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CHAPTER 4: ORGANIZATIONAL AND MANGERIAL ISSUES IN LOGISTICS

Multiple Choice Questions (correct answers are bolded)

1. Fragmented and unified are the two basic organizational structures associated with logistics.
2. In a fragmented logistics structure, logistics activities are managed in multiple departments throughout an organization.
3. One problem with a fragmented 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.
4. In a unified logistics structure, multiple logistics activities are combined into, and managed as, a single department.
5. A centralized logistics organization implies that the corporation maintains a single logistics department that administers the
related activities for the entire company from the home office.
6. A(n) decentralized logistics organization means that logistics-related decisions are made separately at the divisional or
product group level.
7. A primary advantage of centralized logistics is its relative efficiency, whereas a primary advantage of decentralized
logistics is its customer responsiveness.
8. Which of the following is an advantage of a decentralized logistics organization?
d. It can be responsive to customer service requirements.
9. Which of the following is an advantage of a centralized logistics organization?
b. It has good opportunities for freight consolidation.
10. Hierarchical organizational design has its foundations in the command-and-control military operation, where decision
making and communication often follow a top-down flow.
11. A network organizational design attempts to create an organization that is responsive to the parameters of the
contemporary business environment.
12. A key attribute of network organizational design is a shift from function to process
13. Relevancy refers to satisfying current and emerging customer needs.
14. Flexibility can be defined as an organization’s ability to address unexpected operational situations.
15. Productivity refers to the amount of output divided by the amount of input.
16. Productivity improvement efforts in logistics are often directed toward increasing output while holding input constant .
17. What is the most important purpose of warehouse work rules?
b. to keep employees from engaging in unproductive and potentially destructive activities
18. What major retailer has been testing drones within its warehouses as a potential solution to enhance productivity?
c. Walmart
19. A tachograph is a device used to monitor and control the actions taken by a driver and his/her vehicle.
20. Sharing economy refers to an organization making their unused resources available to other organizations.
21. ISO 9000 is a set of generic standards used to document, implement, and demonstrate quality management and assurance
systems.
22. The quality concept that emphasizes the elimination of business errors is known as Six Sigma .
23. Lean Six Sigma refers to the integration of Six Sigma and the Lean approach.
24. What is a key difference between IS0 9000 and the Malcolm Baldrige National Quality Award?
b. The Baldrige Award is more externally focused than is ISO 9000.
25. The Logistics Uncertainty Pyramid Model has been established to identify uncertainty sources that can affect the risk
exposure for logistics activities.
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 Customs and Border Protection (CBP).
27. The Transportation Security Administration (TSA) is responsible for the security of the U.S. transportation system.
28. Customs Trade Partnership Against Terrorism (C-TPAT) refers to a program where public and private organizations
work together to prevent terrorism against the United States.
29. The Importer Security Filing (ISF) rule requires importers to file 10 pieces of information and carriers to file 2 pieces of
information.
30. Which of the following statements is false? d. Theft refers to stolen merchandise worth more than $500.
31. The materials stolen in pilferage are usually for the employee’s own use.
32. What is the primary difference between pilferage and theft? b. Pilferage involves a firm’s own employees,
while theft involves efforts from outsiders.
33. Approximately 20 percent of all pirate attacks in recent years have involved petroleum tankers.
34 The concept of logistics social responsibility, or corporate social responsibility issues that relate directly to logistics, did not
emerge until which decade? c. 1990s
35. The two areas in logistics systems where most energy costs occur are warehousing and transportation .

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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 north side of a building.
37. Transportation accounts for approximately two-thirds of all petroleum consumption in the United States.
38. Which of the following is not one of the three critical factors associated with the process of managing returned goods? d.
how many products are returned
39. Network complexity refers to the growing number nodes and the associated changes to the links in the logistics system.
40. Range 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.

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)
2. In a decentralized logistics structure, logistics activities are managed in multiple departments throughout an organization.
(False)
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)
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)
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)
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 terms of relevancy,
responsiveness, and flexibility. (True)
10. Responsiveness refers to satisfying current and emerging customer needs. (False)
11. The postponement of product assembly and labeling until exact customer requirements are known is an example of
responsiveness. (False)
12. Productivity efforts in logistics are often directed at increasing the amount of output while holding input constant. (True)
13. Union work rules are often very specific in the sense that job descriptions spell out the responsibilities associated with a
particular job. (True)
14. Walmart has begun testing drones within its warehouses as a potential solution to enhance warehouse productivity. (True)
15. The odometer is a recording instrument that produces a continuous, timed record of the truck, its speed, and its engine
speed. (False)
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)
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)
20. ISO 14000 is a set of generic standards used to document, implement, and demonstrate quality management and assurance
systems. (False)
21. The integration of Six Sigma with the Lean approach refers to Lean Six Sigma. (True)
22. ISO 9000 involves organizations benchmarking themselves against organizations from outside their particular industry.
(False)
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)
26. The Transportation Worker Identification Credential (TWIC) uses biometric data to exclude certain workers from secure
areas at ports and terminals. (True)
27. Customs and Border Protection (CBP) is responsible for securing U.S. borders to protect the American people and the
U.S. economy. (True)
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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)
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)
34. Potential logistics social responsibility dimensions include the environment, diversity, safety, and philanthropy, among
others. (True)
35. Warehousing and packaging are the two areas in logistics systems where the most energy costs occur. (False)

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)
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)