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APIC CLTD 202 4 NEW EXAM UPDATE SOLUTION
cross-docking - The concept of packing products on the incoming shipments so they can easily sorted at intermediate warehouses or for outgoing shipments based on final destination. The items are carried from the incoming vehicle docking point to the outgoing vehicle docking point without being stored in inventory at the warehouse. distribution center (DC) - Typically a finished goods warehouse designed for demand- driven rapid distribution to retailers (retail distribution centers), wholesalers, or direct shipments to customers (order fulfillment centers). pick-to-voice system - A method of performing order-picking activities in a warehouse or distribution center using verbal commands. pick-to-light - A pick system that uses software to light up displays at each pick location and determines how much needs to be picked. The picker uses this as their requirement to pull for that particular order to set of orders. warehouse automation - The utilization of mechanical or electronic devices to complete tasks related to storing, retrieving and moving inventory as a substitute for labor resources. picker-to-part system - A materials handling approach for order picking, where the picker goes to where the product is located (e.g., forklift, order picking trucks, etc.). outsourcing - The process of having suppliers provide goods and services that were previously provided internally. warehousing - The activities related to receiving, storing, and shipping materials to and from production or distribution locations. software-as-a-service (SaaS) - A software licensing and distribution model that provides access to applications via the internet on a subscription basis. stock keeping unit (SKU) - In a distribution system, an item at a particular geographic location. For example, one product stocked at the plant and at six different distribution centers would represent seven SKUs. Which option for storage location provides the most benefits for picking crews? - xFixed- location Random-location What should a prospective purchaser be particularly aware of when inspecting an existing warehouse for use as a cross-docking facility? (Check all that apply.) - Adequate maneuvering space for anticipated warehouse traffic
Location of docks What is the key distinction between FEFO and FIFO methods of inventory control in warehouses? - FEFO is more sensitive to lot distinctions in the same SKU. What is the purpose of a dock leveler? - Allowing loading equipment to drive into cargo area What is a correct feature of cross-docking warehouses? - They are equipped to store product with special characteristics. xThey may store little inventory. The receiving and shipping docks may be combined for more rapid transit. They are laid out with very narrow aisles. Jib crane - Lifts vertically and swings in an arch horizontally. Boom conveyor - Capable of extending into cargo area facilitate loading/unloading Narrow aisle turret - Lifts load and cab vertically and loads in both directions. Reach truck - counterbalanced to extend into a pallet rack. AGV -. Equipped with storage platform and guided by sensors What is the best definition of cube utilization? - Percentage of available storage space used for that purpose What is the best way to describe the relationship between a business's corporate strategy and its warehouse strategy? - The warehouse strategy deploys assets to support the corporate strategy and goals. A cross-docking warehouse uses contractor drivers for outbound shipments. What is the best strategy for using the driver during the loading process? - Direct the driver to a lounge or waiting area. helps align supply and demand by locating seasonal stock near its markets. - spot stocking What is the characteristic role of warehousing in a production or assembly facility? - - store finished product
- coordinate means of delivery with warehouse equipment.
- ensure security of pallets.
- use clear and easy-to-read labels.
- use labels that can be scanned into the warehouse management system.
- catch shipment errors befor shipments areeive. What is an accurate statement about the picking process? - in a distribution center, it can reflect the largest share of the labor budget. batch - multiple orders are picked at the same time. wave - orders are combined and released at the same time. Zone - one or more orders are picked in only one area before proceeding to another area. Discrete order - An entire order is picked, from first to last line. What would be considered a value-added warehouse service? - - storing valuable goods in a secure and monitored area.
- providing customer visibility of goods in transit. what are four basic principles of warehouse layout design discussed in the text? - - use space efficiently
- use labor and equipment efficiently.
- protect investments and resources.
- design in availability and flexibility. A warehouse planning team is estimating required space for the warehouse loading/unloading areas. They know the number of loads received every day and ho long it takes to clear a load from the area. They also know the length of a shift. What else do they need to know to estimate space requirements? - - size of a typical load in pallets
- distance between inbound and outbound areas True or false? There are offsetting costs to space added by narrowing warehouse aisles. - True What are at least three examples of waste in warehouses and warehouse processes? -
- correcting errors in labeling or put-away
- poor layout for storage and picking crews that increases travel time.
- using paper tools(instead of electronic tools).
- space taken up by dead stock.
- wasteful storage designs. What are tree ways in which warehouse management has responded to the challenge of ensuring worker health and safety? - - training to avoid repetitive stress injuries and common warehouse injuries.
- analysis and redesign of warehouse processes to improve safety.
- monitoring of warehouse environment for hazarded.
- auditing for compliance with safety requirements. What typical functions does a warehouse management system perform? - - applying advanced shipping notices to managing inbound resources.
- monitoring warehouse inventory.
- issuing required shipping documents. A yard management system can be seen as software that links the warehouse What are three example of a goods-to-picker system? - - Carousels
- mini loads
- pallets to pickers.
- shelves to pickers
- dynamic pick faces. What is the total warehouse capacity if it is 1,000 feet long, 1,500 feet wide and is 22 feet high? Please round to nearest whole number. - 1,000 x 1500 x 22 = 33,000, cubic feet. Due to fire code, sprinkler, and HVAC duct restrictions, the top 2 feet of the warehouse is not useable. What is the actual capacity? Please round to nearest whole number. - 1000 x 1500 x 20 = 30,000,000 cubic feet. As a warehouse manager, you were just informed that you have acquired some new customers and will need to re-evaluate your warehouse space needs due to the increase in volume. How much space will you need in your receiving area, based on the new data you received below?
- Warehouse receives 50 shipments a day.
- Typical inbound shipment holds 30 48"x 40" pallets on a 52' trailer.
- Each shipment takes 1 hour to clear the receiving area.
- Length of shift is 8 hours. - ((50 x 1)/8)x(30 x (48 x 40) = 360,000 Square inches. As a warehouse manager, you were just informed that you have acquired some new customers and will need to re-evaluate your warehouse space needs due to the management system and the. - TMS
What is the best definition of decoupling? - Aligning inventory supply to the needs of different stages of production What is a key characteristic of inventory management for a business operating on lean manufacturing principles? - Small and frequent replenishment of inventory 0 rings are carried in inventory because they are specified in the manufacturing of faucet cartridges. What type of demand does this illustrate? - Dependent demand 4 - 28 A lawn mower manufacturer lists its revenue at US$2.2 billion, its net costs at US$1. billion, and its net inventory at US$275 million. What is its inventory turn? - 5. 4 - 52 Inventory turns = COGS/Average inventory What are the components of average inventory? - Cycle stock and safety stock A manufacturer has determined that 8,000 parts are needed during a 20 day production cycle. It takes 5 days to receive parts. What is the inventory order point? Answer: 8000/20 x 5 = 2000 4 - 30 The manufacturer described in question 24 decides to maintain safety stock at 1, parts. What is the inventory order point now? - 3200 4 - 31 Order Point = (D) x (L) + (SS) 2000 + 1200 = 3200 A new inventory manager reviews levels of buffer stock throughout the production process and cuts inventory quantities at several points. What concern may be driving this interest? - Inefficient risk management practices 4 - 13 What statement about inventory carrying costs is true? - It includes the cost of interest paid on money borrowed to buy goods. 4 - 19 Why is the ABC principle applied to inventory management? - To assign a degree of inventory control based on value A business decides to increase its inventory holding costs to take advantage of a volume discount offered for certain items. What does this situation describe? - Using economies of scale 4 - 15 What situation would be most favorable for a vendor-managed approach to inventory control? - The customer has provided clear terms for order points and quantities. 4 - 44
In its definition of the term "inventory," the dictionary mentions three basic uses for inventory stock. What are they? - - support production
- support activities (e.g., maintenance and repair)
- provide customer service 4 - 4 In a bicycle manufacturing facility, completed frames are placed in inventory. As orders are filled, the frames will be retrieved, and braking and gear-shifting systems and other features will be added. What type of inventory do the bicycle frames represent? - Work in process (WIP) 4 - 4 Which statement correctly describes the effect of inventory on the return on assets(ROA) ratio if income remains the same? - A higher investment in inventory will decrease the ROA. 4 - 6 List the four basic functions that inventory serves in a business? - - serve demand
- smooth impact of fluctuations in supply and demand
- buffer against uncertainty
- create cost-savings opportunities 4 - 9 is the amount of an item that is ordered as a standard quantity to support production needs? - cycling stock 4 - 10 Last year a manufacturer of outdoor grills had to limit production when a new supplier suspended operations for a month. Learning that a similar suspension is planned again, the manufacturer's inventory manager increases the amount of orders beyond what is needed to meet the current production schedule. What is this type of inventory called? - Anticipation inventory 4 - 11 What is the correct term for a quantity of stock held in inventory to protect fluctuation in supply and demand. - safety stock 4 - 14 A transportation company sees an upward trend in diesel prices and contracts for twice as much fuel as it usually purchases for the coming period. What does this illustrate? - Hedge inventory 4- 15 List three basic inventory costs. - - Acquisition
- carrying
- stockout List at least three examples of costs created by inventory stockout. - - lost revenue
- erosion in customer relationship
C=Unit cost A = 1000, S=$50, I = .25 and C = $12 per case, the result is 182.6 rounded up to 183 p. 4 - 40 kitting - The process of constructing and staging kits. dekitting - The removal of accessories or parts kits from a product and returning the kit to the store or main product without the kit to the store. overstock - A supply or quantity of inventory in excess of demand or requirements. buffer - A quantity of materials awaiting further processing. It can refer to raw materials, semifinished stores or hold points, or a work backlog that is purposely maintained behind a work center. safety stock - In general, a quantity of stock planned to be in inventory to protect against fluctuations in demand or supply. ABC classification - A classification of items usually in groups of 10%, 20%, and 70% by sales dollars, volume, or other atribute that helps analyist better group and understand data. anticipation inventories - Additional inventories above basic pipeline stock to cover projected trends of increasing sales, planned sales promotion programs, seasonal fluctuations, plant shutdowns, and vacations. inventory accuracy - When the on-hand quantity is within an allowed tolerance of the recorded balance. This important metric usually is measured as the percent of items with inventory levels that fall within tolerance. economic order quantity (EOQ) - A type of fixed order quantity model that determines the amount of an item to be purchased or manufactured at one time. The intent is to minimize the combined costs of acquiring and carrying inventory. ordering cost - The costs that increase as the number of orders placed increases. It includes costs related to the clerical work of preparing, releasing, monitoring, and receiving orders, the physical handling of goods, inspections, and setup costs, as applicable. hedge inventory - A form of inventory buildup to buffer against some event that may not happen and usually involves speculation related to potential labor strikes, price increases, unsettled governments, and events that could severely impair a company's strategic initiatives.
just in time (JIT) - A philosophy of manufacturing based on planned elimination of all waste and on continuous improvement of productivity. The primary element is to have only the required inventory when needed. decoupling - Creating independence between supply and use of material. Commonly denotes providing inventory between operations so that fluctuations in the production rate of the supplying operation do not constrain production or use rates of the next operation. What is the EOQ for the following item? The item has an annual volume of 15,000 units. Ordering costs are $75 and carrying costs are 18%. Each unit costs $28.00. Please round up or down to nearest whole number. - The correct answer is SQRT[[2 X 15, X $75] / [.18 X $28]] = 668 units. What is the EOQ for the following item? The item has an annual volume of 15,000 units. Ordering costs are $75 and carrying costs are 18%. Each unit costs $28.00. Please round up or down to nearest whole number. The correct answer is SQRT[[2 X 15,000 X $75] / [.18 X $28]] = 668 units. Due to changes in the market, you supplier just increased the cost of the item you were buying. The new cost is $35 each. What is the new EOQ? Please round up or down to nearest whole number. - The correct answer is SQRT[[2 X 15,000 X $75] / [.18 X $35]] = 598 units. DIO (days' inventory outstanding) is one of the three important parts of measuring the Cash-to-Cash cycle time. For your best-selling item you have 1,200 units on hand with an annual sales volume of 20,000 units. If we assume that there are 365 days in the year, what is the DIO for this item? Please round up or down to nearest whole number. - The correct answer is 1,200 / [ 20,000 / 365 ] = 22 DIO. DIO (days' inventory outstanding) is one of the three important parts of measuring the Cash-to-Cash cycle time. For your best-selling item you have 1,200 units on hand with an annual sales volume of 20,000 units. If we assume that there are 365 days in the year, what is the DIO for this item? Please round up or down to nearest whole number. What are your inventory turns on this item? Please round up or down to nearest whole number. - The correct answer is 365 / 22 = 17 Turns. Your manager likes the high inventory turns on this part; however, she is more concerned about the inventory turns for the entire organization. If your annual COGS is $20,000,000 with an average inventory value of $2,500,000, what are the inventory turns for your organization? Please round up or down to nearest whole number. - The correct answer is $20,000,000 / $2,500,000 = 8 Turns.
Which freight classification is defined as an individual shipment that is too small to be shipped as a full container? - LCL 5- 37 How might shipper association members manage inventory volumes? - Order small quantities frequently. 5 - 31 What is the earliest point at which packaging might start to be added? - While the product is WIP inventory,, Which of the following is one of the three main principles of transportation? - Economy of Scale 5- 4 A salesperson wants to sell kits of full aquariums with fish by shipping all the fish together in plastic vessel filled with water and the aquarium on the side. What should the logistics person say? - Bags with just a little water will make the process more cost- effective. 4 - 172 A product is sturdy, and its consumer packaging is sturdy. How sturdy should the master carton be? - It can be less sturdy 4 - 174 what type of technology can provide information on the location of container in transit? - Active RFID tags 4- 184 Which is the most reliable method of capturing data on incoming products? - RFID readers for items on a conveyor belt 4 - 186 A master carton is 40 x 40 x 40 centimeters. What would be the best carton size for smaller goods of the options provided? - 40 x 20 x 20 4 - 186 Which of the following is also defined as a satellite or end-of-the-line terminal? - pickup and delivery (PUD) terminal 5 - 12 T or F? Major operation decisions for fleet operators focus on potential savings, typically in the ares of equipment, leasing, organization, controlling, and regulations. - True 5 - 18 What is a method of storage used when there is a space shortage problem at a receiver's warehouse? - in-transit storage 5 - 23 What is considered and external supplier who performs part of or all logistics functions that are not performed by and in-house logistics department? - 3PL 5 - 24 What is a for-profit business that takes small shipments from a variety of customers and combines them into one bulk shipment for transport? - freight forwarder 5 - 28
Children's juice bottles occupy 980 cubic inches and ship in a box that measures 12" wide x 12" long x 10" high. What is the carton efficiency? Round to the nearest .XX position. - The correct answer is 980 / [12 x 12 x 10] = 68%. Children's juice bottles occupy 980 cubic inches and ship in a box that measures 12" wide x 12" long x 10" high. What is the carton efficiency? Round to the nearest .XX position. The correct answer is 980 / [12 x 12 x 10] = 68%. The packaging engineers realized this was an expensive way to handle and ship these products. They went through a 5S event to change the packaging of the juice boxes. The new packaging will be juice boxes that measure 4" wide x 4" long x 5" high. This new design will fit 18 in a carton. What is the new carton efficiency? Round to the nearest .XX position. - The correct answer {[4 x 4 x 5 ] x 18} / 1440 = 100%. You operate a 3PL warehouse and have just determined all pallet configurations for a full truck load of outbound products making multiple stops. Per your contract with your supply chain partner, you have to determine transport costs for each stop using the fair share method by cube. Stop 1 contains only one pallet of goods. Including the pallet, it measures 48" wide x 40" long x 83" high. On this particular trailer, the maximum height is 96" high. What is the pallet load efficiency for this stop? Round to the nearest .XX position. - The correct answer is [48 x 40 x 83] / [48 x 40 x 96] = 86% Which of the following are elements of CSM? - 3 - 54 x Reputation, consistency, dependability, information Which of the following is typically the single greatest expense for logistics? - xTransportation-related costs 3 - 31 The greater the variability of the order cycle, the greater the amount of the buyer must have on hand - 3 - 34 Safety stock Which network is best for shipping products with unpredictable demand and high value?
- Manufacturer storage with drop ship 3 - 44 Procurement generates , from which are created, and then logistics uses those to create _ - 3 - 18 Purchase orders, work orders, shipping orders Procurement involves which of these activities? - 3 - 16 Inventory control Salvage operations
- product verification and inspection.
- shipment unloading.
- forwarding of urgently needed items to production. which of the following is a tool that logistics uses to manage shipments between points?
- 3 - 31 Routing guide which of the following is the term commonly used by logistics to describe any problem or issue that arises with a customer order? - 3 - 40 Exception customer service is - - the ability of a company to address needs, inquiries, and requests from customers.
- a measure of the delivery of a product to the customer at the time the customer specifies. 3 - 52 The goal of a CSM strategy is to provide a given service level while minimizing costs. - True 3- 60 What is the first step in the process of developing a CSM strategy? - 3 - 60 Analyze the current relationship with customers. According to Ross, the most effective customer service strategy is one that addresses which parties? - 3 - 63
- shareholders
- customers
- members of the supply chain
- employees What metric is closely tied to the customer service ratio? - 3 - 66 stock out frequency Pareto analysis - Principle in prioritizing or ranking a range of items to separate the vital few from the trivial many. order processing - The activity required to administratively process a customer's order and make it ready for shipment or production.
order management - The planning, directing, monitoring, and controlling of the processes related to customer orders, manufacturing orders, and purchase orders. customer relationship management (CRM) - A marketing philosophy based on putting the customer first. The collection and analysis of information designed for sales and marketing decision support (as contrasted to enterprise resources planning information) to understand and support existing and potential customer needs. advance ship notice (ASN) - An electronic data interchange (EDI) notification of shipment of product. order transmittal - The time interval between a customer placing an order to when the seller receives it. order cycle - The progression used by a company starting with receipt of a customer's order and ending with delivery to that customer. order delivery - The duration of time between when the transportation carrier picks up a shipment and when it is received by the customer. outbound logistics - Every process that is involved in the shipping and holding of products after they are completed until they are received by the customer. routing guide - A shipping tool used to manage logistics activities for shipments between two points. It contains mode and carrier information, freight rates and service requirements. order picking - Selecting or "picking" the required quantity of specific products for movement to a packaging area and documenting that the material was moved from one location to shipping. freight claim - A formal legal claim filed by the transportation buyer that the carrier failed to protect the freight properly, seeking monetary compensation for damaged freight, delayed or incorrect deliveries, overcharges, or other service failures. customer service ratio - In a make-to-order company, it is usually some comparison of the number of jobs or dollars shipped in a given time period (e.g., a week) compared with the number of jobs or dollars that were supposed to be shipped in that time period. customer service management (CSM) - A process that enables a business to offer post- purchase service and information to the customer. cycle time - In materials management, it refers to the length of time from when material enters a production facility until it exits.
modes of transportation - A basic method of moving items including road, rail, air, water, pipeline, intermodal, and courier or parcel services. customs trade partnership against terrorism (C-TPAT) - A joint government-business endeavor for imports (not exports) to increase the security of supply chains and U.S. borders. rail gauge - The spacing of the width of the rails on a railway track, measured between the inner sides of the rails. This can vary between countries and cause compatibility issues. short-sea shipping - A form of water transportation that does not cross an ocean, but instead utilizes coastal and inland waterways to move shipments from maritime ports to their destination. twenty-foot equivalent unit (TEU) - A measurement used to describe the carrying capacity of a cargo ship or a terminal's handing capacity. One TEU equals a standard 20ft x 8ft x 8ft (length x width x height) shipping container. line haul - The portion of a transportation journey that moves between two transportation terminals. It is distinguished from and excludes the pickup and delivery portions of a journey used to acquire or distribute LTL freight. non-vessel-operating common carrier (NVOCC) - A consolidator of ocean freight shipments that operates similarly to a freight forwarder and issues its own bills of lading, thus acting as a carrier even though it does not own the means of transportation being used. The FAST program is an initiative of which organization? - U.S. Customs and Border Protection 5 - 53 What is the importance of knowing rail gauge? - Transport through adjacent countries may require a mode switch. VLCC refers to what? - 5 - 110 Particular carrier's size and cargo Which transport mode is most restricted in terms of cargo variety? - Pipeline 5 - 126 The operating ratio describes how much operating revenue is spent on operating expenses. - 5 - 55 true Which of the following is not likely cargo on a barge? - 5 - 111 Containerized furniture
"In bond" is a U.S. Customs designation that identifies carriers who have passed customs inspections. - 5 - 45 False Regional carriers often provide which of the following services? (Choose two.) - Deliveries to local businesses Deliveries to destinations within 500 miles 5 - 148 Truck transport is second to rail in terms of weight shipped and miles traveled per year.
- False 5 - 45 Which of the following pairs is not a likely intermodal combination? - 5 - 137 Rail-pipeline freight bill - A freight carrier's invoice for a shipment. cube rate - A freight rate calculated on cargo volume rather than weight. commodity rate - A rate to ship a specific commodity between a specific origin- destination pairing. expedite - To rush or chase production or purchase orders that are needed in less than the normal lead time. bill of lading (master) (B/L) - A bill of lading that is issued by a carrier who are vessel owners, also known as a steamship company. detention - Carrier charges and fees applied when truck trailers are retained beyond a specified loading or unloading time. demurrage - The carrier charges and fees applied when rail freight cars and ships are retained beyond a specified loading or unloading time. freight settlement - A document that compares the freight order invoice as received to the invoice as expected and authorizes payment if the documents are consistent. exception management - The practice of responding only to issues or events that fall outside a predetermined threshold. Managers are prompted to respond to these critical matters first.
