Chapter 4
Designing the Distribution Network in a Supply Chain
True/Fal
1.Distribution occurs between every pair of stages in the supply chain.
Answer: True
Difficulty: Moderate
2.Distribution only occurs between manufacturing and consumers in the
supply chain.
Answer: Fal
Difficulty: Moderate
3.Companies in the same industry often lect very different distribution
networks, becau the choice of the distribution network can be ud to
achieve a variety of supply chain objectives ranging from low cost to
high responsiveness.
Answer: True
Difficulty: Moderate
4.Companies in the same industry should always lect similar
distribution networks, becau their objectives will be similar.
Answer: Fal
Difficulty: Moderate
5. A customer always wants the highest level of performance along all
dimensions of customer rvice, including respon time, product variety, product availability, customer experience, order visibility, and returnability.
Answer: Fal
Difficulty: Moderate
6. A customer does not necessarily want the highest level of performance
along all dimensions of customer rvice, including respon time,
product variety, product availability, customer experience, order
visibility, and returnability.
Answer: True
Difficulty: Easy
7.Outbound transportation costs per unit tend to be lower than inbound
costs, becau inbound lot sizes are typically larger.
Answer: Fal
Difficulty: Easy
8.Outbound transportation costs per unit tend to be higher than inbound
costs, becau inbound lot sizes are typically larger.
Answer: True
Difficulty: Easy
9.Transportation costs are high with drop-shipping becau the average
outbound distance to the end consumer is large and package carriers
are ud to shipping the product.
Answer: True
Difficulty: Easy
10.Transportation costs are low with drop-shipping becau the
average outbound distance to the end consumer is small.
Answer: Fal
Difficulty: Easy
11.The main advantage of in-transit merge over drop-shipping is the
somewhat lower transportation cost and improved customer experience.
Answer: True
Difficulty: Moderate
12.The main advantage of a distribution network with local storage is
that it can lower the delivery cost and provide a faster respon than
other networks.
Answer: True
Difficulty: Moderate
13.The main advantage of a distribution network with local storage is
that it can lower the inventory and facility costs.
Answer: Fal
Difficulty: Moderate
14.The major disadvantage of a distribution network with local storage
is the incread delivery cost.
Answer: Fal
Difficulty: Moderate
15.The major disadvantage of a distribution network with local storage
is the incread inventory and facility costs.
Answer: True
Difficulty: Easy
16. A distribution network designer needs to consider product
characteristics as well as network requirements when deciding on the
appropriate delivery network.
Answer: True
Difficulty: Hard
17.Only niche companies will end up using a single distribution network.
Answer: True
Difficulty: Easy
18.Most companies are best rved by a single distribution network.
Answer: Fal
Difficulty: Moderate
19.Distributors add value to a supply chain between a supply stage and
a customer stage if there are many small players at the customer
stage, each requiring a small amount of the product at a time.
Answer: True
Difficulty: Moderate
Multiple Choice
1.The steps taken to move and store a product from the supplier stage to a
customer stage in the supply chain is referred to as
c.wholesaling.
d.distribution.
e.manufacturing.
Answer: d
Difficulty: Easy
2.Distribution is a key driver of the overall profitability of a
firm becau
a.the addition of distributors only adds cost to the supply chain.
b.it directly impacts both the supply chain cost and the
customer experience.
c.it slows down the responsiveness of the supply chain.
d.it cannot be developed as a part of supply chain strategy.
e. Distribution is not a key driver of profitability.
Answer: b
Difficulty: Moderate
3. The choice of the distribution network can be ud to achieve supply
chain objectives such as
a.low cost.
b.high responsiveness.
c.high cost.
d.high responsibility.
e. a and b
only Answer: e
Difficulty: Moderate
4.Companies in the same industry often lect very different distribution
networks becau
a.some companies are poorly run.
b.different companies try to avoid using the same approach.
c.different companies have different objectives for their
supply chain.
d.all of the above
< of the above
Answer: c
Difficulty: Moderate
5. A poor/inappropriate distribution network can
a.lead to high profitability.
b.hurt the level of rvice customers receive while increasing cost.
c.have a significant negative impact on the profitability of a firm.
d.all of the above
e. b and c only
Answer: d
Difficulty: Moderate
6. Which of the following would not be the result of a poor/inappropriate
distribution network?
a.High profitability
b.Low level of customer rvice
c.High cost
d.Poor profitability
e.None of the above are true.
Answer: a
Difficulty: Easy
7.On which dimensions should the performance of a distribution network
be evaluated at the highest level?
a.Profitability of individual supply chain components
b.Efficiency of overall supply chain network
c.Customer needs that are met
d.Cost of meeting customer needs
e. c and d only
Answer: e
Difficulty: Hard
8.Which of the following are measures of customer rvice that are
influenced by the structure of the distribution network?
a.Respon time
b.Product variety
c.Product availability
d.Customer experience
e.all of the above
Answer: e
Difficulty: Easy
9.Which of the following are measures of customer rvice that are
influenced by the structure of the distribution network?
a.Returnability
b.Order visibility
c.Customer experience
d.Product availability
e.all of the above
Answer: e
Difficulty: Moderate
10.Which of the following is not a measure of customer rvice that is
influenced by the structure of the distribution network?
a.Returnability
b.Customer experience
c.Customer maturity
d.Product availability
e.All of the above are measures of customer rvice.
Answer: c
Difficulty: Easy
11.The time between when a customer places an order and receives delivery
is
b.product variety.
c.product availability.
d.customer experienc
e.
Answer: a
Difficulty: Easy
