OMGT 3123 FINAL EXAM ECU
QUESTIONS AND ANSWERS
QUESTION ONE: Define the four modes of transportation and at least one strength and
weakness from each one. - Correct Answers -Highway,Water,Rail, Air
QUESTION ONE: Highway Strengths/Weaknesses - Correct Answers -Strength:
Flexibility to deliver where and when needed. Often the best balance among cost,
flexibility, and reliability/ speed of delivery.
Weakness:
Neither the fastest nor the cheapest option.
QUESTION ONE: Water Strengths/Weaknesses - Correct Answers -Strength:
Highly cost-effective for bulky items.Most effective when linked to a multimodal system.
Weakness:
Limited locations.Relatively poor delivery reliability/speed.
QUESTION ONE: Rail Strengths/Weaknesses - Correct Answers -Strength:
Highly cost-effective for bulky items. Can be most effective when linked to a multimodal
system.
Weakness:
Limited locations, although less so than with water. Not as fast as highway, but
improving over time.
QUESTION ONE: Air Strengths/Weaknesses - Correct Answers -Strength:
Quickest mode of delivery. Flexible, especially when linked to the highway mode.
Weakness:
Often the most expensive mode on a per-pound basis
QUESTION TWO: Describe the concept of a landed cost and provide an example of a
landed cost vs. a purchase price. - Correct Answers -Landed cost is the cost of a
product plus all costs driven by logistics activities, such as transportation, warehousing,
handling, customs fees, and the like.
Example: Landed cost is the total expenditure involved in buying a product and shipping
charges for importing it to your warehouse. Apart from the cost price of the product or
purchasing price, landed cost is made up of different charges like customs duties,
currency conversion, insurance and other costs up to the destination store where as
purchasing price is the cost of the product without including these costs.
, QUESTION THREE: Identify and describe the four laws of forecasting (LAW ONE) -
Correct Answers -Law 1: Forecasts Are Almost Always Wrong (But They Are Still
Useful)
Even at the best conditions no forecast can predict the exact level of demand, supply or
price needed for the future. This is because there are too many factors that go into
these forecast which therefore affects the numbers. Forecasts should only be used to
receive close estimates by businesses
QUESTION THREE: Identify and describe the four laws of forecasting (LAW TWO) -
Correct Answers -Law 2: Forecasts for the Near Term Tend to Be More Accurate
Law 2 recognizes that in the near term, the factors that affect the forecast variable are
not likely to change greatly. Meaning when forecasting it is easier to do so in closer
periods of time like months , rather than years or longer periods of time.
QUESTION THREE: Identify and describe the four laws of forecasting (LAW THREE) -
Correct Answers -Law 3: Forecasts for Groups of Products or Services Tend to Be More
Accurate
QUESTION FIVE: Identify 5 out of 6 of the inventory types and describe 2
characteristics of each. (Cycle Stock) - Correct Answers -Cycle Stock:
Components or products that are received in bulk by a downstream partner, gradually
used up, and then replenished again in bulk by the upstream partner.
QUESTION FIVE: Identify 5 out of 6 of the inventory types and describe 2
characteristics of each. - Correct Answers -Safety stock:
Extra inventory & held to protect itself against uncertainties in either demand or
replenishment time.
QUESTION FIVE: Identify 5 out of 6 of the inventory types and describe 2
characteristics of each. (Anticipation inventory) - Correct Answers -Anticipation
inventory:
inventory held in anticipation of customer demand.& allows instant availability of items
when customers want them.
Many businesses have found that it is easier and more accurate to forecast for groups
of products or services than it is to forecast for specific ones. The reason is simple: The
demand, supply, or price of a specific item is usually affected by many more factors.
Meaning it is harder to forecast the demand for Red Coffee Cups rather than just Coffee
Cups.
QUESTION THREE: Identify and describe the four laws of forecasting (LAW FOUR) -
Correct Answers -Law 4: Forecasts Are No Substitute for Calculated Values
QUESTIONS AND ANSWERS
QUESTION ONE: Define the four modes of transportation and at least one strength and
weakness from each one. - Correct Answers -Highway,Water,Rail, Air
QUESTION ONE: Highway Strengths/Weaknesses - Correct Answers -Strength:
Flexibility to deliver where and when needed. Often the best balance among cost,
flexibility, and reliability/ speed of delivery.
Weakness:
Neither the fastest nor the cheapest option.
QUESTION ONE: Water Strengths/Weaknesses - Correct Answers -Strength:
Highly cost-effective for bulky items.Most effective when linked to a multimodal system.
Weakness:
Limited locations.Relatively poor delivery reliability/speed.
QUESTION ONE: Rail Strengths/Weaknesses - Correct Answers -Strength:
Highly cost-effective for bulky items. Can be most effective when linked to a multimodal
system.
Weakness:
Limited locations, although less so than with water. Not as fast as highway, but
improving over time.
QUESTION ONE: Air Strengths/Weaknesses - Correct Answers -Strength:
Quickest mode of delivery. Flexible, especially when linked to the highway mode.
Weakness:
Often the most expensive mode on a per-pound basis
QUESTION TWO: Describe the concept of a landed cost and provide an example of a
landed cost vs. a purchase price. - Correct Answers -Landed cost is the cost of a
product plus all costs driven by logistics activities, such as transportation, warehousing,
handling, customs fees, and the like.
Example: Landed cost is the total expenditure involved in buying a product and shipping
charges for importing it to your warehouse. Apart from the cost price of the product or
purchasing price, landed cost is made up of different charges like customs duties,
currency conversion, insurance and other costs up to the destination store where as
purchasing price is the cost of the product without including these costs.
, QUESTION THREE: Identify and describe the four laws of forecasting (LAW ONE) -
Correct Answers -Law 1: Forecasts Are Almost Always Wrong (But They Are Still
Useful)
Even at the best conditions no forecast can predict the exact level of demand, supply or
price needed for the future. This is because there are too many factors that go into
these forecast which therefore affects the numbers. Forecasts should only be used to
receive close estimates by businesses
QUESTION THREE: Identify and describe the four laws of forecasting (LAW TWO) -
Correct Answers -Law 2: Forecasts for the Near Term Tend to Be More Accurate
Law 2 recognizes that in the near term, the factors that affect the forecast variable are
not likely to change greatly. Meaning when forecasting it is easier to do so in closer
periods of time like months , rather than years or longer periods of time.
QUESTION THREE: Identify and describe the four laws of forecasting (LAW THREE) -
Correct Answers -Law 3: Forecasts for Groups of Products or Services Tend to Be More
Accurate
QUESTION FIVE: Identify 5 out of 6 of the inventory types and describe 2
characteristics of each. (Cycle Stock) - Correct Answers -Cycle Stock:
Components or products that are received in bulk by a downstream partner, gradually
used up, and then replenished again in bulk by the upstream partner.
QUESTION FIVE: Identify 5 out of 6 of the inventory types and describe 2
characteristics of each. - Correct Answers -Safety stock:
Extra inventory & held to protect itself against uncertainties in either demand or
replenishment time.
QUESTION FIVE: Identify 5 out of 6 of the inventory types and describe 2
characteristics of each. (Anticipation inventory) - Correct Answers -Anticipation
inventory:
inventory held in anticipation of customer demand.& allows instant availability of items
when customers want them.
Many businesses have found that it is easier and more accurate to forecast for groups
of products or services than it is to forecast for specific ones. The reason is simple: The
demand, supply, or price of a specific item is usually affected by many more factors.
Meaning it is harder to forecast the demand for Red Coffee Cups rather than just Coffee
Cups.
QUESTION THREE: Identify and describe the four laws of forecasting (LAW FOUR) -
Correct Answers -Law 4: Forecasts Are No Substitute for Calculated Values
