Examination Paper: Logistics
Management
IIBM Institute of Business
Management 6
IIBM Institute
of Business Management
Examination
Paper MM.100
Business
Logistics
Section A:
Objective Type (30 marks)
· This section
consists of Multiple Choice questions & short notes type questions.
· Answer all the
questions.
· Part one
questions carry 1 mark each & Part Two questions carry 5 marks each.
Part One:
Multiple
Choices:
1. This decision involves mode of
selection, shipment size, routing & scheduling:
a. Inventory decision
b. Transport decision
c. Distribution decision
d. Facility location decision
2. This refers to the activities
of gathering the information needed about the products & services
desired & formally requesting
the products to be purchased:
a. Order preparation
b. Order transmittal
c. Observation
d. Order entry
3. A very valuable function for
the TMS is to suggest the patterns for consolidating small shipments
into larger ones.
a. Mode selection
b. Routing
c. Scheduling
d. Freight Consolidation
4. This refers to transporting
truck trailers on railroad flatcars, usually over longer distances than
trucks normally haul
a. Water
b. Pipeline
c. Roadways
d. Trailers on Flatcars
5. An operating philosophy that
is an alternative to the use of inventories for meeting the goal of
having the right goods at the
right place at the right time.
a. Just-in-time
b. Kanban
c. MRP Mechanies
d. None of the above
Examination Paper: Logistics
Management
IIBM Institute of Business
Management 7
6. A buyer may wish to negotiate the
best possible price but not take delivery of the full purchase
amount at one time.
a. Fixed sourcing
b. Contract buying
c. Flexible sourcing
d. Deal buying
7. Transportation rate structure,
especially rate breaks, influence the use of storage facilities is
known as:
a. Storage function
b. Holding
c. Consolidation
d. Break-bulk
8. These warehouses are the most
common type which handle a broad range of merchandise.
a. Household warehouses
b. Mini warehouses
c. Bulk storage warehouses
d. General merchandise warehouses
9. ___________ refers to the time
that goods remain in the transportation equipment during
delivery.
a. Leased space
b. Storage in transit
c. Load unitization
d. Space layout
10. It refers to the selection of
more than one order on a single pass through the stock.
a. Zoning
b. Batching
c. Sequencing
d. Modified area system
Part Two:
1. What is Bid-Rent Curves?
2. What is Mixed Integer linear
Programming?
3. Differentiate between Lumpy
and Regular Demand.
4. Write a short note on ‘Order
Transmittal’.
END
OF SECTION A
Examination Paper: Logistics
Management
IIBM Institute of Business
Management 8
Section B:
Caselets (40 Marks)
· This section
consists of Caselets.
· Answer all the
questions.
· Each Caselet
carries 20 marks.
· Detailed
information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
World is a worldwide refiners and
distributor of fuel products for a automobiles, aircrafts, trucks, and
marine operations, services
stations, and bulk facilities as outlets. Keeping more than 1,000 such outlets
supplied is a significant
operating problem for the company. Maintaining adequate fuel levels at the auto
service stations is its major
concern, because fuel generates the most revenue for the firm and has the
greatest demand for customer
service. Being able to forecast usage rates by product at these service
stations is one of the key
elements of goods distribution operations. In particular, the tanker truck
dispatchers need an accurate
forecast of fuel usage in order to schedule fuel deliveries at service stations
to avoid stock outs.
SERVICE STATION
OPERATION
Service stations may carry three
or four different grades of fuel including 87, 89, and 92 octane gasoline
and diesel fuels. These are
stored in underground tanks. Due to the variations in the usage rates among the
stations and the limited
capacities of these tanks, the frequency of replenishment may range from two or
three times per day to only
several times per week. Each tank is dedicated to one type of fuel. Fuel levels
are measured periodically by
placing a calibrated stick into a storage tank, although some of the more
modern stations have electronic
metering devices on their tanks. Tanker trucks, typically having four fuel
compartments, are used for
replenishment.
A FORECASTING
SITUATION
Each service station’s fuel grade
represents a specific forecasting situation. A case in point is one of the
lower-volume stations selling 87-
octane fuel. With replenishment occurring only a few times per week,
forecast of usage rates on a
daily basis is adequate. Because usage does depend on the day of the week,
forecasting for a particular day
of the week may be quite different from any other day of the week.
Questions:
1. Develop a forecasting
procedure for this service station. Why did you select this method?
2. How should promotions,
holidays, or other such periods where fuel usage rates deviate from
normal patterns be handled in the
forecast?
Examination Paper: Logistics
Management
IIBM Institute of Business
Management 9
Caselet 2
As director of purchasing for
Industrial Distributors, Walter Negley had to plan the purchasing quantities
for the higher-valued products
that Industrial Distribution inventoried and resold to its industrial
customers on a short order cycle.
One such product was a replacement motor used in conveyors.
Replacement sales were received
from customers located in North America and was approximately
constant throughout the year.
These motors were manufactured in West Germany and imported through
the Port of Baltimore. They were
transported by truck to industrial’s privately owned warehouse in the
Chicago area. Although the West
German manufacturer had a price policy that included transportation to
Baltimore, Industrial incurred
the transportation expenses from Baltimore to Chicago. To help determine
the purchase quantities, Walter
gathered the following information:
Information Description
Quantities/Costs Source of Information
Average annual sales 1,500 units
Sales
Replenishment lead time 1 month
(0.083 yr) Purchasing
Clerical cost per requisition $
20 Accounting
Expediting cost per requisition $
5 Traffic
Inventory-carrying cost 30% per
year Finance
Packaged weight per unit 250 lb
Traffic
Unloading cost at warehouse $
0.25 per cwt. Accounting
Storage capacity at warehouse $
300 units Warehouse manager
Public warehouse storage rates $
10 per unit per year Public warehouse
The manufacturer has just
announced its new price schedule for motors at the Port of Baltimore.
Checking with the trucking
company to move the motors from Baltimore,
Units per Order Unit Price
First 100 $ 700
Next 100 $ 680
All over 200 $ 670
Walter found it practical to
contract for either full truckload shipments at $12 per cwt. (100 lb) for
truckload (TL) quantities of 40,
000 lb or more or less-than-truckload (LTL) quantities at $18 per cwt.
Questions:
1. What replenishment order size,
to the nearest 50 units, should Walter place, given the manufacturer’s
noninclusive pricing policy?
2. Should Walter change his
replenishment order size if the manufacture’s pricing policy were one
where the price in each
quantities break includes all units purchased?
END
OF SECTION B
Examination Paper: Logistics
Management
IIBM Institute of Business
Management 10
Section C:
Applied Theory (30 Marks)
· This section
consists of Applied Theory Questions.
· Answer all the
questions.
· Each question
carries 10 marks.
· Detailed
information should from the part of your answer (Word limit 200 to 250 words).
1. What is a heuristic Method?
How are they useful in solving warehouse location problem?
2. What is a “Virtual Inventory”?
What is the planning problem associated with such inventories?
3. Decision makers such as truck
dispatchers, can go a long way toward developing good truck routes &
schedule by applying guideline
principles. What are those principles for good Routing &
Scheduling?
S-2-210311
END
OF SECTION C
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