TEST BANK
CHAPTER 13: TRANSPORTATION MANAGEMENT
Multiple Choice Questions (correct answers are bolded)
1. ___________ refers to the buying and controlling of transportation services by either a shipper
or consignee.
2. In general terms, ___________ accounts for about 6 percent of U.S. gross domestic product.
3. ___________ signifies the price charged for freight transportation.
4. Which of the following is not one of the three primary factors that transportation rates are
based upon?
5. Weight times rate equals ___________.
6. A(n) ___________ rate refers to a specific rate for every possible combination of product,
weight, and distance.
7. A(n) ___________ rate is very good for dealing with demand-specific situations.
8. A(n) ___________ rate simplifies each of the three primary rate factors—product, weight, and
distance.
9. Which of the following is not one of the four factors used to determine a product’s
classification?
10. The National Motor Freight Classification (NMFC) currently has 18 separate ratings, or
classes, that range from Class 50 to Class ___________.
11. ___________ refers to how heavy a product is in relation to its size.
12. ___________ refers to how easy a commodity is to pack into a load.
13. Liability for loss and damage is one factor used to determine a product’s freight
classification. Which of the following is not a loss and damage consideration?
14. Which of the following statements about the class rate system is false?
15. With respect to a commodity’s freight classification, shippers tend to prefer a ___________
classification number and carriers tend to prefer a ___________ classification number.
16. Suppose that a particular item is class 200 according to the National Motor Freight
Classification (NMFC). What is the relationship between this item’s rate and the rate for an item
in class 100?
17. With ___________, the buyer assumes title and control of a shipment at the point of pickup.
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18. With ___________, the seller retains title and control of a shipment until it is delivered.
19. Which of the following is not a possible payment option (terms of sale) for U.S. domestic
shipments?
20. With FOB destination, freight prepaid ___________.
21. A(n) ___________ refers to a transportation manager who purchases a prespecified level of
transportation service and is indifferent to the mode and carrier used to provide the transportation
service.
22. The most important single transportation document is the ___________.
23. Each of the following is true except:
24. An order bill of lading is used ___________.
25. An invoice submitted by the carrier requesting to be paid is ___________.
26. A freight claim must be filed within ___________ months from the date on the bill of lading.
27. Which of the following statements is false?
28. If a product destroyed or damaged in transit is intended to be placed into general replacement
inventory, then the retailer would likely receive ___________.
29. Small shipments are defined as those that ___________.
30. Which of the following statements is false?
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31. Demurrage charges are collected by railroads, ___________, and ___________.
32. Which of the following statements is false?
33. ___________ can be defined as the process of determining how a shipment will be moved
between origin and destination.
34. A ___________ provides a variety of shipment information such as shipment preparation,
freight invoicing, a list of preferred carriers, and a list of which carrier or carriers to use for
shipments moving between two points.
Moderate; Concept; AACSB Category 3: Analytical thinking
35. ___________ refers to determining a shipment’s location during the course of its move.
36. ___________ refers to rapidly moving a shipment through a carrier’s system.
True-False Questions
1. Today’s transportation manager can play an active role in blending the appropriate pricing
[LO: Material at the beginning of the chapter; Moderate; Application; AACSB Category 3:
Analytical thinking]
2. Routing refers to the buying and controlling of transportation services by a shipper or
[LO: Material at the beginning of the chapter; Moderate; Concept; AACSB Category 3:
Analytical thinking]
3. Freight transportation accounts for approximately 10 percent of U.S. gross domestic product.
[LO: Material at the beginning of the chapter; Moderate; Application; AACSB Category 3:
Analytical thinking]
[LO 13.1: To discuss how rates are determined; Easy; Concept; AACSB Category 3: Analytical
thinking]
5. A transportation charge (the cost of transportation) can be calculated by multiplying a
[LO 13.1: To discuss how rates are determined; Easy; Application; AACSB Category 3:
Analytical thinking]
[LO 13.1: To discuss how rates are determined; Moderate; Application; AACSB Category 3:
Analytical thinking]
7. The class rate system simplifies with respect to three primary factors—density, product, and
[LO 13.1: To discuss how rates are determined; Moderate; Application; AACSB Category 3:
Analytical thinking]
8. The National Motor Freight Classification (NMFC) has 20 separate classes, or ratings, from
[LO 13.1: To discuss how rates are determined; Difficult; Synthesis; AACSB Category 3:
Analytical thinking]
9. Ease or difficulty of handling is one of the four factors used to determine a product’s freight
[LO 13.1: To discuss how rates are determined; Moderate; Application; AACSB Category 3:
Analytical thinking]
10. Liability to damage and theft is viewed as the primary factor in setting a product’s freight
[LO 13.1: To discuss how rates are determined; Difficult; Synthesis; AACSB Category 3:
Analytical thinking]
[LO 13.1: To discuss how rates are determined; Moderate; Concept; AACSB Category 3:
Analytical thinking]
11
[LO 13.1: To discuss how rates are determined; Moderate; Concept; AACSB Category 3:
Analytical thinking]
13. An item with a freight classification of class 200 will be charged a higher rate than an item
[LO 13.1: To discuss how rates are determined; Moderate; Application; AACSB Category 3:
Analytical thinking]
14. With respect to a commodity’s freight classification, shippers tend to prefer a higher
[LO 13.1: To discuss how rates are determined; Moderate; Synthesis; AACSB Category 3:
Analytical thinking]
15. With respect to class rates, longer distance shipments are more expensive than shorter
distance shipments, and the difference in costs is proportional to the increase in distance.
[LO 13.1: To discuss how rates are determined; Difficult; Synthesis; AACSB Category 3:
Analytical thinking]
16. The price and service trade-offs available to today’s transportation manager are limited only
[LO 13.1: To discuss how rates are determined; Moderate; Application; AACSB Category 3:
Analytical thinking]
17. With FOB origin pricing, the seller retains title and control of the shipment until it is
[LO 13.1: To discuss how rates are determined; Moderate; Application; AACSB Category 3:
Analytical thinking]
18. A disadvantage of FOB destination pricing from a seller’s perspective is that the seller’s
[LO 13.1: To discuss how rates are determined; Moderate; Application; AACSB Category 3:
Analytical thinking]
19. Because transportation costs tend to be lower per unit of weight for larger shipments, there is
[LO 13.1: To discuss how rates are determined; Easy; Application; AACSB Category 3:
Analytical thinking]
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20. The carrier selection procedure appears to be less straightforward than the procedure for
[LO 13.2: To learn about modal and carrier selection; Moderate; Application; AACSB Category
3: Analytical thinking]
21. Transit time reliability is the most important factor that shippers tend to use when selecting
[LO 13.2: To learn about modal and carrier selection; Difficult; Synthesis; AACSB Category 3:
Analytical thinking]
22. An amodal shipper refers to the use of a logistics intermediary to make the relevant
[LO 13.2: To learn about modal and carrier selection; Moderate; Concept; AACSB Category 3:
Analytical thinking]
23. Transportation documentation serves both a practical function (e.g., what, where, and how
much is being transported) as well as potentially providing legal recourse if something goes
[LO 13.3: To distinguish among various transportation documents; Moderate; Application;
AACSB Category 3: Analytical thinking]
[LO 13.3: To distinguish among various transportation documents; Moderate; Synthesis;
AACSB Category 3: Analytical thinking]
[LO 13.3: To distinguish among various transportation documents; Moderate; Application;
AACSB Category 3: Analytical thinking]
[LO 13.3: To distinguish among various transportation documents; Moderate; Synthesis;
AACSB Category 3: Analytical thinking]
[LO 13.3: To distinguish among various transportation documents; Moderate; Concept; AACSB
Category 3: Analytical thinking]
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28. Freight bill audits are designed to detect errors that result in overcharges and to correct those
[LO 13.3: To distinguish among various transportation documents; Moderate; Synthesis;
AACSB Category 3: Analytical thinking]
[LO 13.3: To distinguish among various transportation documents; Moderate; Application;
AACSB Category 3: Analytical thinking]
30. Suppose that a shipment of products destined for a particular retailer is lost or damaged. If
these products were going into general inventory replacement stock, then the retailer would
[LO 13.3: To distinguish among various transportation documents; Moderate; Synthesis;
AACSB Category 3: Analytical thinking]
31. Concealed loss and damage claims are some of the most difficult for shippers and carriers to
[LO 13.3: To distinguish among various transportation documents; Moderate; Synthesis;
AACSB Category 3: Analytical thinking]
[LO 13.3: To distinguish among various transportation documents; Moderate; Application;
AACSB Category 3: Analytical thinking]
33. Small shipments refer to those that can be handled relatively expeditiously and inexpensively
[LO 13.4: To illustrate select activities associated with making and receiving small shipments;
Moderate; Concept; AACSB Category 3: Analytical thinking]
34. From a carrier perspective, there may be a reluctance to accept small shipments because they
[LO 13.4: To illustrate select activities associated with making and receiving small shipments;
Moderate; Application; AACSB Category 3: Analytical thinking]
35. Demurrage is a penalty payment associated with railroads whereas detention is a penalty
[LO 13.4: To illustrate select activities associated with making and receiving small shipments;
Moderate; Concept; AACSB Category 3: Analytical thinking]
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36. In demurrage-related averaging agreements, slow equipment returns can be offset by fast
[LO 13.4: To illustrate select activities associated with making and receiving small shipments;
Moderate; Application; AACSB Category 3: Analytical thinking]
37. A routing guide can provide a variety of shipment-related information such as shipment
[LO 13.4: To illustrate select activities associated with making and receiving small shipments;
Moderate; Application; AACSB Category 3: Analytical thinking]
[LO 13.4: To illustrate select activities associated with making and receiving small shipments;
Moderate; Concept; AACSB Category 3: Analytical thinking]
39. Expedited shipments by motor carriage can sometimes provide faster and more reliable
[LO 13.4: To illustrate select activities associated with making and receiving small shipments;
Moderate; Synthesis; AACSB Category 3: Analytical thinking]
40. Some transportation managers utilize performance scorecards that contain a list of relevant
[LO 13.4: To illustrate select activities associated with making and receiving small shipments;
Moderate; Application; AACSB Category 3: Analytical thinking]