What is the primary function of a distribution network in a supply chain?
a) To manufacture products
b) To manage financial transactions
c) To deliver products from manufacturers to end customers
d) To design new products Answer: c) To deliver products from manufacturers to end customers
Which of the following is NOT typically a component of a distribution network?
a) Warehouses
b) Transportation vehicles
c) Marketing departments
d) Distribution centers Answer: c) Marketing departments
What does a “Direct Distribution Network” involve?
a) Products are delivered directly from the manufacturer to the customer without intermediaries
b) Products are sold through multiple intermediaries before reaching the customer
c) Products are delivered through third-party logistics providers only
d) Products are stored in multiple distribution centers before reaching the customer Answer: a) Products are delivered directly from the manufacturer to the customer without intermediaries
Which strategy involves multiple distribution centers to improve service levels and reduce transportation costs?
a) Centralized Distribution
b) Decentralized Distribution
c) Direct Distribution
d) Cross-Docking Answer: b) Decentralized Distribution
What is the primary benefit of a “Hub-and-Spoke” distribution network?
a) Increasing the number of distribution centers
b) Centralizing inventory and consolidating shipments to reduce costs
c) Expanding the product line
d) Enhancing product design Answer: b) Centralizing inventory and consolidating shipments to reduce costs
Which of the following best describes “Cross-Docking”?
a) Receiving products from suppliers and immediately shipping them out to customers with minimal storage
b) Storing products in a warehouse for long periods
c) Combining multiple shipments into a single shipment
d) Managing inventory through real-time tracking Answer: a) Receiving products from suppliers and immediately shipping them out to customers with minimal storage
What does “Inventory Buffer” in a distribution network refer to?
a) Extra inventory held to account for demand fluctuations and supply chain uncertainties
b) The cost of holding inventory in a warehouse
c) The time taken to transport goods from suppliers to customers
d) The process of consolidating shipments Answer: a) Extra inventory held to account for demand fluctuations and supply chain uncertainties
Which distribution network design focuses on reducing lead times and improving customer service by locating distribution centers closer to customers?
a) Centralized Distribution
b) Decentralized Distribution
c) Direct Distribution
d) Cross-Docking Answer: b) Decentralized Distribution
What is a major advantage of a “Centralized Distribution” network?
a) Improved customer service by having multiple local warehouses
b) Reduced inventory holding costs and streamlined operations due to fewer distribution centers
c) Increased transportation costs due to longer delivery distances
d) Enhanced flexibility in managing local demand variations Answer: b) Reduced inventory holding costs and streamlined operations due to fewer distribution centers
What is the role of “Third-Party Logistics (3PL)” providers in a distribution network?
a) To manufacture products
b) To handle logistics and distribution functions on behalf of other companies
c) To manage marketing and sales activities
d) To design new products Answer: b) To handle logistics and distribution functions on behalf of other companies
Which term describes a distribution network where inventory is distributed through various intermediaries before reaching the end customer?
a) Direct Distribution
b) Indirect Distribution
c) Centralized Distribution
d) Decentralized Distribution Answer: b) Indirect Distribution
What is the primary advantage of using a “Vendor-Managed Inventory (VMI)” system in a distribution network?
a) Increased lead times for inventory replenishment
b) Reduced inventory levels and improved stock availability through supplier management
c) Higher warehousing costs due to increased inventory holding
d) More frequent transportation delays Answer: b) Reduced inventory levels and improved stock availability through supplier management
Which type of distribution network is characterized by having multiple levels of intermediaries between the manufacturer and the end customer?
a) Direct Distribution
b) Indirect Distribution
c) Centralized Distribution
d) Cross-Docking Answer: b) Indirect Distribution
What does “Reverse Logistics” in a distribution network involve?
a) The process of managing returns and recycling of products from customers back to the manufacturer
b) The process of delivering products from the manufacturer to the customer
c) The process of increasing warehouse space
d) The process of reducing inventory holding costs Answer: a) The process of managing returns and recycling of products from customers back to the manufacturer
Which distribution network design strategy aims to balance service levels and cost efficiency by strategically locating distribution centers?
a) Centralized Distribution
b) Decentralized Distribution
c) Direct Distribution
d) Hub-and-Spoke Answer: d) Hub-and-Spoke
What is the key benefit of “Drop Shipping” in a distribution network?
a) Reduced inventory holding costs by shipping directly from the supplier to the customer
b) Increased warehouse space
c) Improved manufacturing efficiency
d) Enhanced product design Answer: a) Reduced inventory holding costs by shipping directly from the supplier to the customer
Which factor is critical in determining the number and location of distribution centers in a network?
a) The total number of suppliers
b) Customer demand patterns and geographic distribution
c) The number of production facilities
d) The number of products offered Answer: b) Customer demand patterns and geographic distribution
What does “Last-Mile Delivery” refer to in a distribution network?
a) The final leg of the delivery process from the distribution center to the end customer
b) The initial transportation of goods from the supplier to the distribution center
c) The storage of goods in a warehouse
d) The consolidation of shipments at the hub Answer: a) The final leg of the delivery process from the distribution center to the end customer
What is the main objective of “Distribution Network Optimization”?
a) To increase the number of distribution centers
b) To enhance the efficiency and effectiveness of the distribution network by reducing costs and improving service levels
c) To expand the product range
d) To improve the manufacturing process Answer: b) To enhance the efficiency and effectiveness of the distribution network by reducing costs and improving service levels
Which distribution network design is best suited for a company with a wide geographical customer base and high demand variability?
a) Centralized Distribution
b) Decentralized Distribution
c) Direct Distribution
d) Hub-and-Spoke Answer: b) Decentralized Distribution