146
PHYSICAL DISTRIBUTION
CHAPTER 13
ANSWERS TO PROBLEMS
13.1
Rail
Truck
13.2
Sea
Air
13.3
Line haul cost
=
$13.00 × 200 =
$2,600
147
13.9
Let x be the distance from central supply to the market boundary.
Costs of LDCCS and LDCDC are equal at the boundary
13.10 From warehouse:
148
MULTIPLE CHOICE QUESTIONS
1
. Which of the following statements is best regarding distribution channels?
a
. There are only two members in any distribution channel.
b
. The transaction channel is concerned with transfer of ownership.
c
. The distribution channel is concerned with the transfer of goods
d
. all the above are true
e
. b and c only are true.
2
. The particular way materials move will depend upon:
a
. the channels of distribution the firm is using
b
. types of markets served
c
. characteristics of the product
d
. all of the above
e
. none of the above.
3
. Which of the following activities is NOT considered a function of physical distribution?
a
. transportation
b
. production control
c
. distribution inventory
d
.
warehousing
e
. order processing.
4
. The two criteria for establishing a particular physical distribution system are:
a
. cost of the system and service level desired
b
. service level and cost of carrying inventory
c
. cost of transportation and cost of warehousing
d
. cost of transportation and materials handling
e
. cost of warehousing and cost of inventory.
5
. Which of the following statements is best?
a
. the objective of distribution management is to provide the required level of
service at least
cost
b
. there will be cost trade-off between the various activities in physical distribution
c
. distribution can operate separately from marketing and production
d
. a and b are true
e
. b and c are true.
6
. Which of the following statements is best?
a
. physical distribution provides a bridge between marketing and production
b
. physical distribution contributes towards creating demand
c
. replenishment orders to replace field warehouse stocks will not affect
production
d
. a and b are true
e
. b and c are true.
149
7
. Which of the following are elements in the cost of carriage?
I
. Ways
II
. Vehicles
III
. Terminals
a
. I, II and III
b
. I and II
c. I and III
d. II and III.
8
. Which of the following statements is true?
a
. railways are best at moving small volumes of bulky goods over short distances
b
. road transport is the least flexible of all the modes
c
. air cargo should be used for fast service over short distances
d
. all of the above are true
e
. none of the above is true.
9
. A shipper moving expensive goods of small size from Boston to Seattle would likely use:
a
. air
b
. motor
c
.
rail
d
. water
e
. none of the above.
10
. Considering the service desired and the relative cost of the item, which of the following
would you most likely ship by truck?
a
. regular shipments of cut flowers
b
. regular shipments of iron ore
c
. regular shipments of grain
d
. a and b above
e
. b and c above.
11
. Which of the following is true?
a
. because of high capital cost, rail must have a large volume of traffic to justify the
expense
b
. water transport requires low rates of energy per ton mile moved
c
. operating costs per ton mile tend to be low for trucks
d
. a and b above
e
. b and c above.
12
. Of the five modes of transportation, which one requires the lowest capital investment?
a
. air
b
. motor
c
.
rail
d
. water
e
. pipeline.
150
13
. Which mode would provide the fastest service capability?
a
. air
b
. motor
c
.
rail
d
. water.
14
. Which of the following statements is FALSE?
a
. pipeline capital costs are high in comparison with other modes
b
. air cargo is generally used for low value bulky items
c
. truck transport is suitable for distribution of small volume goods to a dispersed
market
d
. water transport is slower than rail
e
. rail transport is more suited to bulky low value items than road transport.
15. A network of companies that participate in the flow of goods and services from producer to
final consumer is a:
a. Supply flow
b. Channel of distribution
c. Transportation channel
d. Logistics supply chain
16
. Which mode would provide the slowest service capability?
a
. air
b
. motor
c
.
rail
d
. water.
17
. A contract carrier provides:
a
. a service available to the general public
b
. a scheduled service
c
. published rates
d
. all of the above
e
. none of the above.
18
. In which case(s) would you use common carriers instead of contract carriers?
a
. regular delivery by a food chain to its stores
b
. shipment to customers by a mail order house
c
. regular shipment of paper from a mill to its warehouse
d
. a and b above
e
. a and c above.
19
. Which of the following types of transportation will provide the best service capability?
a
.
common
b
. contract
c
. private
d
. all of the above are equal
e
. none of the above.
151
20
. In which case(s) would you use contract carriers instead of common carriers?
a
. regular delivery by a food chain to its stores
b
. shipment to customers by a mail order house
c
. regular shipment of paper from a mill to its warehouse
d
. a and b above
e
. a and c above.
21. A service provider that provide product warehouse and delivery services is known as:
a. Third party logistics provider
b. Freight broker
c. Freight forwarder
d. Distribution partner
22
. Which mode of transportation would cost the LEAST per ton mile?
a
. air
b
. motor (truck)
c
.
rail
d
. water.
23
. Which of the following are elements in transportation cost?
a
. line haul
b
. pickup and delivery
c
. terminal handling
d
. all of the above
e
. none of the above.
24
. Which of the following is correct?
a
. consolidating shipments reduces billing and collecting costs
b
. line haul cost per hundredweight can be reduced by increasing the weight
shipped
c
. shipping costs will be higher with common carriers than contract carriers
d
. all of the above
e
. none of the above.
25
. A shipper wishing to reduce transportation costs will:
a
. ship only in small quantities
b
. ship to LTL lots
c
. use trucks for all his shipments
d
. all of the above
e
. none of the above.
26
. Consolidating shipments will reduce which of the following costs?
a
. pickup and delivery
b
. terminal handling
c
. billing and collecting
d
. all of the above
e
. none of the above.
152
27
. TOTAL line haul costs will vary directly with:
a
. the distance moved
b
. the weight moved
c
. the density of the goods
d
. a and b above
e
. b and c above.
28
. The rate charged by a carrier will vary with:
I
. The value of the goods.
II
. The density of the goods.
III
. The color of the goods.
a
. all the above
b
. I and II only
c
. I and III only
d
. II and III only
e
. I only.
29
. To decrease shipping costs a shipper will:
I
. Increase the weight shipped.
II
. Consolidate shipments.
III
. Use a common carrier rather than contract carrier.
a
. all the above
b
. I and II only
c
. I and III only
d
. II and III only
e
. I only.
30. The terms which specify who owns and pays for the cost of the transportation are:
a. Freight on board (FOB) terms
b. Incoterms
c. Both a and b
d. Neither a or b
31
. Which of the following is NOT an important role of distribution centers?
a
. transportation consolidation
b
. in-transit inventory
c
. product mixing
d
. break-bulk storage
e
. customer service.
32
. The market boundary is:
a
. a location beyond which a source cannot supply
b. the line between two or more supply sources where the landed cost is the same
c
. an agreed-upon boundary beyond which competition will not sell
d
. the extent of a market area
e
. a legal limitation placed on the delivery of goods.
153
33
. Which of the following is a basic role of packaging in distribution?
I
. Identify the product.
II
. Contain and protect the product.
III
. Contribute to physical distribution efficiency.
IV. Be an important part of the marketing program.
a
. all the above
b. I, II and III only
c
. I, II and IV only
d
. II, III and IV only
e
. none of the above.
34
. The consolidation of several units into larger units for fewer handlings is called:
a
. unitization
b
. consolidation
c
. cube utilization
d
. packaging
e
. materials handling.
35
. Which of the following statements is best regarding material handling in distribution
systems?
I
. One objective of material handling is to increase cube utilization.
II
. Material handling can increase the service level.
III
. Gasoline powered industrial trucks are used indoors.
a
. all the above are true
b. I and II are true
c
. I and III are true
d
. II and III are true
e
. I only is true.
36
. Which of the following statements is best?
a
. material handling costs will start to rise when nonunitized loads are shipped
b
. inventory costs remain constant as the number of warehouses increase
c
. packaging costs increase as the number of warehouses increase
d
. a and b are true
e
. a and c are true.
37
. As more warehouses are added to a physical distribution system we can expect the cost of:
a
. TL and CL shipments to increase
b
. LCL and LTL shipments to decrease
c
. total transportation costs to decrease
d
. all of the above
e
. a and b above.
38
. Which of the following statements is true regarding goods in a reverse logistics system?
a
. Volumes are equal to the forward logistics system.
b
. They travel through the same terminals as the forward logistics system.
c
. The goods tend to be small in quantity.
d
. Little product information is required.
e
. All of the above are true.
154
39
. The term used for placing the responsibility on the supplier to dispose of packaging or
restricted materials is called
a
. Sustainability
b
. Green reverse logistics
c
. Fourth party logistics
d
. Vendor-managed inventory
40
. Which management area does NOT normally have transportation responsibility?
a
. Logistics
b
.
Purchasing
c
.
Manufacturing
d
. Marketing
c
. All of the above normally have responsibility for transportation.
41
. The LTL costs a product moving through a supply chain are $1 per mile and there is a
warehouse 200 miles from Central supply. Truckload costs to the ware house are $50 and the
warehouse handling and storage costs are $10. The cost to ship the product to the warehouse $50. The
market boundary for this supply chain is:
a
. 260 miles
b
. 130 miles
c
. 125 miles
d
. 100 miles
e
. 50 miles
42
. Which of the following costs is NOT included in the total laid down cost of a product shipped
through a regional warehouse?
a
. Product cost.
b
. Warehouse cost.
c
. TL to warehouse
d
. Warehousing cost.
e
. Market boundary cost.
Chapter 13 Answers to multiple choice questions.