Chapter 18 Global Logistics Answer Key Multiple-Choice Questions 1. The five major decisions addressed by logistics managers areA. transportation, warehousing, location, reverse logistics, and third-party logistics.B. location, transportation, warehousing, reverse logistics, and tactical.C. strategic, third-party logistics, warehousing, transportation, and location.D. None of the above answers is entirely correct.LO: 18.1Topic: Role of Logistics in Supply Chain ManagementDifficulty: 1 EasyAACSB: Reflective thinkingBloom’s: RememberFeedback: The five critical logistics decisions are transportation, warehousing, location, third-party logistics, and strategic decisions.2. Complete the following definition of logistics according to the Council of Supply Chain Management Professionals: Logistics plans, implements, and controls the forward and reverse flows and storage of goods and related information between the point of origin and consumption…A. in order to meet the firm’s requirements.B. in order to meet customer requirements.C. in order to meet regulatory requirements.D. in order to provide the lowest-cost solution.LO: 18.1Topic: Role of Logistics in Supply Chain ManagementDifficulty: 1 EasyAACSB: Reflective thinkingBloom’s: RememberFeedback: Although other requirements may be important, the CSCMP definition is directed to meeting customer requirements.3. Which of the following integration partnerships is especially important when considering logistics?A. Logistics and finance.B. Logistics and information systems.C. Logistics and marketing.D. Logistics and human resources.LO: 18.1Topic: Role of Logistics in Supply Chain ManagementDifficulty: 2 ModerateAACSB: Reflective thinkingBloom’s: UnderstandFeedback: The link with marketing is especially important to ensure that goods and services reach the customer and returns are shipped back to the supplier.18-14. Which of the following is true concerning logistics?A. Logistics is often included as the “place” in the 4Ps of marketing.B. Inventory management is often included in definitions of logistics.C. The government plays a key role in logistics decisions.D. All of the above.LO: 18.1Topic: Role of Logistics in Supply Chain ManagementDifficulty: 2 ModerateAACSB: Reflective thinkingBloom’s: UnderstandFeedback: All of the above are true (see Section 18.1).5. Annual logistics expenditures worldwide areA. less than 5% of the global GDP (less than approximately $1.5 trillion).B. between 5% and 10% of the global GDP (between approximately $1.5 and $3.0 trillion).C. between 10% and 20% of the global GDP (between approximately $3.0 and $6.0 trillion).D. more than 20% of the global GDP (more than approximately $6.0 trillion).LO: 18.1Topic: Role of Logistics in Supply Chain ManagementDifficulty: 1 EasyAACSB: Reflective thinkingBloom’s: RememberFeedback: Annual logistics expenditures worldwide are more than $3.5 trillion and constitute 12% of global GDP.6. Which of the following does NOT represent one of the critical logistics decisions?A. The trade-offs between transporting product by rail or waterway (e.g., barge).B. Transitioning from traditional warehouses to distribution centers.C. Insourcing logistics through company-owned aircraft.D. Using market surveys to estimate future demand.LO: 18.1Topic: Role of Logistics in Supply Chain ManagementDifficulty: 2 ModerateAACSB: Reflective thinkingBloom’s: UnderstandFeedback: A, B, and C are all closely related to the critical logistics decisions. Using market surveys to estimate demand is a forecasting application.18-27. Which of the following is NOT correct concerning the economics of transportation?A. Larger shipments cost less per unit of weight.B. Economies of distance replace economies of scale in transportation decisions.C. Long distances drive down the cost per mile.D. The transportation cost per unit increases as the utilization of container space decreases.LO: 18.2Topic: TransportationDifficulty: 2 ModerateAACSB: Reflective thinkingBloom’s: UnderstandFeedback: Economies of scale, economies of distance, and economies of speed all apply to transportation decisions.8. Which of the following is correct concerning government and transportation?A. Governments own parts of transportation systems, even whole systems.B. Deregulation in the United States meant transportation companies could raise their prices.C. Outside the United States, governments tend to own more of the transportation systems in place.D. All of the above.LO: 18.1Topic: Role of Logistics in Supply Chain ManagementDifficulty: 1 EasyAACSB: Reflective thinkingBloom’s: RememberFeedback: All of the above are true (see Section 18.2).9. A decision to consolidate shipments typically means the company has placed an emphasis onA. reducing costs.B. improving delivery service.C. decreasing warehouse inventory.D. all of the above.LO: 18.2Topic: TransportationDifficulty: 2 ModerateAACSB: Reflective thinkingBloom’s: RememberFeedback: Consolidation is primarily about cost reduction. Delivery can suffer as small shipments wait to be consolidated, which also means higher inventory levels at the warehouse or distribution center.18-310. A company needs to have 25,000 pounds of material trucked from plant A to plant C. It also needs to truck 30,000 pounds of another material from plant B to plant C. The company’s carrier quoted them a cost of $18.00 per hundredweight for two separate shipments to plant C, or a cost of $15.00 per hundredweight if one truck picks up both shipments (with a $1,500.00 charge for the consolidation stop). Which of the following is correct?A. The two separate shipments are the low-cost option by $1,500.00.B. The consolidated shipment is the low-cost option by $1,650.00.C. The consolidated shipment is the low-cost option by $150.00.D. Both options have the same cost.LO: 18.2Topic: TransportationDifficulty: 2 ModerateAACSB: Application of knowledgeBloom’s: ApplyFeedback: The cost of separate shipments = 25,000#($18/100) + 30,000#($18/100) = $9,900. The cost of the consolidated shipment = 55,000#($15/100) + $1,500 = $9,750. $9,900 - $9,750 = $150.00.11. Pooled delivery is the term used to describeA. when two or more companies arrange to consolidate shipments in the same truck. B. when a company consolidates two or more shipments into a single shipment to a location.C. when a company outsources delivery to a common carrier such as UPS or FedEx.D.