Module 1 - I

Question 1

advance ship notice (ASN)

Answer 1

An electronic data interchange (EDI) notification of shipment of product

Question 2

backhauling

Answer 2

The process of a transportation vehicle returning from the original destination point to the point of origin. The 1980 Motor Carrier Act deregulated interstate commercial trucking and thereby allowed carriers to contract for the return trip. This can be with a full, partial, or empty load. An empty one is called deadheading.

Question 3

bar code

Answer 3

A series of alternating bars and spaces printed or stamped on parts, containers, labels, or other media, representing encoded information that can be read by electronic readers. It is used to facilitate timely and accurate input of data to a computer system

Question 4

batch picking

Answer 4

A method of picking orders in which order requirements are aggregated by product across orders to reduce movement to and from product locations. The aggregated quantities of each product are then transported to a common area where the individual orders are constructed.

Question 5

bill of lading (uniform) (B/L)

Answer 5

A carrier’s contract and receipt for goods the carrier agrees to transport from one place to another and to deliver to a designated person. In case of loss, damage, or delay, this is the basis for filing freight claims

Question 6

bonded warehouse

Answer 6

Buildings or parts of buildings designated by the US Secretary of the Treasury for storing imported merchandise, operated under US Customs supervision.

Question 7

break-bulk

Answer 7

1) Dividing truckloads, railcars, or containers of homogeneous items into smaller, more appropriate quantities for use. 2) A distribution center that specializes in these activities. 3) Unitized cargo in bales, boxes, or crates that is placed directly in a ship’s holds rather than in containers.

Question 8

centralized inventory control

Answer 8

Inventory decision making for all stockkeeping units exercised from one office or department for an entire company.

Question 9

common carrier

Answer 9

Transportation available to the public that does not provide special treatment to any one party and is regulated as to the rates charged, the liability assumed, and the service provided. This must obtain a certificate of public convenience and necessity from the Federal Trade Commission for interstate traffic.

Question 10

contract carrier

Answer 10

A carrier that does not serve the general public, but provides transportation for hire for one or a limited number of shippers under a specific contract.

Question 11

cross-docking

Answer 11

The concept of packing products on incoming shipments so they can be easily sorted at intermediate warehouses or for outgoing shipments based on final destination. The items are carried from the incoming vehicle docking point to the outgoing vehicle docking point without being stored in inventory at the warehouse. This reduces inventory investment and storage space requirements.

Question 12

customs broker

Answer 12

A person who manages the paperwork required for international shipping and tracks and moves the shipments through the proper channels.

Question 13

decentralized inventory control

Answer 13

Inventory decision making exercised at each stocking location for SKUs at that location.

Question 14

demurrage

Answer 14

The carrier charges and fees applied when rail freight cars and ships are retained beyond a specified loading or unloading time

Question 15

detention

Answer 15

Carrier charges and fees applied when truck trailers are retained beyond a specified loading or unloading time.

Question 16

discrete order picking

Answer 16

A method of picking orders in which the items on one order are picked before the next order is picked

Question 17

distribution

Answer 17

1) The activities associated with the movement of material, usually finished goods or service parts, from the manufacturer to the customer. These activities encompass the functions of transportation, warehousing, inventory control, material handling, order administration, site and location analysis, industrial packaging, data processing, and the communications network necessary for effective management. It includes all activities related to physical distribution, as well as the return of goods to the manufacturer. In many cases, this movement is made through one or more levels of field warehouses. 2) The systematic division of a whole into discrete parts having distinctive characteristics.

Question 18

distribution center

Answer 18

A location used to store inventory. Decisions driving warehouse management include site selection, number of facilities in the system, layout, and methods of receiving, storing, and retrieving goods.

Question 19

distribution channel

Answer 19

The distribution route, from raw materials through consumption, along which products travel.

Question 20

distribution requirements planning (DRP)

Answer 20

1) The function of determining the need to replenish inventory at branch warehouses. A time-phased order point approach is used where the planned orders at the branch warehouse level are “exploded” via MRP logic to become gross requirements of the supplying source. In the case of multilevel distribution networks, this explosion process can continue down through the various levels of regional warehouses (master warehouse, factory warehouse, etc.) and become input to the master production schedule. Demand on the supplying sources is recognized as dependent, and standard MRP logic applies. 2) More generally, replenishment inventory calculations, which may be based on other planning approaches such as period order quantities or “replace exactly what was used,” rather than being limited to the time-phased order point approach.

Question 21

distribution warehouse

Answer 21

A facility where goods are received in large-volume uniform lots, stored briefly, and then broken down into smaller orders of different items required by the customer. Emphasis is on expeditious movement and handling

Question 22

drop ship

Answer 22

To take the title of the product but not actually handle, stock, or deliver it (i.e., to have one supplier ship directly to another or to have a supplier ship directly to the buyer’s customer).

Question 23

duty

Answer 23

A tax levied by a government on the importation, exportation, or use and consumption of goods

Question 24

fixed-location storage

Answer 24

A method of storage in which a relatively permanent location is assigned for the storage of each item in a storeroom or warehouse. Although more space is needed to store parts than in a random-location storage system, fixed locations become familiar, and therefore a locator file may not be needed.

Question 25

freight consolidation

Answer 25

The grouping of shipments to obtain reduced costs or improved utilization of the transportation function. Consolidation can occur by market area grouping, grouping according to scheduled deliveries, or using third-party pooling services such as public warehouses and freight forwarders.

Question 26

freight forwarder

Answer 26

The “middle man” between the carrier and the organization shipping the product. Often combines smaller shipments to take advantage of lower bulk costs.

Question 27

green reverse logistics

Answer 27

The responsibility of the supplier to dispose of packaging materials or environmentally sensitive materials such as heavy metals.

Question 28

Incoterms®

Answer 28

A set of rules established by the International Chamber of Commerce that provides internationally recognized rules for the interpretation of the most commonly used trade terms in foreign trade and is routinely incorporated in the contracts for the sale of goods worldwide to provide guidance to all parties involved in the transaction.

Question 29

intermodal transport

Answer 29

1) Shipments moved by different types of equipment combining the best features of each mode. 2) The use of two or more different carrier modes in the through movement of a shipment.

Question 30

line haul costs

Answer 30

Basic costs of carrier operation to move a container of freight, including drivers’ wages and usage depreciation. These vary with the cost per mile, the distance shipped, and the weight moved.

Question 31

materials handling

Answer 31

Movement and storage of goods inside the distribution center. This represents a capital cost and is balanced against the operating costs of the facility.

Question 32

milk run

Answer 32

A regular route for pickup of mixed loads from several suppliers. For example, instead of each of five suppliers sending a truckload per week to meet the weekly needs of the customer, one truck visits each of the suppliers on a daily basis before delivering to the customer’s plant. Five truckloads per week are still shipped, but each truckload contains the daily requirement from each supplier.

Question 33

order picking

Answer 33

Selecting or “picking” the required quantity of specific products for movement to a packaging area (usually in response to one or more shipping orders) and documenting that the material was moved from one location to shipping

Question 34

pallet positions

Answer 34

A calculation that determines the space needed for the number of pallets for inventory storage or transportation based on a standard pallet size. Pallet dimensions vary around the globe, but are typically a constant in regional markets. The term is frequently used to quote storage and transportation rates

Question 35

picking list

Answer 35

A document that lists the material to be picked for manufacturing or shipping orders.

Question 36

pickup and delivery costs

Answer 36

Carrier charges for each shipment pickup and the weight of that shipment. Costs can be reduced if several smaller shipments are consolidated and picked up in one trip.

Question 37

private carrier

Answer 37

A group that provides transportation exclusively within an organization.

Question 38

protective packaging

Answer 38

Wrapping or covering of material that provides containment, protection, and identification of inventory in a warehouse. The material must be contained in such a way that will support movement and storage and will fit into the dimension of storage space and transportation vehicles.

Question 39

quantity discount

Answer 39

A price reduction allowance determined by the quantity or value of a purchase.

Question 40

radio frequency identification (RFID)

Answer 40

A system using electronic tags to store data about items. Accessing or retrieving this data is accomplished through a specific radio frequency and does not require close proximity or line-of-sight access.

Question 41

random-location storage

Answer 41

A storage technique in which parts are placed in any space that is empty when they arrive at the storeroom. Although this random method requires the use of a locator file to identify part locations, it often requires less storage space than a fixed-location storage method.

Question 42

receiving

Answer 42

The function encompassing the physical receipt of material, the inspection of the shipment for conformance with the purchase order (quantity and damage), the identification and delivery to destination, and the preparation of receiving reports.

Question 43

remanufacturing

Answer 43

1) An industrial process in which worn-out products are restored to like-new condition. In contrast, a repaired product normally retains its identity, and only those parts that have failed or are badly worn are replaced or serviced. 2) The manufacturing environment where worn-out products are restored to like-new condition

Question 44

reverse logistics

Answer 44

A complete supply chain dedicated to the reverse flow of products and materials for the purpose of returns, repair, remanufacture, and/or recycling

Question 45

shipping manifest

Answer 45

A document that lists the pieces in a shipment. A manifest usually covers an entire load regardless of whether the load is to be delivered to a single destination or to many destinations. Manifests usually list the items, piece count, total weight, and the destination name and address for each destination in the load

Question 46

tariff

Answer 46

An official schedule of taxes and fees imposed by a country on imports or exports.

Question 47

terminal-handling charges

Answer 47

1) Carrier charges dependent on the number of times a shipment must be loaded, handled, and unloaded. Cost can be reduced by consolidating shipments into fewer parcels or by shipping in truckload quantities. 2) For shipping lines, the costs of paying container terminals for unloading and loading during shipment. These costs are borne by the shipping lines at the port of shipment or destination.

Question 48

terminals

Answer 48

In transportation, locations where carriers load and unload goods to and from vehicles. Also used to make connections between local pickup and delivery service and line-haul service. Functions performed in terminals include weighing connections with other routes and carriers, vehicle routing, dispatching, maintenance, paperwork, and administration. Terminals may be owned and operated by the carrier or the public.

Question 49

third-party logistics (3PL)

Answer 49

A buyer and supplier team with a third party that provides product delivery services. This third party may provide added supply chain expertise.

Question 50

time-phased order point (TPOP)

Answer 50

MRP-like time planning logic technique for independent demand items, where gross requirements come from a forecast, not via explosion. Can be used to plan distribution center inventories as well as to plan for service (repair) parts, because MRP logic can readily handle items with dependent demand, independent demand, or a combination of both. An approach that uses time periods, thus allowing for lumpy withdrawals instead of average demand. When used in distribution environments, the planned order releases are input to the master schedule dependent demands.

Question 51

total line-haul cost

Answer 51

Basic costs of carrier operation to move a container of freight, including drivers’ wages and usage depreciation, which vary with the distance shipped and the cost per mile.

Question 52

traffic

Answer 52

A department or function charged with the responsibility for arranging the most economic classification and method of shipment for both incoming and outgoing materials and products

Question 53

transaction channel

Answer 53

A distribution network that deals with change of ownership of goods and services including the activities of negotiation, selling, and contracting

Question 54

transportation

Answer 54

The function of planning, scheduling, and controlling activities related to mode, vendor, and movement of inventories into and out of an organization.

Question 55

truckload (TL) carriers

Answer 55

Carriers that deliver/charge only for full truckload shipments

Question 56

unit load

Answer 56

A shipping unit made up of a number of items; bulky material arranged or constrained so the mass can be picked up or moved as a single unit. Reduces material handling costs. Often shrink-packed on a pallet before shipment.

Question 57

unitization

Answer 57

In warehousing, the consolidation of several units into larger units for fewer handlings

Question 58

warehousing

Answer 58

The activities related to receiving, storing, and shipping materials to and from production or distribution locations.

Question 59

wave picking

Answer 59

A method of selecting and sequencing picking lists or items to minimize the waiting time of the delivered material. Shipping orders may be picked in waves combined by common carrier or destination, and manufacturing orders in waves related to work centers

Question 60

waybill

Answer 60

A document containing a list of goods with shipping instructions related to a shipment.

Question 61

ways

Answer 61

Paths over which a carrier operates, including right-of-way, roadbed, tracks, and other physical facilities. May be owned by the government, privately held by the carrier, or provided by nature.

Question 62

zone

Answer 62

1) A warehouse location methodology that includes some of the characteristics of fixed and random location methods. Zone locations hold certain kinds of items, depending on physical characteristics or frequency of use. 2) The specific warehouse location assigned to an order picker. In picking items for an order, the stock picker gets only the items for each order that are within his/her zone. The picker then fills the next order for items from his/her zone

Question 63

zone picking

Answer 63

A method of subdividing a picking list by areas within a storeroom for more efficient and rapid order picking. A zone-picked order must be grouped to a single location before delivery or must be delivered to different locations such as work centers