Which Combination of Transportation Operating Service Characteristics is Not Correct?


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Which of the following is not a basic principle of material handling?


Identify the choice that best completes the statement or answers the question.

1. Which combination of transportation operating service characteristics is not correct?

A–Speed: air is best; pipeline is worst

B– Availability: motor is best; pipeline is worst

C–Capability: air is best; truck is worst

D–Dependability: pipeline is best; air is worst


2. Generally the least costly method of moving product that is not gaseous, liquid or slurry is:

A– Air.

B– Water

C– Truck.

D– Rail


3. If a transportation vehicle has completed a delivery and is returned empty, the situation is called a:

A – Backhaul.

B – Piggy-back.

C – Freight absorption.

D– Deadhead


4. The mode of transportation hauling the most tonnage is:

A– Truck.

B– Rail.

C– Air.

D– Water.


5. Which of the following is a product characteristic that directly influences transport cost?

A – The products market share.

B – The products density

C – The products technical complexity

D – All of the above


6. One function of a distribution warehouse is consolidation, which means the facility is being used to

A – Group small inbound shipments into one large outbound shipment

B – Collect products/packaging materials or disposal

C – Hold safety stock inventory

D – None of the above


Questions 7 – 8 are based on the following problem:

A company plans to ship three class 100 consignments (CN1, CN2, CN3) from its warehouse in Atlanta, GA to three DCs (DC1, DC2, DC3) in Lansing, MI. The consignment is packed in cardboard boxes. Management must select one of the following options:

1) Ship each consignment individually to each DC.

2) Ship all three consignments from Atlanta as a consolidated load and deliver separately to DC1, DC2, and DC3 located in Lansing. The total additional handling cost is $200.


Use Table8.8 to compute shipping cost for each of the above options. The table below summarizes the data. You may complete it and use it for answering questions 7 & 8.



7. The rate/CWT & total cost to ship CN1 in Atlanta to DC1 in Lansing is:

A. ($18.94/CWT & $1,326).

B. ($18.94/CWT & $1,042).

C. ($14.73/CWT & $1,620).

D. None of the above


8. The total cost to ship using Option 1 or Option 2 is:

A. ($3988 or $2,167).

B. ($1,620 or $1, 2,367).

C. ($14.73 or 9.22).

D. ($3988 or $2,367).


9. “Slotting” a warehouse means:

A. Products are positioned for value added services

B.Products are assigned a specific warehouse location

C.Products are placed in a pick line location

D.None of the above.


10. Materials handling is concerned with

A. inventory levels.

B. breaking bulk.

C. scheduling trade-offs.

D. short-distance movement.


Questions 11 – 12 are based on the following problem:

ABC Industries has an annual sales volume of 24,000 for Product X. The Logistics Manager has developed three proposals as shown in the table below:



11. The total cost building a private warehouse is:

A. $492,000.

B. $495,000.

C. $453,000.

D. $420,000


12. Company ABC should:

A. Build private warehouse.

B. Rent space.

C. Outsource.

D. B or C.


13. The use of a Warehouse Management System (WMS) to route fork trucks on-demand is called:

A. Simultaneous routing.

B. Variable routing.

C. Directed routing.

D. Task Interleaving


14. Since pallets and slip-sheets are similar in purpose, why would anyone choose slip-sheets over pallets for unitization?

A. slip-sheets do not require special handling equipment

B. pallets are more costly

C. slip-sheets can hold more products

D. all of the above


15. Which of the following is not a flexible container?

A. pallet.

B. slip-sheet.

C. corrugated box

D. all of the above are flexible containers


16. Which of the following is not a basic principle of material handling?

A. equipment should be as standardized as possible

B. a system should be designed to provide maximum continuous flow

C. gravity flow should be avoided in system design

D. all of the above are basic principles


17. A maquiladora plant is

A. a trade agreement between the U. S and South America.

B. an entity created under NAFTA

C. a U.S. plant performing manufacturing, processing, or assembly activity in Mexico.

D. a factory owned by the Maquiladora Corporation.


18. Which of the following describes the supply chain strategy for the “International Operations:local presence” stage of global development?

A. Agents and third party logistics service providers

B. Subsidiaries and local distributors with specific business charters and visible local presence

C. Worldwide flow of key resources to leverage global sourcing and marketing advantages

D. None of the above


19. The major justification for Cabotage laws was

A. Reduce transportation uncertainty

B. Reduce transportation cost

C. Protect domestic shipping capacity

D. Protect domestic infrastructure.


20. Firms are globalizing their operations today for all of the following reasons except

A. Take advantage of lower labor rates

B. Obtain reductions in value-added taxes

C. Source product from locations that involve less transportation uncertainty

D. Simplify product variations


21. All of the following are examples of international logistics documentation except

A. Export irrevocable commercial letter of credit

B. Certificate of origin

C. Commercial invoice

D. Shipping invoice


22. All other things being equal, domestic sourcing would be suggested for

A. Products with high value

B. Products with high labor content

C. Products with long life cycles

D. Products with low transportation uncertainty


23. The threshold service level is:

A. The level of service associated with the least total cost system design

B.The level of service only associated with an optimum system design

C.The level of service existing in a system prior to redesign

D. None of the above


24. Spatial/temporal integration means:

A.The solution only considers the impact of space or time

B .The solution is based on the average of both spatial and temporal variables

C.The solution is based on the simultaneous impact of time and space

D.None of the above


25. In terms of warehouse justification which of the following statements is true.

A .A warehouse is justified if it offers a way to achieve competitively superior . Service.

B.A warehouse is justified if it offers a way to provide service at lowest cost

C.A warehouse is justified

D.All of the above


26. Market based Assembly To Order (ATO) is a form of:

A.Manufacturing justified warehousing

B.Procurement justified warehousing

C.Customer justified warehousing

D.None of the above.


27. When designing a warehouse network if the overall safety stock increases as the number of warehouses increase then:

A.Network uncertainty is decreasing

B.Network uncertainty is increasing

C.Network uncertainty in constant

D.Safety stock is appropriately linked to average stock


28. Threshold service level is:

A. Limited to measures of availability

B.Is limited to measures of capability

C.Is unique to each location situation

D.Is the result of service sensitivity analysis?


29. Supply chain design decisions focus on

A. How many warehouses should the firm use and where should they be located?

B. Which product line should be produced?

C. Which marketing channels of distribution should the firm use?

D. All of the above


30. Which of the following inventory technique uses inventory parameters such as safety stock and order quantity as inputs for inventory analysis?

A. Inventory simulation model.

B. ABC Analysis.

C. Analytic inventory model.

D. Work-in-process (WIP) inventory models.


31. The primary objective(s) of freight lane analysis are:

A. Minimize overall freight cost

B. Balance freight movements between multiple origins and destinations

C. Identifying possibilities for back-hauls

D. All of the above


Questions 32 – 33 are based on the following problem:

Jingle Corporation received an order from a customer for 100 units of bells, 200 units of whistles, and 200 units of dingers. The customer received from Jingle Corporation 90 units of bells, 190 units of whistles, and 200 units of dingers.

32. Jingle’s item fill rate was:

A. 90%

B. 95%

C. 33.33%

D. 96%


33. Jingle’s line fill rate was:

A. 100%

B. 95%

C. 33.33%

D. 96%


34. Suppose your company receives trade credit from your suppliers which allows you 10 days to pay for the goods you buy. You flow your inventory through your company every 30 days. You allow your customers 30 days to pay you. Your cash-to-cash cycle time is:

A.10 days.

B. 50 days.

C. 70 days.

D. 60 days.


35. Last year, Able Company had Sales of $10 million, Cost of Goods Sold of $6 million, and Gross Profit of $4 million and Net Profit of $1 million. Average inventory at cost was $2 million. Able’s inventory turn rate was:

A. 5 times.

B. 3 times.

C. 2 times.

D. 5 times


36. What is the best financial metric to show the profit an organization generates in relationship to assets utilized?

A. Return on Assets (ROA)

B. Net Profit Margin (NPM)

C. Return on Net Worth (RONW)

D. B and C


37. On a good day, Joe will sell an average of $50,000 of product. On a medium day he will sell $25,000 and on a bad day he will sell only $10,000. Suppose you observe Joe’s business for 100 days and, during that time, he had 15 good days, 40 medium days and 45 bad days. If you draw a random number to represent his sales for the first simulated day and that number were 47, what kind of simulated day did Joe’s business have? (Note: arrange the random number interval probability distribution so it starts with a good day at 00 followed by a medium day, etc.)

A. A good day.

B. A medium day.

C. A bad day.

D. A and B.


Questions 38– 39 are based on the following problem:

The following table represents the probability distribution for demand of a product sold by Zalmart. Complete the table for use in a Monte Carlo simulation exercise that will use random numbers from Excel spreadsheet [RAND()] to compute weekly demands from the probability distribution.


ProbabilityCumulative ProbabilityWeekly Demand


38. What will be the corresponding weekly demands if a Random Numbers [RAND()] chosen by EXCEL was : 0.65143?

A. 5.

B. 7.

C. 9.

D. None of the above.


39. In order to select a weekly demand of 9, the Random Number [RAND()]chosen by EXCEL must be:

A. > 0.925 and < 1.000.

B. > 0.775 and < 0.925.

C. > 0.625 and < 0.775.

D. None of the above.


40. When would you recommend the use of simulation for studying inventory control systems?

A. When you need a low cost solution.

B. When the management is not involved in the study.

C. When you require the analysis to be done over a long time period.

D. A and B.

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