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1 Basics of Logistics Management tml tml ml 1 Companies must spend money and invest in transporting raw materials and finished goods, materials handling, warehousing, storage, and holding inventory, and managing the distribution process including the cost of information technology. Worldwide, these activities and investments cost companies about a year. A) $500 million B) $1 billion C) $1.5 billion D) $2 trillion E) $3.4 trillion 2 The term customer service as it relates to the definition of logistics management implies A) a firm must drive down logistics costs as long as it can still satisfy customer requirements. B) meeting customer needs is the sole responsibility of the manufacturer. C) every channel member should have input in regards to product design if it affects the way a product is used by the ultimate consumer. D) customers should dictate how, when, and where products are distributed regardless of cost to the manufacturer or its intermediaries. chain. E) the responsibility to satisfy customers' needs applies equally to all members of a supply

2 3 The integration and organization of information and logistics across firms in a supply chain for the purpose of creating and delivering products and services that provide value to ultimate consumers is referred to as. A) supply chain management B) logistics management C) electronic data interchange (EDI) D) just-in-time management E) cost-effective management 4 Which statement regarding responsive supply chains is most accurate? A) Responsive supply chains use slower modes of transportation but faster order processing. B) Responsive supply chains always use the least expensive mode of transportation possible. C) Responsive supply chains use common platforms and common components across several products. D) Responsive supply chains rely on maintaining large inventory warehouses. E) Responsive supply chains achieve economies of scale by having all inventory stored and sorted at a central location. 5 FedEx package shipping service is available on its. In a single session, a company can enter all the information needed to prepare a shipper form, obtain a tracking number, print the form, and schedule a pick up. A) personalized Internet B) data mining system C) e-commerce management system D) marketing information system E) extranet

3 6 Which of the following customer-service components is likely to be most critical for Honda's JIT manufacturing when it purchases original-issue windshield wiper blades? A) lead time B) dependability and on-time delivery C) communication D) convenience E) low price 7. The four key logistic functions in a supply chain include warehousing and materials handling, order processing, inventory management, and. A) communication between buyer and seller B) problem resolution C) order cycle time D) transportation E) financing the purchase 8. Which of the following statements about motor carriers is most accurate? A) The motor carrier industry is composed primarily of two major carriers: Truckmaster and Swift Transportation. B) Truck rates are substantially lower than rail rates. C) Motor carries have a better record than rail carriers regarding lost and damaged goods. D) The only real disadvantage of motor carriers is they are often slow because of traffic. E) An advantage of motor carriers is that piggyback trucks can carry loads of almost any size or weight. 9. A distribution center refers to

4 A) a warehouse that emphasizes the timely movement of goods. B) a warehouse that emphasizes long-term storage of perishable goods. C) a warehouse that is responsible only for storage of inventory and not for the assembly or sorting of goods. D) a centralized, jointly-owned property by non-competing manufacturers in order to reduce expenses. E) a warehouse that does not facilitate the mixing of ingredients to create finished goods. 10. Traditionally, carrying inventory has been justified on several grounds: (1) offering a buffer against variations in supply and demand; (2) providing better service for those customers who wish to be served on demand; (3) promoting production efficiencies; (4) providing a hedge against price increases by suppliers; (5) protecting the firm from contingencies such as strikes and shortages; and (6) A) anticipating increased demand from unanticipated social trends. B) helping stimulate the local economy. C) having sufficient inventory in the event of natural disasters. D) providing a hedge against price increases by suppliers. E) promoting purchasing and transportation discounts. Ans. 1 to e 2. a 3. a 4. c 5. e 6. b 7. d 8. c

5 9. a 10. e 11. Which of the following statements is true? a. Physical distribution and logistics are the same. b. Transportation and logistics are same. c. Logistics is a subset of supply chain. d. Supply chain is a subset of logistics. e. Logistics and supply chain are same. 12. If a customer visiting a departmental store cannot find his desired soap manufactured by Hindustan Unilever Ltd (HUL) in the store, which of the following chain partner will he hold responsible for the nonavailability of the soap? a. The logistics service provider b. Hindustan Unilever Ltd c. The departmental store d. The suppliers of raw materials and components e. The distributor 13. Which of the following sequence is true? a. Inbound logistics Sourcing Conversion into finished goods Outbound logistics Retailing b. Sourcing Outbound logistics Conversion into finished goods Inbound logistics Retailing c. Sourcing Conversion into finished goods Inbound logistics Outbound logistics Retailing d. Sourcing Inbound logistics Outbound logistics Conversion into finished goods Retailing e. Sourcing Inbound logistics Conversion into finished goods Outbound logistics Retailing 14. Supply chain is concerned with the a. flow of raw materials, WIP and finished products in the forward direction

6 b. flow of information in both the directions c. flow of cash in the reverse direction d. flow of materials in the forward direction and that of cash in the reverse direction e. flow of materials in the forward direction, cash in the reverse direction and information in both the directions 15. The objective of a supply chain is: a. to improve the efficiency across the whole supply chain b. to improve responsiveness across the whole supply chain c. to deliver improved value to the customers d. to improve the efficiency and responsiveness across the whole supply chain and also deliver improved value to the customers e. to improve the responsiveness across the whole supply chain and deliver improved value to the customers 16. Which of the following statements is true? a. Toyota supply chain believed in medium-term relationship with the suppliers with loosely held supplier network. b. Dell supply chain propagated the concept of long-term relationship with the suppliers. c. Dell supply chain believed in medium-term relationship with the suppliers with loosely held supplier network. d. Ford supply chain is both highly efficient as well as highly responsive. e. Dell supply chain is both highly efficient as well as highly responsive. 17. In today s supply chain, there has been a shift in the power structure in a chain towards a. Raw-material suppliers b. Manufacturers c. Third-party logistics service providers d. Distributors e. Retailers 18. Which of the following statements is true regarding outsourcing?

7 a. Higher level of outsourcing enables a firm to have better control on all outsourced activities. b. Higher level of outsourcing makes a firm more vulnerable to outside influences. c. Higher level of outsourcing enables a firm to outsource core activities to other competent players. 19. If the focus of a retailer is to achieve leadership in cost, then which of the following phenomenon will hold good? a. Customers will prefer a large variety of products but the retailer will not keep a large variety in the store in order to achieve economies of scale. b. Customers will prefer a large variety of products and the retailer will also keep a large variety in the store in order to satisfy customer needs. c. Customers will prefer short lead time for their products and the retailer will keep higher amount of inventory in order to satisfy customer needs in time. d. Customers will like to have convenience and the retailers will also set up a number of stores at different locations in order to provide convenience to the customers. e. Customers will prefer a large variety of products and the retailer will keep higher variety as also higher amount of inventory in order to satisfy customer needs. 20. The companies will realize the benefits of implementing IT when which of the following is undertaken? a. Companies need to invest heavily in information systems. b. Companies need to automate the existing supply chain systems and processes. c. Companies need to re-engineer their supply chain structure. d. Companies need to undertake revision in the supporting organizational processes. e. Companies need to re-engineer their supply chain structure and undertake revision in the supporting organizational processes. 21. Ford supply chain is characterized by a. Individual customization b. Loosely-held supplier networks c. Increased product variety d. Long-term relationship with the suppliers e. Vertical integration 22. Toyota supply chain is characterized by

8 a. Vertical integration b. Individual customization c. Loosely-held supplier networks d. Zero product variety e. Long-term relationship with the suppliers 23. Dell supply chain is characterized by a. Zero product variety b. Lean production systems c. Vertical integration d. Individual customization e. Long-term relationship with the suppliers 24. Which of the following statements is true? a. A 3PL company is a professional logistics service provider meeting the logistics requirements of an organization and can also integrate its resources, capability, and technology in order to provide comprehensive solution to its customers. b. A 4PL company is a professional logistics service provider meeting the logistics requirements of an organization and can also integrate its resources, capability, and technology in order to provide comprehensive solution to its customers. c. A 4PL company is a professional logistics service provider meeting only the logistics requirements of an organization. d. A 3PL company is a professional logistics service provider meeting only the logistics requirements of an organization. e. A 3PL is a logistics service provider meeting only the logistics requirements of an organization while 4PL is a logistics service provider meeting the logistics requirements of an organization and can also integrate its resources, capability and technology to provide comprehensive solution to its customers. 25. Which one of the following is not the supply challenge being faced by the Indian organizations? a. Poor infrastructure b. Smaller pack sizes c. Complex distribution structure d. Complex taxation structure e. IT implementation

9 Ans. 11 to c 12. c 13. b 14. e 15. d 16. d 17. e 18. e 19. a 20. e 21. d 22. d 23. e 24. e 25. c 26. Strategic stretch involves: A) The fit between the organisation and its environment. B) Creating new opportunities by stretching and exploiting capabilities in new ways. C) The skills of the senior management. D) Utilising all the resources of an organisation to their full capacity. 27. What are core competences? A) Resources which critically underpin competitive advantage and that others cannot obtain.

10 B) Activities and processes needed to meet customers' minimum requirements and therefore to continue to exist. C) Key skills required for success in a particular business. obtain. D) Activities that underpin competitive advantage and are difficult for competitors to imitate or 28. The value chain attempts to identify those activities which add value to: A) The organisation's stakeholders. B) The senior strategic managers in the organisation. C) The organisation's shareholders. D) The customer or final user. 29. The value chain is composed of primary & support activities. Which answer below provides the correct components for primary activities? A) Service, human resource management, marketing & sales, operations and outbound logistics. B) Marketing & Sales, Operations, Outbound Logistics and Service. C) Procurement, Firm Infrastructure, Human Resource Management, Technology Development and Marketing & Sales. D) Inbound Logistics, Operations, Outbound Logistics, Marketing & Sales and Service. 30. What is the purpose of an activity map? A) A system to facilitate better time-planning. B) It is used in business process reengineering to show how the different activities of an organisation are linked together. C) It is used to identify and understand strategic capability by mapping how the different activities of an organisation are linked together. D) A list of activities undertaken by an organization.

11 31. Competitive advantage through linkages between the organisation and its value network can be achieved by: A) Vertical integration. B) Adopting common quality standards internally and externally (with suppliers). C) Examining supplier specifications, common merchandising, applying quality management principles or by collaborating with other organisations in the form of strategic alliances or joint ventures. D) Outsourcing customer service to India. 32. Cost efficiency is determined by which of the following drivers? A) Supply Costs, Experience, Product/Process Design and Economies of Scale. B) Supply Costs & Economies of Scale. C) Product/Process Design and Economies of Scale. D) Experience. 33. Robustness of strategic capabilities is more likely when: A) Linkages in the value network are exploited. B) Core competences are complex, ambiguous and dependent on culture/history. C) Competences lie with specific individuals. D) Core competences lie in separate parts of the organisation's value chain. 34. Which types of organisational knowledge are a source of competitive advantage? A) Explicit knowledge which is classified and formalised in a planned and systematic way. B) Personal knowledge which is hard to communicate and formalise. C) Customer databases, market research reports, management reports. D) Collective and shared experience accumulated through systems, routines and activities of sharing across the organisation.

12 35. In the resource-based view of strategy, what type of strategic capabilities are the source of sustainable competitive advantage? A) Unique resources and core competences. B) Dynamic capabilities. C) Operational excellence. D) Strategic capabilities which are valuable to buyers, rare, robust and non-substitutable. 36. What are the three criteria for the robustness of strategic capability? A) Core competences, unique resources and dynamic capabilities. B) Complexity, causal ambiguity and value to customers. C) Complexity, causal ambiguity and rarity. D) Complexity, causal ambiguity and culture/history. 37. Industry/sector benchmarking compares: A) Organisational performance between firms/public sector organisations in different industries or sectors. B) Organisational performance between firms/public sector organisations in the same industry or sector. C) Organisational performance between firms/public sector organisations in different countries. D) Organisational performance between different divisions of the firm. 38. Best in Class Benchmarking seeks to assess organisational performance against: A) The nearest geographical competitor. B) The competitor who is 'best in class' wherever that may be. C) The competitor who is the best in the industry. D) The nearest principal competitor.

13 39. The purpose of a SWOT analysis is to analyse: A) The business environment in which an organisation operates. B) The strategic capability of an organisation. C) The business environment and the strategic capability of an organisation relative to its competitors. D) External and organisational environments. 40. SWOT should be: A) A general list of issues under each heading. B) Focused on key issues and as specific as possible. C) Completed when an analysis of the external environment has been conducted. D) SWOT analysis is the best strategic management framework for analysing the competitive positioning of an organisation. Ans. 26 to b 27. d 28. d 29. d 30. c 31. a 32. a 33. d 34. d 35. d 36. b

14 37. b 38. b 39. c 40. b 41. Which of the following is not a typical supply chain member? a. wholesaler b. reseller c. retailer's creditor d. customer e. producer 42. When suppliers, distributors, and customers partner with each other to improve the performance of the entire system, they are participating in a. a. channel of distribution b. supply chain c. demand chain d. value delivery network e. supply and demand chain 43. A company's channel decisions directly affect every. a. employee in the channel b. channel member c. customer's choices d. marketing decision e. competitor's actions 44. From the economic system's point of view, the role of marketing intermediaries is to transform the assortment of products made by producers into the assortment of products wanted by. a. manufacturers b. consumers c. marketers

15 d. distributors e. channel members 45. Intermediaries play an important role in matching. a. information and promotion b. manufacturer to product c. supply and demand d. dealer with customer e. product to region 46. Which of the following is not a key function that intermediaries play in completing transactions? a. promotion b. negotiation c. negotiation d. information e. financing 47. In marketing terms, we say that the number of intermediary levels indicates the of a channel. a. width b. depth c. complexity d. length e. involvement 48. An advantage of a channel of distribution over selling direct to consumers is that each channel member plays a in the channel. a. informational role b. decisional role c. time-saving part d. specialized role e. disciplinary role

16 49. Historically, conventional channels have lacked the leadership to. a. assign member roles and manage conflict b. attain efficiency and assign member roles c. set standard pricing and promotions d. set standard pricing and packaging e. assign channel member roles and attain efficiency 50. A channel consisting of one or more independent producers, wholesalers or retailers that are seeking to maximize their own profits even at the expense of profits for the channel as a whole is a. a. administered vertical marketing system b. conventional distribution channel c. vertical distribution structure d. independent channel allocation e. vertical marketing system 51. A corporate VMS has the advantage of controlling the entire distribution chain under. a. a few intermediaries b. little control c. mass distribution d. single ownership e. a profit-maximizing strategic plan 52. A distinguishing feature of a contractual VMS is that coordination and conflict management among the independent members of the channel are attained through. a. natural competitive forces b. working partnerships c. contractual agreements d. limited liability corporations e. oral agreements 53. Leadership in which type of marketing system is assumed not through common ownership or contractual ties but through the size and power of one or a few dominant channel members?

17 a. dual distribution system b. administered VMS c. horizontal marketing system d. conventional marketing channel e. corporate VMS 54. Hybrid marketing systems are also called a. dual distribution systems b. horizontal multichannel systems c. administered franchises d. multichannel distribution systems e. contractual marketing systems 55. The major disadvantage of a multichannel system is that it is harder to control and it can generate. a. greater conflict b. less net profit c. inefficiency d. declining employee morale e. fewer domestic sales 56. In many industries, traditional intermediaries are dropping by the wayside because of changes in and the growth of marketing. a. franchise structure; independent b. state and local laws; target c. channel design; retail d. federal laws; business-to-business e. technology; direct and online 57. Which of the following should be the first step in designing a marketing channel? a. identifying what consumers want from the channel b. identifying channel objectives c. evaluating intermediaries d. analyzing channel alternatives

18 e. exploring international opportunities 58. Companies should state their channel objectives in terms of targeted levels of. a. fair prices b. efficiency and reduced conflict c. customer service d. co-op advertising e. profitability 59. Which type of product might require a more direct marketing channel to avoid delays and too much handling? a. high-priced products b. products in their decline stage c. perishable products d. lower-priced products e. products in their maturity stage 60. Sometimes a producer chooses only a few dealers in a territory to distribute its products or services. Generally these dealers are given a right to distribution. a. exclusive b. administered c. intensive d. selected e. corporate 61. Channel members should be evaluated using all of the following criteria except which one? a. control b. economic factors c. adaptive criteria d. channel leadership e. none of the above 62. It is common for international marketers to their channel strategies for each country.

19 a. adapt b. restrict c. extend d. eliminate e. seek approval for 63. Marketing channel management calls for selecting, managing,, and evaluating channel members over time. a. reducing waste b. pruning c. motivating d. reducing conflict e. reinstating 64. Most companies practice strong PRM to forge long-term relationships with channel members. What does PRM stand for? a. primary relationship management b. potential relationship management c. perennial relationship management d. personnel roster maintenance e. partner relationship management 65. Marketing logistics involves getting the right product to the right customer in the right place at the right time. Which one of the following is not included in this process? a. planning the flow of logistics information to meet customer requirements at a profit b. implementing the plan for the flow of goods and services c. controlling the physical flow of goods, services, and information d. gathering customer's ideas for new products e. bplanning the physical flow of goods and services 66. Which of the following is not an area of responsibility for a logistics manager? a. information systems b. marketing c. inventory

20 d. purchasing e. warehousing 67. To reduce inventory management costs, many companies use a system called, which involves carrying only small inventories of parts or merchandise, often only enough for a few days of operation. a. just-in-time logistics b. limited inventory logistics c. economic order quantity d. reduction-inventory management e. supply chain management 68. Which of the following transportation modes is used for digital products? a. air b. the Internet c. trucks d. rail e. ship 69. Companies manage their supply chains through. a. the Internet b. competitors c. skilled operators d. transportation modes e. information 70. Julie Newmar recognizes that her company needs to provide better customer service and trim distribution costs through teamwork, both inside the company and among all the marketing channel organizations. Julie will begin the practice of. a. disintermediation b. horizontal marketing system management c. integrated logistics management d. customer relationship management e. supply chain management

21 71. Smart companies coordinate their logistics strategies and forge strong partnerships with suppliers and customers to improve customer service and reduce channel costs through. a. cross-functional, cross-company teams b. cross-functional teams c. segregated departmentalization d. partnering e. cross-company teams 72. Today, a growing number of firms now outsource some or all of their logistics to. a. channel members b. competitors c. cross-functional teams d. third-party logistics providers e. disintermediaries 73. Rolex watches can only be found in a limited number of intermediaries. This is an example of. a. independent distribution b. high-end distribution c. quality distribution d. exclusive distribution e. intensive distribution Ans. 41 to e 42. d 43. e 44. e 45. e

22 46. c d 49. b 50. d 51. d 52. d 53. b 54. d 55. b 56. b 57. a 58. a 59. e 60. e 61. d 62. c 63. b 64. d 65. e 66. e 67. a 68. e 69. c 70. a

23 71. b 72. b 73. a