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SCMT Final Practice Questions

In the future, how is the heterogeneity of products on a given truckload expected to change?
It is expected to increase.
At the economy level, the price of transportation is ______________. At the carrier level, it is __________________.
Inelastic, elastic
The long tail of demand refers to an increased _____________________________.
Number of SKUs
What percentage of total GDP does transportation account for?
9%
Transportation is a key part of retailers’ strategies to?
Bridge the physical and digital environments
In the U.S., water transportation is divided into which categories?
-Coastal
-Lake
-Inland
In China, what product dominates rail movements?
Coal
In the U.S., which is largest in terms of ton miles moved?
Rail
Why might starting an LTL carrier be even more difficult than starting a TL carrier?
The capital investment required is much greater.
In the U.S., which mode represents the largest total spend?
Motor Carriage
Which country is the world’s second largest exporter of merchandise?
USA
How is the capacity of ocean liners typically measured?
TEU’s
Which type of firm is an intermediary between an ocean carrier and a shipper?
NVOCC
What has happened to the percentage of the population employed in manufacturing since the 1940s?
It has decreased
What can be used to determine the classification in which a product fits?
Harmonized Tariff
What has happened to the total percentage of GDP associated with manufacturing since the 1940s?
It has not changed
How does the in-transit carrying cost % typically relate to the inventory carrying cost % when the inventory is stored in a warehouse?
In-transit carrying cost % is typically lower than the warehouse inventory carrying cost %
_______________ is the time between when an order is placed and when it is received and becomes available for use.
Lead time
Generally, total annual cost = set up cost + holding cost + safety stock cost + average in-transit inventory cost.
True
If the cost of capital for a firm increases, what do you expect happens to the in-transit inventory carrying cost?
In-transit inventory carrying cost increases
Annual transit cost is a function of which two items?
Annual demand and the transit rate
Which of the following are true? (Mark all that apply.)
If a company is using LTL, then the transportation rate should be considered when calculating the EOQ.

If a company is using a truckload carrier, then the transportation rate should not be considered when calculating the EOQ.

When comparing two different carriers or modes of transportation, there are probably two major differences; cost and service.
True
If using less-than-truckload transportation, which aspects of total cost are affected? (Check all that apply.)
Safety stock cost

Transit cost

In-transit inventory cost

Cycle stock cost

If lead time is constant, certain and always the same, then the cost of safety stock must be considered when calculating total inventory cost.
False
To estimate average in-transit inventory, the transit time (days) should be multiplied by the ________________________________.
Daily Demand Rate
If using truckload transportation and the transit rate increases, what do you expect should happen to the company’s order quantity?
Should Stay the Same.
To take into account the effects of transportation on total cost, we replace item cost (C) with item cost plus transit rate (C + Cm)
in the total annual cost equation
True
If using less-than-truckload transportation and the transit rate increases, what do you expect should happen to the company’s order quantity?
Increase
Which of the following are generally true? (Mark all)
As a firm’s degree of globalization increases, is potential for outsourcing internal capabilities for gain advantage with product design increases.

Tariffs are the taxes that countries levy on imports from other countries.

Which are reasons why a product, like jeans, might be produced in multiple countries?
Labor Specialization

Agreements between countries

Which primary motivation typically happens first for a U.S. company?
The company wants to produce globally to sell domestically.
Which capability is even more important when doing business globally?
Agility
Which of the following can be a big problem for U.S. companies when doing business internationally, such as in India and China?
Time Zone Differences

Transport Equipment Differences

Which are reasons why doing business in China may be challenging? (Check all that apply)
Relationships between business partners are different.

Relationships with the government are different.

How carriers are used may be different.

What is the primary meaning of postponement?
Delay
Which if any of the following statements are true.

A.) When a company makes finishing touches to a product close to its original point of manufacture, it is practicing postponement.

B.) Practicing postponement is probably a losing strategy given the rapid advances in technology.

C.) Postponement adds flexibility and agility to manufacturing and distribution processes.

D.) Practicing postponement can be advantageous from both an inventory and forecasting standpoint.

C. and D.
How does postponement likely affect forecast accuracy?
It increases acuuracy
As the degree of globalization increases, which cost is most likely to increase?
Transportation
If a company shifts from domestic to offshore production, which of the following statements is/are likely to be true?
Safety Stock increases
Reasons to do business globally include ___________.
I. Access to new markets
II. Access to new or needed products
III. Decrease transportation cost
IV. Decrease manufacturing cost
I, II, and III
Which is and example of postponement
3D Printing
As the number of touch-points in a global supply chain increase, which of the following is likely true?
Lead time variability increases
Applying the total cost concept within logistics often means trying to account for intangible costs, such as markdowns or lost sales. (T/F)
True
The continuous review model is a _________ order quantity model and a ________time model.
fixed, variable
______________ is the TMS ability to decide which shipment to tender first.
Sequencing
______________ is pulling together shipments that are going to the same geographic area.
Consolidation
______________ is making a shipment available to a specific carrier.
Tendering and dispaching
What is one of the most important operational aspects of a WMS?
The accuracy of the information/data.
In a warehouse management system, records must be maintained for each item in stock showing:
The quantity on hand, received, and shipped.
What technology may be used by the warehouse to keep accurate information on incoming items?
Radio frequency identification.
Which of the following statements about MRP systems are TRUE?
The lowest quantity of a certain product that a supplier is willing to sell is known as their MOQ.
Which MRP system input element specifies how many, and when, the firm plans to produce each end inventory item?
Master Production Schedule
What is MRP?
A production planning, scheduling, and inventory control system mainly used to manage manufacturing processes.
Inventory requirements of a manufacturer that is part of a distribution requirements planning system are typically calculated from:
foretasted end demand of the downstream partners.
MRP and DRP are time-based planning systems. What is the significance of “time” in these systems?
Both specify exactly when products are required to be available.
Can DRP be applied to a retailer’s business?
Yes
Which is often the most important output of a WMS?
Accurate Inventory Information
Most transportation management systems optimize mode selection.
False
Which type of inventory is being managed by a MRP system?
Raw Materials
Which is NOT an input to an MRP system?
Transportation Schedule
To which other information system is a WMS usually directly connected?
ERP
If using both MRP and DRP, at what level of the supply chain is the independent demand forecasted?
Distribution points to where shipments are made.
Which firm uses and MRP system
Manufacturer

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