Logistics Challenge 2000

About the Challenge A ‘College Bowl’ type competition between universities Tonight’s questions are from last year’s 12th Annual Pittsburgh CLM Roundtable College Challenge In 1998, UNT had the highest finish of any first time team. In 1999, UNT won the national championship. Kathryn Cunningham (pursuing UNT MBA) Chris Jarrard (webTransport) Rex Fryhover (Nokia) Dustin Storey (CH Robinson)

Challenge Costs The Pittsburgh CLM Roundtable pays for the room and board expenses of all competing teams and their faculty advisor Competing teams are responsible for their own travel expenses: In the last two years the UNT teams have been sponsored by the Texas Logistics Education Foundation (TLEF)

Rules and Procedures The competition involves preliminary qualifying rounds. Teams with the top score from each qualifying round (plus the highest 2nd score) compete in the Final Championship Round. Tonight’s college teams: DeVry UNT UTA

Preliminary Round One 10 questions

1st Five Questions: 5 points Response Time: 10 seconds

Round 1 - Question 1 An order bill of lading differs from a straight bill of lading in that: a. an order bill is a freight bill while the straight bill is not b. an order bill is negotiable while the straight bill is not c. the straight bill is negotiable while an order bill is not d. there is no difference between the two

Round 1 - Question 1 An order bill of lading differs from a straight bill of lading in that: a. an order bill is a freight bill while the straight bill is not b. an order bill is negotiable while the straight bill is not c. the straight bill is negotiable while an order bill is not d. there is no difference between the two

In transportation value of service pricing: Round 1 - Question 2 In transportation value of service pricing: considers the supply side of the transport pricing function considers the value of products to be irrelevant with respect to transport pricing considers the ability of the product to withstand transportation charges determines the lower limit of freight rates none of the above

In transportation value of service pricing: Round 1 - Question 2 In transportation value of service pricing: considers the supply side of the transport pricing function considers the value of products to be irrelevant with respect to transport pricing considers the ability of the product to withstand transportation charges determines the lower limit of freight rates none of the above

Round 1 - Question 3 What is the time called that it takes for a customer to receive an order once it has been placed? customer interval product cycle time interval order cycle

Round 1 - Question 3 What is the time called that it takes for a customer to receive an order once it has been placed? customer interval product cycle time interval order cycle

Round 1 - Question 4 If a railroad carries more freight which increases its revenues by, say 10%, but its costs increase by only 5%, what effect will this have on its “operating ratio?” decrease it increase it have no effect

Round 1 - Question 4 If a railroad carries more freight which increases its revenues by, say 10%, but its costs increase by only 5%, what effect will this have on its “operating ratio?” decrease it increase it have no effect

Which best describes the aggregate demand for freight transportation? Round 1 - Question 5 Which best describes the aggregate demand for freight transportation? decreasing inelastic elastic insensitive none of the above

Which best describes the aggregate demand for freight transportation? Round 1 - Question 5 Which best describes the aggregate demand for freight transportation? decreasing inelastic elastic insensitive none of the above

2nd Five Questions: 10 points Response Time: 15 seconds

Round 1 - Question 6 Each of the following factors have significantly altered the face of transportation except: deregulation just-in-time inventory systems fuel price increases the globalization of business

Round 1 - Question 6 Each of the following factors have significantly altered the face of transportation except: deregulation just-in-time inventory systems fuel price increases the globalization of business

Round 1 - Question 7 Which of the following factors tends to drive firms toward centralizing their logistics functions? closer to customer cost control local decision making empower the workforce

Round 1 - Question 7 Which of the following factors tends to drive firms toward centralizing their logistics functions? closer to customer cost control local decision making empower the workforce

With “F.O.B. Origin” terms: Round 1 - Question 8 With “F.O.B. Origin” terms: the shipper is responsible for freight costs the carrier is responsible for freight costs the freight costs are dependent on the carrier’s F.O.B. estimate the consignee is responsible for freight costs

With “F.O.B. Origin” terms: Round 1 - Question 8 With “F.O.B. Origin” terms: the shipper is responsible for freight costs the carrier is responsible for freight costs the freight costs are dependent on the carrier’s F.O.B. estimate the consignee is responsible for freight costs

Contribution pricing theory requires: Round 1 - Question 9 Contribution pricing theory requires: rates must cover fixed costs, variable costs, and planned profit rates must cover fixed costs, variable costs, and marginal profit rates must cover only fixed and variable costs rates must cover variable costs

Contribution pricing theory requires: Round 1 - Question 9 Contribution pricing theory requires: rates must cover fixed costs, variable costs, and planned profit rates must cover fixed costs, variable costs, and marginal profit rates must cover only fixed and variable costs rates must cover variable costs

What is the effect of tapering rates on facility location? Round 1 - Question 10 What is the effect of tapering rates on facility location? pulls the location towards the source or market pushes the facility towards the source of the raw material there is no effect makes the optimum location at the midpoint between the raw material sources and the marketplace

What is the effect of tapering rates on facility location? Round 1 - Question 10 What is the effect of tapering rates on facility location? pulls the location towards the source or market pushes the facility towards the source of the raw material there is no effect makes the optimum location at the midpoint between the raw material sources and the marketplace

Round One Tiebreaker (if required)

Tie 1 - Question 1 Which mode of transportation has the highest proportion of fixed costs? pipeline railroad water motor carrier

Tie 1 - Question 1 Which mode of transportation has the highest proportion of fixed costs? pipeline railroad water motor carrier

Which of the following statements is true? Tie 1 - Question 2 Which of the following statements is true? the biggest problem with screening is that only a sample of items are inspected in batch the average manufacturing firm spends three times more on compensation than on purchases the key document in the movement of goods is the bill of materials a rate that does not vary based on distance is called a blanket rate all of the above are false

Which of the following statements is true? Tie 1 - Question 2 Which of the following statements is true? the biggest problem with screening is that only a sample of items are inspected in batch the average manufacturing firm spends three times more on compensation than on purchases the key document in the movement of goods is the bill of materials a rate that does not vary based on distance is called a blanket rate all of the above are false

Tie 1 - Question 3 The blending of product availability, order cycle time, distribution system flexibility, distribution system information, distribution system malfunction, and post sale product support for customers is known as: the marketing mix the customer service mix the logistics mix the promotion mix

Tie 1 - Question 3 The blending of product availability, order cycle time, distribution system flexibility, distribution system information, distribution system malfunction, and post sale product support for customers is known as: the marketing mix the customer service mix the logistics mix the promotion mix

The Staggers Act of 1980 was important to railroads because it: Tie 1 - Question 4 The Staggers Act of 1980 was important to railroads because it: set up AMTRAK set up Conrail changed merger regulations provided for rail deregulation

The Staggers Act of 1980 was important to railroads because it: Tie 1 - Question 4 The Staggers Act of 1980 was important to railroads because it: set up AMTRAK set up Conrail changed merger regulations provided for rail deregulation

Which transportation mode employs Tie 1 - Question 5 Which transportation mode employs “batching pigs”? air motor pipeline rail water

Which transportation mode employs Tie 1 - Question 5 Which transportation mode employs “batching pigs”? air motor pipeline rail water

Preliminary Round Two 10 Questions

1st Five Questions: 5 points Response Time: 10 seconds

Round 2 - Question 1 The distance factor involving the location of nodes, or fixed points in the logistics system is referred to as: spatial relationship temporal intensity density ruler variance

Round 2 - Question 1 The distance factor involving the location of nodes, or fixed points in the logistics system is referred to as: spatial relationship temporal intensity density ruler variance

Round 2 - Question 2 Selection of air freight transportation, over a motor carrier, even if the choice increases transportation costs, might be justified if: the reputation of the company is improved through the use of higher priced transportation the customer receives the order before the ordered delivery date total logistics costs are lowered transit time is not a factor

Round 2 - Question 2 Selection of air freight transportation, over a motor carrier, even if the choice increases transportation costs, might be justified if: the reputation of the company is improved through the use of higher priced transportation the customer receives the order before the ordered delivery date total logistics costs are lowered transit time is not a factor

What medium is used to move coal in slurry lines? Round 2 - Question 3 What medium is used to move coal in slurry lines? compressed air gas water vacuum none of the above

What medium is used to move coal in slurry lines? Round 2 - Question 3 What medium is used to move coal in slurry lines? compressed air gas water vacuum none of the above

Round 2 - Question 4 Determining where to locate a plant or warehouse involves consideration of the following factor: community services level of local union activity zoning laws location of existing and potential customers all of the above

Round 2 - Question 4 Determining where to locate a plant or warehouse involves consideration of the following factor: community services level of local union activity zoning laws location of existing and potential customers all of the above

As of May of 1999, ocean transport was deregulated. This allowed: Round 2 - Question 5 As of May of 1999, ocean transport was deregulated. This allowed: carriers to price their offerings without the need to publish rates confidential “all trade” service contracts between carriers and shippers a. and b. above none of the above

As of May of 1999, ocean transport was deregulated. This allowed: Round 2 - Question 5 As of May of 1999, ocean transport was deregulated. This allowed: carriers to price their offerings without the need to publish rates confidential “all trade” service contracts between carriers and shippers a. and b. above none of the above

2nd Five Questions: 10 points Response Time: 15 seconds

Round 2 - Question 6 If demand increases by 10% and the value of each unit increases by 10%, what will happen to the EOQ? (Assume that everything else remains the same). the EOQ will increase by 10% the EOQ will increase by 20% the EOQ will decrease by 10% the EOQ will decrease by 20% the EOQ will remain the same

Round 2 - Question 6 If demand increases by 10% and the value of each unit increases by 10%, what will happen to the EOQ? (Assume that everything else remains the same). the EOQ will increase by 10% the EOQ will increase by 20% the EOQ will decrease by 10% the EOQ will decrease by 20% the EOQ will remain the same

Round 2 - Question 7 Which of the following strategies are mass merchant retailers generally pursuing: more “FOB Delivered” terms more “FOB Origin” terms putting less emphasis on terms and more emphasis on first time cost making freight cost the supplier’s problem

Round 2 - Question 7 Which of the following strategies are mass merchant retailers generally pursuing: more “FOB Delivered” terms more “FOB Origin” terms putting less emphasis on terms and more emphasis on first time cost making freight cost the supplier’s problem

As the number of warehouses used by a company increases: Round 2 - Question 8 As the number of warehouses used by a company increases: transport costs will decrease; inventory cost and cost of lost sales will increase transport costs and cost of lost sales will increase; inventory costs will decrease transport costs and inventory cost will decrease; cost of lost sales will increase transport costs and cost of lost sales will decrease; inventory costs will increase none of the above

As the number of warehouses used by a company increases: Round 2 - Question 8 As the number of warehouses used by a company increases: transport costs will decrease; inventory cost and cost of lost sales will increase transport costs and cost of lost sales will increase; inventory costs will decrease transport costs and inventory cost will decrease; cost of lost sales will increase transport costs and cost of lost sales will decrease; inventory costs will increase none of the above

What is the average inventory in the following situation? Round 2 - Question 9 What is the average inventory in the following situation? order size = 100 units 1 demand during lead time equals 50 units the desired level of protection from stockouts is 97.57 (2) 150 units 200 units 100 units 250 units 75 units

What is the average inventory in the following situation? Round 2 - Question 9 What is the average inventory in the following situation? order size = 100 units 1 demand during lead time equals 50 units the desired level of protection from stockouts is 97.57 (2) 150 units 200 units 100 units 250 units 75 units

Giving or sending a purchase order to a supplier: Round 2 - Question 10 Giving or sending a purchase order to a supplier: results in a contract when the acknowledgment copy is returned by the supplier to the purchaser results in a contract only when the supplier ships the material creates a contract must be done in at least two copies to be legal none of the above

Giving or sending a purchase order to a supplier: Round 2 - Question 10 Giving or sending a purchase order to a supplier: results in a contract when the acknowledgment copy is returned by the supplier to the purchaser results in a contract only when the supplier ships the material creates a contract must be done in at least two copies to be legal none of the above

Round Two Tiebreaker (if required)

Which of the following is correct regarding value of service pricing? Tie 2 - Question 1 Which of the following is correct regarding value of service pricing? the model is used to determine the lower limit of freight rates the model considers the supply side of the transportation function the value of the product is considered to be irrelevant in the determination of the freight rate the model considers the ability of the commodity to bear a charge

Which of the following is correct regarding value of service pricing? Tie 2 - Question 1 Which of the following is correct regarding value of service pricing? the model is used to determine the lower limit of freight rates the model considers the supply side of the transportation function the value of the product is considered to be irrelevant in the determination of the freight rate the model considers the ability of the commodity to bear a charge

Tie 2 - Question 2 ________ are inflatable and their purpose is to hold cargo securely in place in order to reduce L & D claims: damage bags dunnage bags PEB bags Los Angeles specials

Tie 2 - Question 2 ________ are inflatable and their purpose is to hold cargo securely in place in order to reduce L & D claims: damage bags dunnage bags PEB bags Los Angeles specials

Tie 2 - Question 3 One task performed by public relations staff at public transportation agencies consist of: increasing or obtaining public support for further financing needs managing the transition to increased privatization addressing social consideration in the area of the environment all of the above

Tie 2 - Question 3 One task performed by public relations staff at public transportation agencies consist of: increasing or obtaining public support for further financing needs managing the transition to increased privatization addressing social consideration in the area of the environment all of the above

Tie 2 - Question 4 Which of the following terms refers to using a combination of air transport and water to deliver goods? fishyback birdyback piggyback camelback hunchback

Tie 2 - Question 4 Which of the following terms refers to using a combination of air transport and water to deliver goods? fishyback birdyback piggyback camelback hunchback

Tie 2 - Question 5 Which type of warehouse is used when a company wishes to store goods that will be used as collateral? bonded financial field private

Tie 2 - Question 5 Which type of warehouse is used when a company wishes to store goods that will be used as collateral? bonded financial field private

Final Round 15 Questions

Rules and Procedures Teams competing in the Final Championship Round will start with 0 points The team with the highest points at the end of the Final Championship Round is declared the winner The winning team in Pittsburgh is asked to designate one student who will be the paid guest of the Pittsburgh Roundtable at the next Annual CLM Conference in New Orleans.

1st Five Questions: 5 points Response Time: 10 seconds

An “evergreen contract” refers to one that __________. Final Round - Question 1 An “evergreen contract” refers to one that __________. is worth a lot of money is environmentally friendly has no end date involves cross-border transactions

An “evergreen contract” refers to one that __________. Final Round - Question 1 An “evergreen contract” refers to one that __________. is worth a lot of money is environmentally friendly has no end date involves cross-border transactions

Final Round - Question 2 Pittsburgh Office Supply (POS) stocks out of a certain item 20% of the time and has determined that 20% of these stock outs result in backorders, 30% result in lost sales, and 50% result in lost customers. POS has determined that backorder at $100. Its annual sales of this particular product is $10,000,000. What is the expected cost of a stockout? $2,000,000 $1,300 $580 $310 $116

Final Round - Question 2 Pittsburgh Office Supply (POS) stocks out of a certain item 20% of the time and has determined that 20% of these stock outs result in backorders, 30% result in lost sales, and 50% result in lost customers. POS has determined that backorder at $100. Its annual sales of this particular product is $10,000,000. What is the expected cost of a stockout? $2,000,000 $1,300 $580 $310 $116

All are principal reasons for holding materials inventory, except: Final Round - Question 3 All are principal reasons for holding materials inventory, except: purchase economies speculative investments in raw materials transportation economies improvements in customer service

All are principal reasons for holding materials inventory, except: Final Round - Question 3 All are principal reasons for holding materials inventory, except: purchase economies speculative investments in raw materials transportation economies improvements in customer service

Final Round - Question 4 Your road atlas falls on the floor and opens to page14. The map indicates the intersection of Federal Interstates I-15 and I-94. The corner of the page which normally indicates the state or providence associated with this map has been chewed off by your dieting roommate. If you were standing at the intersection of these Federal Interstates, which region of the United States would you be in? Northeastern Southeastern Northwestern Southwestern

Final Round - Question 4 Your road atlas falls on the floor and opens to page14. The map indicates the intersection of Federal Interstates I-15 and I-94. The corner of the page which normally indicates the state or providence associated with this map has been chewed off by your dieting roommate. If you were standing at the intersection of these Federal Interstates, which region of the United States would you be in? Northeastern Southeastern Northwestern Southwestern

Final Round - Question 5 The single greatest impetus toward the advancement of intermodalism was: the introduction of containers on US domestic ocean liners regulatory reform in the railroad industry immediately after the World War the ILWU’s (union) demands for increased pay and shorter work weeks none of the above

Final Round - Question 5 The single greatest impetus toward the advancement of intermodalism was: the introduction of containers on US domestic ocean liners regulatory reform in the railroad industry immediately after the World War the ILWU’s (union) demands for increased pay and shorter work weeks none of the above

2nd Five Questions: 10 points Response Time: 15 seconds

Vendor-managed (VMI) is a concept where: Final Round - Question 6 Vendor-managed (VMI) is a concept where: suppliers replenish a retail distribution center with their product without the retailers placing an order retailers handle their own inventory management suppliers replenish a retail distribution center with their product when the retailers tells them to do so vendors hold inventory and ship directly to each stores

Vendor-managed (VMI) is a concept where: Final Round - Question 6 Vendor-managed (VMI) is a concept where: suppliers replenish a retail distribution center with their product without the retailers placing an order retailers handle their own inventory management suppliers replenish a retail distribution center with their product when the retailers tells them to do so vendors hold inventory and ship directly to each stores

The Federal Aviation Authorization Act of 1994: Final Round - Question 7 The Federal Aviation Authorization Act of 1994: completed the deregulation of interstate trucking completed the deregulation of interstate air freight preempted that states from regulating intrastate trucking preempted the states from regulating intrastate air freight

The Federal Aviation Authorization Act of 1994: Final Round - Question 7 The Federal Aviation Authorization Act of 1994: completed the deregulation of interstate trucking completed the deregulation of interstate air freight preempted that states from regulating intrastate trucking preempted the states from regulating intrastate air freight

Final Round - Question 8 We can compare the cost of shipping at a higher volume than the actual weight to realize a lower rate and lower shipping cost of shipping at the actual weight by determining the weight break. The weight break formula is? LV rate * WB = HV rate * MW WB * LV rate = MW * HV rate WB * HV rate = LV rate * MW HV rate * LV rate = WB * MW

Final Round - Question 8 We can compare the cost of shipping at a higher volume than the actual weight to realize a lower rate and lower shipping cost of shipping at the actual weight by determining the weight break. The weight break formula is? LV rate * WB = HV rate * MW WB * LV rate = MW * HV rate WB * HV rate = LV rate * MW HV rate * LV rate = WB * MW

Average cycle stock inventory equals: Final Round - Question 9 Average cycle stock inventory equals: half the order quantity the square root of the order quantity the order quantity time the turns the order quantity level

Average cycle stock inventory equals: Final Round - Question 9 Average cycle stock inventory equals: half the order quantity the square root of the order quantity the order quantity time the turns the order quantity level

Flags of convenience are used: Final Round - Question 10 Flags of convenience are used: to promote the U.S. flag merchant marine to avoid registering in nations with stringent standards to help the U.S. shipbuilding industry none of the above

Flags of convenience are used: Final Round - Question 10 Flags of convenience are used: to promote the U.S. flag merchant marine to avoid registering in nations with stringent standards to help the U.S. shipbuilding industry none of the above

3rd Five Questions: 15 points Response Time: 20 seconds

Final Round - Question 11 Which of the following is correct regarding the zone of reasonableness established for air carriers using the standard industry level as a basis? above 5-10 percent, below 50 percent above 15-20 percent, below 50 percent above 50 percent, below 5-10 percent above 50 percent, below 15-20 percent

Final Round - Question 11 Which of the following is correct regarding the zone of reasonableness established for air carriers using the standard industry level as a basis? above 5-10 percent, below 50 percent above 15-20 percent, below 50 percent above 50 percent, below 5-10 percent above 50 percent, below 15-20 percent

Private warehouses are generally advantageous when: Final Round - Question 12 Private warehouses are generally advantageous when: demand does not fluctuate greater control is necessary throughput is low and sporadic investment capital is scarce promotional items need to be stored (1) and (3) (1), (4), and (5) (1) and (2) (1), (2), and (4) (2) only

Private warehouses are generally advantageous when: Final Round - Question 12 Private warehouses are generally advantageous when: demand does not fluctuate greater control is necessary throughput is low and sporadic investment capital is scarce promotional items need to be stored (1) and (3) (1), (4), and (5) (1) and (2) (1), (2), and (4) (2) only

Which is the largest component of logistics cost in most industries? Final Round - Question 13 Which is the largest component of logistics cost in most industries? inventory costs transportation costs shipper-related costs administrative costs

Which is the largest component of logistics cost in most industries? Final Round - Question 13 Which is the largest component of logistics cost in most industries? inventory costs transportation costs shipper-related costs administrative costs

Final Round - Question 14 Which mode of freight transport accounts for the greatest percentage of inter city ton-miles: pipeline water carriers motor carriers railroads

Final Round - Question 14 Which mode of freight transport accounts for the greatest percentage of inter city ton-miles: pipeline water carriers motor carriers railroads

Which one of the following does not make up a global logistics system: Final Round - Question 15 Which one of the following does not make up a global logistics system: functional dimension transportation dimension sectorial dimension geographic dimension

Which one of the following does not make up a global logistics system: Final Round - Question 15 Which one of the following does not make up a global logistics system: functional dimension transportation dimension sectorial dimension geographic dimension

Final Round Tiebreaker (if required)

Final / Tie - Question 1 A firm has average inventory of $300,000. It orders twice per year. The cost of holding inventory is 15% per year. What is the annual inventory carrying cost? $50,000 $45,000 $90,000 $22,500

Final / Tie - Question 1 A firm has average inventory of $300,000. It orders twice per year. The cost of holding inventory is 15% per year. What is the annual inventory carrying cost? $50,000 $45,000 $90,000 $22,500

Final / Tie - Question 2 Which one of the following is an impossible description of raw material? ubiquitous and pure weight losing and ubiquitous pure and localized weight losing and pure none of the above

Final / Tie - Question 2 Which one of the following is an impossible description of raw material? ubiquitous and pure weight losing and ubiquitous pure and localized weight losing and pure none of the above

Final / Tie - Question 3 When prices are set using the value of service pricing model, the lower limit of price can be no lower than the variable cost to provide the service. What is the upper limit of the price? fixed plus variable costs an allowance established for fixed costs what the service is worth to the shipper fixed cost minus profits

Final / Tie - Question 3 When prices are set using the value of service pricing model, the lower limit of price can be no lower than the variable cost to provide the service. What is the upper limit of the price? fixed plus variable costs an allowance established for fixed costs what the service is worth to the shipper fixed cost minus profits

“Phantom” freight refers to: Final / Tie - Question 4 “Phantom” freight refers to: late shipments shipments accepted by non-certified carriers “cut-rate” contract carriers paying more for freight than the actual shipment

“Phantom” freight refers to: Final / Tie - Question 4 “Phantom” freight refers to: late shipments shipments accepted by non-certified carriers “cut-rate” contract carriers paying more for freight than the actual shipment

Final / Tie - Question 5 Please read the following statements: Statement I Most logistics budgets are static. Statement II Most logistics costs are dynamic. both statements are true the first statement is true, the second is false the first statement is false, the second statement is true both statements are false

Final / Tie - Question 5 Please read the following statements: Statement I Most logistics budgets are static. Statement II Most logistics costs are dynamic. both statements are true the first statement is true, the second is false the first statement is false, the second statement is true both statements are false