Exam 11: Distribution Customer Service and Logistics

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In which of the following places would logistics costs be most likely to run between 9 and 15 percent of GDP?

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A channel of distribution is part of a broader network of relationships called a supply chain.

(True/False)
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The PD concept seeks to maximize the profit for a given customer service level.

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The transporting cost as a percentage of selling price is highest for:

(Multiple Choice)
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Just-in-time (JIT) delivery

(Multiple Choice)
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A footwear company specializing in the production of ballet shoes normally produces shoes only in women's and girl's sizes. The company is hired by several customers to produce shoes in men's and boy's sizes. Which of the following should the manufacturer consider in order to achieve economies of scale in shoe production?

(Multiple Choice)
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The physical distribution ________________________ is how rapidly and dependably a firm can deliver merchandise in demand through the appropriate channels.

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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. In designing the right physical distribution system, United Tools should primarily focus on: 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. In designing the right physical distribution system, United Tools should primarily focus on:

(Multiple Choice)
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For many physical goods, firms spend half or more of their total marketing dollars on physical distribution activities.

(True/False)
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Just-in-time delivery systems typically shift more responsibility for PD activities to the customer rather than the supplier.

(True/False)
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The transporting function adds value by:

(Multiple Choice)
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Which of the following has played a role in increasing competition within the transportation industry in the U.S.?

(Multiple Choice)
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In which of the following orders are activities most likely to be performed on goods arriving at a distribution center?

(Multiple Choice)
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Products that require a high frequency of scheduled shipments would be least suited to travel by

(Multiple Choice)
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Most physical distribution decisions involve trade-offs between

(Multiple Choice)
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As a mode of transportation, railroad freight would be least suited for ____

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A firm may spend 50 percent or more of its total marketing dollars on PD activities.

(True/False)
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Public warehouses (compared to private warehouses) provide greater economy and flexibility when a firm does not have a regular need to store a large volume of goods, but they provide fewer services than a firm's own warehouse could.

(True/False)
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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 Tools is considering building a new private warehouse for its tools. Which of the following are benefits of private warehouses? 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 Tools is considering building a new private warehouse for its tools. Which of the following are benefits of private warehouses?

(Multiple Choice)
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A jewelry maker's suppliers of gold, platinum and silver, the warehouses that store its finished goods, and the trucks that deliver the product to retailers are all part of a:

(Multiple Choice)
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