SCMT Exam 2 - FLASHCARDS - Chapter 15
Which one of the following companies does not specialize in logistics?
United Parcel Service
FedEx
DHL
Ford Motors
Ford
The problem of deciding how best to transport goods from plants to customers involves major trade-offs. Which of the following are some of those major trade-offs?
complexity of the information system
flexibility to react to changes
cost of transporting the product
speed of delivery
inventory levels
flexibility to react to changes
cost of transporting the product
speed of delivery
The ______ offers great flexibility for moving goods to virtually any location not separated by water?
Highway
In hub-and-spoke systems, the warehouse is referred to as a
Hub
Today, a manufacturing company most often will contract with a _____ _____ logistics company to handle many of its logistics functions.
Third party
The problem of deciding how best to transport goods from plants to customers is a _____ one that affects the _____ of a product.
difficult; cost
A technique often used by communications companies to locate their transmission towers.
Centroid method
Which of the following is the terms used for systems that combine the idea of consolidation and that of cross-docking?
Hub-and-spoke system
These provide a mechanism to combine diverse factors in an easy-to-understand format.
factor-rating systems
All functions concerned with the movement of materials and finished goods on a global scale, is termed?
international logistics
A special linear programming method that is useful for solving problems involving moving products from several sources to several destinations is known as _____
Transportation method
Production plant constraints are entered into Solver using what type of constraint?
≤
For what percentage of GDP does logistics account?
8–9 percent
Which of the following is a plant location technique that uses a coordinate grid system?
Transportation method
Factor rating
Location method
Centroid method
Centroid method
This can include the presence of similar-sized businesses, the presence of companies in the same industry and, in the case of international locations, the presence of other foreign companies.
Business climate
Services typically have _____ sites to maintain close contact with customers?
Multiple
The two common objectives of the transportation method are what?
Maximize the profit of shipping n units to m destinations
Minimize the cost of shipping n units to m destinations
All functions concerned with the movement of materials and finished goods on a global scale, is termed?
international logistics
For a service, the location decision is closely tied to what?
the market selection decision
What is The art and science of obtaining, producing, and distributing material and product in the proper place and in the proper quantities?
Logistics
What does logistics include?
- Includes forward and reverse flows
- Includes flow of materials and information
- Load, offload, move, sort and select material
- International Logistics: functions on a global scal
What are major logistics activities faced by a firm?
– Order‐taking and order processing
– Warehousing
– Transportation
– Returns
– After‐sales service
– Managing reliable supply of raw materials & components
What are inbound flows?
Work with suppliers and procurement managers, includes
accounting and finance areas
What are outbound flows?
– Work with marketing, sales, and customers
– Ensure customer requirements are satisfied
What does logistics seek to minimize?
Seeks to minimize the total landed costs, not just one cost element
What percent of sales revenue does logistics include?
As much as 25‐30% of each dollar of sales revenue
What is the sum of all product and logistics related costs?
Total landed costs
What types of costs are raw materials, storage, labor?
Costs within country of manufacture
What is the most visible part of logistics?
Transportation
What is the government’s role in logistics?
Economic and safety regulation
What is safety regulation?
(increasing): safe for carriers and public, including increased emphasis on security from terrorist activity and transparency on travel locations
What is the fact that cost per unit of weight decreases as shipment size increases?
Economies of scale
What is the fact that cost per unit traveled decreases as distance moved increases?
Economies of distance
What is combining many smaller shipments into one large shipment?
Consolidation?
What is a pooled delivery?
Combine small shipments from one area going to the same (destination) area
What is a scheduled delivery?
Delivery at specific times
What mode of transportation is : • Major transportation mode in U.S.
• Can offer door‐to‐door service anywhere
• Low fixed costs, high variable costs
Truck
What is the oldest mode of transportation?
Water
What mode of transportation never stops and is not affected by the weather?
Pipeline
Which mode of transportation is the newest and the least utilized mode?
Air
Which mode of transportation has low dependability and high variability?
Air
Which mode of transportation has high variable costs and low fixed costs?
Air
What is value density?
ratio of value to weight, often determines the mode of transportation and type of carrier used
What mode of transportation is fast but expensive?
Air
What mode of transportation has great flexibility?
Truck
What mode of transportation has high capacity and low cost, but is slow?
Ship
What mode of transportation is low cost but slow and variable?
Train
What mode of transportation is highly specialized and limited to
liquids, gases, and solids in slurry form?
Pipeline
What mode of transportation is the last step in many consumer
supply chain?
Hand delivery
What is a warehouse?
Historically a place to store inventory
What is a distribution center?
Strategically store inventory, package final product configurations and assortments
What is handling and locating material increases costs and the risk of damage?
Material handling
What are robots that retrieve, move, and put‐away material?
Automated Storage and Retrieval Systems
What is an RFID?
Electronic tracking of material
What are operations warehouses must perform on a daily basis?
- Receiving and unloading
- In‐storage handling
- Storage
- Order picking
- Staging
- Shipping
What is the ratio of value to weight, often
determines the mode of transportation and type of
carrier used?
Value density
How many transportation modes will most items need to reach their final destination?
Two
What type of packaging can decrease handling costs and risk of damage?
Proper packaging
What cost industry is packaging?
975 billion
What are the benefits of cross-docking?
Reduces:
• Inventory carrying costs by avoiding storage
• Costs of order fulfillment and material handling
• Number of trucks sent to customers by providing
one shipment with a mix of different products
What are requirements of cross-docking?
• Automated material handling
• Warehouse Management Systems
• Order processing systems
• Quality control systems
• Strong relationships among supply chain partners
What is reverse logistics especially important in?
Especially important in online retail
What is value added services?
Providing additional value to the customer, such as postponement in packaging, labeling, or even small final assembly
What manages all or part of another firm’s logistics, transportation, and/or warehousing?
Third party logistics companies (3PL’s)
What are also called Integrated Service Providers (ISPs)?
Third party logistics companies (3PL’s)
What are examples of major third party logistics companies?
UPS, FedEx, Ryder, Ceva Logistics
What are benefits of new service facilities?
• New service facilities far more common than
new factories and warehouses
– Much less expensive
• Multiple sites close to customers
• Location decision closely tied to the market
selection decision
What logistics services do 3PL’s provide?
– Intermodal transportation
– Order processing, tracking and fulfillment and returns
– Inventory and warehouse management
– JIT delivery to assembly line
– Sales support
True or false: A favorable business climate in facility location decision making might include government legislation of tax abatements?
FALSE
What does proximity to customers help with in regards to facility location?
Makes rapid delivery easier
What is business climate in regards to facility location?
Can include presence of similar‐sized
businesses, businesses in the same industry, and other foreign
companies
What is the goal of total costs in regards to facility location?
Object is to minimize overall cost
What is infrastructure in regards to facility location?
Adequate road, rail, air, and sea transportation along with energy and telecommunications
What is quality of labor in regards to facility location?
Educational and skill levels must match needs
What do suppliers support in regards to facility location?
Proximity of important suppliers supports lean production
What are free trade zones in regards to facility location?
A closed facility into which foreign goods can be brought without being subject to the normal customers requirements
What method is widely used, because it allows for diverse factors?
Factor rating system
What method is used for locating single facilities that considers existing facilities, the distances between them, and the volumes of goods to be shipped between them?
Centroid method
What method does not include special shipping costs for less than a full load?
Centroid method
What method assumes inbound and outbound transportation costs are equal?
Centroid method
True or false: Facility location analysis considers the competitive imperative of locating near the appropriate labor pool to take advantage of high technical skills?
TRUE. The educational and skill levels of the labor pool must match the company’s needs
True or false: Because the world is becoming more highly interconnected, the proximity of an important supplier’s plants is not crucial in supporting lean production methods?
FALSE. A high-quality and competitive supplier base makes a given location suitable. The proximity of important suppliers’ plants also supports lean production methods
True or false: Facility location decisions are made using analytical techniques that are able to weigh a large number of different variables equally?
FALSE. Analytical techniques assist the decisions but seldom weigh different variables equally
Which of the following is not a criterion that influences manufacturing plant or warehouse facility location decisions?
A. Proximity to customers
B. Historical cost
C. Infrastructure of a country
D. Quality of labor
E. Business climate
Historical cost
Which of the following is a plant location methodology good for locating a single facility within a set of existing facilities based in distances and volumes of goods shipped?
A. Factor-rating systems
B. Centroid method
C. Decision trees
D. Linear programming
E. Regression analysis
Centroid method. The centroid method is a technique for locating single facilities that considers the existing facilities, the distances between them, and the volumes of goods to be shipped
