Logistics Management Review
Questions
Course Introduction
Logistics Management provides an in-depth exploration of the processes and strategies involved in the efficient planning, implementation, and control of the flow and storage of goods, services, and related information from the point of origin to the point of consumption. The course examines key components such as transportation, inventory management, warehousing, procurement, order fulfillment, and the integration of information technology in logistical operations. Emphasis is placed on the role of logistics in supply chain management, global trends, cost optimization, quality improvement, and customer satisfaction. Students will develop practical skills and understanding necessary to analyze and solve real-world logistics challenges within diverse organizational contexts.
Recommended Textbook
Supply Chain Management Strategy Planning and Operation 6th Edition by
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Sunil Chopra
Chapter 1: Understanding the Supply Chain
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Sample Questions
Q1) Activities involved in the Customer Relationship Management (CRM) macro process include
A) planning of internal production and storage.
B) order fulfillment.
C) marketing.
D) supply planning.
Answer: C
Q2) Customer arrival refers to
A) the point in time when the customer has access to choices and makes a decision regarding a purchase.
B) the customer informing the retailer of what they want to purchase and the retailer allocating product to the customer.
C) the process where product is prepared and sent to the customer.
D) the process where the customer receives the product and takes ownership.
Answer: A
Q3) The supply chain planning phase exceeds the supply chain design phase in duration.
A)True
B)False Answer: False
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Chapter 2: Supply Chain Performance: Achieving Strategic
Fit and Scope
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Sample Questions
Q1) For a company to achieve strategic fit, it must accomplish the following keys:
A) All functional strategies must fit together to form a coordinated overall strategy.
B) The different functions in a company must appropriately structure their processes and resources to be able to execute these strategies successfully
C) The overall supply chain must operate at the lowest cost possible to achieve success.
D) The design of the overall supply chain and the role of each stage must be aligned to support the supply chain strategy.
Answer: C
Q2) Because demand and supply characteristics change, the supply chain strategy must change over the product life cycle if a company is to continue achieving strategic fit.
A)True
B)False
Answer: True
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Chapter 3: Supply Chain Drivers and Metrics
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Sample Questions
Q1) Zara sources basic products such as white t-shirts from low cost countries because demand is predictable. For trendy products for which demand is unpredictable, Zara sources from company-owned higher cost factories in Europe. For the predictable demand, Zara strives for ________ and for the unpredictable demand, Zara hopes to achieve ________.
A) social responsibility, quality
B) flexibility, social responsibility
C) efficiency, flexibility
D) quality, efficiency
Answer: C
Q2) The components of inventory decisions include capacity, cycle inventory, safety inventory, seasonal inventory, and sourcing.
A)True
B)False
Answer: False
Q3) The high utilization facility will have difficulty responding to demand fluctuations.
A)True
B)False
Answer: True
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Chapter 4: Designing Distribution Networks and Applications to e-Business
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Sample Questions
Q1) Companies in the same industry often select very different distribution networks because
A) some companies are poorly run.
B) different companies try to avoid using the same approach.
C) different companies have different objectives for their supply chain.
D) all of the above
Q2) In general, traditional brick and mortar retail sales outperform online sales along the dimension of
A) product variety.
B) efficient funds transfer.
C) product returns.
D) order status tracking.
Q3) Distributors add value to a supply chain between a supply stage and a customer stage if there are many small players at the customer stage, each requiring a small amount of the product at a time.
A)True
B)False
Q4) Explain the six distinct distribution network designs that may be used to move products from factory to customer.
Chapter 5: Network Design in the Supply Chain
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Sample Questions
Q1) Supply chain network design decisions classified as facility role are concerned with A) what processes are performed at each facility.
B) where facilities should be located.
C) how much capacity should be allocated to each facility.
D) what markets each facility should serve and which supply sources should feed each facility.
Q2) Decisions concerning the role of each facility are significant because
A) they determine the amount of flexibility the supply chain has in demanding change.
B) they determine the amount of flexibility the supply chain has in changing the way it meets demand.
C) they determine the amount of capacity the supply chain has in changing the way it meets demand.
D) they determine the amount of inventory the supply chain has in demanding change.
Q3) Explain the two situations in which managers use network design models.
Q4) Transportation costs increase as the number of facilities is increased.
A)True
B)False
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Chapter 6: Designing Global Supply Chain Networks
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Sample Questions
Q1) A firm may choose to build a flexible global supply chain even in the presence of little demand or supply uncertainty if certainty exists in exchange rates or prices.
A)True
B)False
Q2) The rate of return k is also referred to as the
A) discount rate.
B) hurdle rate.
C) opportunity cost of capital.
D) all of the above
Q3) A global supply chain with offshoring would tend to see which of these performance dimensions decrease?
A) Working capital
B) Hidden costs
C) Supply chain visibility
D) Product returns
Q4) Offshoring typically lowers labor, working capital and fixed costs but increases risk and freight costs.
A)True
B)False
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Chapter 7: Demand Forecasting in a Supply Chain
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Sample Questions
Q1) The moving average forecast method is used when demand has an observable trend or seasonality.
A)True
B)False
Q2) The goal of any forecasting method is to
A) predict the random component of demand and estimate the systematic component.
B) predict the systematic component of demand and estimate the random component.
C) predict the seasonal component of demand and estimate the random component.
D) predict the random component of demand and estimate the seasonal component.
Q3) The measure of how significantly a forecast method consistently over- or underestimates demand is
A) mean squared error (MSE).
B) mean absolute deviation (MAD).
C) bias.
D) the tracking signal.
Q4) The additive form of the systematic component of demand is shown as
A) level × trend × seasonal factor.
B) level + trend + seasonal factor.
C) (level + trend) × seasonal factor.
D) level × (trend + seasonal factor).
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Chapter 8: Aggregate Planning in a Supply Chain
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Sample Questions
Q1) Most strategies that an aggregate planner actually uses are in combination, and are referred to as hybrid strategies.
A)True
B)False
Q2) A planning horizon is usually between three and five years.
A)True
B)False
Q3) ________ is used to determine customer service levels.
A) Inventory held
B) Backlog/stockout quantity
C) Workforce hired/laid off
D) Machine capacity increase/decrease
Q4) The process by which a company determines levels of capacity, production, subcontracting, inventory, stockouts, and even pricing over a specified time horizon is
A) aggregate planning.
B) detail planning.
C) inventory planning.
D) sales planning.
Q5) Formulate the aggregate plan using linear programming and solve it using Solver.
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Chapter 9: Sales and Operations Planning: Planning Supply and Demand in a Supply Chain
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Sample Questions
Q1) Which of the following is an approach that firms can use when managing inventory to meet predictable demand variability?
A) Time flexibility from workforce
B) Use of seasonal workforce
C) Use of subcontracting
D) Using common components across multiple products
Q2) Seasonal demand can be met by
A) maintaining enough manufacturing capacity to meet demand in any period.
B) building up inventory during the off season to meet demand during peak seasons.
C) offering a price promotion during periods of low demand to shift some of the demand into a slow period.
D) all of the above
Q3) The use of a part-time workforce to increase the capacity flexibility by enabling the firm to have more people at work during peak periods is designing product flexibility into the production processes.
A)True
B)False
Q4) Discuss the impact of promotion on demand within a supply chain.
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Chapter 10: Coordination in a Supply Chain
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Sample Questions
Q1) The lack of information sharing between the retailer and manufacturer
A) improves supply chain coordination.
B) minimizes the fluctuation in manufacturer orders.
C) leads to a large fluctuation in manufacturer orders.
D) leads to smaller fluctuations in suppliers' orders.
Q2) The bullwhip effect enables different stages of the supply chain to have a consistent estimate of what demand looks like.
A)True
B)False
Q3) Incentives that focus only on the local impact of an action result in decisions that
A) do not maximize total supply chain profits.
B) maximize total supply chain profits.
C) minimize total supply chain profits.
D) minimize total supply chain cost.
Q4) Quite often in a VMI system, the inventory is
A) owned by the retailer before it is shipped by the supplier.
B) owned by the supplier until it is sold by the retailer.
C) sold by the supplier before it is owned by the retailer.
D) sold by the retailer before it is shipped by the supplier.
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Chapter 11: Managing Economies of Scale in the Supply
Chain: Cycle Inventory
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Sample Questions
Q1) A graphical plot depicting the level of inventory over time is
A) an inventory graph.
B) a distribution inventory.
C) an inventory drawing.
D) an inventory profile.
Q2) Describe the impact of trade promotions on cycle inventory.
Q3) What is the best total cost that Nathan can incur?
A) $488,644
B) $492,780
C) $493,720
D) $484,382
Q4) Cycle inventory exists because producing or purchasing in large lots allows a stage of the supply chain to exploit economies of scale and increase cost.
A)True
B)False
Q5) When demand is steady, cycle inventory and lot size are related as
A) Cycle Inventory = Lot Size \(\times\) 2.
B) Cycle Inventory = Q\(\times\)2.
C) Cycle Inventory = Q/2.
D) Cycle Inventory = Lot Size = Q.
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Chapter 12: Managing Uncertainty in a Supply Chain: Safety Inventory
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Sample Questions
Q1) The fraction of product demand that is satisfied from product in inventory is the A) customer fill rate.
B) product fill rate.
C) order fill rate.
D) cycle service level (CSL).
Q2) A shortage occurs in a replenishment cycle
A) only if the demand during the lead time exceeds the ROP.
B) only if the demand during the lead time is less than the ROP.
C) only if the demand during the lead time exceeds the average demand.
D) only if the demand during the lead time is less than the average demand.
Q3) Discuss the various measures of product availability.
Q4) For the same safety inventory, an increase in lot size increases the fill rate but not the cycle service level.
A)True
B)False
Q5) Product availability reflects a firm's ability to fill a customer order out of available inventory.
A)True
B)False
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Chapter 13: Determining the Optimal Level of Product Availability
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Q1) There is a cost associated with postponement because the production cost using postponement is typically
A) higher than the production cost without it.
B) lower than the production cost without it.
C) very stable.
D) equal to the production cost without it.
Q2) In volume-based tailored sourcing, the predictable part of a product's demand is produced at a flexible facility, whereas the uncertain portion is produced at an efficient facility.
A)True
B)False
Q3) When setting optimal levels of product availability in practice, it is important to
A) obtain a reasonable estimate of the cost of stocking out.
B) obtain a very precise estimate of the cost of stocking out.
C) focus on the most responsive production method, even if it is not low cost.
D) develop a preset target of product availability.
Q4) Explain the relationship between product availability and supply chain profitability.
Q5) Discuss the advantages and disadvantages of quick response.
Page 15
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Chapter 14: Transportation in a Supply Chain
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Sample Questions
Q1) When infrastructure is publicly owned, it is important to price usage to reflect
A) the cost of rebuild the infrastructure once it is fully depreciated.
B) the incremental profit from the use of the infrastructure.
C) the marginal impact on the cost to society.
D) the market clearing price.
Q2) What trade-offs do managers need to consider when making transportation decisions?
Q3) The mode of transportation that results in the lowest transportation cost will lower total costs for a supply chain.
A)True
B)False
Q4) The cost of various facilities in the shipper's supply chain network is A) transportation cost.
B) inventory cost.
C) facility cost.
D) processing cost.
Q5) The use of software to determine transportation routes has been the most common IT application in transportation.
A)True
B)False
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Chapter 15: Sourcing Decisions in a Supply Chain
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Sample Questions
Q1) A third party can increase the supply chain surplus by aggregating demand across multiple firms and gaining production economies of scale that no single firm can on its own. This is called
A) capacity aggregation.
B) inventory aggregation.
C) warehouse aggregation.
D) relationship aggregation.
Q2) A contract that allows the buyer to modify the order (within limits agreed to by the supplier) as demand visibility increases closer to the point of sale is a
A) buyback or returns contract.
B) revenue-sharing contract.
C) quantity flexibility contract.
D) quantity discount contract.
Q3) The entire set of business processes required to purchase goods and services is A) procurement.
B) sourcing.
C) supplier scoring and assessment.
D) supplier selection.
Q4) What factors should be considered when making sourcing decisions?
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Chapter 16: Pricing and Revenue Management in a Supply Chain
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Sample Questions
Q1) The amount of the asset reserved for the higher price segment is such that
A) all orders from the lower priced segment will be accepted and filled.
B) the expected marginal revenue from the higher priced segment is more than the price to the lower price segment.
C) the expected marginal revenue from the higher priced segment is less than the price to the lower price segment.
D) the expected marginal revenue from the higher priced segment equals the price to the lower price segment.
Q2) An effective revenue management tactic when faced with seasonal peaks is to charge a
A) high price during the peak period and a higher price during off-peak periods.
B) higher price during the peak period and a lower price during off-peak periods.
C) lower price during the peak period and a higher price during off-peak periods.
D) low price during the peak period and a lower price during off-peak periods.
Q3) Any asset that loses value over time is perishable.
A)True
B)False
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Chapter 17: Sustainability and the Supply Chain
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Q1) ________ is a social arrangement that encourages all participants to behave such that they do not contribute to the tragedy of the commons.
A) A zero sum game
B) Escalation of commitment
C) Mutual coercion
D) Barzini Red
Q2) The social pillar measures a firm's ability to address issues that are important for its workforce, customers, and society.
A)True
B)False
Q3) What are the challenges to greater sustainability posed by the tragedy of the commons?
Q4) A firm's new sustainability improvement initiative is best begun by focusing on resource reduction activities.
A)True
B)False
Q5) Discuss the factors driving an increased focus on sustainability.
Q6) What are some metrics that can be used to measure sustainability for a supply chain?
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