Supply Chain Management Logistics 3 — Questions and Answers
Question 1: What is the primary purpose of a Transportation Management System (TMS)?
- Managing warehouse slotting and picking
- Planning, executing, and optimizing the movement of goods (Correct answer)
- Tracking supplier performance scorecards
- Forecasting customer demand
Correct answer: Planning, executing, and optimizing the movement of goods
A TMS automates carrier selection, route planning, freight auditing, and shipment tracking to reduce transportation costs and improve service levels.
Question 2: Which warehousing technique assigns the most frequently picked items to locations nearest the shipping dock?
- ABC slotting (Correct answer)
- FIFO rotation
- Bulk storage
- Random putaway
Correct answer: ABC slotting
ABC slotting classifies SKUs by pick frequency and places high-velocity (A) items in the most ergonomic, accessible slots to minimize travel time.
Question 3: A shipper consolidates multiple small shipments from different customers into one full truckload. This practice is called:
- Milk run
- Load consolidation (LTL pooling) (Correct answer)
- Transshipment
- Zone skipping
Correct answer: Load consolidation (LTL pooling)
LTL pooling or load consolidation combines partial shipments heading to the same region into one truckload to achieve lower per-unit freight costs.
Question 4: What does 'landed cost' include in international logistics?
- Only the purchase price of goods
- Purchase price plus freight, insurance, duties, and other import fees (Correct answer)
- Freight and insurance only
- Factory cost plus domestic shipping
Correct answer: Purchase price plus freight, insurance, duties, and other import fees
Landed cost represents the total cost of a product at the destination, encompassing purchase price, ocean/air freight, insurance, customs duties, and port fees.
Question 5: Which inventory control method requires physically counting all stock at one scheduled point in time?
- Cycle counting
- Perpetual inventory
- Periodic (physical) inventory count (Correct answer)
- ABC analysis
Correct answer: Periodic (physical) inventory count
Periodic or physical inventory count involves shutting down or pausing operations to count all items simultaneously, typically annually or quarterly.
Question 6: In supply chain logistics, what is the bullwhip effect?
- Demand fluctuations that amplify upstream in the supply chain (Correct answer)
- A disruption caused by a single large supplier failure
- Oscillating freight rates due to seasonal demand
- Overcapacity in long-haul trucking lanes
Correct answer: Demand fluctuations that amplify upstream in the supply chain
The bullwhip effect occurs when small demand variations at retail level cause increasingly large order swings upstream toward manufacturers and suppliers.
Question 7: Which logistics service provider (LSP) type offers comprehensive end-to-end supply chain solutions including consulting, technology, and operations?
- 1PL (first-party logistics)
- 2PL (asset-based carrier)
- 3PL (third-party logistics)
- 4PL (fourth-party logistics) (Correct answer)
Correct answer: 4PL (fourth-party logistics)
A 4PL manages the entire supply chain on behalf of the client, often orchestrating multiple 3PLs and providing strategic oversight and technology integration.
Supply Chain Management Logistics 3
What is the primary purpose of a Transportation Management System (TMS)?