Ch13 Transportation Management Test Questions & Answers

TEST BANK

CHAPTER 13: TRANSPORTATION MANAGEMENT

Multiple Choice Questions (correct answers are bolded)

1. ___________ refers to the buying and controlling of transportation services by either a shipper or consignee.

a. Transportation management

b. Logistics management

c. Routing

d. Tracking

[LO: Material at the beginning of the chapter; Easy; Concept; AACSB Category 3: Analytical thinking]

2. In general terms, ___________ accounts for about 6 percent of U.S. gross domestic product.

a. warehousing

b. logistics

c. supply chain management

d. transportation

[LO: Material at the beginning of the chapter; Moderate; Application; AACSB Category 3: Analytical thinking]

3. ___________ signifies the price charged for freight transportation.

a. Fare

b. Tariff

c. Rate

d. Revenue

[LO 13.1: To discuss how rates are determined; Easy; Concept; AACSB Category 3: Analytical thinking]

4. Which of the following is not one of the three primary factors that transportation rates are based upon?

a. product

b. density

c. weight

d. distance

[LO 13.1: To discuss how rates are determined; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

5. Weight times rate equals ___________.

a. density

b. transportation cost

c. stowability

d. volume

[LO 13.1: To discuss how rates are determined; Easy; Application; AACSB Category 3: Analytical thinking]

6. A(n) ___________ rate refers to a specific rate for every possible combination of product, weight, and distance.

a. classification

b. ad valorem

c. commodity

d. class

[LO 13.1: To discuss how rates are determined; Easy; Concept; AACSB Category 3: Analytical thinking]

7. A(n) ___________ rate is very good for dealing with demand-specific situations.

a. density

b. commodity

c. class

d. ad valorem

[LO 13.1: To discuss how rates are determined; Moderate; Application; AACSB Category 3: Analytical thinking]

8. A(n) ___________ rate simplifies each of the three primary rate factors—product, weight, and distance.

a. class

b. ad valorem

c. density

d. commodity

[LO 13.1: To discuss how rates are determined; Easy; Concept; AACSB Category 3: Analytical thinking]

9. Which of the following is not one of the four factors used to determine a product’s classification?

a. density

b. liability to damage and theft

c. stowability

d. product value

[LO 13.1: To discuss how rates are determined; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

10. The National Motor Freight Classification (NMFC) currently has 18 separate ratings, or classes, that range from Class 50 to Class ___________.

a. 300

b. 400

c. 500

d. 600

[LO 13.1: To discuss how rates are determined; Moderate; Application; AACSB Category 3: Analytical thinking]

11. ___________ refers to how heavy a product is in relation to its size.

a. Stowability

b. Volume

c. Weight

d. Density

[LO 13.1: To discuss how rates are determined; Moderate; Concept; AACSB Category 3: Analytical thinking]

12. ___________ refers to how easy a commodity is to pack into a load.

a. Recoupering

b. Stowability

c. Dunnage

d. Materials handling

[LO 13.1: To discuss how rates are determined; Moderate; Concept; AACSB Category 3: Analytical thinking]

13. Liability for loss and damage is one factor used to determine a product’s freight classification. Which of the following is not a loss and damage consideration?

a. a commodity’s propensity to damage other freight

b. the ability to load freight on top of a commodity

c. the perishability of a commodity

d. a commodity’s value

[LO 13.1: To discuss how rates are determined; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

14. Which of the following statements about the class rate system is false?

a. Origin and destination zip codes are commonly used when calculating a shipment’s total cost.

b. A commodity’s classification can noticeably impact transportation expenses.

c. Shippers can reduce their transportation expenses by utilizing fewer, heavier shipments rather than multiple, lighter shipments.

d. Shipment costs increase in direct proportion to the increase in distance.

[LO 13.1: To discuss how rates are determined; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

15. With respect to a commodity’s freight classification, shippers tend to prefer a ___________ classification number and carriers tend to prefer a ___________ classification number.

a. lower, lower

b. lower, higher

c. higher, lower

d. higher, higher

[LO 13.1: To discuss how rates are determined; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

16. Suppose that a particular item is class 200 according to the National Motor Freight Classification (NMFC). What is the relationship between this item’s rate and the rate for an item in class 100?

a. The class 200 rate is lower than the class 100 rate.

b. The rate relationship depends on other factors.

c. The rates are identical.

d. The class 200 rate is higher than the class 100 rate.

[LO 13.1: To discuss how rates are determined; Difficult; Application; AACSB Category 3: Analytical thinking]

17. With ___________, the buyer assumes title and control of a shipment at the point of pickup.

a. FOB destination

b. integrated logistics

c. FOB origin

d. omnichannel marketing

[LO 13.1: To discuss how rates are determined; Moderate; Application; AACSB Category 3: Analytical thinking]

18. With ___________, the seller retains title and control of a shipment until it is delivered.

a. FOB destination

b. integrated logistics

c. FOB origin

d. omnichannel marketing

[LO 13.1: To discuss how rates are determined; Moderate; Application; AACSB Category 3: Analytical thinking]

19. Which of the following is not a possible payment option (terms of sale) for U.S. domestic shipments?

a. FOB origin, freight collect and charged back

b. FOB origin, freight collect

c. FOB origin, freight prepaid

d. FOB origin, freight prepaid and charged back

[LO 13.1: To discuss how rates are determined; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

20. With FOB destination, freight prepaid ___________.

a. the buyer pays the freight charges, but the seller owns the goods in transit

b. the buyer pays the freight charges and owns the goods in transit

c. the seller pays the freight charges and owns the goods in transit

d. the seller pays the freight charges, but the buyer owns the goods in transit

[LO 13.1: To discuss how rates are determined; Difficult; Application; AACSB Category 3: Analytical thinking]

21. A(n) ___________ refers to a transportation manager who purchases a prespecified level of transportation service and is indifferent to the mode and carrier used to provide the transportation service.

a. class rate shipper

b. certified logistics professional

c. third-party logistics shipper

d. amodal shipper

[LO 13.2: To learn about modal and carrier selection; Moderate; Concept; AACSB Category 3: Analytical thinking]

22. The most important single transportation document is the ___________.

a. freight bill

b. bill of lading

c. commercial invoice

d. certificate of origin

[LO 13.3: To distinguish among various transportation documents; Moderate; Application; AACSB Category 3: Analytical thinking]

23. Each of the following is true except:

a. The bill of lading is the most important transportation document.

b. The bill of lading adds to the complexity of the transportation manager’s job.

c. The straight bill of lading contains the name of the consignee.

d. The order bill of lading does not contain the name of the consignee.

[LO 13.3: To distinguish among various transportation documents; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

24. An order bill of lading is used ___________.

a. for overseas shipments

b. when a shipment must be expedited

c. when a shipment is started before the buyer is known

d. to guard against disruptions in transit

[LO 13.3: To distinguish among various transportation documents; Moderate; Application; AACSB Category 3: Analytical thinking]

25. An invoice submitted by the carrier requesting to be paid is ___________.

a. a freight bill

b. a bill of lading

c. voucher

d. dunnage

[LO 13.3: To distinguish among various transportation documents; Easy; Concept; AACSB Category 3: Analytical thinking]

26. A freight claim must be filed within ___________ months from the date on the bill of lading.

a. 3

b. 6

c. 9

d. 12

[LO 13.3: To distinguish among various transportation documents; Moderate; Application; AACSB Category 3: Analytical thinking]

27. Which of the following statements is false?

a. Freight claims must be filed within nine months of the delivery date.

b. Concealed loss and damage is a delicate area for shippers and carriers.

c. The volume of freight claims activity has dropped since transportation deregulation.

d. Shippers or carriers are entitled to a product’s full retail value when filing a freight claim.

[LO 13.3: To distinguish among various transportation documents; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

28. If a product destroyed or damaged in transit is intended to be placed into general replacement inventory, then the retailer would likely receive ___________.

a. the retail price plus freight if previously paid

b. the wholesale price plus 20 percent

c. the retail price minus 20 percent

d. the wholesale price plus freight if previously paid

[LO 13.3: To distinguish among various transportation documents; Difficult; Application; AACSB Category 3: Analytical thinking]

29. Small shipments are defined as those that ___________.

a. involve three or fewer cartons

b. are moved primarily by parcel carriers

c. weigh more than 150 pounds but less than 500 pounds

d. weigh more than 10 pounds but less than 100 pounds

[LO 13.4: To illustrate select activities associated with making and receiving small shipments; Moderate; Concept; AACSB Category 3: Analytical thinking]

30. Which of the following statements is false?

a. Carriers may be reluctant to accept small shipments because they require a high degree of manual labor.

b. Some carriers believe they lose money on small shipments.

c. Consolidating small shipments into larger ones could result in poorer service to the final customer.

d. Small shipments should be consolidated across place rather than across time.

[LO 13.4: To illustrate select activities associated with making and receiving small shipments; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

31. Demurrage charges are collected by railroads, ___________, and ___________.

a. motor carriers, pipelines

b. water carriers, pipelines

c. motor carriers, water carriers

d. airlines, pipelines

[LO 13.4: To illustrate select activities associated with making and receiving small shipments; Difficult; Application; AACSB Category 3: Analytical thinking]

32. Which of the following statements is false?

a. Detention is similar to demurrage except that detention applies to pipelines.

b. Demurrage is a penalty payment made to a railroad for keeping equipment beyond the time it should be released.

c. Averaging agreements can be used with demurrage.

d. Carriers and shippers can negotiate demurrage and detention policies.

[LO 13.4: To illustrate select activities associated with making and receiving small shipments; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

33. ___________ can be defined as the process of determining how a shipment will be moved between origin and destination.

a. Tracking

b. Demurrage

c. Transportation

d. Routing

[LO 13.4: To illustrate select activities associated with making and receiving small shipments; Easy; Concept; AACSB Category 3: Analytical thinking]

34. A ___________ provides a variety of shipment information such as shipment preparation, freight invoicing, a list of preferred carriers, and a list of which carrier or carriers to use for shipments moving between two points.

a. freight classification manual

b. routing guide

c. tariff

d. bill of lading

[LO 13.4: To illustrate select activities associated with making and receiving small shipments; Moderate; Concept; AACSB Category 3: Analytical thinking

35. ___________ refers to determining a shipment’s location during the course of its move.

a. Expediting

b. Calibration

c. Reparation

d. Tracking

[LO 13.4: To illustrate select activities associated with making and receiving small shipments; Easy; Concept; AACSB Category 3: Analytical thinking]

36. ___________ refers to rapidly moving a shipment through a carrier’s system.

a. Expediting

b. Tracking

c. Fast logistics

d. Cross-docking

[LO 13.4: Making and receiving small shipments; Easy; Concept; AACSB Category 3: Analytical thinking]

True-False Questions

1. Today’s transportation manager can play an active role in blending the appropriate pricing and service packages for his/her organization.

[LO: Material at the beginning of the chapter; Moderate; Application; AACSB Category 3: Analytical thinking]

1. Routing refers to the buying and controlling of transportation services by a shipper or consignee.

[LO: Material at the beginning of the chapter; Moderate; Concept; AACSB Category 3: Analytical thinking]

1. Freight transportation accounts for approximately 10 percent of U.S. gross domestic product.

[LO: Material at the beginning of the chapter; Moderate; Application; AACSB Category 3: Analytical thinking]

1. A rate is the logistics term that signifies the price charged for freight transportation.

[LO 13.1: To discuss how rates are determined; Easy; Concept; AACSB Category 3: Analytical thinking]

1. A transportation charge (the cost of transportation) can be calculated by multiplying a product’s weight times the applicable rate.

[LO 13.1: To discuss how rates are determined; Easy; Application; AACSB Category 3: Analytical thinking]

1. A commodity rate is very good for dealing with demand-specific situations.

[LO 13.1: To discuss how rates are determined; Moderate; Application; AACSB Category 3: Analytical thinking]

1. The class rate system simplifies with respect to three primary factors—density, product, and distance.

[LO 13.1: To discuss how rates are determined; Moderate; Application; AACSB Category 3: Analytical thinking]

1. The National Motor Freight Classification (NMFC) has 20 separate classes, or ratings, from class 50 to class 600.

[LO 13.1: To discuss how rates are determined; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

1. Ease or difficulty of handling is one of the four factors used to determine a product’s freight classification.

[LO 13.1: To discuss how rates are determined; Moderate; Application; AACSB Category 3: Analytical thinking]

1. Liability to damage and theft is viewed as the primary factor in setting a product’s freight classification.

[LO 13.1: To discuss how rates are determined; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

1. Volume refers to how heavy a product is in relation to its size.

[LO 13.1: To discuss how rates are determined; Moderate; Concept; AACSB Category 3: Analytical thinking]

1. Stowability refers to how easy a commodity is to pack into a load.

[LO 13.1: To discuss how rates are determined; Moderate; Concept; AACSB Category 3: Analytical thinking]

1. An item with a freight classification of class 200 will be charged a higher rate than an item with a freight classification of class 100.

[LO 13.1: To discuss how rates are determined; Moderate; Application; AACSB Category 3: Analytical thinking]

1. With respect to a commodity’s freight classification, shippers tend to prefer a higher classification number whereas carriers tend to prefer a lower classification number.

[LO 13.1: To discuss how rates are determined; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. With respect to class rates, longer distance shipments are more expensive than shorter distance shipments, and the difference in costs is proportional to the increase in distance.

[LO 13.1: To discuss how rates are determined; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

1. The price and service trade-offs available to today’s transportation manager are limited only by his/her creativity and ingenuity.

[LO 13.1: To discuss how rates are determined; Moderate; Application; AACSB Category 3: Analytical thinking]

1. With FOB origin pricing, the seller retains title and control of the shipment until it is delivered.

[LO 13.1: To discuss how rates are determined; Moderate; Application; AACSB Category 3: Analytical thinking]

1. A disadvantage of FOB destination pricing from a seller’s perspective is that the seller’s organization must have a thorough knowledge of transportation management.

[LO 13.1: To discuss how rates are determined; Moderate; Application; AACSB Category 3: Analytical thinking]

1. Because transportation costs tend to be lower per unit of weight for larger shipments, there is a natural motivation to consolidate smaller shipments into larger ones.

[LO 13.1: To discuss how rates are determined; Easy; Application; AACSB Category 3: Analytical thinking]

1. The carrier selection procedure appears to be less straightforward than the procedure for modal selection.

[LO 13.2: To learn about modal and carrier selection; Moderate; Application; AACSB Category 3: Analytical thinking]

1. Transit time reliability is the most important factor that shippers tend to use when selecting carriers.

[LO 13.2: To learn about modal and carrier selection; Difficult; Synthesis; AACSB Category 3: Analytical thinking]

1. An amodal shipper refers to the use of a logistics intermediary to make the relevant transportation decisions.

[LO 13.2: To learn about modal and carrier selection; Moderate; Concept; AACSB Category 3: Analytical thinking]

1. Transportation documentation serves both a practical function (e.g., what, where, and how much is being transported) as well as potentially providing legal recourse if something goes awry.

[LO 13.3: To distinguish among various transportation documents; Moderate; Application; AACSB Category 3: Analytical thinking]

1. The most important single transportation document is the bill of lading.

[LO 13.3: To distinguish among various transportation documents; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. An order bill of lading specifies the consignee.

[LO 13.3: To distinguish among various transportation documents; Moderate; Application; AACSB Category 3: Analytical thinking]

1. Order bills of lading can be used when faced with slow-paying customers.

[LO 13.3: To distinguish among various transportation documents; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. The bill of lading is an invoice, submitted by the carrier, requesting to be paid.

[LO 13.3: To distinguish among various transportation documents; Moderate; Concept; AACSB Category 3: Analytical thinking]

1. Freight bill audits are designed to detect errors that result in overcharges and to correct those errors in the future.

[LO 13.3: To distinguish among various transportation documents; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. A freight claim must be filed within six months of the shipment’s delivery date.

[LO 13.3: To distinguish among various transportation documents; Moderate; Application; AACSB Category 3: Analytical thinking]

1. Suppose that a shipment of products destined for a particular retailer is lost or damaged. If these products were going into general inventory replacement stock, then the retailer would be entitled to recover the wholesale price plus any freight costs already paid.

[LO 13.3: To distinguish among various transportation documents; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. Concealed loss and damage claims are some of the most difficult for shippers and carriers to handle.

[LO 13.3: To distinguish among various transportation documents; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. The volume of transportation freight claims has increased in recent years.

[LO 13.3: To distinguish among various transportation documents; Moderate; Application; AACSB Category 3: Analytical thinking]

1. Small shipments refer to those that can be handled relatively expeditiously and inexpensively by a small package carrier.

[LO 13.4: To illustrate select activities associated with making and receiving small shipments; Moderate; Concept; AACSB Category 3: Analytical thinking]

1. From a carrier perspective, there may be a reluctance to accept small shipments because they tend to require a high degree of manual labor.

[LO 13.4: To illustrate select activities associated with making and receiving small shipments; Moderate; Application; AACSB Category 3: Analytical thinking]

1. Demurrage is a penalty payment associated with railroads whereas detention is a penalty payment associated with motor carriers.

[LO 13.4: To illustrate select activities associated with making and receiving small shipments; Moderate; Concept; AACSB Category 3: Analytical thinking]

1. In demurrage-related averaging agreements, slow equipment returns can be offset by fast equipment returns.

[LO 13.4: To illustrate select activities associated with making and receiving small shipments; Moderate; Application; AACSB Category 3: Analytical thinking]

1. A routing guide can provide a variety of shipment-related information such as shipment preparation and a list of preferred carriers for shipments moving between two points.

[LO 13.4: To illustrate select activities associated with making and receiving small shipments; Moderate; Application; AACSB Category 3: Analytical thinking]

1. Expediting refers to determining a shipment’s location during the course of its move.

[LO 13.4: To illustrate select activities associated with making and receiving small shipments; Moderate; Concept; AACSB Category 3: Analytical thinking]

1. Expedited shipments by motor carriage can sometimes provide faster and more reliable service than expedited shipping involving air transportation.

[LO 13.4: To illustrate select activities associated with making and receiving small shipments; Moderate; Synthesis; AACSB Category 3: Analytical thinking]

1. Some transportation managers utilize performance scorecards that contain a list of relevant attributes and an evaluation of each carrier on every attribute.

[LO 13.4: To illustrate select activities associated with making and receiving small shipments; Moderate; Application; AACSB Category 3: Analytical thinking]