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Logistics and Distribution Flashcards

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  1. A company ships products from a central warehouse to regional distribution centers and then to retail stores. This network structure is best described as:

    Answer: Hub-and-spoke distribution

    A hub-and-spoke model routes freight through central hubs (distribution centers) before sending it to final destinations (retail stores).

  2. Which transportation mode offers the lowest cost per ton-mile for bulk commodities over long distances?

    Answer: Rail

    Rail transportation has one of the lowest cost-per-ton-mile rates, making it ideal for bulk commodities over long distances.

  3. A retailer requires vendors to deliver products already on hangers and price-tagged, ready for the sales floor. This practice is called:

    Answer: Floor-ready merchandise

    Floor-ready merchandise (FRM) means products arrive pre-ticketed, pre-hung, and ready for immediate placement on the sales floor.

  4. The 'last mile' in logistics refers to:

    Answer: The delivery of goods from a distribution center to the end customer

    Last-mile delivery covers the final leg of a supply chain—from a distribution hub to the end consumer's location—and is often the most expensive segment.

  5. Under which Incoterm does the seller bear the maximum responsibility, delivering goods to the buyer's named destination and covering all costs and risks?

    Answer: DDP (Delivered Duty Paid)

    DDP requires the seller to deliver the goods to the named destination, paying all duties, taxes, and bearing all risks until delivery.

  6. A logistics strategy in which a manufacturer ships directly to the end customer on behalf of a retailer, bypassing the retailer's warehouse, is called:

    Answer: Drop shipping

    Drop shipping allows retailers to sell products without holding inventory; the manufacturer or wholesaler ships directly to the customer.

  7. Which metric measures how efficiently a warehouse utilizes its available storage space?

    Answer: Cube utilization rate

    Cube utilization rate measures the percentage of usable warehouse cubic space that is actually occupied by inventory.