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Chapter 14
Transportation in the Supply Chain
True/False
Transportation plays a key role in every supply chain because products are usually produced and consumed in the same location.
Answer: False
Difficulty: Easy
Freight transportation costs in the United States amount to about 6 percent of the GDP.
Answer: True
Difficulty: Moderate
The shipper is the party that requires the movement of the product between two points in the supply chain.
Answer: True
Difficulty: Moderate
The carrier is the party that moves or transports the product.
Answer: True
Difficulty: Easy
A distributor makes investment decisions regarding the transportation infrastructure and then makes operating decisions to try to maximize the return from these assets.
Answer: False
Difficulty: Hard
A carrier uses transportation to minimize the total cost (transportation, inventory, information, and facility) while providing an appropriate level of responsiveness to the customer.
Answer: False
Difficulty: Hard
The vehicle-related cost is incurred whether the vehicle is operating or not and is considered fixed for short-term operational decisions by the carrier.
Answer: True
Difficulty: Moderate
Vehicle-related cost includes any cost associated with terminals, airport gates, and labor that are incurred whether vehicles are in operation or not.
Answer: False
Difficulty: Moderate
Trip-related cost depends on the length and duration of the trip but is independent of the quantity shipped.
Answer: True
Difficulty: Easy
Trip-related cost includes loading/unloading costs and a portion of the fuel cost that varies with the quantity being transported.
Answer: False
Difficulty: Easy
Overhead cost includes the cost of planning and scheduling a transportation network as well as any investment in information technology.
Answer: True
Difficulty: Moderate
A carrier’s decisions are affected by the prices that the market will bear, but not the responsiveness it seeks to provide its target segm
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