Customer Relationship Management

Supply Chain Management, 5e (Chopra/Meindl)

Chapter 4   Designing Distribution Networks and Applications to e-Business

4.1   True/False Questions

1) Distribution occurs between every pair of stages in the supply chain.

Answer:  TRUE

Diff: 2

Topic:  4.1 The Role of Distribution in the Supply Chain

Learning Outcome:  Compare common approaches to supply chain design

2) Companies in the same industry often select very different distribution networks, because the choice of the distribution network can be used to achieve a variety of supply chain objectives ranging from low cost to high responsiveness.

Answer:  TRUE

Diff: 2

Topic:  4.1 The Role of Distribution in the Supply Chain

Learning Outcome:  Compare common approaches to supply chain design

3) Companies in the same industry should always select similar distribution networks, because their objectives will be similar.

Answer:  FALSE

Diff: 2

Topic:  4.1 The Role of Distribution in the Supply Chain

4) A customer does not necessarily want the highest level of performance along all dimensions of customer service, including response time, product variety, product availability, customer experience, order visibility, and returnability.

Answer:  TRUE

Diff: 1

Topic:  4.2 Factors Influencing Distribution Network Design

Learning Outcome:  Compare common approaches to supply chain design

5) Outbound transportation costs per unit tend to be lower than inbound costs, because inbound lot sizes are typically larger.

Answer:  FALSE

Diff: 1

Topic:  4.2 Factors Influencing Distribution Network Design

Learning Outcome:  Compare common approaches to supply chain design

6) Transportation costs are high with drop-shipping because the average outbound distance to the end consumer is large and package carriers are used to shipping the product.

Answer:  TRUE

Diff: 1

Topic:  4.2 Factors Influencing Distribution Network Design

7) The main advantage of in-transit merge over drop-shipping is the somewhat lower transportation cost and improved customer experience.

Answer:  TRUE

Diff: 2

Topic:  4.3 Design Options for a Distribution Network

Learning Outcome:  Compare common approaches to supply chain design

8) The main advantage of a distribution network with local storage is that it can lower the delivery cost and provide a faster response than other networks.

Answer:  TRUE

Diff: 2

Topic:  4.3 Design Options for a Distribution Network

Learning Outcome:  Compare common approaches to supply chain design

9) The main advantage of a distribution network with local storage is that it can lower the inventory and facility costs.

Answer:  FALSE

Diff: 2

Topic:  4.3 Design Options for a Distribution Network

10) The major disadvantage of a distribution network with local storage is the increased inventory and facility costs.

Answer:  TRUE

Diff: 1

Topic:  4.3 Design Options for a Distribution Network

Learning Outcome:  Compare common approaches to supply chain design

11) A distribution network designer needs to consider product characteristics as well as network requirements when deciding on the appropriate delivery network.

Answer:  TRUE

Diff: 3

Topic:  4.3 Design Options for a Distribution Network

Learning Outcome:  Compare common approaches to supply chain design

12) Only niche companies will end up using a single distribution network.

Answer:  TRUE

Diff: 1

Topic:  4.3 Design Options for a Distribution Network

Learning Outcome:  Compare common approaches to supply chain design

13) 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

Diff: 2

Topic:  4.3 Design Options for a Distribution Network

Learning Outcome:  Compare common approaches to supply chain design

14) As long as inbound transportation economies of scale are maintained, increasing the number of facilities decreases total transportation cost.