isye3103b–fall2001.docVIP

ISyE 3103B – Fall 2001 Supply Chain Modeling: Logistics Prof. John Vande Vate Solutions to Practice Exam 1 Answer TRUE or FALSE for each of the following questions : Customer service improves as a result of higher inventory levels. FALSE – need to have the right stuff in inventory (remember the HP case ?) Freight forwarders typically do not own their own transport fleet. TRUE The objective of a logistics system is to minimize transportation costs. FALSE – we want to minimize total cost Purchasing policies of a company do not affect transportation costs. FALSE When regular fluctuations are observed in demand data, one must always adjust for seasonality in the exponential smoothing method to forecast demand. FALSE – need to have a logical justification for the fluctuations, and the fluctuations should be more pronounced than random variations. The overall cost to a company to airfreight goods is always more than the cost to send goods on any other mode of transport. FALSE Inland waterways are not navigable at all times of the day and year. TRUE Briefly explain why hub-and-spoke networks are used for LTL transportation. The key point here is load consolidation. What mode of transport (truck, rail, air or ocean freight), and why, would you use to ship : Electronic chips from Taiwan to the US ? Airfreight – low weight, high cost Fertilizer from Little Rock, AR to Boise, ID ? Rail – Will generally ship in huge quantities Crude oil from Saudi Arabia to Norfolk, VA ? Ocean freight – won’t airfreight millions of barrels of oil !! T-shirts from Long Beach, CA to retail outlets in MA ? Truck – light product, not very expensive, takes less time than rail (response time is very important in retail/fashion industry) Grain from Des Moines, IA to Atlanta, GA ? Rail – will ship in huge quantities, grain is also very bulky The Ace Trucking Company must determine the number of drivers and trucks to have available on a weekly basis. The standard schedule has d