LSCM Chapter Two

t/f The utility created through the basic marketing activities is known as place utility
t/f transportation is the physical movement or flow of goods
t/f During the 1990s and 2000s, logistics costs as a percentage of gross national product declined
t/f An aircraft manufacturer is a good example of an organization with a heavy inbound and simple outbound flow
t/f Acme Battery distributes its batteries to warehouses, where they are stored until ordered by a retailer. The warehouses are located close by the retail markets serve. This is the logistics channel approach to logistics
t/f In a logistics system, warehousing should be optimized at the expense of related logistic activities, such as transportation and procurement
t/f The mathematical calculation of the point of equality between systems under analysis is used for short-run/static analysis
t/f To hold down distribution cost, the lowest cost carrier should always be used
The inverse relationship that exists between the cost of lost sales and inventory costs is the
inventory effect.
Ensuring the availability of the right product, in the right quantity, and the right condition, at the right place, at the right time, for the right customer at the right cost, is which definition of
Seven R’s
Logistics is the process of anticipating customer needs and wants; acquiring the capital,
materials, people, technologies, and information necessary to meet those needs and wants;
optimizing the goods- or service-producing network to fulfill customer requests; and utilizing the network to fulfill customer requests in a timely manner. This is a
general definition
All four subdivisions of logistics have some common characteristics. Which of the below does not belong in the list:
The value that is added to goods through a manufacturing or assembly process is:
form utility
14. Which of the answers below is an example of the creation of form utility by a logistics activity?
Breaking bulk and repackaging at a distribution center
The utility that is created by moving goods from production points to market points where
demand exists is referred to as:
Logistics creates which utility through production forecasting, production scheduling and
inventory control?
quantity utility
Time utility depends on
having the product available when the user wants it
What is often the largest component of logistics costs?
transportation costs
Materials handling is concerned with
short-distance movement
Marketers have begun to recognize the strategic value of place in the marketing mix, as well as the benefits resulting from high-quality logistical services. As a result, which has been recognized as the interface activity between marketing and logistics?
customer service
It can be argued that ____________ is the second language of logistics and supply chain management.
What activity is described as the movement of goods into a warehouse, the placement of
goods in a warehouse, and the movement of goods from storage to order picking areas and eventually to dock areas for transportation out of the warehouse?
materials handling
A ___________ relationship exists between the cost of lost sales and inventory cost
Water Cruisers is located in Jacksonville, Florida, and makes small yachts and luxury pontoon
boats for customers on the East coast of the United States. Each boat requires thousands of
parts purchased from over 1,000 vendors. A number of boats are in production at any one
time, so a large number of parts constantly arrive and are stored. Once a boat is finished, it is
sailed up the coast to a convenient port for customer delivery. Which type of logistics system does Water Cruisers use?
heavy inbound
The product’s dollar value typically affects the cost of logistics activities. Which is not one of these costs?
promotion costs
When a specific point in time, or level of production, is chosen and costs are developed for the
various logistics cost centers, it is called
short run analysis
A ________________ analysis examines a logistics system over a long time period or range of output
What are fixed spatial points where goods stop for storage or processing?
An important sustainability issue that has received much more scrutiny in recent years is
reduction in packaging waste by using alternate materials
What technology has helped make the physical inventory-taking process more efficient and
scanning of bar-coded RFID tags

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