22) A firm that maintains a high-volume of demand throughout the year is a better candidate for
________ logistics services than a firm with sporadic demand.
23) The complicated gift basket was delivered exactly as it was designed and in plenty of time to be
enjoyed during seasonal celebrations. From a logistics performance standpoint, the product could be
considered a(n) ________.
24) The cost of the donuts for the ISOM department’s fall meeting was $73.11 and the delivery and
warehousing service was another $26.89, bringing the ________ to an even $100.
25) All of the participants on the India Immersion study tour were enchanted by the auto rickshaws
whizzing smartly around Bangalore. They found a company willing to ship a dozen units to the United
States, but had some difficulty locating a(n) ________ to handle the customs requirements to actually
bring them in the country.
26) Betz Manufacturing’s ________ system was designed specifically to handle warranty repairs which
supported their green initiative where their products would be disassembled and 100% recycled at the
end of their useful life.
27) Compare the advantages and disadvantages of ownership of logistics assets. What factors should be
considered when deciding whether to own or outsource the assets needed to execute the logistics
function?
28) What logistics and warehousing alternatives are most attractive to a company that competes based
upon volume and design flexibility? Why?
29) What is a perfect order and what are five elements that might comprise such a measure?
30) The crowdsourced logistics firm Fed-Ups was developed by two whiz kids that were fed up with
paying the exorbitant shipping cost to deliver burritos to their parents’ basements. The first month was
plagued by a few problems — some participants proved incapable of locating addresses, others had a fear
of the outside world, and there was a surprising amount of breakage. Still, they were encouraged as they
reviewed the first month’s statistics.
Total # Orders Handled
340
# deliveries with breakage
88
# deliveries on time
260
# deliveries to incorrect addresses
48
# deliveries incomplete
12
Calculate a maximum and a minimum percentage of perfect orders using the data.
Total # Orders Handled
340
# deliveries with breakage
88
# deliveries not on time
80
# deliveries to incorrect addresses
48
# deliveries incomplete
12
31) The landlord’s favorite place to buy shrimp in New Orleans was the Cajun Seafood market on
Claiborne and he did not hesitate to stock up on shrimp when he dropped by the shotgun double house
he bought as an investment a few years ago. Sadly, it was 685 miles one way to visit the property and
even though gas was available at $1.88 per gallon and the car achieved 25 miles per gallon, it was an
expensive and lengthy trip. The cheapest plane tickets that were routinely available cost $199 round trip,
but occasionally there was a super sale where the price dropped lower than that. He always packed a
cooler with $12 worth of ice regardless of how much shrimp he actually bought. The shrimp were a
bargain at $7.99 per pound for jumbos and he always tried to fit 35 pounds of the crustaceans in the
cooler. What is the price of round trip airfare that would make the landed cost of a pound of shrimp the
same for both driving and flying and what is that landed cost?
32) What are the key challenges of implementing a reverse logistics system?
8.4 Logistics Decision Models
1) Acme wants to locate a warehouse to serve their major customers that are shown in the table. What is
the location that will minimize the transportation costs for their family of products?
Customer
Annual Volume
X-Coordinate
Y-Coordinate
Coyote, LLC
25
3
7
Destry
13
5
2
Kingston Inc.
6
8
4
Ed Wood Productions
4
1
5
A) Near (3,4)
B) Near (4,5)
C) Near (5,6)
D) Near (6,5)
2) The Times-Picayune is searching for an ideal spotting station for the morning paper. Neighborhoods,
their location on an XY grid of the city, and morning volume are shown in the table. What is the location
that will minimize the transportation costs for the newspaper?
Annual Volume
X-Coordinate
Y-Coordinate
250
3
7
125
7
5
178
1
3
264
2
5
137
1
6
55
1
4
A) Near (3.1,4.6)
B) Near (4.3,5.8)
C) Near (2.5,5.2)
D) Near (6.4,2.5)
3) The Times-Picayune is searching for an ideal spotting station for the morning paper. Neighborhoods,
their location on an XY grid of the city, and morning volume are shown in the table. What is the location
that will minimize the transportation costs for the newspaper?
Customer
Annual Volume
X-Coordinate
Y-Coordinate
Florida
7
3
7
Desire
39
7
5
Lafitte
245
1
3
Iberville
116
2
5
Guste
55
1
6
CJ Peete
284
1
4
A) Near (3.0, 4.5)
B) Near (4.5, 5.0)
C) Near (2.5, 2.5)
D) Near (1.5, 4.0)
4) Using the map and annual volumes shown next to each location, what is the BEST location for a central
warehouse that can be used to service all of the locations?
A) Near (2,3)
B) Near (3,2)
C) Near (3,4)
D) Near (4,3)
Plants A, B, C, and D produce the same item that is demanded by customers W, X, Y, and Z. Customer
demand and plant capacity are shown in the bottom row and rightmost column in the table. The cost to
ship one unit between each combination of plants and customers is also shown in the table. The
corporation wishes to minimize the total transportation costs of this assignment problem. Use the table to
answer the following question(s).
W
X
Y
Z
Total Supply
$3
$6
$4
$2
22,000
$7
$10
$8
$6
19,000
$10
$13
$11
$9
14,000
$12
$15
$13
$11
15,000
25,000
15,000
18,000
12,000
5) What is a suitable constraint?
A) Minimize Cost = $3∗ SAW + $6∗ SAX + $4∗ SAY + $2∗ SAZ
B) Minimize Cost = $3∗ SAW + $7∗ SBW + $10∗ Scw + $12∗ SDW
C) SAW + SBW + SCW + SDW ≤ 25,000
D) SAW + SAX + SAY + SAZ ≤ 22,000
6) Which of these is part of an appropriate objective function?
A) $12∗ DW + $15∗ DX + $13∗ DY + $11∗ DZ
B) –$3∗ AW – $7∗ BW – $10∗ CW – $12∗ DW
C) CW + CX + CY + CZ = 14,000
D) CW + CX + CY + CZ ≤ 14,000
Plants in Vienna, Lucerne, Bruhl, and Salzburg produce the same item that is demanded by customers in
London, Paris, Milan, and Athens. Customer demand and plant capacity are shown in the bottom row
and rightmost column in the table. The cost to ship one unit between each combination of plants and
customers is also shown in the table. The corporation wishes to minimize the total transportation costs of
this assignment problem. Use the table below to answer the following question(s).
London
Paris
Milan
Athens
Total Capacity
Vienna
$19
16
3
8
600
Lucerne
15
17
17
13
500
Bruhl
13
18
18
7
400
Salzburg
16
18
18
7
470
Total Demand
500
450
620
400
7) What is a suitable constraint?
A) Minimize Cost = $19∗ SVL + $16∗ SVP + $3∗ SVM + $8∗ SVA
B) Minimize Cost = $19∗ SVL + $15∗ SLL + $13∗ SBL + $16∗ SSL
C) SBL + SBP + SBM + SBA ≤ 400
D) 3∗ SVM + 17∗ SLM + 18∗ SBM + 18∗ SSM = 620
8) What of these equations would be part of the appropriate objective function?
A) $19∗ SVL + $16∗ SLL + $3∗ Sbl + $8∗ SSL
B) SBL + SBP + SBM + SBA
C) $19∗ SVL + $16∗ SVP + $3∗ SVM + $8∗ SVA
D) 3∗ SVM + 17∗ SLM + 18∗ SBM + 18∗ SSM
9) Each of the four production sites ships ten units to each of the four customers. What is the cost of this
initial trial shipment plan?
A) $1960
B) $2080
C) $2120
D) $2230
10) The assignment model assumes that:
A) there are no economies of scale in shipping from one point to another.
B) the total amount shipped must exceed plant capacity.
C) the total amount shipped must not exceed demand at each location.
D) negative shipment quantities are acceptable as long as they are balanced by a positive shipment
elsewhere.
11) In order for the weighted center of gravity method to yield an ideal solution all of the transportation
costs in the area must be identical.
12) The solution obtained from an assignment problem is an optimal answer to the problem of shipping
goods from multiple sources to multiple destinations.
13) In order for the assignment problem method to yield an optimal solution all of the transportation
costs in the area must be identical.
14) An ideal method for locating the site for a centralized distribution center might be ________ if the
volumes and costs for the spokes are known.
15) A location model that looks at the problem of serving various demand points from multiple supply
points at the lowest cost is the ________.
16) A producer of action figures is in a quandary about where to locate a central warehouse that will
serve all of their regional centers for the coming millennium. They have predicted average annual
demands for the following locations in the table.
Location
Demand
X-Coordinate
Y-Coordinate
Gotham City
200
9
8
Metropolis
500
7
5
Central City
800
5
5
Gateway City
600
0
5
Capitol City
150
8
6
Where should they locate their central warehouse?
17) The Times-Picayune is searching for an ideal spotting station for the morning paper. Neighborhoods,
their location on an XY grid of the city, and morning volume are shown in the table. What is the location
that will minimize the transportation costs for the newspaper?
Customer
Annual Volume
X-Coordinate
Y-Coordinate
Florida
7
3
7
Desire
39
7
5
Lafitte
245
1
3
Iberville
116
2
5
Guste
55
1
6
CJ Peete
284
1
4
19) Formulate an appropriate objective function and constraints to model this as an assignment problem.
20) Plants A, B, C, and D produce the same item that is demanded by customers W, X, Y, and Z in the
amounts shown in the table. The cost to ship one unit between each combination of plants and customers
is also shown in the table. The corporation wishes to minimize the total transportation costs of this
assignment problem.
What are the decision variables?
What is the objective function?
What are the constraints?
W
X
Y
Z
Total Supply
A
$3
$6
$4
$2
22,000
B
$7
$10
$8
$6
19,000
C
$10
$13
$11
$9
14,000
D
$12
$15
$13
$11
15,000
Total Demand
25,000
15,000
18,000
12,000