Test Bank Chapter 4: Organizational and Mangerial Issues in Logistics Multiple Choice Questions (Correct Answers Are Bolded)

TEST BANK
CHAPTER 4: ORGANIZATIONAL AND MANGERIAL ISSUES IN LOGISTICS
Multiple Choice Questions (correct answers are bolded)
1. ___________ and ___________ are the two basic organizational structures associated with
logistics.
a. Centralized; hierarchical
b. Fragmented; centralized
c. Fragmented; unified
d. Unified; hierarchical
[LO 4.1: To explain organizational structure for logistics; Moderate; Concept; AACSB Category
3: Analytical thinking]
2. In a ___________ logistics structure, logistics activities are managed in multiple departments

throughout an organization.
a. unified
b. fragmented
c. decentralized
d. matrix
3. One problem with a ___________ logistics structure is that because logistics activities are
scattered throughout a firm, they likely remain subservient to the objectives of the department in
which they are housed.
a. fragmented
b. matrix
c. decentralized
d. hierarchical
4. In a ___________ logistics structure, multiple logistics activities are combined into, and
managed as, a single department.
a. hierarchical
b. centralized
c. matrix
1
d. unified
5. A ___________ logistics organization implies that the corporation maintains a single logistics
department that administers the related activities for the entire company from the home office.
a. centralized
b. hierarchical
c. unified
d. command-and-control
6. A(n) ___________ logistics organization means that logistics-related decisions are made
separately at the divisional or product group level.
a. fragmented
b. decentralized
c. flexible
d. agile
7. A primary advantage of ___________ logistics is its relative efficiency, whereas a primary

advantage of ___________ logistics is its customer responsiveness.
a. unified; fragmented
b. unified; decentralized
c. centralized; decentralized
d. fragmented; centralized
[LO 4.1: To explain organizational structure for logistics; Difficult; Synthesis; AACSB Category
8. Which of the following is an advantage of a decentralized logistics organization?
a. It can be less expensive than a centralized organization.

b. There are good opportunities for freight consolidation.
c. There is better control over company data.
d. It can be responsive to customer service requirements.
2
9. Which of the following is an advantage of a centralized logistics organization?
a. It can be less expensive than a decentralized organization.

b. It has good opportunities for freight consolidation.
c. It can be responsive to customer service requirements.
d. It is easier to manage than a decentralized organization.
10. ___________ organizational design has its foundations in the command-and-control military
operation, where decision making and communication often follow a top-down flow.
a. Centralized
b. Unified
c. Matrix
d. Hierarchical
[LO 4.2: To compare traditional and contemporary organizational design for logistics; Moderate;
Concept; AACSB Category 3: Analytical thinking]
11. A ___________ organizational design attempts to create an organization that is responsive to

the parameters of the contemporary business environment.
a. matrix
b. network
c. decentralized
d. unified
12. A key attribute of network organizational design is a shift from ___________ to

___________.
a. function; process
b. centralization; decentralization
c. process; function
d. decentralization; centralization
Application; AACSB Category 3: Analytical thinking]
13. ___________ refers to satisfying current and emerging customer needs.
3
a. Responsiveness
b. Flexibility
c. Relevancy
d. Accommodation
14. ___________ can be defined as an organization’s ability to address unexpected operational

situations.
a. Relevancy
b. Flexibility
c. Accommodation
d. Responsiveness
15. ___________ refers to the amount of output divided by the amount of input.
a. Control
b. Monitoring
c. Productivity
d. Input–output analysis
[LO 4.3: To identify productivity issues and improvement efforts in logistics; Easy; Concept;
AACSB Category 3: Analytical thinking]
16. Productivity improvement efforts in logistics are often directed toward ___________.
a. reducing input while increasing output

b. increasing output by a greater percentage than inputs are increased
c. reducing input while holding output constant
d. increasing output while holding input constant
[LO 4.3: To identify productivity issues and improvement efforts in logistics; Moderate;
Synthesis; AACSB Category 3: Analytical thinking]
17. What is the most important purpose of warehouse work rules?
a. to control pilferage
b. to keep employees from engaging in unproductive and potentially destructive
activities
c. to protect companies from union grievance procedures
d. to give managers control over warehouse workers
4
[LO 4.3: To identify productivity issues and improvement efforts in logistics; Difficult;
18. What major retailer has been testing drones within its warehouses as a potential solution to
enhance productivity?
a. Amazon
b. Home Depot
c. Walmart
d. Target
19. A ___________ is a device used to monitor and control the actions taken by a driver and
his/her vehicle.
a. tachograph
b. tachometer
c. speedometer
d. regulator
20. ___________ refers to an organization making their unused resources available to other
organizations.
a. Sharing economy
b. Flexibility
c. Responsiveness
d. Excess capacity
21. ___________ is a set of generic standards used to document, implement, and demonstrate
quality management and assurance systems.
a. Benchmarking
b. Six Sigma
c. ISO 9000
d. ISO 14000
5
[LO 4.4: To discuss quality issues in logistics; Easy; Concept; AACSB Category 3: Analytical
thinking]
22. The quality concept that emphasizes the elimination of business errors is known as
___________.
a. the Lean approach

b. Six Sigma
c. benchmarking
d. zero tolerance
[LO 4.4: To discuss quality issues in logistics; Moderate; Concept; AACSB Category 3:
Analytical thinking]
23. ___________ refers to the integration of Six Sigma and the Lean approach.
a. ISO 9000
b. Quality management
c. Supply chain management
d. Lean Six Sigma
[LO 4.4: To discuss quality issues in logistics; Moderate; Concept; AACSB Category 3:
24. What is a key difference between IS0 9000 and the Malcolm Baldrige National Quality
Award?
a. Only the Baldrige Award focuses on quality.

b. The Baldrige Award is more externally focused than is ISO 9000.
c. ISO 9000 is more externally focused than the Baldrige Award.
d. ISO 9000 focuses more on lean practices than does the Baldrige Award.
[LO 4.4: To discuss quality issues in logistics; Difficult; Synthesis; AACSB Category 3:
25. The ___________ has been established to identify uncertainty sources that can affect the risk
exposure for logistics activities.
a. Perfect Order
b. Logistics Uncertainty Pyramid Model
c. Department of Homeland Security
d. Logistics Risk Factor
[LO 4.5: To report on programs designed to lessen the impact of terrorism on logistics systems;
Moderate; Concept; AACSB Category 3: Analytical thinking]
6
26. From a logistics perspective, two of most important government agencies incorporated into
the Department of Homeland Security (DHS) were the Transportation Security Administration
(TSA) and ___________.
a. Department of Transportation
b. Federal Maritime Commission
c. Surface Transportation Board
d. Customs and Border Protection (CBP)
Difficult; Application; AACSB Category 3: Analytical thinking]
27. The ___________ is responsible for the security of the U.S. transportation system.
a. Department of Commerce
b. Department of Transportation
c. Transportation Security Administration (TSA)
d. U.S. State Department
Moderate; Application; AACSB Category 3: Analytical thinking]
28. ___________ refers to a program where public and private organizations work together to
prevent terrorism against the United States.
a. Container Security Initiative (CSI)

b. Importer Security Filing (ISF) rule
c. Customs Trade Partnership Against Terrorism (C-TPAT)
d. Securing America’s Borders (SAB)
29. The Importer Security Filing (ISF) rule requires importers to file ___________ pieces of
information and carriers to file ___________ pieces of information.
a. 10; 2
b. 5; 5
c. 2; 10
d. 4; 8
30. Which of the following statements is false?
7
a. Pilferage refers to employee theft.
b. The time and costs associated with theft aren’t always covered by insurance.
c. Some organizations avoid locating their facilities in areas characterized by high crime
rates.
d. Theft refers to stolen merchandise worth more than $500.
[LO 4.6: To describe ways to manage theft and pilferage; Difficult; Synthesis; AACSB Category
31. The materials stolen in ___________ are usually for the employee’s own use.
a. theft
b. demurrage
c. non-monetary compensation
d. pilferage
[LO 4.6: To describe ways to manage theft and pilferage; Moderate; Concept; AACSB Category
32. What is the primary difference between pilferage and theft?
a. There is no difference between the two terms.

b. Pilferage involves a firm’s own employees, while theft involves efforts from
outsiders.
c. Theft refers to stolen merchandise worth more than $500.
d. Pilferage refers to stolen merchandise worth more than $500.
[LO 4.6: To describe ways to manage theft and pilferage; Difficult; Synthesis; AACSB Category
33. Approximately ___________ percent of all pirate attacks in recent years have involved
petroleum tankers.
a. 40
b. 30
c. 20
d. 10
[LO 4.6: To describe ways to manage theft and pilferage; Moderate; Application; AACSB
Category 3: Analytical thinking]
34 The concept of logistics social responsibility, or corporate social responsibility issues that
relate directly to logistics, did not emerge until which decade?
a. 1970s
b. 1980s
8
c. 1990s
d. 2000s
[LO 4.7: To review the concept of logistics social responsibility; Moderate; Application;
35. The two areas in logistics systems where most energy costs occur are ___________ and
___________.
a. warehousing; transportation
b. packaging; transportation
c. materials handling; packaging
d. warehousing; materials handling
[LO 4.7: To review the concept of logistics social responsibility; Moderate; Application; AACSB
36. With respect to the design of warehouses, one suggestion for energy savings is to make sure
that dock doors are not placed on the ___________ side of a building.
a. west
b. east
c. north
d. south
37. Transportation accounts for approximately ___________ of all petroleum consumption in the
United States.
a. three-quarters
b. two-thirds
c. one-half
d. one-third
38. Which of the following is not one of the three critical factors associated with the process of
managing returned goods?
a. why products are returned

b. whether returned goods should be managed internally or outsourced to a third party
c. how to optimize reverse logistics
d. how many products are returned
9
[LO 4.7: To review the concept of logistics social responsibility; Difficult; Synthesis; AACSB
39. ___________ complexity refers to the growing number nodes and the associated changes to
the links in the logistics system.
a. Process
b. Range
c. Network
d. System
[LO 4.8: To articulate logistics issues associated with complexity; Moderate; Concept; AACSB
40. ___________ complexity centers on the implications associated with the increasing number
of products that most companies continue to face in an effort to differentiate themselves with
their customers.
a. Process
b. Range
c. Network
d. System
True-False Questions
1. The organization of logistics activities within a firm depends on a number of factors,

including the number and location of customers and an organization’s size. (True)
[LO 4.1: To explain organizational structure for logistics; Moderate; Application; AACSB
2. In a decentralized logistics structure, logistics activities are managed in multiple departments

throughout an organization. (False)
[LO 4.1: To explain organizational structure for logistics; Easy; Concept; AACSB Category 3:
3. One problem with a fragmented logistics structure is that because logistics activities are
scattered throughout the firm, they likely remain subservient to the objectives of the
departments in which they are housed. (True)
10
[LO 4.1: To explain organizational structure for logistics; Moderate; Synthesis; AACSB
4. In a unified logistics structure, multiple logistics activities are combined into, and managed
as, a single department. (True)
5. A centralized logistics organization generally results in better customer responsiveness than a

decentralized logistics organization. (False)
[LO 4.1: To explain organizational structure for logistics; Moderate; Synthesis; AACSB
6. A decentralized logistics organization means that logistics-related decisions are made at the
divisional or product group level and often in different geographic areas. (True)
7. The majority of companies employ a chief logistics officer (CLO). (False)
[LO 4.1: To explain organizational structure for logistics; Moderate; Application; AACSB
8. A matrix organizational design can be very responsive to customer requirements. (True)
[LO 4.2: Organizational design for logistics; Moderate; Application; AACSB Category 3:
9. From a logistics perspective, a network organizational design in logistics is manifested in

terms of relevancy, responsiveness, and flexibility. (True)
[LO 4.2: Organizational design for logistics; Moderate; Synthesis; AACSB Category 3:
10. Responsiveness refers to satisfying current and emerging customer needs. (False)
[LO 4.2: Organizational design for logistics; Easy; Concept; AACSB Category 3: Analytical
thinking]
11. The postponement of product assembly and labeling until exact customer requirements are
known is an example of responsiveness. (False)
11
[LO 4.2: Organizational design for logistics; Moderate; Application; AACSB Category 3:
12. Productivity efforts in logistics are often directed at increasing the amount of output while
holding input constant. (True)
[LO 4.3 To identify productivity issues and improvement efforts in logistics; Moderate;
13. Union work rules are often very specific in the sense that job descriptions spell out the
responsibilities associated with a particular job. (True)
[LO 4.3 To identify productivity issues and improvement efforts in logistics; Easy; Application;
14. Walmart has begun testing drones within its warehouses as a potential solution to enhance
warehouse productivity. (True)
[LO 4.3 To identify productivity issues and improvement efforts in logistics; Easy; Application;
15. The odometer is a recording instrument that produces a continuous, timed record of the truck,
its speed, and its engine speed. (False)
[LO 4.3 To identify productivity issues and improvement efforts in logistics; Easy; Concept;
16. Wireless communications, global positioning systems, and graphical information systems
offer tremendous opportunities to improve driver productivity. (True)
17. Excess capacity, or unused available space, can be unproductive because it may result in the
purchase of additional equipment or space. (True)
18. Coopetition is a concept that entails an organization making its unused resources available to
other organizations. (False)
[LO 4.3 To identify productivity issues and improvement efforts in logistics; Moderate; Concept;
12
19. Logistics service quality relates to a firm’s ability to deliver products, materials, and services
without defects or errors to both internal and external customers. (True)
[LO 4.4 To discuss quality issues in logistics; Easy; Concept; AACSB Category 3: Analytical
thinking]
20. ISO 14000 is a set of generic standards used to document, implement, and demonstrate
quality management and assurance systems. (False)
thinking]
21. The integration of Six Sigma with the Lean approach refers to Lean Six Sigma. (True)
thinking]
22. ISO 9000 involves organizations benchmarking themselves against organizations from
outside their particular industry. (False)
[LO 4.4 To discuss quality issues in logistics; Moderate; Concept; AACSB Category 3:
23. The Logistics Uncertainty Index has been established to identify uncertainty sources that can
affect the risk exposure for logistics activities. (False)
24. Terrorism can be viewed as an illegal use of or threat of force or violence made by a group or
an individual against a person, a company, or somebody’s property with a goal of menacing
the target, often grounded in politics or ideology. (True)
25. From a logistical perspective, the Transportation Security Administration (TSA) and the
Department of Transportation are two of the most important government entities that were
incorporated into the Department of Homeland Security (DHS). (False)
Moderate; Synthesis; AACSB Category 3: Analytical thinking]
26. The Transportation Worker Identification Credential (TWIC) uses biometric data to exclude
certain workers from secure areas at ports and terminals. (True)
13
27. Customs and Border Protection (CBP) is responsible for securing U.S. borders to protect the
American people and the U.S. economy. (True)
28. Companies that participate in the Customs Trade Partnership Against Terrorism (C-TPAT) are
exempt from all import tariffs and all import quotas. (False)
29. The Importer Security Filing (ISF) rule requires carriers to file 10 pieces of information and
importers to file 2 pieces of information. (False)
30. Experts recommend that the best pilferage policy should be based on zero tolerance. (True)
[LO 4.6: To describe ways to manage theft and pilferage; Easy; Application; AACSB Category 3:
31. One of the most effective methods of protecting goods from theft or pilferage is to keep them
moving through the system. (True)
32. More than 50 percent of all pirate attacks in recent years have involved petroleum tankers.
(True)
33. Logistics does not have an inherent connection to sustainability. (False)
[LO 4.7: To review the concept of logistics social responsibility; Easy; Application; AACSB
34. Potential logistics social responsibility dimensions include the environment, diversity, safety,
and philanthropy, among others. (True)
14
[LO 4.7: To review the concept of logistics social responsibility; Moderate; Synthesis; AACSB
35. Warehousing and packaging are the two areas in logistics systems where the most energy
costs occur. (False)
[LO 4.7: To review the concept of logistics social responsibility; Moderate; Synthesis; AACSB
36. Roof color is often overlooked as an area for warehousing energy control. (True)
37. Transportation accounts for about one-half of all petroleum consumption in the United States.
(False)
38. Reverse logistics can be four to five times more expensive than forward logistics. (True)
39. Network complexity refers to the growing number of nodes and the associated changes to the
links in logistics systems. (True)
[LO 4.8: To articulate logistics issues associated with complexity; Easy; Concept; AACSB
40. System complexity centers on the implications associated with the increasing number of
products that most companies continue to face in an effort to differentiate themselves with
their customers. (False)
15

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Test Bank Chapter 4: Organizational and Mangerial Issues in Logistics Multiple Choice Questions (Correct Answers Are Bolded)

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CHAPTER 4: ORGANIZATIONAL AND MANGERIAL ISSUES IN LOGISTICS

Multiple Choice Questions (correct answers are bolded)

2. In a ___________ logistics structure, logistics activities are managed in multiple departments

7. A primary advantage of ___________ logistics is its relative efficiency, whereas a primary

8. Which of the following is an advantage of a decentralized logistics organization?

a. It can be less expensive than a centralized organization.

a. It can be less expensive than a decentralized organization.

11. A ___________ organizational design attempts to create an organization that is responsive to

12. A key attribute of network organizational design is a shift from ___________ to

13. ___________ refers to satisfying current and emerging customer needs.

14. ___________ can be defined as an organization’s ability to address unexpected operational

a. reducing input while increasing output

17. What is the most important purpose of warehouse work rules?

a. the Lean approach

a. Only the Baldrige Award focuses on quality.

a. Container Security Initiative (CSI)

30. Which of the following statements is false?

32. What is the primary difference between pilferage and theft?

a. There is no difference between the two terms.

a. why products are returned

1. The organization of logistics activities within a firm depends on a number of factors,

2. In a decentralized logistics structure, logistics activities are managed in multiple departments

5. A centralized logistics organization generally results in better customer responsiveness than a

7. The majority of companies employ a chief logistics officer (CLO). (False)

8. A matrix organizational design can be very responsive to customer requirements. (True)

9. From a logistics perspective, a network organizational design in logistics is manifested in

33. Logistics does not have an inherent connection to sustainability. (False)

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