LOGISTICS MANAGEMENT FINAL COMPLETE EXAM QUESTIONS AND
CORRECT ANSWERS
Definition of Logistics - ANSWER 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
informations between the point of origin and the point of consumption in
order to meet customers' requirements.
Seven Rights of Logistics - ANSWER -Product
-Customer
-Time
-Place
-Condition
-Quantity
-Cost
(if all of these are met it's called the Perfect Order)
Five utilities and how logistics influences them. - ANSWER o Utility:
perceived value
o Possession: creating desire
o Form: repackaging, refurbishing
o Time: when needed
o Place: where exactly needed
o Quantity: right amount-breakbulk and assort
How does logistics create value? - ANSWER through movement,
storage, and processing
CSCMP definition of supply chain management - ANSWER
Encompasses the planning and management of all activities involved in
sourcing and procurement, conversion, and all logistics management
activities. Importantly, it also includes coordination and collaboration with
channel partners, which can be suppliers, intermediaries, third party
service providers, and customers. In essence, supply chain
management integrates supply and demand management within and
across companies.
, total cost concept - ANSWER View the sum of logistics operations as a
system and seek to minimize the total cost of the system rather than the
individual functions
Logistics cost tradeoffs - ANSWER Increasing the number of
warehouses increases inventory cost but decreases transportation costs
and (often) decreases the cost of lost sales
Using faster modes of transportation decreases the cost of lost sales
Lot quantity costs and inventory carrying costs are inversely related
Investments in information technology should decrease the cost of lost
sales
Importance of excellent logistics customer service - ANSWER 1.
existing customers are often considered "cheaper" to sell to
2. existing customers are more loyal
3. existing customers often buy more
4. existing customers are a good source for referrals
5. lifetime value of a customer
Deliverable of Order Fulfillment - ANSWER o Product availability is the
most basic output of an order fulfillment system
o Availability costs money
♣ Analyze tradeoffs
o Key measures
♣ Stock-out frequency
♣ Fill Rate
♣ Orders shipped complete
Methods for establishing a customer service strategy - ANSWER •
Establishing an Appropriate logistics customer service strategy
o Determine channel service levels based on knowledge of consumer
reactions to stock-outs
o Examine cost/revenue trade-offs
o Use ABC analysis for customers and products
o Conduct a customer service audit
The Cost of Stock-Outs - ANSWER back orders, lost sales, lost
customers
CORRECT ANSWERS
Definition of Logistics - ANSWER 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
informations between the point of origin and the point of consumption in
order to meet customers' requirements.
Seven Rights of Logistics - ANSWER -Product
-Customer
-Time
-Place
-Condition
-Quantity
-Cost
(if all of these are met it's called the Perfect Order)
Five utilities and how logistics influences them. - ANSWER o Utility:
perceived value
o Possession: creating desire
o Form: repackaging, refurbishing
o Time: when needed
o Place: where exactly needed
o Quantity: right amount-breakbulk and assort
How does logistics create value? - ANSWER through movement,
storage, and processing
CSCMP definition of supply chain management - ANSWER
Encompasses the planning and management of all activities involved in
sourcing and procurement, conversion, and all logistics management
activities. Importantly, it also includes coordination and collaboration with
channel partners, which can be suppliers, intermediaries, third party
service providers, and customers. In essence, supply chain
management integrates supply and demand management within and
across companies.
, total cost concept - ANSWER View the sum of logistics operations as a
system and seek to minimize the total cost of the system rather than the
individual functions
Logistics cost tradeoffs - ANSWER Increasing the number of
warehouses increases inventory cost but decreases transportation costs
and (often) decreases the cost of lost sales
Using faster modes of transportation decreases the cost of lost sales
Lot quantity costs and inventory carrying costs are inversely related
Investments in information technology should decrease the cost of lost
sales
Importance of excellent logistics customer service - ANSWER 1.
existing customers are often considered "cheaper" to sell to
2. existing customers are more loyal
3. existing customers often buy more
4. existing customers are a good source for referrals
5. lifetime value of a customer
Deliverable of Order Fulfillment - ANSWER o Product availability is the
most basic output of an order fulfillment system
o Availability costs money
♣ Analyze tradeoffs
o Key measures
♣ Stock-out frequency
♣ Fill Rate
♣ Orders shipped complete
Methods for establishing a customer service strategy - ANSWER •
Establishing an Appropriate logistics customer service strategy
o Determine channel service levels based on knowledge of consumer
reactions to stock-outs
o Examine cost/revenue trade-offs
o Use ABC analysis for customers and products
o Conduct a customer service audit
The Cost of Stock-Outs - ANSWER back orders, lost sales, lost
customers
