Chapter 9—Domestic U.S.

and Global Logistics

TRUE/FALSE

1. Logistics is what creates the efficient flow of goods between supply chain partners, allowing profits
and competitive advantage to be maximized.

ANS: T PTS: 1
BUSPROG: Analytic LO: 9-1 Bloom’s: Comprehension Difficulty: Easy

2. Transportation, warehousing, marketing, and customer service play very significant roles in the
logistics function.

ANS: F PTS: 1
BUSPROG: Analytic LO: 9-1 Bloom’s: Knowledge Difficulty: Easy

3. According to the textbook, the five basic modes of transportation are motor, rail, air, water, and
pipeline.

ANS: T PTS: 1
BUSPROG: Analytic LO: 9-2 Bloom’s: Knowledge Difficulty: Easy

4. A small LTL shipment that originates on a truck in San Francisco and is moved from San Francisco to
Las Vegas where it is unloaded and put onto another truck for final shipment to Phoenix would be
considered an intermodal shipment since it utilizes more than one vehicle during shipment.

ANS: F PTS: 1
BUSPROG: Analytic LO: 9-2 Bloom’s: Comprehension Difficulty: Easy

5. Generally speaking, motor carriers are less expensive than rail carriers to haul goods.

ANS: F PTS: 1
BUSPROG: Analytic LO: 9-2 Bloom’s: Knowledge Difficulty: Easy

6. Limitations of air carrier transport include cost and airport accessibility.

ANS: T PTS: 1
BUSPROG: Analytic LO: 9-2 Bloom’s: Knowledge Difficulty: Easy

7. A primary advantage for motor carriers is the weather.

ANS: F PTS: 1
BUSPROG: Analytic LO: 9-2 Bloom’s: Knowledge Difficulty: Easy

8. With FOB pricing, a supplier is the legal owner of a product until the product reaches its destination.

ANS: T PTS: 1
BUSPROG: Analytic LO: 9-2 Bloom’s: Comprehension Difficulty: Easy

9. Air Carriers compete most favorably when the distance is long and the shipments are heavy or bulky.
.
ANS: F PTS: 1
 BUSPROG: Analytic LO: 9-2 Bloom’s: Knowledge Difficulty: Easy

10. Since the deregulation of transportation in the U.S., negotiating transportation prices has become less
common among business shippers and logistics providers.

ANS: F PTS: 1
BUSPROG: Analytic LO: 9-3 Bloom’s: Comprehension Difficulty: Easy

11. It can be argued that transportation deregulation is good because it encourages competition and allows
prices to adjust as supply, demand, and negotiations dictate.

ANS: T PTS: 1
BUSPROG: Analytic LO: 9-3 Bloom’s: Knowledge Difficulty: Easy

12. A private carrier is subject to economic regulation and typically transports goods for the company
owning the carrier.

ANS: F PTS: 1
BUSPROG: Analytic LO: 9-3 Bloom’s: Knowledge Difficulty: Easy

13. In Europe, rail transportation tends to be much more prevalent and reliable than rail transportation in
the U.S., because European track, facilities, and equipment are newer and better maintained.

ANS: T PTS: 1
BUSPROG: Diversity LO: 9-4 Bloom’s: Knowledge Difficulty: Easy

14. International intermediaries can provide shipping, consolidation, and other import and export services.
Some examples of these international intermediaries include: NVOCCs and trading companies.

ANS: T PTS: 1
BUSPROG: Diversity LO: 9-4 Bloom’s: Knowledge Difficulty: Easy

15. Foreign-trade zones (FTZs) are secure sites within the European Union under the supervision of the
EU Customs and Tarriffs.

ANS: F PTS: 1
BUSPROG: Analytic LO: 9-4 Bloom’s: Knowledge Difficulty: Easy

16. The responsibility of transportation is to create both time utility and place utility, which means that
products will be delivered at the right time to the desired location.

ANS: T PTS: 1
BUSPROG: Analytic LO: 9-5 Bloom’s: Comprehension Difficulty: Easy

17. Poor logistics management can bring a supply chain to its knees, regardless of the quality of the
products.

ANS: T PTS: 1
BUSPROG: Analytic LO: 9-5 Bloom’s: Comprehension Difficulty: Easy

18. When mistakes occur in deliveries along the supply chain, more safety stocks must be held, adversely
impacting both customer service levels and costs.
 ANS: T PTS: 1
BUSPROG: Analytic LO: 9-5 Bloom’s: Knowledge Difficulty: Easy

19. Private warehouses refer to warehouses that are owned by the firm storing the goods.

ANS: T PTS: 1
BUSPROG: Analytic LO: 9-6 Bloom’s: Knowledge Difficulty: Easy

13. Efficient supply chain management distribution requires that modern warehouses concentrate their
efforts on a wide array of warehousing and distribution functions like storing purchases, work in
progress inventories, and finished goods inventories, receiving shipments, breaking down shipments,
repackaging, and the distribution of components.

ANS: T PTS: 1
BUSPROG: Analytic LO: 9-6 Bloom’s: Knowledge Difficulty: Easy

14. Transportation management system (TMS) applications allow firms to find carriers, track fuel usage
and product movements, and stock the shelves at customers’ location.

ANS: F PTS: 1
BUSPROG: Analytic LO: 9-6 Bloom’s: Comprehension Difficulty: Easy

15. Third-party logistics (3PL) services cannot assist with customs clearance because of strict regulations.

ANS: F PTS: 1
BUSPROG: Diversity LO: 9-7 Bloom’s: Comprehension Difficulty: Easy

16. Con-way Multimodal and BNSF Logistics are both considered third-party logistics providers.

ANS: T PTS: 1
BUSPROG: Analytic LO: 9-7 Bloom’s: Knowledge Difficulty: Easy

17. In a 2016 survey of 3PL usage, 70 percent of shippers and 85 percent of 3PL services said the use of
3PLs contributed to higher logistics costs.

ANS: F PTS: 1
BUSPROG: Analytic LO: 9-7 Bloom’s: Knowledge Difficulty: Easy

18. In many cases, reverse logistics is viewed as an unwanted activity of supply chain management.

ANS: T PTS: 1
BUSPROG: Analytic LO: 9-8 Bloom’s: Knowledge Difficulty: Easy

19. An effective reverse logistics process can create goodwill and enhance customers’ perceptions of
product quality.

ANS: T PTS: 1
BUSPROG: Analytic LO: 9-8 Bloom’s: Comprehension Difficulty: Easy

20. Reverse logistics refers to the movement and storage of returned goods.

ANS: T PTS: 1
BUSPROG: Analytic LO: 9-8 Bloom’s: Knowledge Difficulty: Easy
MULTIPLE CHOICE

1. ______________ creates the efficient flow of goods between supply chain partners, allowing profits
and competitive advantage to be maximized.
a. Operations
b. Transportation planning
c. Logistics
d. Procurement
ANS: C PTS: 1
BUSPROG: Analytic LO: 9-1 Bloom’s: Knowledge Difficulty: Easy

2. In the text, Table 9.1 shows that for-hire logistics expenditures in the U.S., have _____________ in the
past thirty-one years.
a. Remained the same
b. Slowly declined
c. More than quadrupled
d. Decreased for the first 10 years, then increased
ANS: C PTS: 1
BUSPROG: Analytic LO: 9-1 Bloom’s: Knowledge Difficulty: Easy

3. _______________ carry the majority of the world’s water-transported manufactured goods.

a. Supertankers
b. Containerships
c. Barges
d. None of the above
ANS: B PTS: 1
BUSPROG: Analytic LO: 9-2 Bloom’s: Knowledge Difficulty: Easy

4. ________________ are the most flexible mode of transportation and account for 70 percent of all the
freight tonnage moved in the U.S.
a. Water Carriers
b. Rail Carriers
c. Air Carriers
d. Motor Carriers
ANS: D PTS: 1
BUSPROG: Analytic LO: 9-2 Bloom’s: Knowledge Difficulty: Easy

5. Which of the following modes of cargo transport can be characterized as being the most inexpensive
and very slow, yet good for transporting very heavy goods a long-distance?
a. Air Carriers
b. Rail Carriers
c. Water Carriers
d. Motor Carriers
ANS: C PTS: 1
BUSPROG: Analytic LO: 9-2 Bloom’s: Knowledge Difficulty: Easy
 6. Which of the following are intermodal transportation alternatives?
a. Truck trailer-on-flatcar
b. Roll-on-roll-off
c. Piggyback service
d. All of the above
ANS: D PTS: 1
BUSPROG: Analytic LO: 9-2 Bloom’s: Knowledge Difficulty: Easy

7. Which of the following marked the end of the initial push by Congress to deregulate the entire U.S.
transportation industry?
a. The Granger Laws
b. The Transportation Act of 1920
c. The Shipping Act of 1984
d. The Interstate Commerce Act of 2013
ANS: C PTS: 1
BUSPROG: Analytic LO: 9-3 Bloom’s: Knowledge Difficulty: Easy

8. The first major transportation regulation in the U.S. was which of the following:
a. Interstate Commerce Act
b. Granger Laws
c. Motor Carrier Act
d. Interstate Initiation Act
ANS: B PTS: 1
BUSPROG: Analytic LO: 9-3 Bloom’s: Knowledge Difficulty: Easy

9. Which of the following would be considered an act of deregulation?

a. Reed Bullwinkle act  legalized rate bureaus or conferences
b. Granger law  Established maximum rates, prohibited discrimination, and forbade
mergers for railroads.
c. Trucking Industry Regulatory Reform Act  Motor carriers freed from filing rates with the
Interstate Commerce Commission
d. Freight Forwarders Act  Allowed Interstate Commerce Commission control over freight
forwarders; controlled entry, rates, and services.
ANS: C PTS: 1
BUSPROG: Analytic LO: 9-3 Bloom’s: Knowledge Difficulty: Easy

10. It is argued that transportation deregulation is good because:

a. It encourages competition
b. It ensures adequate transportation service throughout the country
c. It protects consumers in terms of monopoly pricing
d. All of the above
ANS: A PTS: 1
BUSPROG: Analytic LO: 9-3 Bloom’s: Comprehension Difficulty: Easy

11. Which of the following legislative acts is NOT in support of transportation deregulation?
a. Railroad Revitalization and Regulatory Reform Act
b. Staggers Rail Act
c. FAA Authorization Act
d. Reed-Bulwinkle Act
 ANS: B PTS: 1
BUSPROG: Analytic LO: 9-3 Bloom’s: Comprehension Difficulty: Easy

12. Which of the following is a direct benefit from the adoption of NAFTA?
a. A reduction in illegal immigrants crossing the border from Mexico
b. An increase in manufacturing job opportunities in the U.S.
c. An increase in trade between U.S., Canada, and Mexico
d. An increase in trade between U.S. and China
ANS: C PTS: 1
BUSPROG: Diversity LO: 9-4 Bloom’s: Knowledge Difficulty: Easy

13. Foreign-trade zones are:

a. Secure sites within the U.S. where goods and materials can be assembled and exported
without being levied domestic duties or excise taxes
b. Secure sites in foreign countries where goods wait for clearance by importing country
c. Markets in the U.S. where foreign countries set up and sell products
d. Bodies of water where cargo ships are allowed to dock to deliver imported goods
ANS: A PTS: 1
BUSPROG: Diversity LO: 9-4 Bloom’s: Knowledge Difficulty: Easy

14. Which of the following international intermediaries helps foreign buyers and sellers find each other
and then handles all the shipping arrangements and documentation preparation?
a. Customs broker
b. Foreign freight forwarder
c. Trading company
d. NVOCC
ANS: C PTS: 1
BUSPROG: Diversity LO: 9-4 Bloom’s: Knowledge Difficulty: Easy

15. Due to the success of NAFTA, the U.S________________.

a. Has decided to extend the agreement until 2025
b. Has free trade agreements in 20 countries
c. Both A & B
d. None of the above
ANS: B PTS: 1
BUSPROG: Diversity LO: 9-4 Bloom’s: Knowledge Difficulty: Easy

16. When mistakes occur in the supply chain, which of the following things might happen?
a. More safety stock must be held
b. Cost may increase due to expedited deliveries
c. Customer service levels drop
d. All of the above
ANS: D PTS: 1
BUSPROG: Analytic LO: 9-5 Bloom’s: Comprehension Difficulty: Easy

17. For integrated supply chains, logistics is considered:

a. Not at all important
b. Somewhat important
c. Important
d. Critically important
 ANS: D PTS: 1
BUSPROG: Diversity LO: 9-5 Bloom’s: Knowledge Difficulty: Easy

18. What type of firm would be most interested in using a third-party logistics service?
a. Small firm with no logistics expertise
b. Large integrated global manufacturing company
c. A for-hire transportation company
d. A freight forwarder
ANS: A PTS: 1
BUSPROG: Analytic LO: 9-5 Bloom’s: Knowledge Difficulty: Easy

19. The acts of receiving shipments, breaking down shipments, repackaging shipments, and distributing
components to a manufacturing location or finished products to customers by a distribution center is
referred to as:
a. Piggy backing
b. Risk pooling
c. Crossdocking
d. Customs Brokering
ANS: C PTS: 1
BUSPROG: Analytic LO: 9-6 Bloom’s: Knowledge Difficulty: Easy

20. ___________________ are for-profit organizations that contract out or lease a wide range of light
manufacturing, warehousing, and distribution services to other companies.
a. Public warehouses
b. Private warehouses
c. Breakbulk warehouses
d. Consolidation warehouses
ANS: A PTS: 1
BUSPROG: Analytic LO: 9-6 Bloom’s: Knowledge Difficulty: Easy

21. Which of the following is NOT consistent with a decentralized warehousing system?
a. Higher safety stocks required
b. Shorter lead times
c. Lower transportation fees
d. None of the above
ANS: D PTS: 1
BUSPROG: Analytic LO: 9-6 Bloom’s: Knowledge Difficulty: Easy

22. A current warehouse system has five warehouses with 4,000 units at each warehouse. The company
desires to change to three warehouses to become more centralized and keep the same customer service
levels. Determine the average warehouse inventory levels, using the square root rule. (Choose the
closest answer.)
a. 6,667
b. 11,619
c. 15,492
d. 25,820
ANS: C PTS: 1
BUSPROG: Analytic LO: 9-6 Bloom’s: Application Difficulty: Easy

23. A product positioned strategy:

 a. Places warehouses close to customers
b. Places warehouses midway between the sources of supply and the customers
c. Places warehouses close to the sources of supply
d. None of the above
ANS: C PTS: 1
BUSPROG: Analytic LO: 9-6 Bloom’s: Knowledge Difficulty: Easy

24. The following are all examples of lean warehousing capabilities EXCEPT:
a. Decreased assembly operations
b. Greater emphasis on crossdocking
c. Reduced lot sizes and shipping quantities
d. Increased automation
ANS: A PTS: 1
BUSPROG: Analytic LO: 9-6 Bloom’s: Comprehension Difficulty: Easy

25. A ___________________ consolidates large numbers of small shipments to fill entire truck trailers or
rail cars to achieve truckload or carload transportation rates.
a. Consolidation forwarder
b. Freight forwarder
c. Transportation broker
d. Load broker
ANS: B PTS: 1
BUSPROG: Analytic LO: 9-7 Bloom’s: Knowledge Difficulty: Easy

26. Which of the following can aggregate cargo and arrange for the domestic or international shipment of
members' cargo at favorable volume rates?
a. Transportation Broker
b. Freight Forwarder
c. Shippers' Associations
d. Integrated Logistics Service Provider
ANS: C PTS: 1
BUSPROG: Analytic LO: 9-7 Bloom’s: Knowledge Difficulty: Easy

27. Intermodal marketing companies (IMCs) are companies that act as intermediaries between intermodal
a. Trucking companies
b. Railroad companies
c. Waste management companies
d. Warehouse management companies
ANS: B PTS: 1
BUSPROG: Analytic LO: 9-7 Bloom’s: Knowledge Difficulty: Easy

28. What does the term “Zombie Inventory” refer to?

a. Items that show up on the books, but are not on the shelf
b. Unsold products that get packaged and shipped with sold goods
c. Product returns that sit unsold in storerooms
d. Extra items in inventory to help reduce stockouts
ANS: C PTS: 1
BUSPROG: Analytic LO: 9-8 Bloom’s: Knowledge Difficulty: Easy
 29. Returns management is also known as _______.
a. Reverse logistics
b. Backward logistics
c. Inverted logistics
d. Waste reduction
ANS: A PTS: 1
BUSPROG: Analytic LO: 9-8 Bloom’s: Knowledge Difficulty: Easy

30. Reverse logistics can have a positive impact on the environment through activities such as?
a. Data warehousing
b. Reneging
c. Risk pooling
d. Recycling
ANS: D PTS: 1
BUSPROG: Analytic LO: 9-8 Bloom’s: Knowledge Difficulty: Easy

SHORT ANSWER

1. Explain some intermodal transportation alternatives.

ANS:
The most common are truck trailer-on-flatcar (TOFC) and container-on-flatcar (COFC), also called
piggyback service. The same containers can be placed on board containerships and airliners. Another
example of intermodal transportation are RO-ROs or roll-on-roll-off containerships. These allow truck
trailers and containers to be directly driven on and off the ship, without use of cranes.

PTS: 5
BUSPROG: Communication LO: 9-2 Bloom’s: Comprehension Difficulty: Moderate

2. Does risk pooling favor a centralized or decentralized warehousing system? Why?

ANS:
Risk pooling favors a centralized warehousing system.

Risk pooling, through the square root rule, illustrates the relationship between inventory, customer
service levels, and the number of warehouses. By using the square root rule formula it can be seen that
demand in different markets is negatively correlated. This means that high demand in one area will
likely be offset by low demand in another area. Thus, having fewer warehouses offsets the need for a
large pool of safety stock distributed amongst a large number of warehouses. In other words system
variability can be better controlled from one centralized warehouse versus a large number of
warehouses all of which would have to have their own pool of safety stocks in order to control demand
variability within their region.

PTS: 5
BUSPROG: Communication LO: 9-6 Bloom’s: Comprehension Difficulty: Difficult

3. List and explain three capabilities of lean warehousing.

ANS:
a. Greater emphasis on cross docking  Faster inbound and outbound turnaround results in
lower overall inventory requirements
 b. Reduced lot sizes and shipping quantities  inbound and outbound shipments are smaller
in size. Faster, but more handling is required
c. A commitment to customers and service quality  Employees more focused on
satisfying warehouses inbound and outbound customers
d. Increased automation  To be faster and more reliable, more automation is required to
remain competitive.
e. Increased assembly operations  lean systems and mass customization will require last
minute assembly. This increases the requirements for employee skill and machinery at
these facilities.

PTS: 5
BUSPROG: Communication LO: 9-6 Bloom’s: Comprehension Difficulty: Moderate

4. Suppose you have a shipment of products that needs to be transported. Explain the type of service that
each of the following intermediaries offer?

a. Freight forwarders
b. Transportation brokers
c. Shippers' Associations

ANS:
a. Freight forwarders  These intermediaries take small shipments from numerous
companies and consolidate them to make large shipments. These larger consolidated
shipments can thus realize the lower rates associated with large shipments. Some of
these savings can then be passed along to the individual shippers.
b. Transportation brokers  These intermediaries bring together shippers and transportation
companies. They often have excellent knowledge of transportation alternatives. Small
companies that need transportation options may approach transportation brokers who
can then lead them to the optimal shipping solution available to them.
c. Shippers' Associations  These are non-profit cooperatives made up of companies that
seek to move product domestically or internationally. They take their members'
shipments consolidate them into full truckloads and thus help their members realize
volume discounts. In addition, the larger pooled shipments can then allow for the
negotiation of improved terms of service.

PTS: 5
BUSPROG: Communication LO: 9-7 Bloom’s: Comprehension Difficulty: Difficult

ESSAY

1. List the five modes of transportation. For each mode provide a brief description (or examples) of the
type of cargo that typically travels via that mode of transport.

ANS:
a. MOTOR: Motor carriers are actually quite versatile, so nearly anything from packaged
household goods to building materials to liquid petroleum are all candidates to be moved
via motor carrier.

b. RAIL: Rail carriers typically carry very heavy shipments. This might include heavy
building materials, construction equipment, or coal.

c. AIR: Air carriers typically carry items with a high cost to weight ratio. In other words,
 air carriers carry very light, high-value goods that need to travel long distances quickly.
This might include items like jewelry, fine wines, or even racehorses. On occasion items
are also shipped by air because of an emergency, for convenience, or perhaps to offset
high packaging and/or insurance costs.

d. WATER: Water carriers typically haul heavy, bulky, low value materials like cold,
grain, and sand. Nonetheless, because transport by water is so cheap almost any item
may be shipped by water. Some items that typically travel via water carrier include:
automobiles, petroleum, liquefied natural gas, containerized cargo, frozen fish, and
produce.

e. PIPELINE: Pipelines move materials only when they are in a liquid or gaseous state.
Items that would typically move via pipeline include: petroleum, coal in a slurry form,
natural gas, drinking water, or gasoline.

PTS: 10
BUSPROG: Communication LO: 9-2 Bloom’s: Comprehension Difficulty: Difficult

2. Answer the following concerning deregulation in the transportation industry.

a. List the benefits of deregulation in the transportation industry

b. List the disadvantages of deregulation in the transportation industry
c. Give an example of when deregulation led to disastrous consequences

ANS:
a. Advantages of deregulation
 Encouraged competition
 Allowed the free market to set prices and often prices dropped as a result
 Allowed the people most directly involved to apply their best judgment to solve
problems
 Increased efficiency and safety
 Inhibited the growth of monopolies
 Increased the number of air passenger carriers almost three-fold
 Made it easier for firms to enter the motor carrier market

b. Disadvantages of deregulation
 Rural and other unprofitable populations were underserved
 It tended to lead to lead to unfair, unpoliced markets
 Social concerns were lost. For example, businesses ignored damage to the
environment
 Many regulations were imposed to solve problems and deregulation brought the
same problems back
 Increased competition to the point where many companies went out of business
 Exposed people to fraud and excessive risk-taking by companies

c. Example when deregulation lead to disastrous consequences

In 1999, U.S. banks were deregulated to allow them to compete globally with more
profitable financial firms. This lead to banks investing in risky derivatives to increase
profit and shareholder value. This culminated in the global financial crisis.

PTS: 10
BUSPROG: Communication LO: 9-3 Bloom’s: Comprehension Difficulty: Difficult
3. As a logistics specialist for your organization you are being asked to develop a model, which will aid
your company in future global expansion projects.

Answer the following questions as part of your initial step in developing a helpful model.
a. List 5 key components of the local infrastructure that must be investigated before
committing to expansion? Why are these important?
b. Provide 4 aspects of government relating to logistics that need to be considered before
committing to expansion?

ANS:

a. List 5 key components of the local infrastructure that must be investigated before
committing to expansion? Why are these important?
There are many possible answers, below is a list of some of the more common/likely
answers:
1. Roads  Important to trucking and Intermodalism. Accessibility.
2. Ports  Important to ocean shipping and Intermodalism. Accessibility.
3. Rail network  Important to shipment by rail and Intermodalism.
4. Airports  Important to shipment by air.
5. Telecommunication infrastructure  Important to all modes of transport. Provides
supply chain/shipment visibility.
6. Fuel/Utility network  Allows for shipment via all modes without interruption.
7. Warehousing/DC availability  Allows for efficient shipment and storage, as well
as complex distribution systems.
8. Pipeline network  Allows for uninterrupted shipment via pipelines.

b. Provide 4 aspects of government relating to logistics that need to be considered before

committing to expansion?
There are many possible answers, below is a list of some of the more common/likely
answers:
1. Transportation regulations
2. Amount Bureaucracy
3. Ability to maintain a stable uncorrupt law enforcement team
4. Commitment to secure logistics network
5. Commitment to building and maintaining infrastructure
6. Commitment to international trade  Trade agreements, open markets...
7. Level of environmental regulations that might affect logistics
8. Customs laws, Import/export laws

PTS: 10
BUSPROG: Communication LO: 9-4 Bloom’s: Analysis Difficulty: Difficult

4. Joxcel Corporation is a company that sells an enormous amount of fine jewelry worldwide from its
headquarters in Paris, France. Presently 10% of their revenues come from sales in the United States.
Joxcel Corporation would like to grow the business by about 200% over the next three years.
Presently, a majority of their product is kept in a private warehouse in France.
While the shipments to United States will always be relatively small in size due to the cost and nature
of the product, Joxcel Corporation would still like to take advantage of any possible distribution
efficiencies by sending their shipments to a distribution center in United States that can then package
their small shipments with other jewelry shipments headed towards common retailers and/or
wholesalers. In order to do so they'll need to make accommodations for shipment, find retail and
wholesale companies willing to distribute their product, find intermediaries to both help export the
product out of France and help import the product into the United States.

Based on the above information and your knowledge of international transportation, answer the
questions below in the hopes of providing Joxcel Corporation with some preliminary information that
will aid them in creating a successful logistical itinerary:

a. Which modes of transportation should be utilized in getting the product from Joxcel
Corporation's warehouse in France to a distribution center in United States? Why?
b. Which intermediaries should Joxcel Corporation consider in finding customers in United
States and exporting the product out of a France? Why?
c. Which intermediary should Joxcel Corporation consider in helping them import the
product into United States? Why?
d. Briefly discuss their warehousing plan. Does it make sense? Why?

ANS:

a. Which modes of transportation should be utilized in getting the product from Joxcel
Corporation's warehouse in France to distribution Center in United States? Why?
The most likely mode of transportation to get product with such a high cost to weight
ratio out of France and into the United States would be air.

The student should probably also include information on how the product will get to the
airplane from the private warehouse and from the airplane to the final distribution
Center. For this portion of the shipment a motor carrier would most likely be used.
Motor transportation is both versatile in terms of the products that it can carry and agile
in terms of the locations it can reach.

b. Which intermediaries should Joxcel Corporation consider in finding customers in

United States and exporting the product out of a France? Why?
A trading company most likely would be the best answer for this particular question.
Trading companies aid foreign sellers in finding foreign buyers. In addition, they can
handle the export arrangements, documentation, and transportation of the goods in
question.

While the student may also cite foreign freight forwarders, this answer is not as
desirable. While a foreign freight forwarder can handle the export arrangements,
documentation, and transportation of goods, they typically do not aid foreign sellers in
finding foreign buyers. Nonetheless, partial credit may be deserved.

c. Which intermediary should Joxcel Corporation consider in helping them import the
product into United States? Why?
Customs brokers aid in moving international shipments through customs. They are
knowledgeable on documentation and other customs related areas, thus they make the
importation of product easier and they help in answering any questions Customs
Officials may have.

Some students may cite that trading company's help make import arrangements also.
 This would also be an acceptable answer according to the language in the textbook.

d. Briefly discuss their warehousing plan. Does it make sense? Why?

This question is fairly open-ended. The student may comment on the positive and
negative aspects of Joxcel Corporation utilizing a private warehouse in France. They
may then discuss the benefits of taking their moderate sized shipments that were
imported into United States and then consolidating those shipments at consolidation
warehouses with other small shipments headed towards common customers.

PTS: 10
BUSPROG: Communication LO: 9-6 Bloom’s: Application Difficulty: Difficult