18-9
25. For most firms, the optimal number of warehouses in a logistics network
26. The Stout Warehousing Company offers logistics network design and warehouse
management services to customers along with traditional trucking and storage services. This type
of company is known as
27. Which of the following statements concerning third-party logistics providers (3PLs) is true?
18-10
28. Which of the following statements concerning third-party logistics providers (3PLs) is
FALSE?
29. Which of the following is the most basic service provided by third-party logistics providers
(3PLs)?
30. The first step in determining a logistics strategy is to
31. Materials handling, transportation, and warehousing are elements of
32. Smith Equipment has three separate shipments to customers all in the same city. The
shipment weights are 20,000 lbs. 25,000 lbs., and 10,000 lbs. Smith Equipment’s carrier charges
$14 per hundredweight (cwt) if each shipment is sent separately. If the three shipments are
consolidated at Smith Equipment’s warehouse and sent in a single truck, the carrier charges $11
per cwt with a $500 consolidated delivery fee per destination added. Smith Equipment should
33. Using the same information given above (Problem 32), assume the carrier promises one-day
delivery on the separate shipments, and two-day delivery on the consolidated shipment. If shorter
delivery time is important to these customers, Smith Equipment should
34. Smith Equipment has a single shipment of 20 units, each weighing 1,500 lbs., to go from its
headquarters to its East Coast warehouse. If cost is the primary concern, what is the best mode of
transportation given the following information?
Mode Delivery time Handling Cost
Direct truck 3 days 2 times $27 per hundredweight (cwt)
LTL 5 days 6 times $35 per cwt
Rail 10 days 4 times $20 per cwt
Air 16 hours 4 times $66 per cwt
35. Using the same information given above (Problem 34), if today is Monday and the shipment
must be received at the warehouse by this Friday, which is the best mode of transportation?
A. Direct truck.
B. LTL.
C. Rail.
D. Air.
LO: 18.2
Topic: Transportation
Difficulty: 1 Easy
AACSB: Application of knowledge
Bloom’s: Apply
Feedback: Although cheapest, rail is too slow to meet the four-day delivery requirement. Direct truck meets the time requirement and has the
next lowest cost.
True/False Questions
36.Bringing several small shipments together to make a single larger shipment is called
consolidation.
37. Transportation costs are accounted for in the basic EOQ model.
38. Logistics includes the planning and control of returned goods and related information from
the customer to the manufacturer.
39. Larger shipments cost more per pound.
40. Logistics decisions span three modes of transportation: road (truck), rail, and air.
41. Transportation mode decisions are generally driven by two major factors: cost and service.
42. The ability to ship products from different points of origin to different destinations is a
dimension of service to be considered when choosing a transportation mode.
43. Governments have shown strong resistance to giving outright subsidies and tax incentives to
attract firms to locate their facilities in a particular city or country.
44. Classic center-of-gravity analytics is the final step in warehouse location decisions.
18-15
45. Third-party logistics providers can play a significant role when disaster strikes, such as
getting supplies to hurricane victims.