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In an effort to increase their customer service levels and reduce order cycle time, a company is considering adding two additional warehouses to their overall operations.

As a result, which of the following statements best reflects the cost impact of the additional warehouses?

A.
Lower inventory costs and higher facility costs
A.
Lower inventory costs and higher facility costs
Answers
B.
Higher inventory costs and lower facility costs
B.
Higher inventory costs and lower facility costs
Answers
C.
Higher inventory costs and higher inbound transportation costs
C.
Higher inventory costs and higher inbound transportation costs
Answers
D.
Lower inventory costs and lower inbound transportation costs
D.
Lower inventory costs and lower inbound transportation costs
Answers
Suggested answer: A

An oil and gas company needs to ship petrol 1,000 miles from the port on entry to an inland refinery. Which of the following modes of transportation provides the best long-term, cost- efficient solution?

A.
Rail
A.
Rail
Answers
B.
Trucking
B.
Trucking
Answers
C.
Pipeline
C.
Pipeline
Answers
D.
Barge
D.
Barge
Answers
Suggested answer: C

Which of the following types benchmarking would a company utilize in order to determine why a significant gap exists in its order fill rates?

A.
Performance benchmarking
A.
Performance benchmarking
Answers
B.
Process benchmarking
B.
Process benchmarking
Answers
C.
Product benchmarking
C.
Product benchmarking
Answers
D.
Strategic benchmarking
D.
Strategic benchmarking
Answers
Suggested answer: B

Which of the following facility location techniques is equivalent to a break-even point?

A.
Weighted-factor rating method
A.
Weighted-factor rating method
Answers
B.
transportation problem model
B.
transportation problem model
Answers
C.
Cost volume analysis
C.
Cost volume analysis
Answers
D.
Center-of-gravity method
D.
Center-of-gravity method
Answers
Suggested answer: C

A manager would like to insure marine cargo for a 12-month period. Which of the following policies would be best to provide coverage for all of the shipment during this period?

A.
Open
A.
Open
Answers
B.
Special cargo
B.
Special cargo
Answers
C.
All-risks
C.
All-risks
Answers
D.
Warehouse to warehouse
D.
Warehouse to warehouse
Answers
Suggested answer: A

An international organization has a pricing strategy that allows it to sell its product at different prices depending on the country where the product is sold.

Which of the following unintended consequences is a result of this strategy?

A.
Counterfeit products in the supply chain
A.
Counterfeit products in the supply chain
Answers
B.
Gray market products in the supply chain
B.
Gray market products in the supply chain
Answers
C.
Hostile takeover by a conglomerate
C.
Hostile takeover by a conglomerate
Answers
D.
Decrease in profits due to variable revenues
D.
Decrease in profits due to variable revenues
Answers
Suggested answer: A

Which of the following costs represents an example of a fixed cost in the motor carrier industry?

A.
Vehicle registration
A.
Vehicle registration
Answers
B.
Fuel
B.
Fuel
Answers
C.
Maintenance
C.
Maintenance
Answers
D.
Terminals
D.
Terminals
Answers
Suggested answer: A

A company desires to improve its cash flow situation by postponing its customs duties payment until the last possible point in the supply chain.

The company should consider using which type of warehouse?

A.
Bonded
A.
Bonded
Answers
B.
Contract
B.
Contract
Answers
C.
Third-party
C.
Third-party
Answers
D.
Government
D.
Government
Answers
Suggested answer: A

The practice of carriers charging all of their customers more during the peak harvest season is a type of pricing known as:

A.
differential rates.
A.
differential rates.
Answers
B.
incremental rates.
B.
incremental rates.
Answers
C.
distributive rates.
C.
distributive rates.
Answers
D.
commodity rates.
D.
commodity rates.
Answers
Suggested answer: D

In warehouse operations, picking process occurs when:

A.
customer orders for product are ready to be shipped or to replenish a forward case or unit pick area.
A.
customer orders for product are ready to be shipped or to replenish a forward case or unit pick area.
Answers
B.
immediately after a product is stored in a designated location in order to be shipped to the customer.
B.
immediately after a product is stored in a designated location in order to be shipped to the customer.
Answers
C.
a Kanban signal arrives to replenish material in the workshop.
C.
a Kanban signal arrives to replenish material in the workshop.
Answers
D.
when a customer order needs to be replaced by a new product die to engineering changes.
D.
when a customer order needs to be replaced by a new product die to engineering changes.
Answers
Suggested answer: D
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