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Exam 11: Distribution Customer Service and Logistics

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Question 41

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Which of the following is NOT true about the supply chain for Ford Motor Company?

A) The supply chain includes the Ford dealers that sell its cars to consumers.
B) The supply chain does not include production plants where Ford cars are built.
C) The supply chain includes a tire supplier to Ford's production plants.
D) The supply chain includes a company that sells rubber to Ford's tire supplier.
E) The supply chain includes trucks that deliver cars to Ford dealers.

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Question 42

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For short distances and higher-value products, trucks may charge higher rates, but provide slower service.

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Question 43

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Every firm should try to use the just-in-time approach to physical distribution.

Which of the following statements about supply chains is FALSE?

Regarding alternative transporting modes, which of the following statements is TRUE?

Which of the following statements concerning physical distribution trade-offs is NOT true?

Loading truck trailers on railcars for shipment closer to the trucks' destination points is called "piggyback service."

The main function of a "distribution center" is to speed the flow of goods and avoid unnecessary storage.

Which of the following observations about the total cost approach is NOT true?

Airfreight generally increases both transporting cost and the total cost of distribution because it tends to add to inventory costs, spoilage, theft, and damage.

Tammy works in transportation for a company that manufactures tractors and other farm equipment in China for the U.S. market. Cost is her primary concern in getting products to farm states in the U.S. Midwest. Which mode(s) of transportation would you suggest?

Jackie works in transportation for a company that ships expensive, high quality fish all across the United States. The perishable nature of her product, the value of freshness, and the high prices she charges would lead you to recommend which transportation mode?

Trucks

Electronic data interchange (EDI) :

Which of the following products would have the lowest transporting costs as a percentage of the selling price?

The best way to ship a large shipment of coal (which is a heavy and bulky good) from Pennsylvania to California at a relatively low cost would be to use:

Use this information for question that refer to the United Tools case. Terry Harter is marketing manager for United Tools and Mike O'Reilly is the firm's logistics manager. They work together to make decisions about how to get United's hand and power tools to its customers--a mix of manufacturing plants and final consumers (who buy United tools at a hardware store) . United Tools does not own its own transport facilities and it works with wholesalers to reach its business customers. Together, Harter and O'Reilly try to coordinate transporting, storing, and product handling activities to minimize cost while still achieving the customer service level their customers and intermediaries want. This usually requires that United keep an inventory of most of its products on hand, but demand for its products is fairly consistent over time so inventory is easy to manage. Harter has identified four options for physical distribution systems she could use to reach two of her key wholesalers, Ralston Supply and Ricotta Tool Co. The total cost for each option--and the distribution service levels that can be achieved--are as follows: Ralston Supply expects a very high level (90 percent) of distribution customer service. Ricotta Tool Co. is willing to settle for a 70 percent customer service level, even if that means some products will occasionally be out of stock, if it gets products at a lower price. For its large retail hardware customers (like Home Depot) , United regularly ships smaller orders directly to individual stores or in some cases to the retail chain's warehouses. Cross-country shipments usually go by rail while regional shipments usually go by truck. United ships to the regional distribution centers of one of the retail hardware chains that it serves. The main advantage of the distribution centers for the retailer is likely to be that they $\begin{array}{lrl}\text { Main feature of system: }&\text { Total Cost }&\text { Distribution Service Level }\\1.\text { Airfreight } & \$ 1,000,000 & 95 \text { percent } \\2.\text { Inland waterways } & \$ 300,000 & 60 \text { percent } \\3.\text { Trucks } & \$ 500,000 & 70 \text { percent } \\4.\text { Rail and regional } & \$ 650,000 & 80 \text { percent } \\\text { warehouses } & &\end{array}$

Considering weight, the most expensive transporting mode is:

Which of the following statements is NOT TRUE?

Inventory refers to