Transportation and Distribution Management
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Course Introduction
Transportation and Distribution Management explores the strategic and operational aspects of efficiently moving goods and materials within supply chains. The course covers key topics such as transportation modes and their selection, route planning, carrier management, cost structures, freight documentation, distribution center operations, and the impact of technology on logistics networks. Students will analyze the integration of transportation and distribution with inventory control, customer service, and global logistics, while considering environmental sustainability and regulatory issues. The curriculum is designed to provide a comprehensive understanding of the role transportation and distribution play in achieving organizational goals and customer satisfaction.
Recommended Textbook
Supply Chain Management Strategy Planning and Operation 6th Edition by
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Page 2
Sunil Chopra
Chapter 1: Understanding the Supply Chain
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Q1) Supply chain macro processes include which of the following?
A) Internal Relationship Management (IRM)
B) Customer Relationship Management (CRM)
C) External Relationship Management (ERM)
D) Supply Chain Relationship Management (SCRM)
Answer: B
Q2) A supply chain features a constant flow of
A) information, product and funds.
B) personnel, information, and policies.
C) processes, funds, and product.
D) product, processes, and support.
Answer: A
Q3) 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
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Chapter 2: Supply Chain Performance: Achieving Strategic
Fit and Scope
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Q1) Discuss the two keys to the success or failure of a company.
Answer: A company's success or failure is thus closely linked to the following keys:
1. The competitive strategy and all functional strategies must fit together to form a coordinated overall strategy. Each functional strategy must support other functional strategies and help a firm reach its competitive strategy goal.
2. The different functions in a company must appropriately structure their processes and resources to be able to execute these strategies successfully.
Q2) A company's competitive strategy defines the set of customer needs that it seeks to satisfy through its products and services.
A)True
B)False Answer: True
Q3) Globalization has increased the opportunities and decreased the risks for supply chains.
A)True
B)False Answer: False
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Chapter 3: Supply Chain Drivers and Metrics
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Q1) What is the average order size of the gasoline?
A) 15.00
B) 13.75
C) 14.25
D) 14.75
Answer: B
Q2) The art and science of making projections about what future demand and conditions will be is
A) supply chain coordination.
B) forecasting.
C) aggregate planning.
D) revenue management.
Answer: B
Q3) ________ typically measures the cost of bringing product into a facility as a percentage of sales or cost of goods sold (COGS).
A) Average outbound transportation cost
B) Average inbound transportation cost
C) Average incoming shipment size
D) Average inbound transportation cost per shipment
Answer: B
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Chapter 4: Designing Distribution Networks and Applications to e-Business
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Q1) Which distribution network design is being used when inventory is stored at the manufacturer or distributor warehouse but customers place their orders online or on the phone and then come to designated pickup points to collect their orders?
A) Manufacturer storage with direct shipping
B) Manufacturer/distributor storage with customer pickup
C) Distributor storage with package carrier delivery
D) Distributor storage with last mile delivery
Q2) The ease with which the customer can place and receive their order as well as other aspects of value that the sales staff provides is
A) customer experience.
B) order visibility.
C) product availability.
D) response time.
Q3) The costs incurred in bringing material into a facility are
A) sourcing transportation costs.
B) outbound transportation costs.
C) crossbound transportation costs.
D) inbound transportation costs.
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Chapter 5: Network Design in the Supply Chain
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Q1) The implications of culture should not be glossed over because
A) tariffs and tax incentives should be carefully considered.
B) facilities last a long time and have an enduring impact on a firm's performance.
C) it is astounding how often tax incentives drive the choice of location.
D) the location of a facility has a significant impact on the extent and form of communication that develops in the supply chain network.
Q2) When designing supply chain networks, companies must build appropriate flexibility to help counter fluctuations in exchange rates and demand across different countries.
A)True
B)False
Q3) The facilities in a supply chain network must
A) at least maximize total logistics cost.
B) at least equal the number that maximizes total logistics cost.
C) at least equal the number that minimizes total logistics cost.
D) at least minimize total logistics cost.
Q4) Describe the factors that influence supply chain network design decisions.
Q5) Explain the two situations in which managers use network design models.
Q6) Explain how supply chain network design decisions are classified.
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Chapter 6: Designing Global Supply Chain Networks
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Q1) Decision tree analysis is based on Bellman's principle, which states that for any choice of strategy in a given state,
A) the optimal strategy is the one that is selected if the entire analysis is assumed to begin in the first period.
B) the optimal strategy is the one that is selected if the entire analysis is assumed to begin in the last period.
C) the optimal strategy in the next period is the one that is selected if the entire analysis is assumed to begin in the last period.
D) the optimal strategy in the next period is the one that is selected if the entire analysis is assumed to begin in the next period.
Q2) The discount factor used to obtain the present value of money in the next period where k represents the rate of return is A) k.
B) 1 + k.
C) 1/(1 + k).
D) k /(1 + k).
Q3) Summarize the steps in the decision tree analysis methodology.
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Chapter 7: Demand Forecasting in a Supply Chain
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Q1) ________ forecasting methods assume that the demand forecast is highly correlated with certain factors in the environment (the state of the economy, interest rates, etc.).
A) Qualitative
B) Time-series
C) Causal
D) Simulation
Q2) Collaborative forecasting based on sales to the end customer can help enterprises further up the supply chain reduce forecast error.
A)True
B)False
Q3) When either the supply of raw materials or the demand for the finished product is highly variable, forecasting and the accompanying managerial decisions
A) are extremely simple.
B) are relatively straightforward.
C) are extremely difficult.
D) should not be attempted.
Q4) Explain the basic, six-step approach to help an organization perform effective forecasting.
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Chapter 8: Aggregate Planning in a Supply Chain
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Q1) The goal of aggregate planning is to build a plan that satisfies demand while minimizing downtime.
A)True
B)False
Q2) Linear programming finds the solution that creates the highest profit while satisfying the constraints that a company faces.
A)True
B)False
Q3) Explain the basic strategies that an aggregate planner has available to balance the various costs and meet demand.
Q4) Aggregate planning is concerned with determining
A) the production level, sales level, and capacity for each period.
B) the demand level, inventory level, and capacity for each period.
C) the production level, inventory level, and capacity for each period.
D) the production level, staffing level, and capacity for each period.
Q5) Most strategies that an aggregate planner actually uses are in combination, and are referred to as hybrid strategies.
A)True
B)False
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Chapter 9: Sales and Operations Planning: Planning Supply and Demand in
a
Supply Chain
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Q1) Determining how profits will be allocated to different members of the supply chain is a key to successful collaboration.
A)True
B)False
Q2) The advantage of building up inventory during the off season to meet demand during peak seasons and keep production stable year round is
A) very low inventory costs because no inventory needs to be carried from period to period.
B) much of the expensive capacity would go unused during most months when demand was lower.
C) in the fact that a firm could get by with a smaller, less expensive factory.
D) in the fact that a firm could get by with a larger, more expensive factory.
Q3) The pricing and promotion decisions are often made by A) marketing and sales.
B) marketing and operations.
C) operations and sales.
D) marketing, operations, and sales.
Q4) Discuss the approaches that can be used to manage capacity to meet predictable variability of demand.
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Chapter 10: Coordination in a Supply Chain
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Q1) The lack of supply chain coordination on various measures of performance has costs associated with it. Which of the following is one of these costs?
A) Quality
B) Reliability
C) Manufacturing
D) Pricing
Q2) Supply chain coordination improves if all stages of the chain take actions that are aligned and together increase total supply chain surplus.
A)True
B)False
Q3) The bullwhip effect causes
A) maximization of supply chain surplus.
B) improved accuracy of demand information within the supply chain.
C) different stages of the supply chain to have a very different estimate of what demand looks like.
D) less need for aggregate planning.
Q4) Describe the impact of forecasts based on orders rather than actual customer demand.
Q5) Describe the impact of behavioral obstacles on supply chain coordination.
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Chapter 11: Managing Economies of Scale in the Supply
Chain: Cycle Inventory
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Q1) The goal of trade promotions is to
A) influence retailers to act in a way that helps the retailer achieve its objectives.
B) influence retailers to act in a way that helps the manufacturer achieve its objectives.
C) influence retailers to act in a way that will maximize supply chain profit.
D) influence retailers to act in a way minimize supply chain cost.
Q2) The XYZ Company has an assembly plant in Cincinnati and its parts plant in Indianapolis. Parts are transported from Indianapolis to Cincinnati using trucks. Each shipment costs $100. The Cincinnati plant assembles and sells 300 finished products each day and operates 50 weeks a year. Part #456 costs $50 and XYZ Company incurs a holding cost of 20 percent per year. How many of part #456 should XYZ Company put in each shipment? What is the cycle inventory of part #456 at XYZ Company?
Q3) A key to reducing cycle inventory is
A) the reduction of holding cost.
B) the reduction of manufacturing cost.
C) the reduction of lot size.
D) the reduction of warehouse space.
Q4) Discuss the characteristics of a successful multi-echelon supply chain.
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Chapter 12: Managing Uncertainty in a Supply Chain: Safety Inventory
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Q1) Product fill rate is the fraction of product demand that is satisfied from product in inventory.
A)True
B)False
Q2) A(n) ________ in supply uncertainty can help ________ safety inventory required without hurting product availability.
A) reduction, increase B) increase, reduce C) reduction, reduce D) reduction, cancel
Q3) The use of one product to satisfy demand for a different product is A) information centralization.
B) specialization.
C) product substitution. D) component commonality.
Q4) What is the fill rate under this policy?
A) 0.9398
B) 0.9833
C) 0.9921
D) 0.9998
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Chapter 13: Determining the Optimal Level of Product Availability
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Q1) The level of product availability, also referred to as the ________, is one of the primary measures of a supply chain's responsiveness.
A) no stock out level
B) reliability level
C) customer service level
D) logistics measure
Q2) In product-based tailored sourcing, low-volume products with uncertain demand are obtained from a flexible source, while high-volume products with less demand uncertainty are obtained from an efficient source.
A)True
B)False
Q3) 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
Q4) Describe the approaches a manager can use to reduce demand uncertainty.
Q5) Explain how tailored sourcing can be used to improve profitability.
Q6) Discuss the advantages and disadvantages of quick response.
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Chapter 14: Transportation in a Supply Chain
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Q1) The cost of holding inventory incurred by the shipper's supply chain network is
A) transportation cost.
B) inventory cost.
C) facility cost.
D) processing cost.
Q2) The key players in any transportation that takes place within a supply chain are
A) the shipper and the receiver.
B) the shipper and the supplier.
C) the shipper and the manufacturer.
D) the shipper and the carrier.
Q3) Suppose that a highway is governed by a use fee charged to motorists that is based on congestion, operation and maintenance. The total traffic t is used to determine the cost of 5t². What is the marginal cost?
A) 5
B) 5t
C) 10
D) 10t
Q4) Discuss the importance of designing flexibility into the transportation network.
Q5) Discuss the two key players involved in any transportation in the supply chain.
Page 16
Q6) Explain why transportation systems should be tailored.
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Chapter 15: Sourcing Decisions in a Supply Chain
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Q1) Supplier performance must be rated on many different factors because
A) the factors impact the total supply chain cost.
B) the factors minimize the supply chain involvement.
C) the factors reduce the impact of price.
D) the factors maximize the supply chain price.
Q2) The process by which companies acquire raw materials, components, products, services, and other resources from suppliers to execute their operations is A) procurement.
B) sourcing.
C) supplier scoring and assessment.
D) supplier selection.
Q3) Price has traditionally been the only dimension that suppliers have been compared on during the process of A) procurement.
B) sourcing.
C) supplier scoring and assessment.
D) supplier selection.
Q4) Why should on-time performance be considered in supplier selection decisions?
Q5) What are some of the benefits of effective sourcing decisions?
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Chapter 16: Pricing and Revenue Management in a Supply Chain
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Q1) The cost of wasted capacity is
A) the reduction in margin that results from having to go to a backup source.
B) the margin that would have been generated if the capacity had been used for production.
C) the productivity increase generated when the capacity is used for production.
D) the sales potential of excess capacity kept in reserve for emergency production.
Q2) The amount of the asset reserved for the higher price segment is such that the expected marginal revenue from the higher priced segment is less than the price to the lower price segment.
A)True
B)False
Q3) If the corporate price and young couples' price both double, how many additional rooms should the Stone Lion hold for corporate clients?
A) 3
B) 2
C) 1
D) 0
Q4) Describe the role of revenue management.
Page 18
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Chapter 17: Sustainability and the Supply Chain
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Q1) The primary reason for the general lack of design for remanufacturing is that remanufacturing is more expensive for a manufacturer.
A)True
B)False
Q2) Simple awareness of what your own electricity consumption is usually reduces a consumer's electricity use by between 10% and 15%.
A)True
B)False
Q3) Under a cap and trade system, the price of emissions is
A) determined directly as a function of the output.
B) determined indirectly and can change.
C) determined indirectly and is invariant.
D) determined directly and is invariant.
Q4) Most supply chain design innovations that lower transportation costs paradoxically tend to increase fuel consumption and emissions.
A)True
B)False
Q5) What are some opportunities for improved sustainability in various supply chain drivers?
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