1.
A
B
C
D
2.
A.
B.
C.
D.
E.
3.
A
B.
C.
D.
4.
A.
B.
C.
D.
E.
5.
A.
B.
C.
D.
6.
A.
B.
C.
D.
As auto companies evolve their methods for transporting new vehicles to market they have moved
most aggressively over last year:
Towards using more containerized movements in which cars are placed in containers before being
moved by rail.
Towards using firms like UPS to manage finished vehicle transportation
Towards using more trucking partnerships to move individual plant mixes of cars direct to dealer
lots, by passing mixing centers.
Towards taking stronger internal control of the planning and management of car transportation
There has been much talk in recent months about railroad mergers and related problems with rail
service. Since railroads were partly deregulated in the early 1980s, which of the following comes
closest to describing what has happened to rail rates in real terms:
They have come down 20% on average
They have come down 50% on average
They have gone up 20% on average
They have gone up 50% on average
Rail rates have stayed about the same
The U.S.-Canada Free Trade Agreement and the subsequent NAFTA had some provisions relating to
trade and transportation. Which of the following is most correct at this time:
Neither Mexican or Canadian trucks can make a pickup in the U.S. and then deliver those goods to
some point in the U.S.
Mexican trucks cannot make wholly domestic moves in the U.S. but Canadian ones can.
Both Mexican and Canadian trucks are allowed to make wholly domestic moves in the U.S.
Both Mexican and Canadian trucks can enter the U.S. to make deliveries of goods picked up
outside the U.S. but neither can make wholly domestic moves.
The mechanics of JIT are most similar to which inventory management approach?
MRP
fixed order interval
DRP
Two-bin-system
just-in-case
Of the following, which would be expected to have the highest transportation costs?
freight consolidation/pooling
LTL direct
Market positioned warehouse
Its impossible to make a generalization
Of the following, which would be expected to have the highest transportation costs?
freight consolidation/pooling
LTL direct
Market positioned warehouse
Its impossible to make a generalization
7.
A.
B.
C.
D.
E.
According to the systems concept:
Performance of the individual components should be optimized to ensure optimization of the total
system.
Components of the system should perform at their individual optimum levels
Components are functionally related so that they influence each other.
Performance of individual components takes precedence over the performance of the total system.
Changes in one component will not affect the performance of other components
8.
The need to integrate purchasing and logistics has been spurred by the need to:
A.
B.
C.
D.
E.
reduce inventory costs
recover lost opportunities in transportation
link the firm’s production flows with those of suppliers
accelerate the velocity at which inventory moves through the system
All of the above
9.
A.
B.
C.
D.
The transportation costs per hundredweight (cwt) for a very lightweight and bulky product will be
_____________ than the cost per hundredweight for a very dense product such as steel.
Higher
Lower
About the same
Higher, or Lower, Depending on the item
10. Which of these is most correct concerning logistics related salaries. The correct answer is based on an
article in the April, 1999 issue of Logistics Management reporting on their annual survey of readers on
the topic of logistics salaries:
A.
B.
C.
D.
Vice Presidents of Logistics average $311000 per year, while Traffic Managers average $126000
per year, and college grads average $5000 more per year than high school grads.
Vice Presidents of Logistics average $176000 per year, while Traffic Managers average $89000
per year, and college grads average $10000 more per year than high school grads.
Vice Presidents of Logistics average $176000 per year, while Traffic Managers average $52000
per year, and college grads average $5000 more per year than high school grads.
Vice Presidents of Logistics average $110000 per year, while Traffic Managers average $52000
per year, and college grads average $15000 more per year than high school grads.
11. A released value rate is one where:
A.
B.
C.
D.
The air freight carrier agrees to waive its right to declare the value of the shipment
The motor carrier agrees to increase its liability for freight damages.
The rail carrier agrees to increase its liability for damages to that of an ocean carrier.
The motor carrier is not liable for freight damages.
12. The STB has recently voted to:
A.
B.
C.
D.
Allow the BNSF-CN merger to proceed under a regular schedule.
Allow the BNSF-CSX merger to proceed under a regular schedule.
Require the BNSF-CSX merger to be postponed for 15 months.
Require the BNSF-CN merger to be postponed for 15 months.
13. The most recent approved and completed merger in the rail industry was between:
A.
B.
C.
D.
E.
CN and IC
BNSF and SP
BNSF and CSX
BNSF and CN
CONRAIL and NS/CSX
14. Intermodal container and trailer volume loadings in the U.S. during 1998 totaled approximately:
A.
B.
C.
D.
E.
31 million units
9 million units
4 million units
2 million units
no one tracks this
15. The following can be said about E-retailing logistics:
A.
B.
C.
D.
E.
Logistics costs as a percent of sales are lower than for traditional bricks and mortal retailers
because of the extensive use of technology and the Internet.
Logistics costs as a percent of sales are higher than for traditional bricks and mortar retailers
because of the costs of picking and shipping single orders directly to consumers homes.
Order fulfillment performance has gone very well.
A and C
B and C
16. All of the following are major elements that make-up inventory carrying costs except:
A.
B.
C.
D.
interest charges on investment
insurance cost and property taxes
marketing costs
storage costs
17. The appropriate position for an organizations supply strategy is:
A.
B.
C.
D.
in the center of the strategic business plan
As a sub-strategy of the organization’s conversion strategy
Fully integrated into the strategic business plan
Different for each organization
18. The challenges involved in managing strategic alliances do not include:
A.
B.
C.
D.
knowing when the relationship has reached the end of its useful life
handling technology sharing in a sensitive yet open manner
monitoring who is getting the most benefit out of each transaction
making sure that communication is effective ad timely
19. The major advantage of a materials management department most commonly is:
A.
sales are increased
B.
C.
D.
customer service functions more effectively
greatly improved coordination between purchasing and production control results
communication between production and inventory improves
20. “Rational Subgroups” is a special form of
A.
B.
C.
D.
pricing
determining order quantity
taking samples
forming negotiation teams
21. According to the Cpk index, a process is acceptable if the index value is
A.
B.
C.
D.
>1
<1
>0
<0
22. The bill of materials includes
A.
B.
C.
D.
the total quantity of materials/parts needed to meet annual production projections
the total quantity of material/parts to make one end unit
the list of potential suppliers
none of the above
23. In ABC analysis, A-type items might contain
A.
B.
C.
D.
10% of the total items purchased and 80% of the total purchase dollars
50% of the total items purchased and 50% of the total purchased dollars
10% of the total items purchased and 10% of the total purchased dollars
80% of the total items purchased and 10% of the total purchase dollars
24. Small, one-time purchases often are handled best by a
A.
B.
C.
D.
blanket system
term contracting system
electronic ordering system
petty cash system
25. Control charts to measure a process around a target specification should include
A.
B.
C.
D.
X-bar and Y bar charts
X-bar and R charts
X-bar charts only
P-charts
26. A quality assurance program impacts all of the following except
A.
competitiveness
B.
C.
D.
suitability
total cost of products’ “qualtiy”
reliability
27. “Pre-Paid and Add” freight terms would mean that:
A.
B.
C.
D.
The consignee pays the carrier and adds the charges to the bill.
The shipper pays the carrier and adds the charges to the consignee’s account.
The shipper pays the carrier and adds the charges to the invoice for the goods.
The consignee pre-pays the carrier and adds the charges to the invoice for the goods.
28. With “FOB Origin” terms
A.
B.
C.
D.
The shipper is responsible for freight costs.
The consignee is responsible for freight costs.
The carrier is responsible for freight costs.
The freight costs are dependent on the carrier’s FOB estimate.
29. U.S. logistics as a percent of GDP are approximately
A.
B.
C.
D.
6%
8%
10%
12%
30. Which of the following terms makes the least sense?
A.
B.
C.
D.
FOB Delivered Freight Collect.
FOB Delivered Freight Pre-Paid
FOB Origin Freight Collect
FOB Origin Freight Pre-Paid.
31. As of May of 1999, ocean transportation is being deregulated. This will allow:
A.
B.
C.
D.
Carriers to price their ____ list price offerings without the need to publish rates.
Confidential “all trades” service contracts between carriers and shippers.
A and B above
None of the above
32. The Federal Aviation Authorization Act of 1994:
A.
B.
C.
D.
Completed the deregulation of interstate trucking.
Completed the deregulation of interstate air freight.
Preempted the states from regulating intrastate trucking.
Preemted the states from regulating intrastate air freight.
33. Which parties took the lead in achieving deregulation of the transportation sector in the U.S.?
A.
Both carriers and shippers
B.
C.
D.
Shippers
Carriers
None of the above
34. Which of the following strategies are mass merchant retailers generally pursuing:
A.
B.
C.
D.
More “FOB Delivered” terms.
More “FOB Origin” terms.
Putting less emphasis on terms and more emphasis on first time cost
Making freight costs the supplier’s problem.
35. Mass Merchant retailers are considering the kinds of supply chain flow approaches that make the most
sense. Which of the following options are most
of these retailers most often pursuing?
A.
B.
C.
D.
More cross-docking.
More direct store delivery (DSD).
More DC “store and flow”.
Less cross-docking and more DC “store and flow”.
36. The retailer supply chain management strategy known as “VMI” refers to:
A.
B.
C.
D.
Retailers taking more control over their vendors.
Retailers asking vendors to take control of the supply chain.
“Variable Minimum Inventories”.
Vendors taking a more broad based management view.
37. Average cycle stock inventory equals:
A.
B.
C.
D.
Half the order quantity.
The square root of the order quantity.
The order quantity times the turns.
The order quantity level.
38. Full manufactured cost is $10/case and variable manufactured cost is $7/case. If an advanced order
processing system is installed, it is estimated that, due to an increased number of planning days,
average inventory levels can be decreased from 100,000 cases to 50,000 cases. If the inventory
carrying cost is 25%, what will be the estimated annual savings in the inventory carrying costs?
A.
B.
C.
D.
E.
$250,000
$87,500
$125,000
$12,500
$50,000
39. Cabotage laws
A.
B.
C.
apply only to ocean carriers
are not commonly found outside of the U.S.
restrict the utilization of labor and equipment domiciled in one country from producing
transportation in another.
D.
E.
Will be dissolved by NAFTA
all of the above.
40. Reducing the credit period, such as from 90 to 30 days, in order to improve cash flow and return on
investment:
A.
B.
C.
D.
E.
is a purely financial decision which will have little or no influence on the logistics system.
will cause customers to order in smaller quantities, (assuming they continue to purchase from the
firm ) thereby increasing logistics costs.
will improve the cash flow of customers.
will cause customers to place larger orders, thereby decreasing logistics costs.
None of the above.
41. All of the following factors are cited by Alderson as reasons for the emergence of channels of
distribution except:
A.
B.
C.
D.
E.
intermediaries can increase the efficiency of the exchange process.
intermediaries can perform the functions of sorting and assorting.
channel arrangements make possible the routinization of transaction.
channels facilitate the searching process by customers.
Manufacturers receive more revenue per unit when intermediaries are used.
42. IMC’s are:
A.
B.
C.
D.
Interstate Management Carriers
Firms that specialize in international air freight
Ocean freight specialists
Firms that specialize in intermodal
43. In which of the following situations would the logistics function have the most control over
transportation?
A.
B.
C.
D.
raw materials purchased F.O.B. origin, and finished products sold F.O.B. delivered
raw materials purchased F.O.B. delivered, and finished products sold F.O.B. origin
raw materials purchased F.O.B. origin , and finished products sold F.O.B. origin
none of the above
44. As the number of warehouses used by a company increases:
A.
B.
C.
D.
E.
transport costs will decrease; inventory costs and cost of lost sales will increase.
transport costs and cost of lost sales will increase; inventory costs will decrease.
transport costs and inventory costs will decrease; cost of lost sales will increase.
transport costs and cost of lost sales will decrease; inventory costs will increase.
None of the above.
45. What is the inventory in the following situation?
Order size = 100 units
one standard deviation of demand during lead time equals 50 units and the desired level of protection
from stockout is 97.57 (2 standard deviations).
A.
B.
C.
D.
E.
150 units
200 units
100 units
250 units
75 units
46. Logistics costs in the U.S., as a percent of GDP:
A.
B.
C.
D.
Have gone down since 1980
Have stayed about the same since 1980, despite the best efforts of logisticians.
Have gone up since 1980 due to increased customer requirements.
Are not known.
47. Under NAFTA:
A.
B.
C.
D.
Canadian and Mexican trucks can make international and domestic moves in the U.S.
Canadian trucks can make international and domestic moves in the U.S., but Mexican trucks
cannot.
U.S. citizens can now own up to 100% of a Mexican for hire trucking company.
There have been no changes in cross-border trucking rights for U.S. and Mexican firms so far.
48. What is the direct effect on inventory levels of an unreliable carrier with inconsistent transit time?
A.
B.
C.
D.
Higher transportation costs
Higher safety stock requirements
Higher cycle stocks
The complexity of interfaces decreases.
49. A firm has average inventory of $300,000. It orders twice per year. The cost of holding inventory is
15% per year. What is the annual inventory carrying cost?
A.
B.
C.
D.
$50,000
$45,000
$90,000
$22,500
50. Since truck deregulation, the number of carriers used by most shippers has:
A.
B.
C.
D.
Increased
Decreased
There is no general trend
Remained the same
51. The Surface Transportation Board is:
A.
B.
C.
D.
The federal agency that decides how much money to spend on roads and where to spend it.
In charge of economic regulation issues related to rail and truck
An association of rail and truck carriers.
No longer in existence due to the end of economic regulation of trucking.