Chapter 14 Transportation in the Supply Chain True/False 1. Transportation plays a key role in every supply chain because products are usually produced and consumed in the same location. Answer: False Difficulty: Easy 2. Freight transportation costs in the United States amount to about 6 percent of the GDP. Answer: True Difficulty: Moderate 3. The shipper is the party that requires the movement of the product between two points in the supply chain. Answer: True Difficulty: Moderate 4. The carrier is the party that moves or transports the product. Answer: True Difficulty: Easy 5. A distributor makes investment decisions regarding the transportation infrastructure and then makes operating decisions to try to maximize the return from these assets. Answer: False Difficulty: Hard 6. A carrier uses transportation to minimize the total cost (transportation, inventory, information, and facility) while providing an appropriate level of responsiveness to the customer. Answer: False Difficulty: Hard 7. The vehicle-related cost is incurred whether the vehicle is operating or not and is considered fixed for short-term operational decisions by the carrier. Answer: True Difficulty: Moderate 8. Vehicle-related cost includes any cost associated with terminals, airport gates, and labor that are incurred whether vehicles are in operation or not. Answer: False Difficulty: Moderate 9. Trip-related cost depends on the length and duration of the trip but is independent of the quantity shipped. Answer: True Difficulty: Easy 10. Trip-related cost includes loading/unloading costs and a portion of the fuel cost that varies with the quantity being transported. Answer: False Difficulty: Easy 11. Overhead cost includes the cost of plannin...
