Supply Chain Management, 5e (Chopra/Meindl)
Chapter 4 Designing Distribution Networks and Applications to e-Business
4.1 True/False Questions
1) Distribution occurs between every pair of stages in the supply chain.
Answer: TRUE
Diff: 2
Topic: 4.1 The Role of Distribution in the Supply Chain
Learning Outcome: Compare common approaches to supply chain design
2) Companies in the same industry often select very different distribution networks, because the
choice of the distribution network can be used to achieve a variety of supply chain objectives
ranging from low cost to high responsiveness.
Answer: TRUE
Diff: 2
Topic: 4.1 The Role of Distribution in the Supply Chain
Learning Outcome: Compare common approaches to supply chain design
3) Companies in the same industry should always select similar distribution networks, because
their objectives will be similar.
Answer: FALSE
Diff: 2
Topic: 4.1 The Role of Distribution in the Supply Chain
4) A customer does not necessarily want the highest level of performance along all dimensions of
customer service, including response time, product variety, product availability, customer
experience, order visibility, and returnability.
Answer: TRUE
Diff: 1
Topic: 4.2 Factors Influencing Distribution Network Design
Learning Outcome: Compare common approaches to supply chain design
5) Outbound transportation costs per unit tend to be lower than inbound costs, because inbound
lot sizes are typically larger.
Answer: FALSE
Diff: 1
Topic: 4.2 Factors Influencing Distribution Network Design
Learning Outcome: Compare common approaches to supply chain design
4-1
, 6) Transportation costs are high with drop-shipping because the average outbound distance to the
end consumer is large and package carriers are used to shipping the product.
Answer: TRUE
Diff: 1
Topic: 4.2 Factors Influencing Distribution Network Design
7) The main advantage of in-transit merge over drop-shipping is the somewhat lower
transportation cost and improved customer experience.
Answer: TRUE
Diff: 2
Topic: 4.3 Design Options for a Distribution Network
Learning Outcome: Compare common approaches to supply chain design
8) The main advantage of a distribution network with local storage is that it can lower the
delivery cost and provide a faster response than other networks.
Answer: TRUE
Diff: 2
Topic: 4.3 Design Options for a Distribution Network
Learning Outcome: Compare common approaches to supply chain design
9) The main advantage of a distribution network with local storage is that it can lower the
inventory and facility costs.
Answer: FALSE
Diff: 2
Topic: 4.3 Design Options for a Distribution Network
10) The major disadvantage of a distribution network with local storage is the increased
inventory and facility costs.
Answer: TRUE
Diff: 1
Topic: 4.3 Design Options for a Distribution Network
Learning Outcome: Compare common approaches to supply chain design
11) A distribution network designer needs to consider product characteristics as well as network
requirements when deciding on the appropriate delivery network.
Answer: TRUE
Diff: 3
Topic: 4.3 Design Options for a Distribution Network
Learning Outcome: Compare common approaches to supply chain design
4-2
Chapter 4 Designing Distribution Networks and Applications to e-Business
4.1 True/False Questions
1) Distribution occurs between every pair of stages in the supply chain.
Answer: TRUE
Diff: 2
Topic: 4.1 The Role of Distribution in the Supply Chain
Learning Outcome: Compare common approaches to supply chain design
2) Companies in the same industry often select very different distribution networks, because the
choice of the distribution network can be used to achieve a variety of supply chain objectives
ranging from low cost to high responsiveness.
Answer: TRUE
Diff: 2
Topic: 4.1 The Role of Distribution in the Supply Chain
Learning Outcome: Compare common approaches to supply chain design
3) Companies in the same industry should always select similar distribution networks, because
their objectives will be similar.
Answer: FALSE
Diff: 2
Topic: 4.1 The Role of Distribution in the Supply Chain
4) A customer does not necessarily want the highest level of performance along all dimensions of
customer service, including response time, product variety, product availability, customer
experience, order visibility, and returnability.
Answer: TRUE
Diff: 1
Topic: 4.2 Factors Influencing Distribution Network Design
Learning Outcome: Compare common approaches to supply chain design
5) Outbound transportation costs per unit tend to be lower than inbound costs, because inbound
lot sizes are typically larger.
Answer: FALSE
Diff: 1
Topic: 4.2 Factors Influencing Distribution Network Design
Learning Outcome: Compare common approaches to supply chain design
4-1
, 6) Transportation costs are high with drop-shipping because the average outbound distance to the
end consumer is large and package carriers are used to shipping the product.
Answer: TRUE
Diff: 1
Topic: 4.2 Factors Influencing Distribution Network Design
7) The main advantage of in-transit merge over drop-shipping is the somewhat lower
transportation cost and improved customer experience.
Answer: TRUE
Diff: 2
Topic: 4.3 Design Options for a Distribution Network
Learning Outcome: Compare common approaches to supply chain design
8) The main advantage of a distribution network with local storage is that it can lower the
delivery cost and provide a faster response than other networks.
Answer: TRUE
Diff: 2
Topic: 4.3 Design Options for a Distribution Network
Learning Outcome: Compare common approaches to supply chain design
9) The main advantage of a distribution network with local storage is that it can lower the
inventory and facility costs.
Answer: FALSE
Diff: 2
Topic: 4.3 Design Options for a Distribution Network
10) The major disadvantage of a distribution network with local storage is the increased
inventory and facility costs.
Answer: TRUE
Diff: 1
Topic: 4.3 Design Options for a Distribution Network
Learning Outcome: Compare common approaches to supply chain design
11) A distribution network designer needs to consider product characteristics as well as network
requirements when deciding on the appropriate delivery network.
Answer: TRUE
Diff: 3
Topic: 4.3 Design Options for a Distribution Network
Learning Outcome: Compare common approaches to supply chain design
4-2
