Deck 15: Supply Chain and Channel Management

Question 1

Distribution centers are always operated by distribution specialists.

Answer 1

False

Question 2

The computer-to-computer exchange of business documents from a retailer to a vendor and back is referred to as vendor-managed inventory (VMI).

Answer 2

False

Question 3

In the four Ps of marketing, place refers to all the activities required to get the right product to the right customer when that customer wants it.

Answer 3

True

Question 4

Retailers generally have no prior knowledge of the merchandise they will be receiving from suppliers in any particular shipment.

Question 5

In a direct marketing channel, there are no intermediaries between the buyer and the seller.

Question 6

Radio frequency identification (RFID) tags automatically transmit information about a container's contents or individual products.

Question 7

A distribution center and a fulfillment center are one and the same.

Question 8

The vertical marketing system that exhibits the most formalization and control is the corporate vertical marketing system.

Question 9

One reason retailers are reluctant to use distribution centers is that retail store space is typically much less expensive than space at a distribution center, so it is more cost-effective to store merchandise and get it ready for sale at the retail store rather than at a distribution center.

Question 10

Marketing channel management adds value because it gets products to customers efficiently, quickly, and at low cost.

Question 11

Quick response (QR) inventory systems allow retailers to maximize their inventory holdings.

Question 12

Marketing channel relationships evolve when the parties have common goals.

Question 13

When a firm is just starting out or entering a new market, it doesn't typically have the option of designing the best marketing channel structure.

Question 14

When Walmart threatens to punish or punishes the other channel member for not undertaking certain tasks, such as if it were to delay payment for a late delivery, this is an example of expertise power.

Question 15

Conflicts within a supply chain tend to be more pronounced when the members are part of a corporate vertical marketing system.

Question 16

When two competing retailers have a disagreement, it is an example of a horizontal channel conflict.

Question 17

Marketing channel management and supply chain management are virtually the same.

Question 18

Wholesalers are often used in an indirect marketing channel.

Question 19

Universal product codes (UPCs) are used to describe products for inventory taxation purposes.

Question 20

When manufacturers such as Avon sell directly to consumers, they perform both production and retailing activities.

Question 21

A local furniture store buys furniture from various manufacturers and resells the furniture to its customers. What type of marketing channel does this represent?

A) horizontal
B) vertical
C) indirect
D) direct
E) simple

Question 22

A ________ program is a promotional strategy that encourages people to pass along a marketing message to other potential consumers.

A) supply chain
B) direct marketing
C) viral marketing
D) wholesale marketing
E) social media

Question 23

A ________ is a facility for the receipt, storage, and redistribution of goods to company stores.

A) circulation center
B) distribution center
C) supply chain hub
D) collaborative replenishment office
E) floor-ready franchising center

Question 24

Sophie made pies and sold them from her food truck to local businesses. This is an example of a(n)

A) direct marketing channel.
B) distribution center.
C) simplified transaction.
D) wholesale operation.
E) indirect marketing channel.

Question 25

Students of marketing often overlook or underestimate the importance of place in the marketing mix simply because

A) it happens behind the scenes.
B) it conflicts with promotion.
C) it occurs after making pricing decisions.
D) no one is directly in charge of place decisions.
E) the product itself is so much more important.

Question 26

Stores like Home Depot and Costco act as wholesalers when they

A) take delivery in whole-lot quantities.
B) sell directly to consumers.
C) sell products for distributors.
D) sell to contractors or restaurant owners.
E) compete with each other.

Question 27

Trisha makes purses out of old blue jeans and sells them to customers at local craft fairs. What type of marketing channel does this represent?

A) indirect
B) vertical
C) horizontal
D) direct
E) simple

Question 28

Steven managed an auto parts store in the 1990s. How long would it have taken Steven to fulfill an order from the warehouse to his customer?

A) 7 to 10 days
B) 6 weeks.
C) One week
D) 15 to 30 days
E) 3 to 4 days

Question 29

Which element of the marketing mix specifically deals with supply chain management?

A) product
B) price
C) place
D) promotion
E) production

Question 30

A distribution center is typically operated by

A) the marketing department.
B) vertically integrated consumer networks.
C) retailers, manufacturers, or distribution specialists.
D) wholesalers.
E) electronic data interchange services.

Question 31

In a(n) ________ marketing channel, one or more intermediaries work with manufacturers to provide goods and services to customers.

A) indirect
B) vertical
C) horizontal
D) simple
E) direct

Question 32

Naomi knows she has to order her store's Christmas holiday merchandise in April to ensure delivery before the holiday season. Naomi is concerned with the supply chain management goal of

A) providing products at the right time.
B) providing products at the right locations.
C) providing the right quantities.
D) satisfying the service levels supply chain participants expect.
E) minimizing systemwide costs.

Question 33

Typically, manufacturers and retailers exchange business documents through a(n) ________system, the computer-to-computer exchange of business documents from a retailer to a vendor and back.

A) cross-docking exchange
B) electronic data interchange
C) vendor-managed inventory
D) vertical conflict reduction
E) radio frequency identification

Question 34

When a customer purchases a smartphone at Best Buy, all of the following information flows in the supply chain are started except

A) the sales associate scans the UPC recording the sale.
B) the sale is transmitted to Best Buy's distribution center to adjust inventory data.
C) the purchase is added to the customer's purchasing habit records.
D) Best Buy's buyer aggregates sales at all stores and uses the information to send a reorder to the manufacturer.
E) the point-of-sale terminal records the sale and sends it to Best Buy's buyer.

Question 35

Having no intermediaries between the buyer and seller is a defining characteristic of a(n) ________ marketing channel.

A) indirect
B) vertical
C) horizontal
D) simple
E) direct

Question 36

Dawn works for a firm that buys products directly from the manufacturer and resells them to retailers, who then sell the products to consumers. Dawn works for a

A) retail distribution center.
B) retail jobber.
C) store representative.
D) wholesaler.
E) manufacturer's representative.

Question 37

In marketing's four Ps, place refers to all activities required to get

A) the design of the terminal location for products accomplished.
B) the right product to the right customer when that customer wants it.
C) access to the physical space within a retail establishment.
D) consumers to the destination.
E) demand chain management functionally operable.

Question 38

When Costco sells to consumers directly, it acts as a ________; when it sells to other businesses, such as a restaurant owner, it acts as a ________.

A) wholesaler; retailer
B) retailer; manufacturer
C) retailer; wholesaler
D) manufacturer; wholesaler
E) marketing channel; supply channel

Question 39

A(n)________ is used in the shipment of products directly to customers.

A) fulfillment center
B) distribution center
C) administration center
D) data warehouse
E) vendor warehouse

Question 40

In addition to merchandise and payments, information flows throughout a supply chain. All of the following statements are a good characterization of the flow of information in a supply chain except

A) a manufacturer will send and receive information from buyers, stores, and distribution centers.
B) stores will send and receive information from manufacturers, buyers, distribution centers, and customers.
C) distribution centers will send and receive information from stores and manufacturers.
D) customers will send and receive information from stores and manufacturers.
E) buyers will send and receive information from stores and manufacturers.

Question 41

Forever 21 has adopted an inventory system that reduces the amount of time between the recognition that an order needs to be placed and the arrival of the needed merchandise at the seller's store, available for sale. This increases product availability and lowers inventory investment. These benefits are attributed to the ________ system.

A) cross-docking
B) UPC
C) just-in-time (JIT)
D) EDI
E) vendor-managed inventory

Question 42

Each time a politician or celebrity writes a book, bookstores can expect at least some customers to want the book, but whether or not it will become a best-seller is less certain. The bookstore's primary inventory management challenge is

A) how to get the author to sign copies of the book.
B) whether to price the books in the distribution center or at the retail store.
C) which other books to promote along with this book.
D) whether or not to display the book at the checkout counter.
E) having enough books to satisfy customer demands versus the cost of having the inventory.

Question 43

At the BMW plant in Spartanburg, South Carolina, rather than use a typical order-to-delivery process, it has suppliers deliver parts every four hours when the plant is in operation. BMW uses a ________ inventory control system.

A) cross-docking
B) lead time
C) just-in-time (JIT)
D) pick ticket
E) UPC

Question 44

All of the following are activities carried on in a distribution center except

A) coordinating inbound transportation.
B) receiving, checking, storing, and cross-docking merchandise.
C) distributing paychecks and paystubs for retail employees.
D) getting merchandise floor ready.
E) coordinating outbound transportation.

Question 45

Because manufacturers with JIT systems produce merchandise closer to the time of sale, they can

A) organize cooperative agreements among competing manufacturers to reduce oversupply.
B) reduce inventories needed to satisfy retailers' demand.
C) use exclusive geographic territories to centralize production.
D) effectively eliminate the need for a dispatcher.
E) replace independent supply chains with corporate supply chains.

Question 46

Getting merchandise floor-ready entails

A) distributing and dispatching.
B) ticketing and marking.
C) vertical supply chain wholesaling.
D) intensive cross-docking.
E) selective checking.

Question 47

Today, when a customer orders merchandise from an online vendor, the vendor usually sends an immediate order confirmation message by e-mail. Usually within a day or two, a second message arrives stating that the order is in the mail. This second message is a type of

A) vertical contractual notice.
B) VMI requirement.
C) advanced shipping notice.
D) universal product code report.
E) RFID tag.

Question 48

Colin has just received a delivery from the company's distribution center. He opens the containers and finds the popcorn and snacks are all bar-coded and priced and the package includes an end-of-the-aisle display rack. Colin has received a(n) ________ shipment.

A) quick-response packaged
B) ahead of the curve
C) lead time synchronized
D) floor-ready
E) synthesized

Question 49

H&M has adopted the inventory management system that delivers less merchandise on a more frequent basis than in traditional inventory systems. The firm gets the merchandise just in time for it to be used in the manufacture of another product or for sale when the customer wants it. This is an example of a(n) ________ inventory system.

A) cross-docking
B) quick response (QR)
C) UPC
D) EDI
E) lead time

Question 50

Radio frequency identification tags are

A) selective distribution designs used to maximize geographic efficiency.
B) electronic discount information tags used to provide reduced prices to select customers.
C) VMI demand scheduling data tags.
D) tiny computer chips that transmit information about a container's contents.
E) information tags used for floor-ready merchandising.

Question 51

Ted is glad his company finally converted to an RFID system. Now, he no longer needs to go through all the new goods to make sure what they ordered was what they received. Ted is responsible for ________ in his company.

A) checking
B) dispatching
C) receiving
D) JIT
E) quick response

Question 52

All of the following are advantages of using a distribution center except

A) more accurate sales forecasts are possible.
B) retailers need to keep less merchandise in the store as inventory if the stores get frequent deliveries.
C) it is easier to avoid running out of stock or having too much stock.
D) use of a distribution center saves money since the storage space at a distribution center is generally less expensive than that of a store.
E) customers know they are dealing with a more sophisticated and financially well-off operation if the firm uses a distribution center.

Question 53

In a ________ distribution center, merchandise moves from vendors' trucks to retailers' delivery trucks in a matter of hours.

A) traditional
B) combination
C) cross-docking
D) vertical
E) horizontal

Question 54

Some retailers require their suppliers to ship merchandise ________, thus eliminating the time and expense associated with ticketing and marking.

A) floor-ready
B) flattened
C) lead time synchronized
D) aggregated
E) synthesized

Question 55

In vendor-managed inventory systems,

A) corporations send information to retail customers, bypassing wholesalers and retailers.
B) companies send information to cooperatives.
C) customers send information to retailers.
D) sales reps send sales information to the retailer.
E) retailers send sales information to the manufacturer.

Question 56

Which of the following is true regarding the ticketing and marking process?

A) It refers to marking off inventory that has been removed from the retailer's shelves.
B) It is more efficient for a retailer to perform these activities at a distribution center than in its stores.
C) It is more efficient to perform this task when the product is in the store aisles and ready to be shelved.
D) The retailer should never consider having the vendor ship floor-ready merchandise.
E) It is more efficient for a retailer to perform these activities in its storeroom.

Question 57

Roland has just received notification from a vendor that his clothing merchandise order has been processed and dispatched. Roland has just received a(n)

A) horizontal contractual notice.
B) vendor-managed inventory alert.
C) advanced shipping notice.
D) universal product code report.
E) EDI tag.

Question 58

________ is when vendors ship merchandise prepackaged in the quantity required for each store to the distribution center.

A) Quick response
B) Checking
C) Combination warehousing
D) Cross-docking
E) Horizontal merchandising

Question 59

Walmart's customers have come to expect to find P&G products in stores, and P&G depends on Walmart to purchase a good portion of its output to sell to its own customers. This scenario represents the first phase of a

A) quick-response system.
B) virtual marketing system.
C) horizontal marketing system.
D) vertical marketing system.
E) reward marketing system.

Question 60

Flora is frustrated with her company's supply chain management information system. She wants to be able to receive sales data, initiate purchase orders, send and receive invoices, and receive returned merchandise documentation. Flora needs a(n)

A) cross-docking exchange.
B) electronic data interchange system.
C) vendor-managed inventory system.
D) vertical conflict reduction system.
E) radio frequency identification system.

Question 61

In a vertical marketing system, if the system is ________, the less likely conflict will occur.

A) less formal
B) more independent
C) less independent
D) more conventional
E) more formal

Question 62

Although conflict is likely to occur in any marketing channel, it is generally more pronounced when

A) the supply chain members are geographically too close to each other.
B) manufacturers pressure retailers.
C) retailers pressure manufacturers.
D) the channel members are independent entities.
E) the economy is booming.

Question 63

Felicia had just taken over her family's business after spending ten years in the marketing department of a large corporation. She met with a representative from one of her firm's biggest customers, who told her, "We should think about how we can make the pie bigger rather than fighting over the size of the slices." She had expected a more cutthroat approach rather than this call for a

A) partnering relationship.
B) shared mission statement.
C) common marketing system.
D) corporate vertical marketing system.
E) linked supply chain.

Question 64

In a(n) ________ marketing channel, each member attempts to satisfy its own objectives.

A) cooperative
B) corporate
C) contractual
D) administered
E) conventional

Question 65

A(n) ________ is a supply chain whose members act like a unified system.

A) vertical marketing system
B) independent marketing system
C) concentrated marketing system
D) conventional marketing system
E) strategic marketing system

Question 66

Especially in the fashion industry where styles and trends change rapidly, a quick response system can

A) allow retailers to better forecast long-term demand.
B) reduce logistical overlay.
C) increase cross-docking promotional effectiveness.
D) align deliveries more closely with actual sales.
E) allow manufacturers to introduce unpopular styles and still be successful.

Question 67

If a firm declared that it wanted to develop a strategic relationship, but was unwilling to commit funds or any effort to make it succeed, there would be an obvious lack of

A) mutual trust.
B) common goals.
C) a contractual arrangement.
D) credible commitments.
E) open communication.

Question 68

In a corporate vertical marketing system,

A) conflict tends to be a major problem.
B) independent firms at different levels of the marketing channel join through contracts to obtain economies of scale and coordination to reduce conflict.
C) there is no common ownership, and the dominant member has significant power to impose its ideas and objectives.
D) independent firms join together formally to decide how the marketing channel will operate.
E) participants-such as warehouses, transportation companies, and retail outlets-are typically owned by a parent company where potential conflict among segments of the channel is lessened.

Question 69

All of the following statements about distribution centers are true except

A) they enable retailers to carry less merchandise in individual stores.
B) distribution center space is typically more expensive than retail space.
C) they are appropriate for all retailers, from the largest to the smallest.
D) they are the quickest way to get all products to retailers.
E) they complicate the process of predicting accurate sales forecasts.

Question 70

Yesterday, Lorinda overheard a surprisingly unpleasant encounter between the manager of the hardware store where she works and a sales rep who sells a well-known line of tools. The rep insisted that his tools should be more prominently displayed and that a better assortment would mean more sales. The manager had other plans and told him so, and the conversation turned into a loud argument. What Lorinda observed was an example of

A) sales tactics.
B) channel conflict.
C) retail strategy tension.
D) passive aggressive behavior.
E) a failure of EDI processes.

Question 71

All of the following are required to build a successful strategic relationship except

A) mutual trust.
B) open communications.
C) creation of a joint venture.
D) common goals.
E) credible commitments.

Question 72

Franchising is the most common type of contractual ________ marketing system.

A) cooperative
B) corporate
C) vertical
D) administered
E) conventional

Question 73

The Stanley company wants Home Depot to carry all its tools but not the tools of its competitors so that Stanley can maximize its sales. But Home Depot carries a mix of tool brands so it can maximize the sales in its tool category. This misalignment of goals will likely lead to a(n) ________ channel conflict.

A) horizontal
B) independent
C) conventional
D) coercive
E) vertical

Question 74

Walmart needs P&G to satisfy its customers, and P&G recognizes that if it can keep Walmart happy, it will have more than enough business for years to come. Walmart and P&G recognize that it is in their common interest to be

A) separate identities.
B) strategic partners.
C) supply chain intermediaries.
D) in a corporate vertical marketing system.
E) in an administered vertical marketing system.

Question 75

In a(n) ________ marketing channel, several independent members each attempt maximize their profits.

A) cooperative
B) independent
C) contractual
D) administered
E) corporate

Question 76

Because of its size and relative power, Walmart can easily impose controls on small manufacturers, such as PenAgain, but with large, powerful suppliers such as P&G, the control is more balanced between parties. Walmart's various marketing channel relationships offer examples of different forms of a(n) ________ marketing system.

A) cooperative
B) corporate
C) independent
D) administered vertical
E) conventional horizontal

Question 77

Marketing channels and supply chains comprise various buying entities that form relationships with one another. The basic motivating factor in these interactions is

A) collaboration creates transactional relationships.
B) the most powerful member of the supply chain always wins.
C) each party wants something from the others.
D) the participants must create the best possible EDI system.
E) retail floor salespeople need emotional support from management.

Question 78

In an administered vertical marketing system,

A) no individual participant has control over the others, since a third-party administrator oversees the entire supply chain.
B) independent firms at different levels of the marketing channel join through contracts to obtain economies of scale and coordination to reduce conflict.
C) there is no common ownership, and the dominant member has significant power to impose its ideas and objectives.
D) independent firms join together formally to decide as a group how the marketing channel will operate.
E) participants-such as warehouses, transportation companies, and retail outlets-are typically owned by a parent company to ensure harmonious relations throughout the supply chain.

Question 79

A recent innovation by Amazon, the Vendor Flex program, seeks to lower overall transportation costs but also creates new forms of channel conflict with competitors. As a partner in the Vendor Flex program, P&G agreed to allow Amazon to build fulfillment centers within P&G's own warehouses, thus helping to eliminate some of the costs of transporting P&G's products to Amazon's fulfillment centers. Believing that the program was giving its competitor Amazon an unfair advantage, Target reacted vigorously, moving all P&G products from prominent end-cap positions in its stores to less prestigious and less visible locations. Target also stopped using P&G as its primary source of advice for planning merchandising strategies within each category. This is an example of ________ channel conflict.

A) horizontal
B) independent
C) conventional
D) coercive
E) vertical

Question 80

TT TOYS manufactures toys. The company recently started buying paint for its toys from a Chinese firm. This Chinese company is part of TT Toys'

A) supply chain.
B) corporate vertical marketing system.
C) distribution center.
D) CFPR.
E) voluntary chain.