Question 1

Optimization occurs when elements of the physical distribution system are judged on their individual merits and not on how effectively they integrate together.

Accepted Answer

Optimization occurs when elements of the physical distribution system are evaluated and integrated in a manner that ensures the entire system operates effectively and efficiently, rather than judging each element on its individual performance alone.

Question 2

Transportation and delivery expenses alone add roughly 10 percent to the cost of a product.

Accepted Answer

Transportation and delivery expenses can significantly impact the total cost of a product, often adding around 10 percent or more to its final price, depending on various factors such as distance, mode of transportation, and fuel costs.

Question 3

Piggybacking is a transportation arrangement in which highway trailers and containers ride on railroad cars, combining the long-haul capacity of the train with the door-to-door flexibility of the truck.

Accepted Answer

Piggybacking in transportation refers to the practice of loading highway trailers or shipping containers onto rail cars. This method combines the efficiency of rail transport for long distances with the flexibility and accessibility of road transport for shorter distances, providing a door-to-door delivery solution.

Question 4

Freight carriers are classified as common, contract, and institutional carriers.

Accepted Answer

Freight carriers are classified as common, contract, and private carriers, not institutional carriers.

Question 5

Common carriers can legally move freight via ground transportation only.

Accepted Answer

Common carriers can move freight via various modes of transportation, including ground, air, and water, not just limited to ground transportation.

Question 6

In transportation, the class rate is the standard, undiscounted rate for a specific commodity moving between any two points.

Accepted Answer

The class rate is a standard rate used in transportation to determine the cost of shipping a commodity between two locations without any discounts applied.

Question 7

When it comes to warehouse location, it is almost always more efficient to have fewer but larger warehouses, even if they have to be spaced further apart.

Accepted Answer

The efficiency of warehouse size and location depends on various factors including the nature of the business, distribution needs, transportation costs, and the speed of delivery required. Fewer but larger warehouses can reduce costs in some scenarios but can also lead to increased transportation costs and delivery times for customers located far from the centralized locations.

Question 8

Suboptimization results when managers of individual physical distribution functions seek to meet their overall customer service goal by meshing all physical distribution elements to achieve lowest total cost.

Accepted Answer

Suboptimization occurs when managers of individual units or functions focus on their specific objectives in a way that leads to suboptimal outcomes for the overall organization, often ignoring the broader organizational goals or the interdependencies among different functions.

Question 9

Logistics managers can cut distribution costs and improve customer service dramatically by automating their warehouse systems.

Accepted Answer

Automating warehouse systems can streamline operations, reduce errors, and speed up processing times, which in turn can lower distribution costs and enhance customer service by ensuring faster and more accurate deliveries.

Question 10

Warehouses are normally classified as either storage or distribution facilities. Storage is used for long-term inventory balancing, and distribution warehouses are used for sorting, assembling, and distributing goods as quickly as possible.

Accepted Answer

Storage warehouses focus on holding goods for longer periods to balance inventory levels, while distribution warehouses are designed for rapid movement of goods, involving sorting, assembling, and quick distribution to meet immediate demand.

Question 11

Just-in-time production, RFID tags, and vendor-managed inventory systems have improved the efficiency with which inventory is tracked and stored.

Accepted Answer

These technologies and systems enable real-time tracking of inventory, reduce excess stock, and streamline the supply chain, thereby improving the efficiency of inventory management.

Question 12

Customer-service standards set goals and define acceptable performance for the quality of service that a firm expects to deliver to its customers. The designers of the physical distribution systems must then try to attain these goals for the lowest possible cost.

Accepted Answer

Customer-service standards are benchmarks that dictate the level of service a company aims to provide, and the design of physical distribution systems is indeed focused on achieving these standards efficiently, balancing quality with cost.

Question 13

Water carrier costs have continued to decline, making this mode of transportation the cheapest per tonne-kilometre of all the transportation means available.

Accepted Answer

The answer of Water carrier costs have continued to decline,...

Question 14

Growth in the air freight industry has skyrocketed in the last few years-specifically in the market sector interested in overnight delivery.

Accepted Answer

The answer of Growth in the air freight industry has...

Question 15

Because of increased fuel costs and motor tax rates, motor carriers receive less revenue per tonne shipped than other carriers.

Accepted Answer

Motor carriers often have different cost structures and can be more flexible in their operations, allowing them to adjust pricing and services in ways that might not directly correlate with fuel costs and tax rates compared to other carriers like rail or air, which might have higher fixed costs or different efficiency levels per tonne shipped.

Question 16

The order process comprises four steps: credit check, record of sale, accounting entries, and order fulfillment.

Accepted Answer

The order process typically includes these steps to ensure financial viability, record keeping, financial accounting, and finally, delivering the product or service to the customer.

Question 17

Piggyback, birdyback, and fishyback are all intermodal terms for motor carriers coordinating shipments with rail, air, and water carriers respectively.

Accepted Answer

Piggyback refers to the transportation of truck trailers on rail flatcars, birdyback to the combination of air and truck transport, and fishyback to the shipping of containers by sea and then by road or rail.

Question 18

One factor that encourages the use of pipelines is speed, with the average pipeline moving goods at a rate of 34 kilometres per hour.

Accepted Answer

Pipelines are primarily valued for their efficiency in transporting large volumes of liquids and gases over long distances continuously, not for speed. Their advantage lies in their ability to provide a constant supply rather than rapid transportation.

Question 19

Inventory control is part of a company's accounting system but is often inaccurately considered part of the physical distribution system.

Accepted Answer

The answer of Inventory control is part of a company's...

Question 20

In transportation, a commodity rate, or special rate, is given by carriers to shippers of bulk commodity products such as soy, corn, and oats.

Accepted Answer

The answer of In transportation, a commodity rate, or special...

Quiz 12: Marketing Channels and Supply Chain Management