Transportation: A Global Supply Chain Perspective 9th Edition by Robert A. Novack Test bank

builds up in the supply chain to prevent stock outs. The further back in the supply chain an
organization is from the market, the greater the uncertainty usually the higher the level of safety
stock.
POINTS: 1
DIFFICULTY: Hard
REFERENCES: Page 25
QUESTION TYPE: Essay
HAS VARIABLES: False
DATE CREATED: 8/8/2015 3:08 AM
DATE MODIFIED: 8/13/2015 1:03 AM
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40. Describe the three phases of development for supply chain concept.
ANSWER: The three phases are: physical distribution, business logistics, and supply chain management.
Physical distribution was developed during the 1960s with a focus on the outbound side of a
producer. In other words, after a product was produced until it reached the customer with a focus
upon minimizing the total cost of that phase. Business logistics added the inbound side with a
continued focus upon lowest total cost. The third phase was supply chain management which
focused on the extended enterprises and the three major flows—products, information and cash.
POINTS: 1
DIFFICULTY: Hard
REFERENCES: Pages 20-21
QUESTION TYPE: Essay
HAS VARIABLES: False