Study Guide for Chapter 17:
1.____ can be defined as the sum of all purchased goods and services that are not a direct part of products or
services delivered to the customer.
a. Direct spend
b. MRO
c. Indirect spend
d. Consignment inventory
e. Kanban
ANS: C
2. ____ is defined by CSCMP as that part of supply chain management that plans, implements, and controls the
efficient, effective forward and reverse flow and storage of goods, services, and related information
between the point of origin and the point of consumption in order to meet customers' requirements.
a. Supply management
b. Logistics management
c. Purchasing
d. Transportation management
e. None of these choices.
ANS: B
3.Which of the following is not one of the major transportation service linkages throughout a typical supply
chain?
a. Production planning.
b. Inbound logistics.
c. Intraorganizational movements.
d. Outbound logistics.
e. Recovery and recycling.
ANS: A
4.All of the following are criteria used to measure transportation performance except ____.
a. speed
b. reliability
c. capability
d. accessibility
e. hours of service
ANS: E
5. ____ refers to a mode's or carrier's ability to provide the proper equipment and provide the appropriate
services for a given product movement.
a. Accessibility
b. Capability
c. Speed
d. Total cost
e. Reliability
ANS: B
6. Which of the following is not one of the advantages of motor carrier over other modes of transportation?
a.
b.
c.
d.
e.
High flexibility.
Good reliability.
Good for JIT delivery.
Good speed.
Low cost.
ANS: E
7. Which of the following is not one of the advantages of rail carrier over other modes of transportation?
a. Lower cost.
b. Good for expediting/emergency situations.
c. Can handle a wide range of items.
d. Piggyback services can increase flexibility.
e. Direct between major cities.
ANS: B
8. The total cost structure of ____ is similar to ____ as the equipment, rights-of-way, and physical structure have
a high fixed cost and a low variable operating cost.
a. motor carrier....air carrier
b. motor carrier....pipeline
c. water carrier....rail carrier
d. pipeline....rail carrier
e. Cannot determine from the above information.
ANS: D
9. A/An ____ serves the transportation requirements of the party with which it has a legal agreement and
provides only those services that have been negotiated with the shipper at a mutually agreed upon price.
a. intermodal carrier
b. private carrier
c. common carrier
d. exempt carrier
e. contract carrier
ANS: E
10. ____ is an emerging collaborative business model that seeks to move away from the traditional transactionbased model toward meeting the mutual interests of both the buyer and logistics service provider.
a. Total quality management
b. Wavelength
c. Private carriage
d. Performance-based logistics
e. None of these choices.
ANS: D
11. Which of the following is not an advantage of using a 3PL?
a. Economies of scale and increased flexibility.
b. Improve service performance levels.
c. Changeover costs.
d. Release capital from sale of assets.
e. Concentrate on core business activities.
ANS: C
12. Compare and contrast the relative costs and service advantages/disadvantages of air, motor, water,
pipeline, and rail carriers.
13. What are the difference types of performance metrics used to measure transportation providers?
14. What are the major differences between a common and a contract carrier?
15. What is indirect spending?
16. List the major enabling tactics used to implement an indirect spend procurement strategy..
17. What is 3PL? What are the advantages and disvantages of using 3PLs?
18. What are the internal and external methods of managing indirect spending?