfer functions and neural networks
Application
Useful with complex, generally non-linear, relationships between historical patterns and demand. Analyses identify and evaluate alternative sets of parameters to determine the best fit and use it to predict future demand. Often more useful for macro forecasts, such as energy consumption, economic growth, or aggregate transportation.
Limitation
While there are quantitative factors for selecting the best model, there is often substantial judgment involved as well, so these techniques are often not suited for
detailed item-location-time period forecasts.
multi-variate
____ is the largest expenditure in logistics, usually
representing over 60% of a typical firm’s total logistics spend
Transportation
A transportation functionality known as ____, which is the movement of inventory to specified destinations.
Product Movement
A transportation functionality known as ____, which occurs while product is in transit or
waiting to be moved or unloaded.
Product storage
A transportation functionality known as ____, describing that in-transit inventory is “captive,” usually inaccessible during transportation
Restrictive element
A transportation functionality known as ____, describing that inventory can be diverted during shipment to a new destination.
Flexible Element
One of the transportation participants known as _____, who have a common interest in moving goods from origin to destination within a give time at the lowest cost.
Shipper and Consignee
One of the transportation participants known as _____, who desire to maximize their revenue from movement while
minimizing associated costs.
Carriers
One of the transportation participants known as _____, who facilitate carrier and customer matching.
Agents (brokers and freight forwarders)
One of the transportation participants known as _____, who desires a stable and efficient transportation environment
to support economic growth.
Government
One of the transportation participants known as _____, that offers a wide array of technology applications, primarily focused on providing real-time status
information.
INformation technology
One of the transportation participants known as _____, who is concerned with transportation accessibility, expense, and
standards for security, safety, and the environment.
Public
A type of regulation seeking to make transportation equally accessible and economical to all without discrimination.
Economic Regulation
A type of regulation which takes measures to protect public safety and environment
Social/Safety Regulation
Enumerate 5 Transportation Modal Structure
– Rail (Tracks)
– Highway (trucks)
– Water
– Pipeline
– air
True or False
Carload refers to moving freight by two or more modes of transportation.
false; should be Intermodal not carload
True or False
Trucks are more efficient than rail for small shipments over short distances.
true
___ is a transportation modal structure that ranks between rail and truck in fixed cost.
Water
___ is a transportation modal structure that has the highest fixed cost and lowest variable cost of all modes.
Pipeline
True or False:
A transportation mode in water has no emissions and no empty container or vehicle to return
False; should be pipeline instead of water
A transportation modal structure that is the fastest of all modes.
Air
a transportation modal structure where its fixed cost is 2nd lowest, but variable cost are extremely high
Air
true or false
Most products shipped in trucks have high value, high priority, or extreme “perishability”
False; should be air-shipped
5 IDENTIFICATION
- _____ is the elapsed movement time from origin to destination.
*_____ is the ability of a mode to service any given pair of locations. - ____ is the potential variance from expected delivery schedule.
*____ is the ability to handle any load size or configuration. - _____ is the quantity of scheduled movements a mode can handle.
– speed
– Availability
– dependability
– Capability
– Frequency
_____ is of the specialized transportation services that is:
* Combining the use of truckload and rail.
* Best known and most widely used is trail-on-flat-car (TOFC) or
container-on-flat-car (COFC).
* Service offered by shipping lines
* More than 1 mode of transport on one transport document
Intermodal
______ are firms that do not own assets acting as a middleman between shippers and carriers
Nonoperating Intermediaries
Transportation Economics and Pricing
Driven by multiple factors, primary ones being:
* ________ – the cost per unit weight
decreases as distance increases.
* ________ – the cost per unit weight decreases
as total weight increases.
* _______ – the cost per unit weight decreases
as the density of the shipment increases
Economy of Distance
Economy of Weight
Economy of Density
Enumerate 7 Economic Drivers of Rates in Transportation
- Distance.
- Weight.
- Density.
- Stowability.
- Handling.
- Liability.
- Market
____ is rate of cost decreases as
distance increases.
Tapering Principle
One of the 7 Economic Drivers of Rates in Transportation which Directly contributes to variable expenses.
Distance and Cost
For reference: 7 Economic Drivers of Rates
* Distance.
* Weight.
* Density.
* Stowability.
* Handling.
* Liability.
* Market
True or false
Cost per pound decreases as weight decreases until carrier vehicle is full.
False.
Cost per pound
decreases as weight
INCREASES until carrier
vehicle is full.
True or false
Cost per unit of weight
declines as product density
increases
TRUE
one of the economic drivers of rates in transportation, describing odd package shapes and sizes waste cubic capacity
– Stowability
For reference: 7 Economic Drivers of Rates
* Distance.
* Weight.
* Density.
* Stowability.
* Handling.
* Liability.
* Market
True or False
Items with circular shapes
are more accessible to stow
False. Rectangular in shape instead
____ is defined as a method used to optimize the packing or arrangement of items or products within containers, pallets, or trucks to maximize space
utilization and minimize wasted space.
nesting
one of the economic drivers of rates in transportation where carriers must accept financial responsibility
Liability
In context of MARKET
*________ – economy of scale.
* ______ – movements both ways between a given market/lane.
* ______ – opportunity to avoid empty miles.
* _____ – also known as empty miles to relocate equipment.
– Lane volumes
– Balance
– Back haul
– Dead head
4 Costing freights:
______ – costs that change in a predictable, direct manner in relation to some level of activity.
* _____ – expenses that do not change in the short run and
must be paid even when a company is not operating.
* _____ – created by the decision to provide a particular service.
* _____ – includes carrier costs that are incurred on behalf of all or select shippers
– Variable
– Fixed
– Joint
– Common
true or false
Variable costs in transportation are only incurred if you operate the
vehicle.
true
True or false
fixed costs in transportation are generally measured per mile or unit weight or both.
false. should be variable costs
true or false
Fixed costs are influenced
by shipment volume.
False; not influenced
______ price is similar to cost-plus pricing strategy for manufacturing.
- Carrier estimates cost of providing service, then adds on a percent profit margin.
- Commonly used for pricing transport of low value goods or in highly competitive situations.
Cost of Service
_____ price is based on value as perceived by the shipper rather than the carrier.
– Higher margins than cost-of-service
pricing.
– Depends on the value of the goods
being shipped.
– Used for high value goods or when no
competition exists.
Value of Service
Why type of FOB
- Seller arranges for transportation and adds charges to the
sales invoice. - Title does not pass to the buyer until delivery is completed.
F.O.B. destination.
Why type of FOB
- Seller states price at point of origin and agrees to load a
carrier but assumes no further responsibility. - Buyer selects carrier and mode, pays transportation, and
assumes the risk for in-transit loss or damage
FOB Origin
What type of Delivering Pricing?
Buyer pays a single price regardless of where they are located
Single zone Delivered pricing
What are the 6 payment options ofr each FOB Price?
1.) Terms of Sale F.O.B. Shipping Point, FREIGHT COLLECT
2.) Terms of Sale F.O.B. Shipping Point, FREIGHT ALLOWED
3.)Terms of Sale F.O.B. Shipping Point, FREIGHT PREPAID
AND CHARGED BACK
4.) Terms of Sale F.O.B. Destination, FREIGHT COLLECT
5.) Terms of Sale F.O.B. Destination, FREIGHT PREPAID
6.) Terms of Sale F.O.B. Destination, FREIGHT COLLECT AND ALLOWED
What type of Delivering Pricing?
Seller charges different prices for different geographic areas.
Multiple zone pricing.
What type of Delivering Pricing?
Final delivered price is determined by the product’s list price plus transportation cost from a designated base point.
Base point pricing.
for reference:
3 types of delivered pricing:
–Single zone delivered pricing.
– Multiple zone pricing.
– Base point pricing.
_____ are an integral part of a firm’s information technology strategy. In general, it is proactively identifies and evaluates transportation strategies and tactics to determine the best method for the shipment of a given product.
Transportation management systems (TMS)
Transportation Management Systems
_________ – key functionalities such as equipment scheduling and yard management, load planning, shipment routing, and shipment track and trace.
__________ – identification of opportunities to consolidate orders and shipments to drive efficiency and economy of scale, occurs both proactively and in a reactive approach.
____________ – recommendation of optimal carrier solution based on service and price.
____________– ensuring all local, state, and federal regulations are followed (example, drivers’ hours of service).
__________ – the “back end” of transportation including paying carriers, auditing bills for accuracy, and tracking claims activity.
– operations
– Consolidation
– Negotiation
– Control
– Payment, auditing, and claims administration
______ is the basic document utilized in purchasing transport services.
* Serves as a receipt and
documents products and
quantities shipped.
* Specifies terms and conditions
or carrier liability and
documents responsibility for all
involved.
Bill of Lading
One of the documentations in transportations where:
* Carrier’s method for charging for services performed.
* May be either prepaid or collect.
Freight bill
One of the documentations in transportations where:
* Lists individual stops or consignees when multiple shipments are placed on a single vehicle.
* Lists the stop, bill of lading, weight, and case count for each shipment.
Shipment Manifest.
____ is Usually, the largest single cost expenditure in most logistics operations.
tranportation
_____ equivalent to purchasing FOB origin; however, seller provides a discount to buyer to account for transportation expense
pickup allowances
