CPL Transportation, Distribution & Warehousing 3 — Questions and Answers
Question 1: A logistics manager evaluating carriers uses the 'total cost of transportation' concept. Which factor is NOT typically included?
- Transit time variability
- Loss and damage claims rate
- Carrier's corporate tax rate (Correct answer)
- Freight rates and accessorial charges
Correct answer: Carrier's corporate tax rate
A carrier's corporate tax rate is a financial matter internal to the carrier and is not a factor in the shipper's total cost of transportation analysis.
Question 2: Cross-docking is most beneficial when:
- Inventory safety stock needs to be built
- Products require quality inspection before shipment
- Products can move directly from inbound to outbound with minimal storage (Correct answer)
- Long-term storage rates are favorable
Correct answer: Products can move directly from inbound to outbound with minimal storage
Cross-docking eliminates storage by transferring goods directly from inbound to outbound docks, reducing handling costs and accelerating delivery.
Question 3: The Interstate Commerce Commission Termination Act of 1995 transferred economic regulation of motor carriers to which agency?
- Federal Motor Carrier Safety Administration
- Surface Transportation Board (Correct answer)
- Department of Transportation
- Federal Highway Administration
Correct answer: Surface Transportation Board
The ICC Termination Act abolished the ICC and transferred residual economic regulatory authority over surface transportation to the newly created Surface Transportation Board.
Question 4: In a warehouse slotting strategy, which inventory classification method is used to assign the most accessible locations to the fastest-moving items?
- FIFO rotation
- ABC analysis (Correct answer)
- LIFO stacking
- EOQ modeling
Correct answer: ABC analysis
ABC analysis ranks SKUs by movement velocity so that 'A' items (high velocity) are slotted in prime pick locations, reducing overall travel time.
Question 5: A transportation broker arranges for freight movement without:
- Charging a commission or fee
- Taking legal responsibility for the cargo (Correct answer)
- Matching shippers with carriers
- Using load boards or technology platforms
Correct answer: Taking legal responsibility for the cargo
Brokers arrange transportation between shippers and carriers but do not take custody of or legal responsibility for the freight itself.
Question 6: Which distribution network design offers the fastest customer delivery times but the highest warehousing cost?
- Centralized single DC
- Regional multi-DC network (Correct answer)
- Direct plant shipment
- Cross-dock only network
Correct answer: Regional multi-DC network
A regional multi-DC network places inventory closer to customers enabling faster delivery, but requires duplicating inventory and facility costs across multiple locations.
Question 7: The Carmack Amendment governs liability for:
- Hazardous materials placarding requirements
- Cargo loss and damage claims against interstate carriers (Correct answer)
- Driver hours-of-service violations
- Customs duties on imported goods
Correct answer: Cargo loss and damage claims against interstate carriers
The Carmack Amendment establishes the federal framework for cargo loss and damage liability for interstate rail and motor carriers, limiting shipper remedies to actual loss.
CPL Transportation, Distribution & Warehousing 3
A logistics manager evaluating carriers uses the 'total cost of transportation' concept.
Which factor is NOT typically included?