Question 1

Indirect channels of distribution are more common in consumer markets than with industrial markets.

Accepted Answer

A) True 
 B)False

Question 2

A firm's order lead time is 7 days, its usage rate is 5 units per day, and its safety stock is 10 units. Its reorder point is ___ units.

Accepted Answer

A)  22 
B)  45 
C)  57 
D)  75 
A)  22 
B)  45 
C)  57 
D)  75

Question 3

A firm needs 7 days for an order to be processed and received, sells 8 items per day, and keeps a safety stock of 10 items. Its reorder point should be 87.

Accepted Answer

A) True 
 B)False

Question 4

Vertical integration (such as a manufacturer operating a factory outlet store) enables the manufacturer to

Accepted Answer

A)  shorten its distribution channel. 
B)  better focus its distribution channel. 
C)  broaden its distribution channel. 
D)  lengthen its distribution channel. 
A)  shorten its distribution channel. 
B)  better focus its distribution channel. 
C)  broaden its distribution channel. 
D)  lengthen its distribution channel.

Question 5

A key factor in relationship marketing is the long-term nature of relationships in distribution.

Accepted Answer

A) True 
 B)False

Question 6

A supplier/distribution intermediary contract covers such factors as pricing, conditions of sale, territorial rights, the services/responsibility mix, contract length, and conditions of termination.

Accepted Answer

A) True 
 B)False

Question 7

A manufacturer's refusal to ship merchandise to a retailer that undercuts competitors' prices is an example of

Accepted Answer

A)  channel cooperation. 
B)  channel conflict. 
C)  a pushing strategy. 
D)  a pulling strategy. 
A)  channel cooperation. 
B)  channel conflict. 
C)  a pushing strategy. 
D)  a pulling strategy.

Question 8

A franchise agreement between a Wendy's franchisee and the Wendy's franchisor illustrates

Accepted Answer

A)  an administered arrangement. 
B)  selective distribution. 
C)  a dual channel of distribution. 
D)  horizontal integration. 
A)  an administered arrangement. 
B)  selective distribution. 
C)  a dual channel of distribution. 
D)  horizontal integration.

Question 9

The assorting element of the sorting process enables

Accepted Answer

A)  small shipments to be transported economically. 
B)  products to be graded by color, size, and quality. 
C)  independent distributors to work together to achieve a common goal. 
D)  consumers to have a broad selection of products. 
A)  small shipments to be transported economically. 
B)  products to be graded by color, size, and quality. 
C)  independent distributors to work together to achieve a common goal. 
D)  consumers to have a broad selection of products.

Question 10

Keiretsus represent vertical integration in an international market.

Accepted Answer

A) True 
 B)False

Question 11

Which statement concerning railroads is correct?

Accepted Answer

A)  Railroads offer more flexibility in shipping than motor carriers. 
B)  Fixed costs of railroad shipping are low. 
C)  Railroads often ship items that are too heavy for motor carriers. 
D)  Railroads generally ship items that are high in value relative to their size. 
A)  Railroads offer more flexibility in shipping than motor carriers. 
B)  Fixed costs of railroad shipping are low. 
C)  Railroads often ship items that are too heavy for motor carriers. 
D)  Railroads generally ship items that are high in value relative to their size.

Question 12

Which of the following is a major distribution planning function?

Accepted Answer

A)  Pricing 
B)  Inventory management 
C)  Cost control 
D)  Promotion 
A)  Pricing 
B)  Inventory management 
C)  Cost control 
D)  Promotion

Question 13

Channel width may be reduced through horizontal integration (such as a wholesaler purchasing a competing wholesaler).

Accepted Answer

A) True 
 B)False

Question 14

A manufacturer may have to develop consumer demand through a pushing strategy to encourage intermediaries to stock a new product.

Accepted Answer

A) True 
 B)False

Question 15

For a manufacturer, the training of a wholesaler's sales personnel, providing of promotional materials, and offering a special sales contest for the wholesaler's sales personnel are important elements in which type of distribution strategy?

Accepted Answer

A)  Pushing 
B)  Pulling 
C)  Administered channel 
D)  Dual channel 
A)  Pushing 
B)  Pulling 
C)  Administered channel 
D)  Dual channel

Question 16

Medical supplies, flowers, and high-value computer supplies are most likely to utilize which transformation form?

Accepted Answer

A)  Motor trucks 
B)  Railroads 
C)  Waterways 
D)  Airways 
A)  Motor trucks 
B)  Railroads 
C)  Waterways 
D)  Airways

Question 17

With a dual channel of distribution, a firm can use intensive distribution for some products and exclusive distribution for other products.

Accepted Answer

A) True 
 B)False

Question 18

A slotting allowance, in which retailers require that a manufacturer pay for the use of shelf space for new products, illustrates

Accepted Answer

A)  channel cooperation. 
B)  channel conflict. 
C)  a pulling strategy. 
D)  the total-cost approach. 
A)  channel cooperation. 
B)  channel conflict. 
C)  a pulling strategy. 
D)  the total-cost approach.

Question 19

Direct channels reduce the number of transactions between a manufacturer and its final consumers.

Accepted Answer

A) True 
 B)False

Question 20

A medical equipment manufacturer has decided to use airways due to its being the least costly means of physical distribution. The firm is aware that airways have the highest transportation costs. Which concept does this strategy illustrate?

Accepted Answer

A)  The total-cost approach 
B)  A physical distribution system 
C)  Clear distribution standards 
D)  Vertical integration 
A)  The total-cost approach 
B)  A physical distribution system 
C)  Clear distribution standards 
D)  Vertical integration

Exam 14: Value Chain Management and Logistics

Indirect channels of distribution are more common in consumer markets than with industrial markets.

A firm's order lead time is 7 days, its usage rate is 5 units per day, and its safety stock is 10 units. Its reorder point is ___ units.

A firm needs 7 days for an order to be processed and received, sells 8 items per day, and keeps a safety stock of 10 items. Its reorder point should be 87.

Vertical integration (such as a manufacturer operating a factory outlet store) enables the manufacturer to

A key factor in relationship marketing is the long-term nature of relationships in distribution.

A supplier/distribution intermediary contract covers such factors as pricing, conditions of sale, territorial rights, the services/responsibility mix, contract length, and conditions of termination.

A manufacturer's refusal to ship merchandise to a retailer that undercuts competitors' prices is an example of

A franchise agreement between a Wendy's franchisee and the Wendy's franchisor illustrates

The assorting element of the sorting process enables

Keiretsus represent vertical integration in an international market.

Which statement concerning railroads is correct?

Which of the following is a major distribution planning function?

Channel width may be reduced through horizontal integration (such as a wholesaler purchasing a competing wholesaler).

A manufacturer may have to develop consumer demand through a pushing strategy to encourage intermediaries to stock a new product.

For a manufacturer, the training of a wholesaler's sales personnel, providing of promotional materials, and offering a special sales contest for the wholesaler's sales personnel are important elements in which type of distribution strategy?

Medical supplies, flowers, and high-value computer supplies are most likely to utilize which transformation form?

With a dual channel of distribution, a firm can use intensive distribution for some products and exclusive distribution for other products.

A slotting allowance, in which retailers require that a manufacturer pay for the use of shelf space for new products, illustrates

Direct channels reduce the number of transactions between a manufacturer and its final consumers.

A medical equipment manufacturer has decided to use airways due to its being the least costly means of physical distribution. The firm is aware that airways have the highest transportation costs. Which concept does this strategy illustrate?

Marketing Today

The Environment in Which Marketing Operates

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Goods Versus Services Marketing

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Considerations in Price Planning

Developing and Applying a Pricing Strategy

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