Exam 1 Review - Logistics Exam Questions PDF

Things to pay special attention to: 1. Part 3 Problems will largely be Forecasting. Review all 4 sets of forecasting slides, homework problem and forecasting assignment 2. Know how to work BOTH methods of Weighted Moving Averag...

Things to pay special attention to: 1. Part 3 Problems will largely be Forecasting. Review all 4 sets of forecasting slides, homework problem and forecasting assignment 2. Know how to work BOTH methods of Weighted Moving Average, remember I went over the trickier method in class (Hint: See problem B on Forecasting Slide 26) 3. Also one thing to mention on “Naïve Forecasting” … if you are missing and don’t have data to calculate a value using Naïve forecasting is a viable alternative (Slide 22 in Forecasting) 4. For short answer type questions some things to study: a. What are the events/outcomes which occur with a stockout  The buyer waits until the product is available.  The buyer backorders the product.  The seller expedites shipment.  The seller (if possible) substitutes (trades up) a product.  The seller (if possible) buys from a competitor (loss of revenue) – Buyout.  The seller loses current revenue.  The seller loses a buyer and future revenue b. Define and know the differences between FOB Origin/Destination, Zone Pricing, Single Uniform Pricing, Freight Equalization Pricing, Etc.  F.O.B destination: means that the supplier is responsible for goods in transit before they are delivered  F.O.B origin: supplier is responsible for goods in transit once they’re shipped  Zone Pricing: o Prices are same when you ship to any location within a zone o Used in package shipping – usually defined by the distance or the network of the logistics provider o Shipping time also is similar when you ship to any location within a zone  Single Uniform Pricing: Single price for all customers regardless of their location  Freight Equalization Pricing: Freight Equalization Pricing – If two firms have equal efficiency in producing and selling which results in same product costs at factory locations then competitive pricing is a matter of transportation costs. The firm with higher transportation costs may wish to absorb the added cost to remain competitive  Basing-Point Price: Establishes some point other than the one from which the product is actually delivered as the point which to compute price. If location chosen is the location of a major competitor prices can be forced to be similar to the competition  Incentive Pricing: shot-term reduced pricing c. Product Life Cycle – What are the phases and what is important in each phase  Introduction o Product design and development critical o Frequent product and process design changes o Short production runs o High production costs o Limited models o Attention to quality  Growth o Forecasting critical o Product and process reliability o Competitive product improvements and options This study source was downloaded by 100000875477284 from CourseHero.com on 02-05-2025 20:17:26 GMT -06:00 https://www.coursehero.com/file/169955903/Review-for-Exam-1-Spring-20222docx/  o Increase capacity o Shift toward product focused o Enhance distribution  Maturity o Standardization o Less rapid product changes - more minor changes o Optimum capacity o Increasing stability of process o Long production runs o Product improvement and cost cutting  Decline o Little product differentiation o Cost minimization o Overcapacity in the industry o Prune line to eliminate items not returning good margin o Reduce capacity d. Pareto’s law – what is it and how did we use it for product classifications examples/problems  Also known as the 80-20 rule; useful in distribution planning and inventory control  In a typical scenario, the vital few are the few issues that are resulting in 80% of the problem  The trivial many are the numerous issues contributing to 20% of the problem  You classify items as A,B, and C  A items should have the most attention devoted to them  Different ABC classifications: o Based on sales o Based on hits (number of times a customer purchased an order) o Based on profit margin on inventory investment o D – very slow items o Dead o New items (no revenue or sales history) o X and Y items – if you don’t stock them  For math refer to PP 6 e. The steps in customer relationship management (Slide 5 in Logistics Customer Service)  Step 1: Segment the customer base by profitability.  Step 2: Identify the product/service package for each customer segment.  Step 3: Develop and execute the best processes.  Step 4: Measure performance and continuously improve. Some additional hints: 1. Focus on MAD, MSE, and RSFE examples … know what is indicated if RSFE is negative or positive (what does that mean? … i.e. forecast less than actual demand or forecast greater than actual demand?) 2. What does increasing or decreasing the alpha value do for exponential smoothing? … Is a higher or lower alpha value provide a smoother forecast? Which value range of alpha provides a more responsive forecast (higher or lower alpha value) ? A lower alpha spreads weight more evenly across periods and results in a smoother forecast. A higher alpha gives weight to the most recent period and is more responsive 3. Review Activity Based Costing … what is it? How does it work or differ from traditional cost accounting methods? This study source was downloaded by 100000875477284 from CourseHero.com on 02-05-2025 20:17:26 GMT -06:00 https://www.coursehero.com/file/169955903/Review-for-Exam-1-Spring-20222docx/  Activity-based costing measures the cost and performance of activities, resources, and cost objects. Resources are assigned to activities, then activities are assigned to cost objects based on their use. Traditional cost accounting is well suited to situations where an output and an allocation process are highly correlated. Traditional cost accounting is not very effective in situations where the output is not correlated with the allocation base. Refer to PP 3 for math example PP 1 Review  Five Major External Forces Driving Change o Globalization  Globalization creates more economic and political risk, shorter product life cycle, and the blurring of traditional organizational boundaries.  Duplicability  more similar products  reduction in demand o Technology  Technology is a facilitator of internal process and supply chain transformation. It is also a major force in changing the dynamics of the marketplace.  Internet allows access to info 24/7  Companies use social media to data mine for info to use in forecasting  Allows for connection and collaboration o Organizational Consolidation  During the 1980s and especially the 1990s, economic power and the driving force in supply chains shift from product manufacturers to the retail end of the supply chain. o Empowered Consumer  Consumers have the opportunity to compare prices, quality, and service. Consequently, they demand competitive prices, high quality, tailored or customized products, convenience, flexibility, and responsiveness. They tend to have a low tolerance level for poor quality in products and services  Consumers are empowered by exponentially expanded access to product sources and related information and increased buying power due to high income levels o Government Policy and Regulations  More competitive environment is a result of the deregulation of several important sectors in the United States occurred in the 1980s and 1990s  Transportation sector  Financial sector  Communications industry  Supply chain initially only focused on outbound logistics and physical distribution o In 1980s inbound logistics was incorporated  Supply Chain Management o Integrated management of the flow of materials and products, services, cash, and information from suppliers to the final customer and back again.  Supply Chain Flows o Product flow  Physical movement of goods and materials o Information flow  Enabling physical flow of products  Decision making This study source was downloaded by 100000875477284 from CourseHero.com on 02-05-2025 20:17:26 GMT -06:00 https://www.coursehero.com/file/169955903/Review-for-Exam-1-Spring-20222docx/   Supply chain collaborations o Cash flow  Management of working capital o Demand flow  Detect and understand demand signals  Synchronize demand vs. supply  Strategy o Mission  Organization’s purpose for being  Provides boundaries and focus  Answers “How can we satisfy people’s needs?”  Expressed in a published statement o Vision – Strategy Development, Where are we going?  Consideration of unconventional, counter-intuitive strategies.  SWOT Analysis.  Addresses 4 components: customer, the company, suppliers, and competitors  Competitive Priorities o Cost o Quality (Dependability) o Flexibility o Lead Time o Time to market o Innovation  Guiding principles and concepts to formulate a logistics strategy o Total Cost o Differentiated Distribution o Mixed Strategy o Postponement o Consolidation o Standardization  Postponement o Capitalizing on firm customer orders o Eliminating forecast error to the greatest extent possible o Controlling lead time variability o Decreasing average lead times PP 2 Review  Customer Service elements o Pre-transaction elements  Written statement of policy  Statement in hands of customer  Organizational structure  System flexibility  Technical services o Transaction elements  Stockout level  Ability to backorder  Elements of order cycle This study source was downloaded by 100000875477284 from CourseHero.com on 02-05-2025 20:17:26 GMT -06:00 https://www.coursehero.com/file/169955903/Review-for-Exam-1-Spring-20222docx/   Time  Transship  System accuracy  Order conveniences  Product substitution o Post- transaction elements  Installation, warranty alterations, repairs, parts  Product tracking  Customer claims, complaints  Product packaging  Temporary replacement of product during repairs  Most important customer service elements o On-time delivery o Order fill rate o Product condition o Accurate documentation  CRM o Step 1: Segment the customer base by profitability. o Step 2: Identify the product/service package for each customer segment. o Step 3: Develop and execute the best processes. o Step 4: Measure performance and continuously improve.  Elements of Customer Service o Time This study source was downloaded by 100000875477284 from CourseHero.com on 02-05-2025 20:17:26 GMT -06:00 https://www.coursehero.com/file/169955903/Review-for-Exam-1-Spring-20222docx/  o Dependability  Cycle time  Safe delivery  Correct orders o Communications o Convenience  Performance Measures for customer service o Orders received on time o Orders received complete o Orders received damage free o Orders filled and billed accurately  Order management influences on customer service o Product availability  normally hold more inventory to increase product availability  Point of where it is being measured is critical  Ex: Peanuts are a product availability is the ultimate measure of logistics and supply chain performance  Product availability influences both the seller’s and buyer’s inventories  Internal Metrics o are designed to measure the efficiency of how well the seller is setting its inventories to fill items or lines on an order. o Item fill rate  An “item” might be a case of product, an inner-pack, or an “each” on an order  the percentage of items in stock available to fill an order o Line fill rate  A “line” represents a single product on a multiple p,kk76roduct order  defined as the percentage of total lines filled complete on a multiple line order  External Metrics o Are designed to capture the buyer experience with product availability o Order fill rate  the percentage of orders filled complete o Perfect Order  percentage of orders filled completely, received on time, billed accurately, etc  Cost of Stockouts o The buyer waits until the product is available. o The buyer backorders the product. o The seller expedites shipment. o The seller (if possible) substitutes (trades up) a product. o The seller (if possible) buys from a competitor (loss of revenue) – Buyout. o The seller loses current revenue. PP 5 Review  Types of relationships o Vertical relationships This study source was downloaded by 100000875477284 from CourseHero.com on 02-05-2025 20:17:26 GMT -06:00 https://www.coursehero.com/file/169955903/Review-for-Exam-1-Spring-20222docx/   these refer to the traditional linkages between firms in the supply chain such as retailers, distributors, manufacturers, and parts and materials suppliers. o Horizontal relationships  includes those business agreements between firms that have “parallel” or cooperating positions in the logistics process.  Relationship Types o Transactional o Collaborative o Strategic  Steps in forming relationships o 1. Perform strategic assessment o 2. Decision to form a relationship o 3. Evaluate alternatives o 4. Select partners o 5. Structure operating model o 6. Implementation and continuous improvement  Required for a core competency area o Expertise o Ability to invest o Strategic fit  Implementation and continuous improvement o Customer value research o Flow charting o Statistical Process Control o Activity-based costing o Benchmarking o Process reengineering  Collaborative relationships benefits and barriers  Focus on core competencies of supply  Resistance to change chain organizations  Conflicting business objectives  Increased sharing of information and  Inconsistent goals and key performance knowledge indicators  Greater responsiveness to customers’  Lack of trust needs  Unwillingness to share information  Creation of competitive advantage over  Lack of managerial support competing supply chains  Turf protection  More productive and satisfying relationships  3PL’s o 3PL firms may be defined as an external supplier that performs all or part of a company’s logistics functions. o Types of 3PL providers  Transportation-based  3PL providers founded as a subsidiary or major division of a large transportation firm. This study source was downloaded by 100000875477284 from CourseHero.com on 02-05-2025 20:17:26 GMT -06:00 https://www.coursehero.com/file/169955903/Review-for-Exam-1-Spring-20222docx/   Examples: FedEx Supply Chain Services, UPS Supply Chain Solutions, DHL, Ryder Supply Chain Solutions, Schneider logistics, and Penske Logistics.  Warehouse/distribution-based  Generally referring to services relating to warehousing and distribution.  Examples: CEVA Logistics, DSC Logistics, ^YH (****IB