scm 4301 test 2

What are the three components to an Effective Transportation System?

1. Greater competition (opportunities to serve distant markets)
2. Economies of Scale (decoupling of markets & production sites)
3. Reduced Prices (inexpensive transportation, intense competition)

What are some challenges in transportation?

1. Supply chain complexity
2. Competing goals among SC partners
3. Changing customer requirements
4. Limited info available
5. Synchronizing transportation with other SC activities
6. Capacity and rising rates
7. Gov regulation

What are characteristics of Performance regarding service in transportation?

1. Average transit time
2. Average transit time variability
3. Loss and Damage

What are the characteristics of Price regarding service in transportation?

1. Line-haul
2. Terminal/Local
3. Accessorial or Special charges

What are the costs associated with Trucks as a mode of transportation?

1. Low fixed cost
2. High Variable Cost

What are the costs associated with Rail as a mode of transportation?

1. High fixed cost
2. Low Variable Cost

What are the costs associated with Air as a mode of transportation?

1. High variable costs
2. Low fixed costs

What are the costs associated with Water as a mode of transportation?

1. High terminal costs
2. Low line-haul costs

What are the costs associated with Pipeline as a mode of transportation?

1. High fixed cost
2. Low variable costs

Performance overview of all modes? (I.e. advantages/disadvantages of each mode)

Air - fast over long distance
Water - very slow, moderately reliable
Truck - moderately fast and reliable
Rail - slow and less reliable than truck

What is FOB origin pricing?

The buyer absorbs the freight costs from the shipping point ("free on board").

What is FOB destination?

Seller pays freight charges, title of goods passes at delivery.

What are the 5 decision factors of Modal transportation selection?

1. Accessibility (advantage: trucks. disadvantage: air, rail, water)

2. Transit time (advantage: air & truck. disadvantage: rail, water, pipeline)

3. Reliability (advantage: air, truck. disadvantage: water & rail)

4. Product safety (advantage: truck & air. disadvantage: rail & water)

5. Cost (advantage varies, truck & air most expensive)

What are the characteristics of a bill of lading?

1. Originates the shipment
2. provides all carrier information
3. stipulates contract terms, including carrier liability for loss
4. acts as a receipt for the goods
5. in some cases, shows title of goods

What are the characteristics of the freight bill?

Carrier's invoice for carrier chargers that list: shipment, origin and destination, consignee, items, weight, charges)

What are the 3 characteristics of volume-related rates?

1. Minimum or any quantity charge for low volume or small shipments.

2. Less-than-vehicle load for shipment larger than minimum quantity

3. High volumes or full vehicle loads

What are the 4 characteristics of distance-related rates?

1. Uniform rates
2. Proportional rates
3. Tapering rates
4. Blanket rates

What are demand-related rates?

Rates based on demand of goods forecasted for shipment.

What are transport prices based on regarding line-haul rates?

By product, shipment size, by route, and other charges.

What are transport prices based on regarding special service charges?

Special-line haul services as well as terminal services.

What are the objectives for vehicle routing?

1. Reduce costs
2. Improve customer service
3. Both reducing costs & improving customer service

What are three MAIN principles of good routing and scheduling?

1. Load trucks with stops that are in close proximity to each other

2. Stops on different days should be arranged to produce tight clusters

3. The sequence of stops on a truck pattern should form a teardrop pattern

What are characteristics of good routing and scheduling?

1. Build routes w/ first stop farthest stop from depot.

2. use largest vehicles first

3. pickups should be mixed w/ delivery routes

4. narrow stop time window restrictions should be avoided. (i.e UPS guarantees delivery from 4-6pm)

What is the Savings Method Observation?

Points that offer the greatest savings are FARTHEST from the depot and CLOSEST to each other

What are the four characteristics of Transport Service Selection?

1. Variety of Service Characteristics (i.e. cost, speed, dependability)

2. Basic cost-trade offs (i.e channel inventories vs. speed & dependability)

3. Competitive Considerations (i.e. transportation provides competitive advantage)

4. Apprasial of selection methods (direct & indirect costs)

What is freight consolidation?

Combining small shipments into larger ones

What are the four types of freight consolidation?

1. Inventory consolidation (hold inventory until full load)

2. Vehicle consolidation (combining routes)

3. Warehouse consolidation (cross-docking)

4. Temporal consolidation (customers kept waiting until shipments are combined)

Who are the top three U.S. trading partners from highest to lowest?

1. Canada
2. China
3. Mexico

What are the 5 cohesive strategies to be successful in the global market place?

1. Product development
2. Technology
3. Marketing
4. Manufacturing
5. Supply chains

What are key characteristics in global markets and strategy?

1. standardization reduces complexity
2. global competition reduces the product life cycle
3. traditional organizational structures and models frequently change
4. globalization introduces volatility

How much money is passed through U.S. ports every year?

Over $2 trillion.

$18 billion in taxes.

Which country's ports dominate international rankings?

Chinese POE

In the U.S., what are the top three POE by tonnage ranked from highest to lowest?

1. Port of S. Louisiana
2. Houston
3. LA, long beach

In the U.S., what are the top two POE by no. of containers ranked from highest to lowest?

1. LA, long beach
2. New york

What are the two challenges along POE?

1. Capacity
2. Security

What are the 5 types of global intermediaries?

1. Freight forwarders (typical surface/ocean forwarders, consolidate small shipments)

2. Non-vessel-operating Common carriers (NVOCC - consolidates & dispense containers)

3. Export Management Companies (agents for domestic firms, obtain orders, etc.)

4. Export Trading Companies (export goods overseas)

5. Customs House Brokers (typically US-mexico border transactions, oversee movements of goods through customs, power of attorney from shipper,)

What are the four types of storage and handling on POE?

1. Transit sheds (temporary storage)

2. Hold on dock storage (carrier provides storage on dock until next departure)

3. Public warehouses (available storage, fees similar to domestic shipments)

4. Bonded warehouses (operate under custom agency's supervision repack, sort, clean merchandise without paying import duties)

What is a Free trade zone?

Sometimes known as export processing zones, manufacturing does not have to take place for trading privileges to be gained.

What 5 benefits do Free Trade Zones offer?

1. Duty deferral and elimination
2. Lower tariff rates
3. Lower tariff incidence
4. Exchange rate hedging
5. Tax brakes by host nations

What is NAFTA and what principles is it based off of?

Agreement b/t Canada, US, Mexico.

1. Unimpeded flow of goods
2. Most favored nation status, low duties
3. Commitment to enhance cross border movement

TRUCKING RESTRICTIONS STILL REMAIN especially b/t US AND MEXICO

What sort of challenges are faced in cross border traffic?

1. Capacity
2. Truck movement
3. Security
4. Lack of integration

What is a maquiladora and how many factories does the U.S. operate in Mexico?

Foreign-owned manufacturing plant in Mexico, U.S operates more than 2,000 facilities.

What are the new directions and challenges associated with manufacturing plants?

1. Locating factories in countries that consume the products

2. Focused production (plant typically produces one or two products, typically located in different countries)

What is AIDC (automatic identification & data capture) and what are the 3 keys to it?

Data collection by means other than manually via keyboard.

1. Cost management
2. Productivity enhancement
3. Improved customer service

What are the two applications of AIDC?

1. Help keep track of things (parts products, inventory, items and documents

2. Helps keep track of people (time & attendance, access control)

What sort of metrics are used for data quality with AIDC?

1. Accuracy
2. Timeliness
3. Effectiveness
4. Reliability

What are the human factors associated with AIDC?

1. Humans are slow
2. Humans are prone to errors
3. Higher probability of human error when data increases
4. Low skilled labor for data entry

What are the advantages and disadvantages to barcoding?

1. Advantages include: inexpensive, widely used, open system standards

2. Disadvantages include: symbol must be visible, static data, symbol might be separated from the product

What is RFID and where can it be used?

Radio Frequency Identification - used in environents where barcoding can't be used. Data is encoded in a chip and put in a tag.

What companies and associations are pushing for RFID in supply chain?

1. Push from channel captains (wal-mart requiring suppliers to use RFID at pallet)

2. Department of Defense

3. Healthcare Distribution Management

What are the benefits of RFID?

1. No line of sight required
2. Read multiple tags at the same time
3. Reduced shrinkage
4. Real time info on tags
5. Withstand dirty/harsh environments
6. Fast, reliable, more accurate, but expensive

What are the challenges associated with RFID?

1. Expensive
2. Lack of standards and interoperability
3. Cost of implementation
4. Global issues
5. RF transmission distance
6. Tag/reader sensitivity
7. Privacy concerns

What are Smart Cards and what are the two basic kinds? What applications are they used in?

Standard plastic card w/ computer onboard.

1. Intelligent (contains CPU, stores data, makes decisions)

2. Memory only (stores data)

Used in medical records, intelligent access, passports, E-cash

What are the advantages and disadvantages associated w/ Smart cards?

1. Advantages: off-line database, read/write capability, decision-making capabilities

2. Disadvantages (expensive, low volume, standards in development)

What are Voice Data Entry systems? What sort of applications are they used in?

Converts human speech into coded signals.

Used in Warehousing and other SC applications such as manufacturing and package/mail sorting.

What are the advantages and disadvantages associated w/ Voice Data Entry systems?

1. Advantages: Hands-free, no mark needed, portable and light-weight, real time entry

2. Disadvantages (system training, subject to external noise, relative cost)

Transport Variable cost

Vary with service or volume
e.g.: fuel, labor, handling, pickup, etc.

Transport fixed cost

Constant, not dependent on service or volume
e.g.: terminal facilities, transport equipment, carrier administration

Class Rates

Function of distance between origin and destination, and other factors.

rail and truck

piggyback (Trailer on Flat car (TOFC))

Truck & Water

fishyback

Truck & Air

birdyback

grid technique

This method determines the ton-mile center, or center of mass, and is similar in concept to the Weighted Center of Gravity Method.

Grid method advantages

•Relatively simple
•Can provide a starting point for location analysis

Grid method limitations

•Static approach—solution optimal for only one point in time
•Assumes linear transportation rates; actual transportation rates increase with distance, but less than proportionally
•Does not consider topographic and other geographic conditions

Major factors considered in location decisions:

· Labor climate
· Transportation services and infrastructure
· Proximity to markets and customers
· Quality of life
· Taxes and industrial development incentives
· Supplier networks
· Land costs and utilities
Company preference

Sweep Method

Extend a straight line from the depot and rotate in clockwise/counterclockwise direction (either direction) until it intersects a stop. Ask the question: if I include this stop will I violate the constraints (capacity, travel time, time window)

Savings Method

The points that offer the greatest savings when combined on the same route are those that are furthest from the depot and closest to each other.

Savings" is better than "Sweep" method—has lower average error

Shortest Path Method

•The Shortest Path Method determines the best path from origin to destination over a network of possible routes.

Have two sets, visited (solved) and unvisited (unsolved) nodes

Find the closest unsolved node to a solved node.

Calculate the cost to the unsolved node by adding the accumulated cost to the solved node to the cost from the solved node to the unsolved node.

Select the unsolved node with the minimum time as the new solved node. Identify the link.

When the destination node is solved, the computations are done. The solution is found by backtracking through the connections made.