Logistics Exam 1 Questions + Answers (Kissick)

Terms in this set (37)

What are the primary forces driving the rate of change in economic and political landscape?
Globalization
Technology
Organizational Consolidation + Power Shift
Empowerment of the Consumer
Gov. Policy and Regulations
Logistics can be divided into two major categories. What are they? Explain each one briefly.
1)- INBOUND LOGISTICS- Planning, forecasting, Purchasing, production. Raw Materials/inbound materials.

2)- OUTBOUND LOGISTICS- Geared towards customer satisfaction. Physical Distribution. Delivery Ops. Warehousing, transportation, materials.
What are the five primary activities in the value chain?
1) Inbound Logistics
2) Operations
3) Outbound Logistics
4) Marketing/Sales
5) Service
Briefly explain why a reduction in the throughput time is beneficial to the organization:
- By reducing Throughput time, costs may decrease allowing more competitive pricing. Inventory is more controllable and easier to prevent stockovers.

-Improved Quality, lower work in process and finished goods inventory (significant is ultimately a reduction in costs for the company)

-Less forecasting error - shorter time horizons

-Greater flexibility - in regards to production and manufacturing changes. For example, if a company detects a decrease in demand for their product, they can more effortlessly make short notice changes. (Bullwhip effect)
What is the Bullwhip Effect?
-Long intervals between orders.

-Can cause uncertainty about levels and patterns of demand.

-Can cause high inventory which is costly to maintain.
What are the 7 r's of logistics?
1- right product
2- right place
3- right customer
4- right price
5- right condition
6- right time
7- right quantity
What are the 5 forms of utility that add value to a product? Explain each BRIEFLY
Form-
-value added by changing form of the product (taking raw materials and making an iPhone).

Time-
- Value added by having it available at a specific demand point and time. (Important because companies need to reduce costs. Timing is becoming more and more crucial. See "JIT Inventory")

Place-
- moving from production points to market points. (transportation)
-causes competition to INCREASE, which causes demand to DECREASE, and availability to INCREASE.

Quantity-
- Deliverance of the proper quantities. (too less of something could hinder sales, too much could cost more in inventory.)

Possession-
- Created through basic marketing activities related to promotion and sale. (direct and indirect contact with the customer)
There are many logistics activities, list 6 of these.
transportation
warehousing / storage
Industrial Packaging
Materials Handling
Inventory Control
Order Fulfillment
Demand Forecasting
Production Planning / Scheduling
Procurement
Customer Service
Facility Location
Name the four principal areas of marketing that logistics interacts with.
Price
Product
Promotion
Place
What are three factors relating to the cost and importance of logistics?
Competitive Relationships
Product Relationships
Spatial Relationships
What are the four competitive related factors that affect the cost and importance of logistics?
Order cycle
Substitutability
Inventory Effect
Transportation Effect
What are the product related factors that affect the cost and importance of logistics?
Dollar Value
Density
Special Handling and Susceptibility to Damage
How do the following affect the inventory, transportation, and packaging costs?
...
In logistics, what are nodes and links?
Nodes - fixed spatial points where goods stop for storage and processing

Links- represent the transportation network which connects the nodes in the logistics system
We are comparing two systems. System 1 has a high fixed cost and low variable costs. System 2 has low fixed costs and high variable costs. If the quantity of a product is small, which system would be preferred? if the quantity of a product is large, which system would be preferred? explain each answer briefly.
System 1 is better with high output levels since the variable costs are lower.

System 2 would be more ideal for smaller quantities.
When did the most recent era of globalization start? what are the two important characteristics of this era?
It began around 2000 and is being powered by individuals and smaller organizations

has technological advancements in the form of communications and technology which connects the globe.
How has technology enhanced globalization?
Transportation, communication, equipment. (this needs more explanation)
What are the four important characteristics of global markets?
standardization reduces complexity

global competition reduces product lifecycle

traditional organizational structures and business models frequently change

globalization introduces more volatility
What is C-TPAT. Briefly explain it and its purpose.
A cooperative effort to secure the global supply chain and to facilitate legitimate cargo and convoyance
what are the two main evolving directions in global manufacturing? Briefly explain.
Locating factories and logistics facilities in countries that use or consume the products

Focuses production - a plan produces only one or two products
What are the 4 Primary modes of global transportation?
Land
Ocean
Air
Rail
Who are freight forwarders and what is their function?
Supplies expertise to international shippers and consolidates small shipments into more economical sizes and derives income from fees or services.
What is the primary difference between export management versus export trading companies?
Export Management- act as agents for domestic firms in the international realm. They obtain orders selecting appropriate markets, distribution channels, and promotional campaigns.

Export Trade - export goods and services to overseas buyers and handles most of the export arrangement. Allows small to medium sized firms to engage in foreign trade.
What is a bonded warehouse? what is its function?
They operate under customs agency's supervision and are used to store, repack, sort, or clean imported merchandise entered for warehousing without paying import duties while goods are in storage.
Explain the difference between vertical and horizontal relationships
Vertical refer to the traditional linkages between firms in the supply chain such as retailers, distributers, manufacturers, and parts and materials suppliers

Horizontal refers to business agreements between firms that have parallel or cooperating positions in the logistics process
What are the three levels that describe the intensity of involvement?
Transactional
strategic,
collaborative
Explain collaborative relationship in a strategic alliance
The relationship suggests that a strategic alliance is one in which two or more business organizations cooperate and willingly modify their business objectives and practices to help achieve long term goals and objectives.
Explain 5 ways in which relationships between organizations differ
Duration
Obligations
Expectations
Interaction/Communication
Cooperation
Planning
Goals
Performance
Benefits and Burdens
What are the four major factors that are drivers for forming relationships?
Perform strategic assessment
Decision to form relationship
Evaluate Alternatives
Select Partners
What are the four factors that are facilitators for forming relationships?
Perform strategic assessment
Decision to form relationship
Evaluate Alternatives
Select Partners
Briefly describe the three types of collaborative relationships
Vertical Collaboration - Between buyer and supplier in the supply chain

Horizontal Collaboration - between buyer buyer or seller seller

Full Collaboration - Dynamic combo of both of the above
Briefly Describe a 3PL and its function
Third party Logistics: Firm may be defined as an external supplier that performs all or part of a company's logistics functions. Among these, 3PL's enable reduced costs, fewer assets, less working capital, and improved order performance.
Describe the different types of 3PL providers
Transportation Based
Warehouse/Distribution Based
Forwarder Based
Financial Based
Information Based
Define the following: Measure, Metric, index
Measure: require no calculations and are uni-dimensional (Units of Inventory)
Metric: Requires calculation and often contains several measures (grades)
Index: combines 2 or more metrics into a single value. (GPA)
Identify 5 characteristics of a good measure
Quantitative
Easy to understand
Encourages appropriate behavior
Visible
Defined and mutually understood
Multidimensional
Trus
What is a SCOR Model?
They supply chain operations and reference model
How does SCOR model define reliability and agility?
Reliability: The performance of supply chain in delivering the correct product, to the correct place, in the correct quantity, in the correct condition with the correct documentation and to the correct customer

Agility: The flexibility of the supply chain in responding to marketplace changes to gain or maintain a competitive advantage
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