Multiple Choice Answers

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1 Which of the following is not a 1990’s event that changed the traditional patterns of how the United States conducts business overseas?
a. deregulation of the telecommunications industry
b. the North American Free Trade Agreement
c. fuller economic integration in Western Europe
d. the end of Soviet rule in Eastern Europe

2 The most important single transportation document is the:
a. bill of lading
b. freight bill
c. commercial invoice
d. certificate of origin

3 Incoterms refer to:
a. terms of sale for international shipments
b. a specific method of payment for international shipments
c. standardization of international trade terminology
d. standardized procedures for handling international shipments

4 Order transmittal:
a.may be irregular because of the variability associated with using the postal service
b.should always be written
c.should be subjected to strict value analysis
d.is the most important component of the order cycle

5 Less than truckload (LTL) carriers:
a.are heavily regulated by the ICC
b.serve only regional markets
c.deal in shipments too large for parcel carriers
d.carry the shipment directly from shipper to consignee

6Each of the following is a dimension in facility location except:
a.time
b.cost
c.value
d.size

7___________ is the number two trading partner with the United States.
a.Japan
b.the United Kingdom
c.Canada
d.Mexico

8Which of the following statements is false?
a.air is the fastest mode of transportation
b.water transportation is less expensive than pipeline transportation
c.truck is sometimes faster than rail
d.weather affects all modes except pipeline

9Logistics clearly contributes to ___________ and ___________ utility.
a. time; place
b. form; time
c. place; form
d.possession; time

10All of the following are inventory classifications, except:
a.stockout
b.base stock
c.buffer stock
d.in transit
11Electronic data interchange represents what general type of information management system?
a.communication system
b.transaction processing system
c.decision support system
d.office automation system

12The general trend in recent years has been for companies to do what with their distribution networks?
a.maintain the status quo
b.reduce the number of facilities
c.slightly increase the number of facilities
d.relocate their facilities

13When marginal analysis is used with respect to safety stocks one is looking for:
a.the point where the costs of holding additional safety stock are equal to the savings in stockout costs avoided
b.the point where the costs of holding additional safety stock are equal to the carrying costs of the EOQ
c.the point at which 95% of possible demand situations can be covered
d.the point at which the marginal cost of one additional unit of safety stock is nearly zero

14Which of the following statements is false?
a.the United States is the highest cost country, in terms of labor wages, in the world
b.some companies prefer to locate facilities in non union areas
c.right to work laws mean that an individual cannot be forced to join a union
d.nationwide labor union contracts often contain local supplements

15Which of the following is false?
a.logistics service providers specialize in providing various types of logistics services
b.more logistics service providers are likely to pursue the one stop shopping concept
c.in the future, an increasing percentage of economic activity will be devoted to providing physical goods rather than services
d.providing physical goods rather than services services are difficult or impossible to store

16____________ and ____________ refer to adjustments associated with the quantity of product.
a.accumulating; allocating
b.allocating; assorting
c.sorting; accumulating
d.sorting; assorting

17Why might customer service be more effective than pricing as a competitive tool?
a.price reductions can be done only once or twice before they become ineffective
b.holding large inventory stocks is cheaper than price reductions
c.superior customer service will be noticed more than a price reduction
d.superior customer service is more difficult to imitate

18Outside consultants are sometimes employed in systems analysis because:
a.they can be more objective
b.they are more cost effective than company employees
c.they are more knowledgeable about the firm being studied
d.they are more knowledgeable about operations research and other sophisticated quantitative techniques

19A field warehouse is:
a.a facility that is often used as a field sales office along with the traditional storage function
b.a facility established primarily to hold material serving as collateral for a loan
c.a facility that is primarily used as a breakbulk point
d.a facility located in a number of remote areas from the main production facility

20All of the following are true, except:
a.warehouse management systems generally have payback periods of one to two years
b.there tend to be higher pick errors in facilities that have warehouse management systems
c.warehouse management systems can reduce the required number of warehouse workers
d.there are many different vendors of warehouse management systems

21Legislation passed after the ____________ requires petroleum carriers and tank firms to have in place extensive response plans for dealing with possible spills.
a.Exxon Valdez oil spill
b.terrorist attacks of September 11, 2001
c. Persian Gulf War of 1991
d. Vietnam War

22If a product destroyed or damaged in transit is intended to be placed into general replacement inventory, then the retailer would likely receive:
a. Conformance
b. Reliability
c. Durability
d. Feasibility

23What is dunnage?
a. a type of packaging material that is placed inside of boxes
b. a slang term for a particular type of ocean liner
c. additional transportation fees that are charged to small shippers
d. material that is used to block and brace products inside carrier equipment

24It is estimated that the theft and pilferage of products stored in warehousing facilities causes losses in the range of ____________ to ____________ times the products’ value.
a. five; six
b. four; five
c. three; four
d. two; three

25If a product destroyed or damaged in transit is intended to be placed into general replacement inventory, then the retailer would likely receive:
a. nothing but an apology from the carrier
b. the wholesale price plus 20%
c. the retail price minus 20%
d. the wholesale price, plus freight if previously paid

26 A non tariff barrier is:
a. illegal in most countries
b. a procedure to encourage exports
c. a technique to reduce imports
d. a tariff that can be imposed in either U.S. dollars or the Euro dollar

27 The cash flow associated with holding inventory is known as inventory ____________.
a. turnover
b. float
c. costs
d. return

28____________ recognizes that all inventories are not of equal value to a firm and thus all inventories should not be managed in the same way.
a. vendor managed inventory
b. suboptimization
c. marginal analysis
d. ABC analysis

29 Right to work laws refer to a situation where:
a. worker strikes are illegal
b. an individual cannot be compelled to join a union as a condition of employment
c. each state provides employment to those people receiving public assistance
d. every person who wants a job is guaranteed a job

30 A ____________ encompasses all activities associated with the flow and transformation of goods from the raw material stage, through to the end user, as well as the associated information flows.
a. production line
b. supply chain
c. marketing channel
d. warehouse

31The key to reducing bunching is:
a. reducing the number of customers
b. controlling when customers place orders
c. adding warehouses
d. reducing the number of SKUs

32Which of the following statements about EDI is not true?
a. EDI can have high setup costs
b. EDI can result in increased inventory carrying costs
c. EDI can lead to increased billing accuracy
d. The Internet is likely a complement to, rather than substitute for, EDI

33The current SCOR model identifies ____________ key processes associated with supply
chain management.
a. three
b. four
c. five
d. six

34____________ may be the critical success factor that distinguishes successful and unsuccessful supply chains.
a. collaboration
b. resiliency
c. world class logistics
d. information technology

35The two most frequent uses of labor in logistics are ____________ and ____________.
a. order management; warehousing
b. transportation; customer service
c. transportation; warehousing
d. order management; customer service

36 A main difference between international freight forwarders and customshouse brokers is:
a. there are no differences
b. forwarders take title to goods although customshouse brokers do not
c. forwarders tend to handle exports while customshouse brokers tend to handle imports
d. customshouse brokers are typically government agents

37Many environmental regulations in the United States are aimed at reducing ____________.
a. water pollution
b. air pollution
c. fuel consumption
d. the amount of material that ends up in landfills

38An advantage of partial systems analysis is that ____________.
a. it can be completed by current company employees, without the use of outside consultants
b. it is often not possible to do a total system analysis, and thus the only feasible alternative is partial systems analysis
c. it can often be completed without using sophisticated quantitative techniques
d. it almost always significantly increases the effectiveness of the order

39The rates for international air carriers are established by:
a. individual carriers
b. government negotiations
c. the International Air Transport Association
d. shippers associations

40Which of the following is not a reason for the increased importance of logistics?
a. growing power of manufacturers
b. reduction in economic regulation
c. globalization of trade
d. technological advances

41___________ is the movement of goods and people between two points.
a. logistics
b. transportation
c. materials handling
d. telecommunications

42Logistics managers use the ___________ approach to coordinate inbound logistics, materials management, and physical distribution in a cost efficient manner.
a. total cost
b. supply chain
c. mass logistics
d. interfunctional

43The primary advantage of ____________ is that it enables a firm to test the feasibility of proposed changes at relatively little expense.
a. data mining
b. expert systems
c. simulation
d. benchmarking

44What has been referred to as the crux of order picking?
a. order accuracy
b. travel time
c. employees who can count and read
d. bar code scanning equipment

45What company developed the supplier integration program known as JIT II?
a. Procter & Gamble
b. Gap
c. Bose
d. McDonald’s

46What is a combi?
a. a large airplane that has a moveable bulkhead
b. a type of equipment that can be used by all modes except pipeline
c. a bi modal vehicle
d. a specialized type of materials handling equipment

47Between 1980 and 2000 the best known product recall involved:
a. tampered bottles of Tylenol
b. hand held hair dryers made with asbestos
c. flammable sleepwear for children
d. fireworks

48 Which of the following is not a type of information that is needed by engineers to properly design a protective packaging system?
a. severity of the distribution environment
b. the budget for packaging
c. fragility of the product to be protected
d. performance characteristics of various cushioning materials

49Disintermediation refers to:
a. the removal of channel layers (levels)
b. a breakdown in labor negotiations
c. a quality technique used by world class logistics firms
d. communication problems between channel members

50An understanding of how the human body functions as it performs physical tasks is known as ____________.
a. economics
b. ergonomics
c. cybernetics
d. kinesiology