Type: Test Bank
Resource: Contemporary Logistics
Edition: 12th Edition
Author(s): Paul R. Murphy
A. Knemeyer
TEST BANK
CHAPTER 1: AN OVERVIEW OF LOGISTICS
Multiple Choice Questions (correct answers are bolded)
1. Logistics clearly contributes to ___________ and ___________ utility.
a. time; place
b. form; time
c. place; form
d. possession; time
[LO 1.1: To discuss the economic impacts of logistics; Moderate; Application; AACSB Category
3: Analytical thinking]
2. ___________ utility refers to the value or usefulness that comes from a customer being able
to take possession of a product.
a. Time
b. Place
c. Form
d. Possession
[LO 1.1: To discuss the economic impacts of logistics; Easy; Concept; AACSB Category 3:
Analytical thinking]
3. ___________ utility refers to having products available where they are needed by
customers.
a. Possession
b. Time
c. Place
d. Form
[LO 1.1: To discuss the economic impacts of logistics; Easy; Concept; AACSB Category 3:
Analytical thinking]
4. All of the following are types of economic utility except:
a. time.
b. production.
c. place.
d. possession.
1
.
[LO 1.1: To discuss the economic impacts of logistics; Moderate; Synthesis; AACSB Category
3: Analytical thinking]
5. “How well a company does what it says it’s going to do” represents ___________.
a. efficiency
b. productivity
c. quality
d. effectiveness
[LO 1.2: To define what logistics is; Easy; Concept; AASCB Category 3: Analytical thinking]
6. What concept refers to “how well company resources are used to achieve what a company
promises it can do”?
a. efficiency
b. productivity
c. reengineering
d. effectiveness
[LO 1.2: To define what logistics is; Easy; Concept; AASCB Category 3: Analytical thinking]
7. Every customer getting the same type and level of logistics service refers to ___________.
a. tailored logistics
b. mass logistics
c. effectiveness
d. efficiency
[LO 1.2: To define what logistics is; Easy; Concept; AASCB Category 3: Analytical thinking]
8. Which of the following is not a reason for the increased importance of logistics?
a. growing power of manufacturers
b. reduction in economic regulation
c. globalization of trade
d. technological advances
[LO 1.3: To analyze the increased importance of logistics; Moderate; Synthesis; AACSB
Category 3: Analytical thinking]
9. Widespread reductions in economic regulation of U.S. transportation carriers occurred in
___________.
a. the 1960s and 1970s
b. the 1970s and 1980s
2
.
c. the 1980s and 1990s
d. only the 1990s
[LO 1:3: To analyze the increased importance of logistics; Easy; Application; AACSB
Category 3: Analytical thinking]
10. The ___________ concept suggests that the customer desires a product offering that is highly
tailored to the customer’s exact preferences.
a. market demassification
b. relationship marketing
c. customized customer
d. niche marketing
[LO 1.3: To analyze the increased importance of logistics; Easy; Concept; AACSB Category 3:
Analytical thinking]
11. Approximately ___________ percent of U.S. families with children reports that both parents
work.
a. 70
b. 60
c. 50
d. 40
[LO 1.3: To analyze the increased importance of logistics; Moderate; Application; AACSB
Category 3: Analytical thinking]
12. ___________ refers to the removal of intermediaries between producer and consumer.
a. Direct channel
b. Market demassification
c. Consolidation
d. Disintermediation
[LO 1.3: To analyze the increased importance of logistics; Easy; Concept; AACSB Category 3:
Analytical thinking]
13. ___________ are stores with large amounts of both floor space and product for sale.
a. Mass merchandisers
b. Power retailers
c. Big-box retailers
d. Do-it-yourself (DIY) retailers
3
.
[LO 1.3: To analyze the increased importance of logistics; Easy; Application; AACSB Category
3: Analytical thinking]
14. An example of ___________ involves ordering something online and then picking it up at a
bricks-and-mortar store.
a. supply chain management
b. finance
c. omnichannel retailing
d. big-box retailing
[LO 1.3: To analyze the increased importance of logistics; Easy; Application; AACSB Category
3: Analytical thinking]
15. World trade has grown at an average annual rate of approximately ___________ percent
since 1990.
a. 6
b. 5
c. 4
d. 3
[LO 1.3: To analyze the increased importance of logistics; Moderate; Application; AACSB
Category 3: Analytical thinking]
16. The ___________ approach indicates that a company’s objectives can be realized by
recognizing the mutual interdependence of major functional areas.
a. systems
b. supply chain
c. physical distribution
d. materials management
[LO 1.4: To discuss the systems and total cost approaches to logistics; Easy; Concept; AACSB
Category 3: Analytical thinking]
17. The movement and storage of materials into a firm refers to ___________.
a. physical distribution
b. materials management
c. supply chain management
d. materials handling
[LO 1.4: To discuss the systems and total cost approaches to logistics; Easy; Concept; AACSB
Category 3: Analytical thinking]
4
.
18. Which concept refers to the storage of finished product and movement to the customer?
a. supply chain management
b. business logistics
c. physical distribution
d. materials management
[LO 1.4: To discuss the systems and total cost approaches to logistics; Easy; Concept; AACSB
Category 3: Analytical thinking]
19. Logistics managers use the ___________ approach to coordinate materials management and
physical distribution in a cost-efficient manner.
a. total cost
b. supply chain
c. balanced
d. intrafunctional logistics
[LO 1.4: To discuss the systems and total cost approaches to logistics; Easy; Concept; AACSB
Category 3: Analytical thinking]
20. A cost trade-off is a situation where:
a. all costs react according to their individual degrees of inflation in the economy.
b. all costs are reflected as a percentage variation from standard costs.
c. some costs increase and some costs decrease.
d. some costs are eliminated by efficient management controls.
[LO 1.4: To discuss the systems and total cost approaches to logistics; Moderate; Synthesis;
AACSB Category 3: Analytical thinking]
21. The ___________ department often measures inventory in terms of its cost or value in
dollars whereas ___________ tends to measure inventory in terms of units.
a. marketing; logistics
b. finance; production
c. marketing; production
d. finance; logistics
[LO 1.5: To expose you to logistical relationships within the firm; Moderate; Application;
AACSB Category 3: Analytical thinking]
22. A common interface between production and logistics involves:
a. the types of materials handling equipment.
b. the length of production runs.
5
.
c. the use of plastic versus wood pallets.
d. the mode of transportation.
[LO 1.5: To expose you to logistical relationships within the firm; Moderate; Application;
AACSB Category 3: Analytical thinking]
23. ___________ refers to the delay of value-added activities such as assembly, production, and
packaging to the latest possible time.
a. Building block
b. Lean manufacturing
c. Deferral
d. Postponement
[LO 1.5: To expose you to logistical relationships within the firm; Easy; Concept; AACSB
Category 3: Analytical thinking]
24. The four basic components of the marketing mix include all of the following except:
a. price.
b. production.
c. place.
d. promotion.
[LO 1.5: To expose you to logistical relationships within the firm; Easy; Concept; AACSB
Category 3: Analytical thinking]
25. Landed costs refer to:
a. the costs of a product shipped via surface transport.
b. the costs of a product that is quoted cash on delivery (COD).
c. the costs of a prepaid shipment.
d. a price that includes both the cost of the product plus transportation to the buyer.
[LO 1.5: To expose you to logistical relationships within the firm; Moderate; Concept; AACSB
Category 3: Analytical thinking]
26. ___________ refers to being out of an item at the same time there is demand for it.
a. Postponement
b. Tailored logistics
c. Stockout
d. Supplier indifference
[LO 1.5: To expose you to logistical relationships within the firm; Easy; Concept; AACSB
Category 3: Analytical thinking]
6
.
27. Enticing customers with the promise of a low-priced product, only to find that it is
unavailable, but having a higher-priced substitute product readily available refers to
___________.
a. loss-leader marketing
b. unfair trade practices
c. bait-and-switch tactics
d. price lining
[LO 1.5: To expose you to logistical relationships within the firm; Easy; Concept; AACSB
Category 3: Analytical thinking]
28. Which of the following is not part of the marketing channel?
a. logistics channel
b. negotiations channel
c. management channel
d. finance channel
[LO 1.6: To introduce you to marketing channels; Moderate; Application; AACSB Category 3:
Analytical thinking]
29. The ownership channel consists of all parties except:
a. customers.
b. manufacturers.
c. wholesalers.
d. retailers.
[LO 1.6: To introduce you to marketing channels; Moderate; Concept; AACSB Category 3:
Analytical thinking]
30. Which channel covers the movement of title to the goods?
a. promotions
b. logistics
c. finance
d. ownership
[LO 1.6: To introduce you to marketing channels; Easy; Concept; AACSB Category 3:
Analytical thinking]
31. ___________ is bringing together similar stocks from different sources.
a. Accumulating
7
.
b. Assorting
c. Auditing
d. Allocating
[LO 1.6: To introduce you to marketing channels; Moderate; Concept; AACSB Category 3:
Analytical thinking]
32. ___________ refers to breaking a homogeneous supply into smaller lots.
a. Sorting out
b. Allocating
c. Accumulating
d. Assorting
[LO 1.6: To introduce you to marketing channels; Moderate; Concept; AACSB Category 3:
Analytical thinking]
33. Channel intermediaries:
a. assume temporary ownership of the goods.
b. tend to lack focus.
c. fill niches.
d. tend to disappear as the market becomes organized.
[LO 1.6: To introduce you to marketing channels; Moderate; Synthesis; AACSB Category 3:
Analytical thinking]
34. Brokers are intermediaries that are commonly associated with the ___________ channel.
a. promotions
b. finance
c. ownership
d. negotiation
[LO 1.6: To introduce you to marketing channels; Moderate; Concept; AACSB Category 3:
Analytical thinking]
35. The costliest logistics activity in many firms is ___________.
a. industrial packaging
b. transportation management
c. order management
d. warehousing management
[LO 1.7: To provide a brief overview of activities in the logistics channel; Moderate;
Application; AACSB Category 3: Analytical thinking]
8
.
True-False Questions
1. Absolute and relative logistics costs in relation to gross domestic product (GDP) vary from
country to country. (True) [LO 1.1: To discuss the economic impacts of logistics; Easy;
Application; AACSB Category 3: Analytical thinking]
2. The four general types of economic utility are production, possession, time, and place. (False)
[LO 1.1: To discuss the economic impacts of logistics; Easy; Concept; AACSB Category 3:
Analytical thinking]
3. Logistics clearly contributes to time and form utility. (False) [LO 1.1: To discuss the
economic impacts of logistics; Easy; Application; AACSB Category 3: Analytical thinking]
4. The current definition of logistics, as promulgated by the Council of Supply Chain
Management Professionals (CSCMP), suggests that logistics is part of supply chain
management. (True) [LO 1.2: To define what logistics is; Easy; application; AASCB Category
3: Analytical thinking]
5. Logistics is only concerned with forward flows—that is, those directed toward the point of
consumption. (False) [LO 1.2: Define what logistics is; Easy; Application; AASCB Category 3:
Analytical thinking]
6. The purpose of logistics is to maximize customer service. (False) [LO 1.2: To define what
logistics is; Easy; Application; AASCB Category 3: Analytical thinking]
7. In mass logistics, groups of customers with similar logistical needs and wants are provided
with logistics services appropriate to those wants and needs. (False) [LO 1.2: To define what
logistics is; Easy; Concept; AASCB Category 3: Analytical thinking]
8. Humanitarian logistics represents an emerging application of logistics to not-for-profit
organizations. (True) [LO 1.2: To define what logistics is; Easy; Application; AASCB Category
3: Analytical thinking]
9. Reductions in economic regulation allowed individual transportation companies flexibility in
pricing and service. (True) [LO 1.3: To analyze the increased importance of logistics; Easy;
Application; AACSB Category 3: Analytical thinking]
10. Market demassification suggests that the customer desires a product offering that is highly
tailored to his exact preference. (False) [LO 1.3: To analyze the increased importance of
logistics; Moderate; Concept; AACSB Category 3: Analytical thinking]
11. Disintermediation refers to the removal of intermediaries between producer and consumer.
(True) [LO 1.3: To analyze the increased importance of logistics; Easy; Concept; AACSB
Category 3: Analytical thinking]
9
.
12. Superior logistics is an essential component of corporate strategies for many big-box
retailers. (True) [LO 1.3: To analyze the increased importance of logistics; Easy; Application;
AACSB Category 3: Analytical thinking]
13. Logistics has played a minor role in the growth of global trade. (False) [LO 1.3: To analyze
the increased importance of logistics; Easy; Application; AACSB Category 3: Analytical
thinking]
14. The systems approach indicates that a company’s objectives can be realized by recognizing
the mutual interdependence of the major functional areas of a firm. (True) [LO 1.4: To discuss
the systems and total cost approaches to logistics; Easy; Concept; AACSB Category 3:
Analytical thinking]
15. A stock-keeping unit (SKU) refers to a line item of inventory offered for sale by a company.
(True) [LO 1.4: To discuss the systems and total cost approaches to logistics; Easy; Concept;
AACSB Category 3: Analytical thinking]
16. Physical distribution is synonymous with materials management. (False) [LO 1.4: To discuss
the systems and total cost approaches to logistics; Easy; Concept; AACSB Category 3:
Analytical thinking]
17. Interfunctional logistics attempts to coordinate materials management and physical
distribution in a cost-efficient manner that supports an organization’s customer service
objectives. (False) [LO 1.4: To discuss the systems and total cost approaches to logistics;
Moderate; Application; AACSB Category 3: Analytical thinking]
18. The key to the total cost approach is that all relevant cost items are considered
simultaneously when making a decision. (True) [LO 1.4: To discuss the systems and total cost
approaches to logistics; Easy; Application; AACSB Category 3: Analytical thinking]
19. The finance department tends to measure inventory in terms of units whereas logistics tends
to measure inventory in terms of its cost or value. (False) [LO 1.5: Logistical relationships
within the firm; Easy; Application; AACSB Category 3: Analytical thinking]
20. Long production runs sometimes result in excessive inventory of products with limited
demand for them. (True) [LO 1.5: To expose you to logistical relationships within the firm;
Easy; Application; AACSB Category 3: Analytical thinking]
21. Postponement is the delay of value-added activities such as assembly, production, and
packaging to the latest possible time. (True) [LO 1.5: To expose you to logistical relationships
within the firm; Easy; Concept; AACSB Category 3: Analytical thinking]
22. Logistics offers many companies an important route for creating marketing superiority.
(True) [LO 1.5: To expose you to logistical relationships within the firm; Moderate;
Application; AACSB Category 3: Analytical thinking]
10
.
23. Dual distribution refers to an alliance that allows customers to purchase products from two or
more name-brand retailers at one store location. (False) [LO 1.5: To expose you to logistical
relationships within the firm; Easy; Concept; AACSB Category 3: Analytical thinking]
24. Landed costs refer to the price of a product at its source. (False) [LO 1.5: To expose you to
logistical relationships within the firm; Easy; Concept; AACSB Category 3: Analytical thinking]
25. Stockouts refer to a situation in which a company is out of an item at the same time that there
is demand for that item. (True) [LO 1.5: To expose you to logistical relationships within the
firm; Easy; Concept; AACSB Category 3: Analytical thinking]
26. Logistical decisions tend not to be impacted by marketers’ growing emphasis on offering
sustainable products. (False) [LO 1.5: To expose you to logistical relationships within the firm;
Easy; Application; AACSB Category 3: Analytical thinking]
27. Many promotional decisions, such as pricing campaigns that lower the price of certain items,
require close coordination between marketing and logistics. (True) [LO 1.5: To expose you to
logistical relationships within the firm; Easy; Application; AACSB Category 3: Analytical
thinking]
28. The ownership channel is the one where buy and sell agreements are reached. (False) [LO
1.6: To introduce you to marketing channels; Easy; Application; AACSB Category 3:
Analytical thinking]
29. The financing channel handles a company’s credit and payment for goods. (True) [LO 1.6:
To introduce you to marketing channels; Easy; Application; AACSB Category 3: Analytical
thinking]
30. There is no link between the promotions and logistics channels. (False) [LO 1.6: To
introduce you to marketing channels; Moderate; Synthesis; AACSB Category 3: Analytical
thinking]
31. The most significant contribution that the logistics channel makes to the overall channel
process is the sorting function. (True) [LO 1.6: To introduce you to marketing channels; Hard;
Application; AACSB Category 3: Analytical thinking]
32. The sorting function has four steps. (True) [LO 1.6: To introduce you to marketing channels;
Moderate; Application; AACSB Category 3: Analytical thinking]
33. The sorting function takes place between retailers and the consumer. (False) [LO 1.6: To
introduce you to marketing channels; Easy; Application; AACSB Category 3: Analytical
thinking]
34. Intermediaries assume ownership of goods while those goods are in the marketing channel.
(False) [LO 1.6: To introduce you to marketing channels; Moderate; Application; AACSB
Category 3: Analytical thinking]
11
.
35. A broker is a type of intermediary often associated with the negotiations channel. (True) [LO
1.6: To introduce you to marketing channels; Easy; Concept; AACSB Category 3: Analytical
thinking]
36. A commonly used logistical intermediary is the freight forwarder. (True) [LO 1.6: To
introduce you to marketing channels; Moderate; Application; AACSB Category 3: Analytical
thinking]
37. Demand forecasting is not considered to be a logistics-related activity. (False) [LO 1.7: To
provide a brief overview of activities in the logistics channel; Easy; Application; AACSB
Category 3: Analytical thinking]
38. Packaging can have both a marketing and logistical dimension. (True) [LO 1.7: To provide a
brief overview of activities in the logistics channel; Moderate; Application; AACSB Category 3:
Analytical thinking]
39. Warehousing represents the costliest logistics activity in many organizations. (False) [LO
1.7: To provide a brief overview of activities in the logistics channel; Moderate; Application;
AACSB Category 3: Analytical thinking]
40. The job market for logisticians and supply chain managers continues to be strong at the
undergraduate, but not the MBA, level. (False) [LO 1.8: To familiarize you with logistics
careers; Easy; Application; AACSB Category 3: Analytical thinking]
12
.