Final exam 429

1. MULTIPLE CHOICE QUESTIONS - AROUND 10 QUESTIONS - TOPICS

INCLUDE:
- Network Design: Site Determinants, Central Gravity Methods, etc.
- Foundation of Logistics
- Warehouse Management: functions, operations, layouts
- Logistics Information Technology
- Transportation and Transportation Management: TL, LTL, Modes, Rate
Determination, Breaks, etc.
- Inventory Management - Replenishment models; Inventory Costs; Inventory
Classification; Inventory Performance Measure
- KPIs; How to communicate KPIs across different management levels.
- International Logistics: Incoterms; Entities in International Logistics;
Documents

2. SHORT ANSWER QUESTIONS

- Inventory Management: inventory investment; safety stock, ROP, etc.
- International Logistics
- Warehouse Management
- Incoterms 2010
- Reverse Logistics
- Omni Channel Distribution

1. Multiple choice questions

Chapter 1: Introduction to logistic

Logistics functions
-Demand Management and Customer Service
- Network Design, Distribution
- Transportation
- Warehouse
- Inventory
- Packaging and Material Handling

Economic impact
o Possession utility: The utility of possession refers to the benefit customers derive
from ownership of a company's product once they have purchased it.

o Form utility: The utility of form refers to the specific product or service that a
company offers to its potential customers. For example, a manufacturing firm
might offer the raw material of rubber in the form of automobile tires.
 o Place utility: The utility of place refers primarily to making goods or services
readily and conveniently available to potential customers.

o Time utility: The utility of time refers to easy availability of products or services
at the time when customers need or want to purchase them.

Total logistics cost: transportation, inventory carrying, and warehousing, packaging,

administration, lost sales.

Chapter 2: Demand management

Demand types : Independent demand ,dependent demand, MRP

Forecasting:
Foundation of : operation planning, production planning, supply and logistics
planning

Types of forecast:
Demand forecast: by dollar value, product
Supply forecast: availability, prices

Three Directions of Forecasts:

Forecasting Techniques

Judgmental Expert Opinions

Time Series Past Data
Associative One Correlated With Another
DRP

Chapter 3: Order Management and Customer Service

I. Order Management

Influence The Order

- Activity Based Costing

-Customer Profitability

Execute The Order

1. Order Transmittal
Electronically or Manually
2. Order Processing
Inventory Policies
Number and Location of Warehouses

3. Order Picking and Assembly

Potential area for improvement
Order Delivery

4. Modes of Transportation
Delivery Time

II. Customer service

Customer Service Dimensions in Logistics

Time
Dependability
-Lead Time/ Safe Delivery/ Correct Orders
Communication
- Pre/ During/ Post Transaction
Convenience

Performance measures: Order receive on time, order receive complete, order receive
damage free, order filled accurately, order billed accurately.

Cost of stock-out : back orders, lost customer, lost sales

Chapter 4: Network design

Cross-docking is a practice in logistics of unloading materials from an incoming semi-

trailer truck or railroad car and loading these materials directly into outbound trucks,
trailers, or rail cars, with little or no storage in between.

Center of gravity method is a quantitative technique that can be used to determine the
optimal location of a facility based upon minimizing the transportation between where
the goods are produced and where they are sold
 Chapter 5: Transportation @ Transportation management

Transportation Modes

Truck
Rail
Air
Marine
Pipeline
Intermodal : Containers ,barges, trailers, flatcar, ro-ro vessels, bulk carries

Transportation specialist
o Freight Forwarders and Agents
o Shippers Associations
o Brokers
o Parcel Carriers

Differences between LTL and TL

The transport of freight that does not require the entire space of a truck is also known as
less than truckload (LTL) shipping, whereas full truckload (TL) shipments take up the
space or weight limit of an entire trailer.

Rate determination
Primary Factors

Weight/Density : Truckload (T/L), LTL, Minimum Weight

Distance
Product Description/Fragility

Additional Factors
o Class Rate
o Fuel Surcharge
o Cubic Volume
 o Accessorial Charges

Weight break: The weight break is the quantity necessary for a per unit reduction in price
for the cargo's transportation. It is also called the weight threshold.

Transportation pricing

Carrier Pricing

Class Rates
Commodity Rates
Contract Rates
FAK Rates

Seller Freight Pricing

Zone Pricing
Basing Point Pricing

Transportation documents
Bill of lading: A bill of lading is a legal document between the shipper of goods and the
carrier detailing the type, quantity and destination of the goods being carried. The bill of
lading also serves as a receipt of shipment when the goods are delivered at the
predetermined destination. This document must accompany the shipped goods, no matter
the form of transportation, and must be signed by an authorized representative from the
carrier, shipper and receiver.

Freight bill: A freight bill, which also is referred to as a bill of lading, is a legal contract
between the shipper and the carrier

Freight claim ( loss or damage claim)

Chapter 6: Warehousing management

Warehousing Facilities

Warehouses: Store product between points of origin and point of

consumption
Distribution Centers: emphasize the rapid movement of products through a
facility, attempt to maximize throughput (the amount of product entering
and leaving a facility in a given time period)
Cross-docking Facilities: process of receiving product and shipping it out
the same day or overnight without putting it into storage

Functions of Warehouses

Storage
Consolidation
Bulk Breaking : breaking larger quantities into smaller quantities
Product Mixing
Cross Dock Sorting
Order Processing
Postponement
Security

Warehouse Operations

Receiving
Correct Numbers of Packages
Freight Damage
Match Paperwork
Match Goods to Paperwork

Movement
Mechanical (Fork Lifts, Pallet Jacks)
Automated (Conveyors, ASRS) Storage

Storage
Put-Away Process (Assigned or Random)

Order Processing
Pull
Pack
Ship

Inventory Replenishment
Order Quantities
 Order Frequency

Value Added Services

Inventory Control (Bar Code, RFID)

Damage Control
Safety forklift driver -
Dangerous goods/ materials

Sustainability
Energy Use
Recycling
Trash Minimization

Principles of Warehouse Layout

One Story Design

Move Goods in Straight Line
Efficient Material Handling Equip.

Efficient Storage Plan

Fast Movers Up Front
Complementary Products Together
Minimize Mispicks

Minimize Aisle Space: NEVER Dead End Aisles

Use Full Cube of Building

Chapter 7: Inventory management

1) Inventory classification
-Cycle or base stock: inventory satisfy normal demand
- Safety stock
- Pipeline or in-transit (hng qu cnh)
- Speculative stock : inventory held for several reasons such as seasonal demand,
potential shortages of product
- Psychic stock : inventory is carried to stimulate demand

Inventory types : Raw materials and components, work-in process, finished

goods, MRO, squirrel stock, surplus and scrap
2) Inventory Costs
Inventory Carrying Costs
Ordering/ Setup Costs
 Expected Stock-out Costs
In-Transit Inventory Carrying Costs

3) How much to order

EOQ: determines the point at which sum of carrying cost and ordering cost is minimized,
or the point at which carrying cost= ordering cost.

i. Tools: Replenishment Models

New vendor model
Q= Average demand + Z * std. Demand
Critical ration (Z) = CU / (C0+CU)
CU: cost of understock
C0: cost of overstock

Example

A bookstore daily purchase newspapers at the beginning of the day, sell them
during the day, and at the end of the day collect a salvage value for unsold
newspapers. The owner wants to maximize the profit by the order the optimal
quantity. He estimates that average daily demand would be 50 newspapers with
standard deviation of 10 newspapers. He purchases at $0.25, sells at $1.4, and
salvages at $0.15 per piece.
1.15
Z= + = = 0.92
1.15+0.1

Q= 50 + (Z* 10) = 64.1

Chapter 8 : Logistic information technology

- MRP: is a production planning, scheduling, and inventory control system

used to manage manufacturing processes

-MRP II: is defined as a method for the effective planning of all resources of a
manufacturing company

-DRP (Distribution requirement planning) : is a process which is used to

determine which goods or materials will be required at which location and at what
time to meet the anticipated demand.

-DRP II : includes maintaining the provision for major non-inventory items and
resources such as labor, material handling systems, and storage space.

-ERP: (Enterprise resource planning)

-WMS (warehouse management system)
- TMS (Transcranial magnetic stimulation)
- CPFR (Collaborative planning, forecasting, and replenishment)
- TOC (Theory of constrains)

KPIs; How to communicate KPIs across different management levels.

A Key Performance Indicator (KPI) is a measurable value that demonstrates how

effectively a company is achieving key business objectives. Organizations use
KPIs to evaluate their success at reaching targets
 Chapter 9: International logistics

Political factors:
Tariff: tax on imported goods
Import quota: limit the amount of imported product
Embargoes: The prohibition of trade between particular countries

International documentation
Certificate of origin ( giy chng nhn xut x)
Commercial invoice : summarized the entire transaction and key information such
as description of goods, the term of sale and method of payments, the shipment
quantity, method of shipment..
A shippers export declaration: contain export transaction data such as
transportation mode, transaction participants, description what is being exported
A shipper letter of instruction: provide explicit shipment instruction.

Incoterms
EXW (Ex-works)
FCA( Free carrier)
FAS
FOB
CFR (Cost and Freight)
CPT (Carriage pay to)
CIF (Cost, insurance and freight)
CIP (Carriage, insurance paid to)
DES (Delivered ex ship)
DEQ (Delivered ex quay)
DAF (Delivered at frontier)
DDP (Delivered duty paid)
DDU (Delivered duty unpaid)