Question 1

In both a supply chain and a channel of distribution, the primary aim should be to create maximum value for the customer.

Accepted Answer

A) True 
 B)False  True

Question 2

Storing makes goods available where they're needed.

Accepted Answer

A) True 
 B)False  False

Question 3

A distribution center is designed to:

Accepted Answer

A)  stockpile goods for long periods and avoid rising prices. 
B)  buy low and sell high. 
C)  reduce inventory turnover. 
D)  speed the flow of goods and avoid unnecessary storing. 
E)  all of the above. 
A)  stockpile goods for long periods and avoid rising prices. 
B)  buy low and sell high. 
C)  reduce inventory turnover. 
D)  speed the flow of goods and avoid unnecessary storing. 
E)  all of the above. D

Question 4

Containerization:

Accepted Answer

A)  is widely used by railroads, but has not caught on with other modes. 
B)  makes it easier to load and unload products, but it increases the risk of damage. 
C)  has increased competition between railroads and water shippers since both offer this service. 
D)  is commonly used for international shipments from Japan. 
E)  None of the above is true. 
A)  is widely used by railroads, but has not caught on with other modes. 
B)  makes it easier to load and unload products, but it increases the risk of damage. 
C)  has increased competition between railroads and water shippers since both offer this service. 
D)  is commonly used for international shipments from Japan. 
E)  None of the above is true.

Question 5

Alex has to transport iron ore from New Orleans to Memphis. Which mode of transport is he more likely to use?

Accepted Answer

A)  Airways 
B)  Truck 
C)  Railroad 
D)  Inland waterways 
E)  Monorail 
A)  Airways 
B)  Truck 
C)  Railroad 
D)  Inland waterways 
E)  Monorail

Question 6

Physical distribution decisions interact with which other marketing mix decisions?

Accepted Answer

A)  Price decisions. 
B)  Promotion decisions. 
C)  Product decisions. 
D)  All of the above. 
E)  None of the above. 
A)  Price decisions. 
B)  Promotion decisions. 
C)  Product decisions. 
D)  All of the above. 
E)  None of the above.

Question 7

Trucks

Accepted Answer

A)  are best at moving large quantities of goods for longer distances. 
B)  are the most expensive of any of the modes. 
C)  are very slow compared to railroads, and this makes it hard to compete effectively. 
D)  compete aggressively with other modes for high-value shipments. 
E)  All of the above are true. 
A)  are best at moving large quantities of goods for longer distances. 
B)  are the most expensive of any of the modes. 
C)  are very slow compared to railroads, and this makes it hard to compete effectively. 
D)  compete aggressively with other modes for high-value shipments. 
E)  All of the above are true.

Question 8

Which of the following transportation modes is "best" at handling a variety of goods?

Accepted Answer

A)  Truck 
B)  Rail 
C)  Water 
D)  Air 
E)  Pipeline 
A)  Truck 
B)  Rail 
C)  Water 
D)  Air 
E)  Pipeline

Question 9

Use this information for questions that refer to the United Tools case.
Terry Harter is marketing manager for United Tools and Mike O'Reilly is the firm's logistics manager. They work together to make decisions about how to get United's hand and power tools to its customers - a mix of manufacturing plants and final consumers (who buy United tools at a hardware store). United Tools does not own its own transport facilities and it works with wholesalers to reach its business customers.
Together, Harter and O'Reilly try to coordinate transporting, storing, and product handling activities to minimize cost while still achieving the customer service level their customers and intermediaries want. This usually requires that United keep an inventory of most of its products on hand, but demand for its products is fairly consistent over time so inventory is easy to manage.
Harter has identified four options for physical distribution systems she could use to reach two of her key wholesalers, Ralston Supply and Ricotta Tool Co. The total cost for each option--and the distribution service levels that can be achieved--are as follows:   Ralston Supply expects a very high level (90 percent) of distribution customer service. Ricotta Tool Co. is willing to settle for a 70 percent customer service level, even if that means some products will occasionally be out of stock, if it gets products at a lower price.
For its large retail hardware customers (like Home Depot), United regularly ships smaller orders directly to individual stores or in some cases to the retail chain's warehouses. Cross-country shipments usually go by rail while regional shipments usually go by truck.
-United ships to the regional distribution centers of one of the retail hardware chains that it serves. The main advantage of the distribution centers for the retailer is likely to be that they

Accepted Answer

A)  can store a larger inventory than traditional warehouses. 
B)  eliminate the need for electronic communications between the distribution centers and the individual stores. 
C)  speed the flow of tools from the factory to the stores. 
D)  all of the above are typical advantages of distribution centers. 
E)  none of the above are advantages. 
A)  can store a larger inventory than traditional warehouses. 
B)  eliminate the need for electronic communications between the distribution centers and the individual stores. 
C)  speed the flow of tools from the factory to the stores. 
D)  all of the above are typical advantages of distribution centers. 
E)  none of the above are advantages.

Question 10

Private warehouses (compared to public warehouses) are most appropriate when a firm has a regular need to store a large quantity of goods.

Accepted Answer

A) True 
 B)False

Question 11

In the U.S., trucks carry more freight over more miles than any other mode of transportation.

Accepted Answer

A) True 
 B)False

Question 12

Most physical distribution decisions involve trade-offs between

Accepted Answer

A)  the total cost of physical distribution and consumer service levels only. 
B)  transportation costs and inventory carrying costs only. 
C)  costs, consumer service levels, and sales. 
D)  sales and consumer service levels only. 
E)  availability and speed of delivery only. 
A)  the total cost of physical distribution and consumer service levels only. 
B)  transportation costs and inventory carrying costs only. 
C)  costs, consumer service levels, and sales. 
D)  sales and consumer service levels only. 
E)  availability and speed of delivery only.

Question 13

Physical distribution is the part of marketing that is visible to most customers.

Accepted Answer

A) True 
 B)False

Question 14

Considering weight, the most expensive transporting mode is:

Accepted Answer

A)  pipelines. 
B)  railroads. 
C)  trucks. 
D)  inland waterways. 
E)  airfreight. 
A)  pipelines. 
B)  railroads. 
C)  trucks. 
D)  inland waterways. 
E)  airfreight.

Question 15

With the PD concept, firms decide what specific service level to provide their customers.

Accepted Answer

A) True 
 B)False

Question 16

A marketing manager should never increase the total cost of distribution--even if this would result in a better customer service level for his target market.

Accepted Answer

A) True 
 B)False

Question 17

It is usually most economical to ship bulky nonperishable items, such as coal and iron ore, by

Accepted Answer

A)  water. 
B)  pipeline. 
C)  truck. 
D)  air. 
E)  None of the above is a good answer, since the cost of shipping a product usually does not vary from one mode to another. 
A)  water. 
B)  pipeline. 
C)  truck. 
D)  air. 
E)  None of the above is a good answer, since the cost of shipping a product usually does not vary from one mode to another.

Question 18

Retailers selling a new product that is in hot demand -- like the latest DVD release or a best selling book -- would be unlikely to incur higher costs for faster delivery.

Accepted Answer

A) True 
 B)False

Question 19

JIT shifts greater responsibility for physical distribution activities forward in the channel.

Accepted Answer

A) True 
 B)False

Question 20

Logistics costs vary little between developed economies like the U.S. and developing economies like Africa.

Accepted Answer

A) True 
 B)False

Exam 12: Distribution Customer Service and Logistics

In both a supply chain and a channel of distribution, the primary aim should be to create maximum value for the customer.

Storing makes goods available where they're needed.

A distribution center is designed to:

Containerization:

Alex has to transport iron ore from New Orleans to Memphis. Which mode of transport is he more likely to use?

Physical distribution decisions interact with which other marketing mix decisions?

Trucks

Which of the following transportation modes is "best" at handling a variety of goods?

Private warehouses (compared to public warehouses) are most appropriate when a firm has a regular need to store a large quantity of goods.

In the U.S., trucks carry more freight over more miles than any other mode of transportation.

Most physical distribution decisions involve trade-offs between

Physical distribution is the part of marketing that is visible to most customers.

Considering weight, the most expensive transporting mode is:

With the PD concept, firms decide what specific service level to provide their customers.

A marketing manager should never increase the total cost of distribution--even if this would result in a better customer service level for his target market.

It is usually most economical to ship bulky nonperishable items, such as coal and iron ore, by

Retailers selling a new product that is in hot demand -- like the latest DVD release or a best selling book -- would be unlikely to incur higher costs for faster delivery.

JIT shifts greater responsibility for physical distribution activities forward in the channel.

Logistics costs vary little between developed economies like the U.S. and developing economies like Africa.

Marketings Value to Consumers, Firms, and Society

Marketing Strategy Planning

Evaluating Opportunities in the Changing Marketing Environment

Focusing Marketing Strategy With Segmentation and Positioning

Demographic Dimensions of Global Consumer Markets

Final Consumers and Their Buying Behavior

Business and Organizational Customers and Their Buying Behavior

Improving Decisions With Marketing Information

Elements of Product Planning for Goods and Services

Product Management and New-Product Development

Place and Development of Channel Systems

Retailers,wholesalers,and Their Strategy Planning

Promotion-Introduction to Integrated Marketing Communications

Personal Selling and Customer Service

Advertising, Publicity, and Sales Promotion

Pricing Objectives and Policies

Price Setting in the Business World

Implementing and Controlling Marketing Plans: Evolution and Revolution

Managing Marketings Link With Other Functional Areas

Ethical Marketing in a Consumer-Oriented World: Appraisal and Challenges

Economics Fundamentals

Marketing Arithmetic

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