SCM 468 - LOGISTICS MANAGEMENT COMPLETE EXAM QUESTIONS
AND 100% CORRECT ANSWERS LATEST VERSION
1PL (First Party Logistics)
The manufacturer or the industrial actor does not outsource transportion and
logistics activities to third parties. These functions are carried out by the
company's own departments.
2PL (Second Party Logistics)
The manufacturer hires a carrier or warehouse manager as a subcontractor for
the operational execution of a clearly defined transportion or logistics task. The
organization and follow-up remain the responsibility of the manufacturer.
3PL (Third Party Logistics)
(1) A logistics model where the manufacturer outsources a package of
transportion and logistics activities. (2) A firm to which logistics services are
outsourced.
4PL (Fourth Party Logistics)
The manufacturer not only outsources the organization of its logistics tasks to
third parties, but also the management thereof. In this arrangement, short-term
thinking, purely on the basis of cost-related reasons, is replaced with long-term
partnerships where quality of the service is the main driver. See: Lead Logistics
Provider.
Aggregation
The practice of pooling variables, resulting in lower total variance for the
combined variable. This practice is used for demand management, inventory
management, and shipping, among other things.
AS/RS (Automated Storage/Retrieval System)
A high-density rack physical inventory apparatus that uses vehicles to
automatically load and unload the racks.
ASN (Advance Ship Notice)
,An EDI notification that a supplier will send to its customers when product is on
the way.
Auto ID
Any type of automated identification system, bar coding and radio frequency
tagging (RFID).
AWB (Air Waybill)
A bill of lading for air transport that serves as a receipt for the shipper, indicates
that the carrier has accepted the goods listed, obligates the carrier to carry the
consignment to the airport of destination according to specified conditions.
Backhaul
The process of a transportation vehicle returning from the original destination
point to the point of origin with a new load (and made possible by the 1980
Motor Carrier Act which deregulated interstate commercial trucking).
Barge
The cargo-carrying vehicle, primarily used by inland water carriers, which may
or may not have its own propulsion mechanism for the purpose of transporting
goods.
Batch Picking
A method of selecting items for shipment where requirements are aggregated by
product across orders to reduce movement to and from product locations. The
aggregated quantities of each product are then transported to a common area
where the individual orders are constructed.
Bill of Lading (BOL, B/L)
A transportation document that is the contract of carriage containing the terms
and conditions between the shipper and carrier.
BPR (Business Process Reengineering)
The fundamental rethinking and radical redesign of processes, with a cross-
functional focus, to achieve breakthrough improvements to cost, quality, service
and speed. Usually results in big step changes rather than small step
improvements.
Breadman
, An arrangement where the supplier delivers on a regular basis and determines
the delivery quantity within the customer's guidelines.
Break Bulk
Dividing truckloads, railcars, of containers of homogeneous items into smaller,
more appropriate quantities for use.
Broker
An agency that obtains negotiated large-volume transportation rates from
carriers, and resells this capacity to shippers. Unlike freight forwarders, these
agencies will not handle freight and owns no pickup/delivery equipment or
storage facilities.
Bulk Cargo
Cargo that is stowed loose on transportation vehicles, in a tank or hold without
specific packaging, and handled by pump, scoop, conveyor, or shovel.
Examples: grain, coal, petroleum, chemicals.
Bullwhip Effect
An extreme change in the upstream supply chain position caused by a small
change in downstream demand.
Carrier
A firm that provides transportation services, typically owning and operating
transportation equipment. Examples include: trucking company, railroad,
airline, steamship line, parcel/express company.
CMI (Co-Managed Inventory)
A form of continuous replenishment in which the manufacturer is responsible
for replenishment of standard merchandise, while the retailer manages the
replenishment of promotional merchandise.
COFC (Container-On-Flatcar)
A term used in intermodal transportation in which containers are stacked onto
rail flatcars for rail transportation. No truck chassis is used, and doublestack
cars are possible, thus more containers can be carried by a shorter, lighter train.
Common Carrier
A for-hire carrier providing transportation services to the general public.
Consignee
AND 100% CORRECT ANSWERS LATEST VERSION
1PL (First Party Logistics)
The manufacturer or the industrial actor does not outsource transportion and
logistics activities to third parties. These functions are carried out by the
company's own departments.
2PL (Second Party Logistics)
The manufacturer hires a carrier or warehouse manager as a subcontractor for
the operational execution of a clearly defined transportion or logistics task. The
organization and follow-up remain the responsibility of the manufacturer.
3PL (Third Party Logistics)
(1) A logistics model where the manufacturer outsources a package of
transportion and logistics activities. (2) A firm to which logistics services are
outsourced.
4PL (Fourth Party Logistics)
The manufacturer not only outsources the organization of its logistics tasks to
third parties, but also the management thereof. In this arrangement, short-term
thinking, purely on the basis of cost-related reasons, is replaced with long-term
partnerships where quality of the service is the main driver. See: Lead Logistics
Provider.
Aggregation
The practice of pooling variables, resulting in lower total variance for the
combined variable. This practice is used for demand management, inventory
management, and shipping, among other things.
AS/RS (Automated Storage/Retrieval System)
A high-density rack physical inventory apparatus that uses vehicles to
automatically load and unload the racks.
ASN (Advance Ship Notice)
,An EDI notification that a supplier will send to its customers when product is on
the way.
Auto ID
Any type of automated identification system, bar coding and radio frequency
tagging (RFID).
AWB (Air Waybill)
A bill of lading for air transport that serves as a receipt for the shipper, indicates
that the carrier has accepted the goods listed, obligates the carrier to carry the
consignment to the airport of destination according to specified conditions.
Backhaul
The process of a transportation vehicle returning from the original destination
point to the point of origin with a new load (and made possible by the 1980
Motor Carrier Act which deregulated interstate commercial trucking).
Barge
The cargo-carrying vehicle, primarily used by inland water carriers, which may
or may not have its own propulsion mechanism for the purpose of transporting
goods.
Batch Picking
A method of selecting items for shipment where requirements are aggregated by
product across orders to reduce movement to and from product locations. The
aggregated quantities of each product are then transported to a common area
where the individual orders are constructed.
Bill of Lading (BOL, B/L)
A transportation document that is the contract of carriage containing the terms
and conditions between the shipper and carrier.
BPR (Business Process Reengineering)
The fundamental rethinking and radical redesign of processes, with a cross-
functional focus, to achieve breakthrough improvements to cost, quality, service
and speed. Usually results in big step changes rather than small step
improvements.
Breadman
, An arrangement where the supplier delivers on a regular basis and determines
the delivery quantity within the customer's guidelines.
Break Bulk
Dividing truckloads, railcars, of containers of homogeneous items into smaller,
more appropriate quantities for use.
Broker
An agency that obtains negotiated large-volume transportation rates from
carriers, and resells this capacity to shippers. Unlike freight forwarders, these
agencies will not handle freight and owns no pickup/delivery equipment or
storage facilities.
Bulk Cargo
Cargo that is stowed loose on transportation vehicles, in a tank or hold without
specific packaging, and handled by pump, scoop, conveyor, or shovel.
Examples: grain, coal, petroleum, chemicals.
Bullwhip Effect
An extreme change in the upstream supply chain position caused by a small
change in downstream demand.
Carrier
A firm that provides transportation services, typically owning and operating
transportation equipment. Examples include: trucking company, railroad,
airline, steamship line, parcel/express company.
CMI (Co-Managed Inventory)
A form of continuous replenishment in which the manufacturer is responsible
for replenishment of standard merchandise, while the retailer manages the
replenishment of promotional merchandise.
COFC (Container-On-Flatcar)
A term used in intermodal transportation in which containers are stacked onto
rail flatcars for rail transportation. No truck chassis is used, and doublestack
cars are possible, thus more containers can be carried by a shorter, lighter train.
Common Carrier
A for-hire carrier providing transportation services to the general public.
Consignee
