BSIE Supply Chain Management & Logistics 2 — Questions and Answers
Question 1: What is cross-docking in warehouse management?
- Storing goods in climate-controlled areas
- Transferring inbound shipments directly to outbound vehicles with minimal storage time (Correct answer)
- Cross-training warehouse employees
- Linking two warehouses with a conveyor belt
Correct answer: Transferring inbound shipments directly to outbound vehicles with minimal storage time
Cross-docking moves products from receiving directly to shipping docks, bypassing storage and dramatically reducing handling time and warehouse space needs.
Question 2: What is the 'total cost of ownership' (TCO) concept in procurement?
- The purchase price of an item only
- All costs associated with acquiring, using, and disposing of a product over its lifetime (Correct answer)
- Annual maintenance cost divided by asset life
- The sum of supplier quotes for a commodity
Correct answer: All costs associated with acquiring, using, and disposing of a product over its lifetime
TCO includes acquisition, installation, operation, maintenance, and disposal costs, providing a complete picture beyond the initial purchase price.
Question 3: Which type of demand is derived from the demand for a final product?
- Independent demand
- Dependent demand (Correct answer)
- Stochastic demand
- Latent demand
Correct answer: Dependent demand
Dependent demand for raw materials and components is directly calculated from the production plan for the finished goods they comprise.
Question 4: What is the primary benefit of postponement strategy in supply chain management?
- Reducing the number of suppliers
- Delaying product differentiation until closer to actual customer demand to reduce forecast risk (Correct answer)
- Eliminating all safety stock
- Outsourcing final assembly to customers
Correct answer: Delaying product differentiation until closer to actual customer demand to reduce forecast risk
Postponement delays value-added activities (like customization or packaging) until demand is more certain, reducing overstock and understock risks.
Question 5: In logistics, what does 'modal shift' refer to?
- Changing warehouse locations
- Transferring freight from one mode of transportation to another (e.g., truck to rail) (Correct answer)
- Updating an ERP system module
- Switching from manual to automated material handling
Correct answer: Transferring freight from one mode of transportation to another (e.g., truck to rail)
Modal shift involves moving freight from one transport mode (e.g., road) to another (e.g., rail or sea) to optimize cost, carbon emissions, or speed.
Question 6: What is the role of a third-party logistics (3PL) provider?
- Providing financing for capital equipment purchases
- Outsourcing supply chain functions such as warehousing, transportation, and fulfillment (Correct answer)
- Auditing a company's supplier quality records
- Managing a company's accounts payable process
Correct answer: Outsourcing supply chain functions such as warehousing, transportation, and fulfillment
A 3PL firm manages outsourced logistics operations—including storage, transportation, order fulfillment, and customs brokerage—on behalf of its clients.
BSIE Supply Chain Management & Logistics 2
What is cross-docking in warehouse management?