Distribution Network Design Impact Evaluation Quiz

What are the two dimensions along which the performance of a distribution network should be evaluated?

Customer satisfaction and order volume
Customer needs that are met and cost of meeting customer needs (correct)
Time to market and returnability
Product variety and product availability

Which customer service measure is defined as the probability of having a product in stock when a customer order arrives?

Response time
Product availability (correct)
Returnability
Product variety

What does 'Order visibility' refer to in the context of distribution network design?

The ability of customers to track their orders from placement to delivery (correct)
The time it takes to bring a new product to the market
The ease with which a customer can return unsatisfactory merchandise
The ease with which customers can place and receive orders

What is one of the key decisions that managers must make when designing a distribution network?

Deciding if products will be delivered to the customer location or picked up from a preordained site (A) Signup and view all the answers

How is 'returnability' defined in the context of distribution network design?

The ease with which a customer can return unsatisfactory merchandise (A) Signup and view all the answers

What is the primary difference between a distribution chain and a supply chain?

A supply chain acquires raw material, produces products, and delivers to customers; a distribution chain manages the movement of products from suppliers to end consumers. (C) Signup and view all the answers

How does distribution management contribute to a firm's overall profitability?

It affects both supply chain cost and customer experience directly. (C) Signup and view all the answers

What is the role of a distribution network in achieving supply chain objectives?

Affecting supply chain objectives from low cost to high responsiveness. (C) Signup and view all the answers

Which statement best describes the movement within the distribution chain?

Raw materials are moved from suppliers to manufacturers, while finished products are moved from manufacturers to customers. (A) Signup and view all the answers

Why is distribution considered a key driver of a firm's profitability?

It directly impacts both supply chain costs and customer experience. (A) Signup and view all the answers

How can a poor distribution network impact service levels and costs for customers?

By hurting service levels and increasing the overall cost. (D) Signup and view all the answers

Why do firms try to consolidate and limit the number of facilities in their supply chain network?

To decrease facility costs by exploiting economies of scale (D) Signup and view all the answers

In which scenario is a distribution network with local inventory most suitable?

For low-volume, high-variety products with high transportation costs (C) Signup and view all the answers

Why does an e-business benefit from centralizing inventories?

To improve product availability and offer greater variety (D) Signup and view all the answers

What is a key advantage of a distribution network design involving manufacturer storage with direct shipping?

Lower transportation costs due to direct shipping (A) Signup and view all the answers

Why do firms reduce the number of facilities in their supply chain network?

To exploit economies of scale and decrease facility costs (A) Signup and view all the answers

What type of products benefit the most from a distribution network with local inventory?

Low-volume, high-variety products with high transportation costs (D) Signup and view all the answers

What type of products are better suited for distribution networks that ship directly to the customer?

High-value products with low and uncertain demand (C) Signup and view all the answers

How has e-business affected customer experience in terms of access and customization?

Improved by providing 24-hour access and a more customized experience (C) Signup and view all the answers

What is a disadvantage of selling a product online compared to a retail store in terms of response time?

Increased response time relative to a retail store (C) Signup and view all the answers

What is a characteristic of distribution networks that ship directly to customers in terms of inventory levels?

Carry low levels of inventory (C) Signup and view all the answers

How has the rise of e-businesses impacted supply chains in terms of transportation costs?

Increased transportation costs, especially for low-value products with predictable demand (C) Signup and view all the answers

In what scenarios has e-business proven most effective according to the text?

For high-value products with uncertain demand and customers willing to wait for delivery (C) Signup and view all the answers