BUSINESS 5005 Unit 4 assessment questions with answers

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Unit 4 Assessment Questions 1.) The range between the minimum price and the maximum price is most commonly called? A.) The equilibrium price B.) The zone of reasonableness C.) Value of service pri... cing D.) Full cost pricing 2.) The TIA broker-Carrier Agreement requires that a broker offer a carrier a minimum of ________ loads annually A.) One B.) Three C.) Ten D.) Fifteen E.) Trick question: the TIA Broker-Carrier Agreement does not specify a minimum number of loads 3.) When a commodity type product is moved in a busy lane with many competitors, the price a shipper is willing to pay for a TL freight movement is likely to be based on? A.) Carrier costs B.) Market rates C.) A comparison with alternative forms of transportation such as LTL 4.) In a TL market where the loads have special handling requirements and carrier services are perceived to be very different from each other, the maximum price that can be charged is? A.) The carrier cost only B.) The carrier cost plus the transaction cost C.) The price charged by competitors D.) The service value of the move to the shipper/consignee 5.) The price of a load minus the cost of moving the load is called? A.) Marginal revenue B.) Marginal income C.) Contribution margin D.) Net profit E.) Owner’s equity 6.) The minimum price over the long run for a specific freight move is? A.) The carrier cost only B.) The carrier cost plus the transaction cost C.) The price charged by competitors D.) The service value of the move to the shipper/consignee This study source was downloaded by 100000821916538 from CourseHero.com on 03-25-2021 14:20:31 GMT -05:00 https://www.coursehero.com/file/64320501/Unit-4-assessment-questions-with-answersdocx/ This study resource was shared via CourseHero.com 7.) True or False: When it comes to shipper contracts, a key concept is “what’s past is past” in other words, actions that have taken place between a shipper and a broker on previous loads have no bearing on how a court might interpret a current dispute. A.) True B.) False 8.) A lack of carrier capacity in a given lane results in a shift of power to the? A.) Shipper B.) Carrier 9.) True or False: The TIA Broker-Carrier Agreement does not require a carrier to notify a broker if its FMCSA safety rating falls to “unsatisfactory” or “conditional”, instead, the agreements specifies that it is the sole responsibility to ascertain this rating. A.) True B.) False 10.) True or False: You should always reject a load if the price the shipper is willing to pay is less than the direct costs + allocated fixed costs for the load? A.) True B.) False 11.) Under the NITL-TIA Broker/Shipper Transportation Agreement, ________ will invoice the shipper for freight charges? A.) The broker B.) The carrier C.) Both the broker and the carrier 12.) Examine the following figures (not all data may be needed to answer the question). Benchmark price for fuel = $1.15/gallon; Fuel Index price = $3.15/gallon; MPG for truck = 5 mpg, Length of haul 200 miles. What would be an appropriate fuel surcharge? A.) $2/mile B.) $1/mile C.) $0.40/mile D.) $0.04/mile E.) $0.01/mile 13.) The TIA Broker-Carrier Agreement defines the relationship between a broker and a carrier as an? A.) Agent/employer relationship B.) Employee/employer relationship C.) Independent contractor relationship D.) Exclusive relationship This study source was downloaded by 100000821916538 from CourseHero.com on 03-25-2021 14:20:31 GMT -05:00 https://www.coursehero.com/file/64320501/Unit-4-assessment-questions-with-answersdocx/ This study resource was shared via CourseHero.com 14.) In the TIA Broker-Carrier Agreement, Who should sign the agreement? A.) Representatives of the broker and carrier B.) Representatives of the broker, carrier, and shipper C.) Representatives of the broker, carrier, shipper and a witness D.) The broker’s representative is the only individual who should sign a broker-carrier agreement 15.) Which of the following is not contained in the TIA Broker-Carrier Agreement? A.) A section on broker responsibilities B.) A section on carrier responsibilities C.) A section on how disputes are to be resolved D.) A section prohibiting back solicitation by the carrier E.) All of the above are contained in the agreement 16.) True or False: The TIA Model Broker-Carrier Agreement prohibits double-brokering? A.) True B.) False 17.) For a shipper to be willing to pay a price above what competitors charge,? A.) The carrier needs to differentiate its service to the shipper in a meaningful way B.) The carrier must utilize a fuel surcharge C.) The carrier must add ancillary charges to the basic freight movement charge 18.) True or False: The TIA Model Broker-Carrier Agreement requires an exclusive relationship between a broker and a Carrier? A.) True B.) False 19.) Jim (a broker) has offers from three different shippers to move their loads for $900 (Shipper A), $1100 (B), and $1200 (C), respectively, all to be moved in the same lane. Each load will cost Jim’s company $800 each in direct costs (move, delays, etc.). Jim has $600 in total fixed costs that have to be allocated across these loads, so he assigns $200 in fixed cost to each load. Based on this information, what should Jim do? A.) Accept load C only B.) Accept loads from B and C only C.) Accept loads from A, B, and C D.) Do not accept any of these loads 20.) All of the following should be considered “red flags” for a shipper contract (i e, things to avoid) EXCEPT; A.) Holding the broker liable as a common carrier B.) Requiring the shipper to tender a minimum of three loads per year to the broker C.) Requiring the broker to run background checks on drivers D.) Requiring the broker to submit the original bill of lading to the shipper for payment This study source was downloaded by 100000821916538 from CourseHero.com on 03-25-2021 14:20:31 GMT -05:00 https://www.coursehero.com/file/64320501/Unit-4-assessment-questions-with-answersdocx/ This study resource was shared via CourseHero.com 21.) True or False: It is generally acceptable to calculate a fuel surcharge as a percentage of the freight cost for a load? A.) True B.) False 22.) A shipper discovers that a replacement CNC mill must arrive in Moline in five days, and not five weeks like the shipper had thought. There’s no time for the shipper to seek proposals for moving this delicate equipment, so the shipper calls XYZ Transport, a carrier that specializes in emergency loads and hard-to-handle loads. XYZ Transport will likely use ________ pricing for this load? A.) Full cost B.) Value of service C.) Cost of service D.) Cash flow 23.) Which of the following is NOT recommended to be present in a broker-shipper contract? A.) Payment terms B.) Insurance terms C.) Escape clause(s) D.) Obligations of each party E.) All of the above should be included 24.) The purpose of a single shipment charge is to? A.) Increase the number of single shipments from a specific shipper B.) Increase the number of single shipments from all shippers C.) Generate additional revenue from shipments that require significant time relative to the revenue they produce 25.) A Line haul LTL move may be priced A.) By weight B.) By volume C.) By shipment D.) All of the above 26.) True or False: The TIA Broker-Carrier Agreement permits a carrier to re-broker without approval from the broker unless hazardous materials are involved A.) True B.) False 27.) The TIA Model Broker-Carrier Agreement indicates that when a carrier is moving a load on behalf of a broker, the employees of the carrier are under the control of? A.) The carrier B.) The shipper C.) The broker This study source was downloaded by 100000821916538 from CourseHero.com on 03-25-2021 14:20:31 GMT -05:00 https://www.coursehero.com/file/64320501/Unit-4-assessment-questions-with-answersdocx/ This study resource was shared via CourseHero.com 28.) Setting an initial price low in order to capture a larger market share and to deter competitors from entering a market is called a ________ strategy? A.) Price skimming B.) Penetration pricing C.) Service bundling D.) Value of service pricing E.) Cost of service pricing 29.) XYZ Trucking provides TL service. In the past, they have also separately sold an additional service which allows shippers to receive exact locations and ETAs for XYZ loads. XYZ has now decided to combine this service with its basic TL service for a single price. This is called? A.) Discount pricing B.) Penetration pricing C.) Service bundling D.) Value of service pricing E.) None of the above 30.) In which of the following situations would value of service pricing be most common? A.) A commodity type product is being moved from Chicago to Atlanta B.) A load is moved from Nashville to Miami, where most carriers are running close to full C.) A load of delicate scientific instruments that require special handling is moved from Seattle to San Jose, CA D.) A carrier is facing potential bankruptcy and needs to generate cash for survival 31.) Assume a freight move has direct costs of $1000 and a transaction cost of $100. The carrier has $100,000 in fixed costs that are allocated equally across the 5,000 loads it moves makes each year ($20 per load). The company also seeks to make $50 profit for each load moved. What would be the price charged for this load if the company uses full cost pricing? A.) $1000 B.) $1100 C.) $1150 D.) $1170 32.) True or False: The TIA Model Broker-Carrier Agreement allows a broker to hire a carrier with an unsatisfactory safety rating if the carrier has insurance coverage that exceeds the value of the load. A.) True B.) False This study source was downloaded by 100000821916538 from CourseHero.com on 03-25-2021 14:20:31 GMT -05:00 https://www.coursehero.com/file/64320501/Unit-4-assessment-questions-with-answersdocx/ This study resource was shared via CourseHero.com 33.) A disadvantage of full cost pricing would be? A.) It can result in underpricing B.) It can result in overpricing C.) It is not viable in the long term due to the inability to cover fixed costs D.) All of the above are disadvantages E.) Both A and B are disadvantages 34.) A detention/demurrage charge can be based upon? A.) Opportunity cost B.) Financial cost of the equipment C.) Both A and B D.) None of the above 35.) As a shipper’s knowledge of carrier alternatives for moving a load increases, the power of the carrier? A.) Increases B.) Remains the same C.) Decreases 36.) Which of the following is NOT a goal of the NITL-TIA Broker/Shipper Transportation Agreement? A.) To reduce the likelihood of double payment issues B.) To specify the level of insurance coverage to be carried by the broker C.) To make it clear that for purposes of the contract the broker is considered to be the carrier D.) To specify a process for dispute resolution 37.) If a carrier refuses to sign the TIA Model Broker-Carrier Agreement, A.) You should not do business with the carrier B.) You should use the model broker-Carrier Agreement as a template to help you determine what needs to be in the contract that you do sign C.) You should use the Broker-Carrier Agreement supplied by the carrier, and if any disputes occur later on you can argue that you gave the carrier an opportunity to sign the Model Broker-Carrier Agreement D.) You should contact an arbiter to determine which contract for should be used 38.) Which of the following statements about carrier transaction costs is true? A.) Transaction costs are generally invisible to the shipper B.) A dollar reduction in transaction costs is a dollar added to the bottom line for a carrier C.) A transaction cost is defined as the cost to generate a given transition D.) All of the above is true This study source was downloaded by 100000821916538 from CourseHero.com on 03-25-2021 14:20:31 GMT -05:00 https://www.coursehero.com/file/64320501/Unit-4-assessment-questions-with-answersdocx/ This study resource was shared via CourseHero.com 39.) Examine the following (not all of it is needed to answer the question) Sales force compensation = $200,000, Sales force incentives, bonuses and benefits = $150,000, Technology and other costs = $50,000, Number of FT brokers = 3, Number of carriers under contract = 50. IF a brokerage company moves 4,000 loads during the year, what is the transaction costs? A.) $7,000 B.) $1,000 C.) $100 D.) 62.50 E.) $50 40.) Which of the following statements concerning “carrier cost” and transportation pricing is TRUE? A.) Carrier cost is determined by the STB B.) Carrier cost is the only basis for determining transportation pricing C.) It is necessary to know carrier cost in order to determine whether a given price is sustainable over the long run D.) Carrier cost is determined by the value that the freight move has to be consignor/consignee 41.) The or False: In a Broker-Carrier contract, it is important to stipulate that the carrier is acting as an agent of the broker A.) True B.) False 42.) Which of these transportation pricing strategies would be least viable for a carrier to use over the long run? A.) Full cost B.) Value of service C.) Cost of service D.) Cash flow 43.) A PUD (local) LTL move may be priced by A.) Time per shipment B.) Volume per shipment C.) Zone pricing 44.) To calculate a price using ROI Pricing, you would need to know (among other things) A.) The prices charged by competitors, the cost of moving a load, and the number of competitors present B.) The cost of moving a load, the value the movement has to the shipper/consignee, and the number of competitors present C.) The size of the investment, the cost of moving a load, and the expected quantity of loads to be moved D.) The size of the investment E.) The prices charged by competitors, and the number of competitors present This study source was downloaded by 100000821916538 from CourseHero.com on 03-25-2021 14:20:31 GMT -05:00 https://www.coursehero.com/file/64320501/Unit-4-assessment-questions-with-answersdocx/ This study resource was shared via CourseHero.com 45.) In a TL market where the services provided by each carrier are undifferentiated, the maximum price that should be charged is? A.) The carrier cost only B.) The carrier cost plus the transaction cost C.) The price charged by competitors D.) The service value of the move to the shipper/consignee 46.) A charge for keeping a truck beyond a specified time limit for loading/unloading is called? A.) Detention B.) Demurrage C.) A storage charge D.) Diversion 47.) The first step for calculating a fuel surcharge is: A.) Determining the price index that will be used for determining fuel price B.) Benchmarking a price for fuel C.) Determining fuel use 48.)Which of the following means of quoting a price is least likely to encourage a shipper to cut corners on packaging used to protect the products being shipped? A.) A price per mile B.) A price per hundredweight C.) Price per box 49.) When a carrier is unable to pay its bills and needs an influx of revenues in order to survive, it is most likely to use ________ as a short-term pricing strategy. A.) Full cost B.) Value of service C.) Cost of service D.) Cash flow 50.) True or False: The TIA Broker-Carrier Agreement creates an exclusive relationship between the broker and the carrier (the broker may not enter into a broker-carrier agreement with another carrier, and the carrier may not enter into a broker-carrier agreement with another broker.) A.) True B.) False This study source was downloaded by 100000821916538 from CourseHero.com on 03-25-2021 14:20:31 GMT -05:00 https://www.coursehero.com/file/64320501/Unit-4-assessment-questions-with-answersdocx/ This study resource was shared via CourseHero.com Powered by TCPDF (www.tcpdf.org) [Show More]

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